Is the phenomena known as “Social Software” ready to be decoupled, or opened up? I’ll go on record saying “No”. Why? Well, for one, because everyone else is saying yes, and I like to be different, but more importantly, because “The Theory” leads me to believe that.
I could be wrong, and that’s OK. I may even be trying to apply the wrong theory to this particular phenomena. I want to inspire thought and conversation here.
One reason I may be wrong, is that software is much better understood then it was just a few years ago, and is behaving much more like modeling-clay in the concept car studio, (thanks in part to better software management and thinkers like [Joel Spolsky] and others) so a software capability may be able to decouple parts of the value chain while leaving other parts available for optimization.
So give this a read and join the conversation in the Comments section at the bottom.
(this should roll over the screen in Star Wars perspective fashion along with some tympani music)
We’re living in a brief period of time, where something is particularly new, scintillating and possibly rewarding. Groups of people have learned to use the Internet to communicate remotely with one another and to do it in a variety of manners which have collectively become known as “Social Media”.
Blogs have popped up to discuss it, software has been written to enable it, groups have researched it and people from all walks of life have gravitated towards it to exploit it for business and pleasure. It’s becoming a marketing channel unto itself where , a practical way to affordably interact with people not in your immediate proximity, and according to some, for people to generally waste a great deal of time, which people tend to be quite good at.[Google] has launched a capability into the marketplace called [Open Social] which promises to level the playing field by offering a standardized way of interfacing with parts of the system. It’s made an “Open Standard” which developers can all use which may lead to more and more people writing software which will live under their sphere of influence.
Are we ready for that; that’s the question.
A LITTLE THEORY:
OK, so what’s this “Theory” and why is Joe poo-pooing the latest industry darling?
I’ll explain, but first off, how about a show of hands from everyone who’s read at least one of [Clay Christensen]’s books… great, that’s not bad; smart group.
Well, for the rest of you, and for those of you who read that stuff and just didn’t get it, I’ll do a quick run down of a couple of Clay’s theories. I’m not going go on here about how incredibly smart Clay is, but just to say I had the pleasure of having WR Hambrecht as one of my anchor clients years ago and was lucky enough to have some of his mojo rub off on me.
The Theory: Offerings (I’ll use the term “Offering” to describe products, services, or a blur of both of them) typically move through their life cycle from being “not good enough” to “too good for the average user to appreciate”. As they move along, they usually do this through a process called improvement.
Users have a set of needs that they hire a product to do. When a product doesn’t meet these needs, the Users has a couple choices: Pay more for a better product, or suffer with an inferior set of capabilities. Usually, unless that user is particularly sophisticated, they stick with what isn’t good enough and welcome the Offering’s “improvements”.
At this stage the Offering isn’t great, and the User isn’t very happy. This is really o.k., because it primes the pump for improvement. It forces the provider of the offering to work its pants off to get better before it starves &/or goes broke. This mandate (survival) forces it to make it’s improvements at any cost, including that of ignoring any standards or the need to cleanly integrate with any of it’s associated components. I’m not going to go into this, though I give practical examples in my speaking engagements, and if you buy Clays books you’ll get plenty.
Suffice it to say, when an Offering isn’t good enough, it pushes its way upstream by designing and engineering whatever it needs to. The only way it can really push the envelope is to optimize itself in a proprietary manner. This is fairly expensive, because everything in the offering has to be hand created – you can’t be proprietary and use generic parts at the same thing. The good thing, the customer is willing to pay a premium for these offerings at this stage, because the potential is so exciting, and the proprietary architecture usually makes them highly optimized, and really special – think of Apple vs. PC in the early days of personal computers.
What happens next is quite interesting. The Offering keeps moving upmarket and eventually moves North of what the customer needs. At that point the average customer isn’t willing to pay more for new features they’ll never use anyway*, and the really sophisticated users have what they need, but their wants elevate; they want customization, speed, reconfigurability.
