I love this post
from Fred re
Caterina's, on syndication and how bus dev is different compared to 1.0. "
Think of the time and energy that went into these deals. And to get 0.1% of the users to take up a service is so deflating."
Although as per the classic definition of the entrepreneur from french - which i remember getting taught one night in 2nd year entrepreneurial finance class - the gist of it being (even in this post google world) the entrepreneur will try and create
something from nothing, and believe they can beat the market (dumb suits) by doing a deal that costs nothing, incurs little time waste, and financially pays huge dividends. The textbook said match the resource allocation to the opportunity size. So dont spend huge amounts of time on small deals. And if you can use automated technology to build high quantity, low cost customer acquisition for example, beautiful.
I also remember a great scene in Michael Wolff's epoch defining Burn Rate when 2 bus dev guys are trying to smell off who is the decision maker and cheque signer in the room vs who are the underlings that have no impact on the deal but need to attend meetings to "synergise". (while the protagonist in the book likes to spend times in art galleries contemplating the insanity of it all) But as Caterina says who wants to be "d
rinking stale coffee in windowless conference rooms" - which is even easier to say once u have successfully done it once and sold your company - kudos : You dont have to anymore. You have a choice. And we all have a degree of choice. Depending on how smart we are. In executing, and timing.
Thats why the new technology at least gives new types of choices, and a form of arbitrage against intermediate forces like white collar bureaucracy. With these API's I dont need someone elses marketing department to support my pitch, ill just jack the Matrix into MySpace, Facebook, YouTube, Flickr, and all the other floating ecosystems out there.
More engineers please Mr Ogilvy.Earlier today I had a parallel thought about what happened when new online businesses were setup downunder 1997-9 (and im thinking about the successful ones here); You used to have to hire corporate comms guys to do press releases; Have an above the line agency for a couple $m advertising (with only 2% allocated online)
And then as product/bus dev guy you did some
"distribution" deals to get your product out there. Average deal time was 6 months, so u had alot of time in bars and cafes. (unless u were paying ala how ebay did so damn well, they paid all distribution owners unlimited CPC's for a decade) The metrics and technology has changed.
While some of these strategies worked, I think it was more like the person who pays money to a hypnotist to give up smoking and therefore statistically has a much higher chance of giving up smoking. "
See it's fact !" says the hypnotist. In this case you'd spend your mill$ and do your networking and deals and the hardwork would pay off somewhere. You wanted your product to succeed so you did whatever you could, but it was very ineffective. (and also remember the internet audience was exponentially smaller and was own expensive narrowband)
But it wasnt necessarily the deals or money that created success for the lucky few companies. One by one consumers trialled these services. And like a movie or book, told their friends it worked, and then some crafty advertiser figured out it was a good sales channel, and then their competitors did and so on. Now Saturday Newspaper classifieds are almost dead.
The New networking in this little new web of ours, happens alot in blogs and the related sync-d on and offline world. I met some blog readers the other night when I presented and couldnt believe they were real people. Most of my time now I work on real stuff (virtually), barely take time wasting phone calls or skype messages : With the end result being far superior output and more time to enjoy that I dont confuse with work. (except when something like blogging has "value add" network effect benefits that are vhard to measure eg What is the NPV of my flickrstream ? ;)
Fred and Caterina's thesis also means
the new bus dev is the algorithm. (just as the newspaper editor has found and is finding out since Google/Yahoo News, digg etc came along) The algorithm is now moving from the editorial department to marketing ! Tomorrow's creative director is sure looking different.
And instead of an MBA or FMCG marketer, the robots are going to need to be instructed by product technicians. Bang up an API, chuck in some RSS and boys and girls we are going to the races. Oh, I would just like more engineers , or Yelp parties - great shots SFYahooGuy :) I havent given up smoking though.
A VC : 'The bottom line is that web 2.0 offers a new way to get integration with leading web services and
you don't have to waste your time and the time of other busy people trying to craft deals that will probably work out badly anyway. As Caterina says, "Much, much better this way!"'
Caterina : "
Traditional business development meant spending a lot of money on dry cleaning, animating your powerpoint, drinking stale coffee in windowless conference rooms and scouring the thesaurus looking for synonyms for "synergy". Not to mention trying to get hopelessly overbooked people to return your email. And then after the deal was done, squabbling over who dealt with the customer service. Much, much better this way!"
