Feb 28, 2012

Web 2.0 Business Model

After 16 years battling with Internet (both in technological schemes and business models) I am having a “déjà vu”. In the year 1999 I was reading, as crazy, books and magazines about Internet, by far, Business2.0 magazine  and the books of  John Hagel III : Net Worth  and Net Gain were the best. In the technological side the books about Java and XML programming of Deitel Collection deserves special mention.
I became so obsessed that after finishing my doctorial thesis about the effect of Internet in the tourism sector (what else?) I began to work, to create, to do consultancy for internet companies that, when I was lucky they were related with the tourism sector!
At first hand, I began to see the evolution of Internet technology. I saw the pass from Static HTML pages to Dynamic Pages thanks to Java Script (then a secondary language and nowadays one of the most important if you want to earn a living in Web 2.0) and heavy use of Data Base (then all SQL orientated and now complemented with Not-Only-SQL).
I have also seen the evolution from “my site” to syndication portals, where the focus change from the 3C’s (content, commerce and community) “my site” can offer to the 3C’s I can get or send through Internet from any site which I have a commercial and technological agreement.
Then as today, advances in technology bring new business models. People that say “it’s not the technology is the business model” usually are the same ones that say that high kicks in Martial Arts are not effective. When you are unable to do something or unable to have a clear framework about it your tendency is to dismiss it or to say that it isn’t important.

The fact of the matter is that Business Model and Technological schemes are equally important and it’s very important for continuing the innovation flow to create new business model based on the advanced that new technologies allow. For that reason I teach both, technology schemes and business model, fact that is highly appreciated for my Touristologists (in my dreams!!!)

Obviously, it is equally important not repeat the same business model over and over.

In the year 2000 the blast of the first Internet bubble happened, basically because it appeared a saturation of the same business model:
I create a website, I get a lot of visitors and I can get money from publicity.
This business model is a good one when you are the only one who is using it. When all the webs try to use the same… You don’t have a business model you have a recipe for disaster. The web 1.0 bubble blast wasn’t for bad technology it was for a lack of new and adequate business models.
Nowadays, the same story seems to repeat over and over again. Technology is improving, Cloud Computing (IaaS, Paas, SaaS See the video from this post for more information) Mobile applications with augmented reality and LBS (location Base Services) Big Data methodologies to analyze unstructured information from SnS, blogs… and to help organizations to make better decisions…
BUT again the business model that some of the new websites are using is already dead. It was good at the beginning but when everybody is doing the same is worthless.
I create a website where people share recommendations and experiences, they can group to get a discount by volume and they are able to benefit from flash sales. …
This business model is not bad BUT it is the same over and over!!! As happened with web 1.0 …
1) There are so many doing the same (Not specialization whatsoever)
2) The big gorillas are already there and it is not possible to compete against them.
The time of generic Web 2.0 websites is over. If you don’t get many users the site won’t be competitive enough. To get a lot of users you will need a big investment and even if you are successful, the big gorillas will do something cheaper or better.

As a Touristologist, consultant and entrepreneur I have the wonderful opportunity to see new companies and to me it’s clear if they have a competitive advantage or not.
I’m willing to create new enterprises and I encourage all my Touristologist to do so, but only if me or them can become a winner, otherwise it’s better to wait for the right occasion!
The other day I read a post in twitter “To be an expert in social media you have to show results the rest are just war stories” Not bad!  But better than show specifics results that can be the success of today and the failure of tomorrow, you have to prove that you have a framework that allows you to deal with new information, new websites, new business models, new technological schemes and then take good decisions.
"There is nothing more practical than a good theory." said Kurt Lewin, especially when you apply it in reality and it works! A good theory persists on time and it’s always true. The success of an experiment can depend on the circumstances, change them and you can pass from success to failure in a blink. This can be a case in point… Einstein 1 I Wanna Be Famous 0 

At the end of the day all successful business models in Web 2.0 era must deliver the 3 C’s (Content, Commerce, and Community) in the three ways that, to me, define web 2.0:
Customized: Not all the content, commerce or community just the one that I need for objective and subjective reasons. You also have to take into consideration that the same person can need different things in different circumstances. So, think about different versions of ME. And all that in the place where I am. So, related to my current geo-location.
Syndicated: Getting and sending the 3C’s relevant for your users from any place in Internet BUT aggregated and manageable from your site as a single point of control. This will allow you to get the leadership of the chain of value and get commissions as you develop Your Own Butterfly Strategy
Last but definitely not least, all ready to be improved with the features provided by virtual communities: Recommendations, aggregation, other members (Pro-Am) leading the creation, communications and commercialization of services…
In order to do that you have to create business process that cover not only the company but all the chain of value. Finally, you can combine all this features with a Freemium Business Model
Paul Valery said “Science is a collection of successful recipes” ” and I add AND FRAMEWORKS that help you to deal with reality. For that reason Touristology and Web-Engineering are sciences!
What do you think can be the following slide a tool to assess the business model of a website in the Web 2.0 era?

Maybe you prefer the LAST version...

Can you use it in order to assess the websites that I explain in previous post?
Can you use it in order to assess YOUR future entrepreneurship project?
Still connected…. I didn’t hear no bell!!!


  1. You will be welcome in Touristology and Internet Technologies world, Steve!!!

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