I had quite a lot to say. Fred suggested that I turn one of my comments into a blog post. For now it’s the same as my comment on AVC, with the exception of some editing for flow purposes. So here it is. Enjoy.
I’ve always had some issues with this. I thought this through quite a lot on my own. It takes a lot of thinking. It would take a lot of cooperation, and educating and helping the potential partners feel comfortable and fully understand for them to want to cooperate.
It’ll be a pretty epic decision among the founders of first stated independent web structure. And if it is executed properly, and I do think the right people exist with enough of an understanding to guide it properly, then it will be amazing.
There does have to be a long-term sustainable reason for a company to be apart of said independent web though.
When someone’s posting optimistically about how something can be so amazing, there’s not usually much mention of the possible drawbacks. I’m wondering what those drawbacks and negatives for whatever size companies or consumers might be. By allowing someone’s piece of pie to become bigger (for some, the more successful companies/the better executed) therefore causes someone’s piece or size of pie to become smaller.
The positive side is easy to see: making it easier to flow between services and/or information, if those services and information has a good user experience to them and useful - then they will begin to be used more than others.
How do you make partnerships / arrangements that are fair - that can calculate and take into account the short-term gives and takes, and the long-term gives and takes?
Who’s to say if one large piece of the puzzle decides to allow themselves to open up themselves, that it doesn’t cause them to not be as competitive? But does then immediate competitiveness matter in this ecosystem? With some metrics, I’d say yes.
On the positive side for consumers: it will link consumers more quickly into what they’re most likely looking for (either specific services or information, say at least 80% of the time).
Let’s use Google as a start.
Google likes people searching, and that’s where they mostly get revenue (for now).
Now, let’s add Tumblr into it so Tumblr provides curated sections for Google and higher-weighted content by user-produced (assuming “real” people are better determined [and not spambots] on Tumblr so results are good).
And then let’s say that people start using Tumblr’s search box instead of Google’s search box.
If Google becomes a main referrer for curated services and information, and they therefore lose unknown amount of traffic - but perhaps it’s agreed that they’ll be integrated as the ‘search box’ and a funnel that’s used, where a budget is set aside for advertising and for filling in gaps in the ecosystem.
Getting acquired by Google then makes this a moot point.
But getting acquired by Google means Google will have to pay what the Tumblr founders see as future revenues from whatever extensions to business they see.
So assume then there’s no acquisition, but instead an agreement/partnership.
Who draws the boundary line to determine where that individual business is able to innovate into and increase their own revenues and profits? Assume that will be good for the whole ecosystem, as there’d have to be a % of those increased profits going back into the overall ecosystem …
It comes down to a matter of letting go, trusting that the gaps for revenues will be discovered and filled, and that there will be an increase in benefit for the whole ecosystem over time (including your own company).
Then the tough part is figuring out and deciding the initial value of each section. Do you take current growth rate into account? Do you take current revenues into account? Current users? So just get all of the investors and boards to agree (and probably throw out a lot of what they learned in business school), and you’ll have a winning ecosystem, with immense ever-innovating brilliant teams that are looking out for eachother - and where they have the drive still to earn more, and will have their backs being watched.
What do non-independant web top competitors do? Undercut pricing, gain customers/users, improve and copy the best and keep those users? They’ll maintain a segmentation of people online.
It would be cool and fun to then play the game of marketing to steal those specific segmentations into joining the ‘independent web’ ecosystem of companies - where the power of many (the marketing budget) can be harnessed to do so in a powerful way. And you’ll have a whole bunch of brilliant minds feeling like kids on a playground figuring out what next big thing they can do that’ll help everyone who’s aiming for a better future.
Hopefully I’m not spouting too far off by what this post insinuates… it felt like a naturally venting opportunity anyway.
Clearly the people with the most and the most successful independent parts of the web (I would throw you into that group Fred) will benefit the most - not to hold this against Fred in any way, as his decisions for his investment theory has lead him to having successful portfolio companies - that only reenforce his theories. And not to say that this isn’t the best for consumers, but consumers outside of the internet aren’t taken care of very well. Society doesn’t take care of everyone yet, and currently how people struggle to get enough to take care of themselves and their families is this horrible struggle based on fear (that most aren’t aware of, or not aware of how profound of an impact it has).
So if you’re looking to make $1 billion over the next 5 years, okay then. But if you’re looking to make $100 million per year over the next 20 years, then Fred’s theory wins.
Controlled-closed platforms == Short-term benefits of higher profits, highest risk (control control control! bully bully bully! fear fear fear!)
Fred’s “independent web” ecosystem == Long-term benefit and success and sustainability, lowest risk (but yup — you’ll have to share kids!!)
P.S. I want to be apart of this and discussion relating to this, so please find a way to contact and include me. I’d be grateful. :)