At this point, it’s no longer profitable to do everything themselves; no one’s paying more for the improvements (this by the way, is what’s called becoming a “commodity”), so the business has to look elsewhere for leverage – to modularity (and other OE techniques).
The big takeaway here is that the converse of this is just as true: if you modularize too early, you sacrifice the ability to push the envelope. It’s why concept cars are designed in clay, and not built on the factory floor… The optimization of the system is what’s important when that system is still not good enough.
WOW, ENOUGH THEORY:
So, where does Social Media and Open Social fit into this?
I think, based on this theory, and my reading of the market, that Social Media is not good enough yet, and is therefore too premature to benefit from open standards. Host applications (like FaceBook and Pownce and others) need to keep their systems (called “Containers” in the field) highly optimized so all these busy developers out in the wild can continue writing add-ons that are tightly coupled to their specific set of capabilities.
Now, it’s possible that the Containers are in fact good enough and it’s time for them to standardize at least some segment of their interfaces so that the Subsystems (the Widgets, or whatever you want to call them) can get more proprietary and drive more value.
Now, there’s one aspect of the The Theory (he-re we go again) I didn’t mention, and that’s that if a market entrant (in this case Open Social) as attacking a segment of the incumbents business model which is important enough, the incumbent will fight, and usually win, especially if they have momentum. And, if it’s not perceived as valuable enough and the incumbent let’s it go, they usually get eaten alive as the market entrant increases the scope of their new offering (which, yes, eventually becomes commoditized and gets disrupted by something else)
Either way, it’s a great position for Google to be in as it drives the decoupling of other systems which will be built on their framework and is just bound to drive value in a more egalitarian fashion. If it doesn’t drive a massive API battle so there are multiple competing specs it may make life easier on a few developers, but I’m not going to rest my chips on a square saying we’ve got it all figured out so soon.
*based on a macroeconomic principle that goes something along the lines of “the marginal value of a product or service adjusts as a direct reflection of the marginal utility”
I don’t know that I agree with you, and here’s why. In the case where a company is looking to componentize one of its Offerings, I think the case that you describe makes some sense. For instance, if Herman Miller were to break down Babble http://www.bfionline.com/babble/ into components right now, it might be too early. There is not a critical mass of Babble users right now, and this might make it harder on Herman Miller to support and co-evolve the components AND the original Offering.
In the case of software, opening up a system is what enables compontentized applications (one of the things people buzz about when they put on their Web 2.0 hats.) In the case of Open Social, Google is introducing a way for developers to have a relatively common way of working with more than one host app. A company like Plaxo can repurpose their Offering for integration into multiple services rather than making a MySpace Offering and a Facebook Offering ands Orkut Offering, etc.
Seems like most software in the current web landscape is already in the “reusable componet” state. If we’re talking about truly modular data or functions that can snap into multiple containers, the optimization that Facebook achieves through a proprietary system isn’t probably that great. I would expect Facebook to just add OpenSocial to what they currently offer. Of course there are specific non-transportable elements to Facebook, that make up their offering, where optimization will create what value Facebook provides to its community.
In Christensen’s examples there is a literal cost in cash money to the consumer. So an ink jet printer beats a laser printer because it’s cheaper and it’s pretty good. In the world of social networking, where I’ll admit I’m a newbie, there’s no dollar cost, just a time cost (or time suck, as some might say). All these sites are free to the users, and hope to tag on an advertising model to monetize. Right now they’re in the burn rate phase. They’ve got a little organic revenue, but they need to burn invested capital to get to a business and revenue model that is sustainable. The question here is, who actually gets to survival (or a buy out). Google has the advantage that they print money with adsense, the other players aren’t yet sustainable.
I think the more interesting question is, do users want want OpenSocial implies? What is the user experience of membership in multiple social networks? Is that good, or is it just information overload and confusing. It’s certainly possible to connect this stuff up and share data and a set of modules, but just like account aggregation in the financial services space — it’s a good theory, it’s just that the users weren’t interested.
[…] Great wrap up of my presentation with Chris Brogan. Is social media ready for open social? interesting perspective. […]