November 02, 2005

Bubblegeneration on Ning

Umair Haque has problems with my suggestions for Ning :

Not a bad idea, but there are a few problems with this strategy.

1) The market is not huge

2) There are many (many) substitutes, most of which are open-source (=free)

3) Most of the end-user markets are winner-take-all markets; ie, there's not a huge gap for a Metafilter, in, say, finance - Mefi's already got it covered.

4) But the biggie is really that Ning is a layer commoditizer. Ning's bet is esentially the peer production/cheap coordination bet - that the core atomizes, and so value shifts to the edges of the value chain, and Ning will be able to grab a share (somehow). Positioning as middleware contradicts these economics.

OK, some good points. But I think they're wrong.

1) Cast your mind back to 1995 and imagine someone assessing the market for blog-hosting who says : "this won't be important, the number of journalists is tiny."

The existance of a new price-point for publishing created a much bigger market because a larger number of people got involved. Remember that my post was a response to the question "what (in web 2.0) is disruptive?" and I argued we should stick to Christensen's notion. In these cases "disruptive innovations" make something available for the first time, to people outside the traditional market.

Of course, building little web-applications is probably not as large a market as building little web-based opinion columns, but the size is yet to be tested.

Here are some people who might be building applications if the price was right :

  • Anyone who uses a spreadsheet. These were once specialist tools for accountants and financial analysts. Now spreadsheets are probably the most widely produced "applications" written.

  • Anyone who has an idea for a "mash-up" of two pieces of data from other sites. Mash-ups now range from custom Greasemonkey scripts to Ning apps. to SPARQL queries on RDF databases to cutting and pasting AdSense ads or the Iraq Body Count box into their blog's gutter. People understand this principle, even when they don't understand how to make it work. Easy, stereotypical application development would help these people.

  • Anyone who wants "customized" applications / services on their site. At the moment, you can use out of the box blogging software, wikis, discussion forums etc. Or you can pay someone to produce bespoke applications. There's still a large gulf in between. The small business who loves the existing out-of-the-box customer feedback form, but would just like to add one more field which allowed their customer to add an invoice number. Suddenly the small developer needs to charge another 10,000 dollars for another week's work. What if that sort of customization could be brought down to an hour's extra work in a higher-level configuration language?

2) Against free software. There are two costs to developing applications : one is the cost of paying Microsoft (or Sun or IBM) for the tools. The other is the time to understand the tools and actually develop the application. Of the two, the second is usually more serious. And free software doesn't offer any improvement here. There are libraries and toolkits and languages available for developers, but they work at much the same level as the commercial ones. And often the commercial tools are slicker and build the product with less friction than the free ones.

What I'm hoping for from Ning (or similar web-development platform) is something that can produce an order of magnitude efficiency for producing "stereotypical" applications. Free-software is not offering those savings in development time.

3) Once again, I beg to differ. One of the strange aspects of the new web is that lots of old ideas are being re-invented. Is vbulletin somehow less susceptible to competition by something better than Hotmail was to GMail?

4) Good point, in the sense that it looks at first glance as if Ning is only aimed at the very edge of the network, the individual user. What I was suggesting was that Ning didn't exactly drop this emphasis, but supplemented it by looking at the nearly-edge; created a tool for small ISVs and web-development agencies to more cheaply build customized, stereotypical applications for their customers. This is certainly pushing things further out than the current tools do, but not looking to final "end users".

Postscript on names : Oh, and it's not like web 1.0 names were all that. Seth Godin (and others in marketing) have the opinion that it's more important for the name to be unique and findable. "Generic" names are hated., I can't help feeling succeeded despite the name. Or maybe it's a kind of "fuck you, we're impossible to remember but we don't care" name. I don't use it, anyway.
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