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Good design always benefits from a feedback loop between users and those doing the designing, and the tighter that loop is, the faster a service can learn from and adapt to its users. Google’s newly announced Gmail Labs is clearly an attempt to do this for the popular Webmail service. Google is adding a new tab called “”Labs” that allows users to try out all kinds of new features and then immediately let Gmail developers know what they think. So what, you might be thinking. Isn’t the Gmail service already in beta anyway? In other words, it’s already in testing mode, so what makes this any different?

I don’t think Gmail Labs is that different — it’s just more feedback, faster. Obviously, anyone who uses any Google app or service can send an email to a support address, check an online forum, use something like GetSatisfation, or check support groups or FAQs. But how many users give up before they do all of those things? That’s feedback a designer or developer could use — and eventually, they will probably get it. But the faster it comes in, the faster a service can be smoothed out and made more feature-rich. That’s part of what makes Web services so different from shrink-wrapped software.

It reminds me of Daniel Burka’s presentation from meshU a few weeks ago: In it, the PEI-born Digg designer used one of my favourite metaphors for iterative, evolutionary design — a story that comes from The Whole Earth Catalog many years ago, in which an architect laid out a university, but didn’t put in any sidewalks. Instead, he waited to see where people walked and then paved that. The lesson, in other words, is not to try and anticipate all the ways someone might want to use your service — see how they use it, and then focus on that.

There are many great moments in the Wall Street Journal’s retrospective about the changing of the guard at Microsoft, which describes how former CEO Bill Gates fought with — and, in classic Gates fashion, sarcastically undermined — new CEO and friend Steve Ballmer in front of the troops. But one of the things that jumped out at me (as it did at Zoli Erdos) was the part where the article describes the fate of NetDocs, an attempt by Microsoft to grapple with the freight train that was rushing headlong towards the company (and continues to do so): namely, the advent of Web-enabled Office-style applications.

In one case, two vice presidents clashed over the future of NetDocs, a promising effort to offer software programs such as word processing over the Internet. The issue: Because NetDocs risked cannibalizing sales of Microsoft’s cash-cow Office programs, some executives wanted NetDocs killed.

Messrs. Gates and Ballmer were unable to settle on a plan. First, NetDocs ballooned to a 400-person staff, then it got folded into the Office group in early 2001, where it died.

In other words, Microsoft geared up to deal with the potential threat posed by Web apps, and then at some point decided not to. Obviously, the potential for Office-style Web services was mostly that — potential — rather than reality in the late 1990s. So you could argue that Microsoft didn’t really need to deal with it at the time. But just think about how much further along that understanding curve the company would be now, instead of letting the fear of cannibalization push it away. At some point, the company will have to grab that nettle firmly, and it’s not going to get any easier — if anything, it’s only going to get harder.

Another month, another rant from U2’s longtime manager Paul McGuinness, about how everyone else is to blame for the music industry’s problems, except of course the music industry and the major record labels. Primarily, he blames the Internet service providers — whom he compares to “shoplifters” and says are “rigging the market” — but he also tosses a few grenades at cellphone handset makers, telecom companies and (as far as I can tell) everyone other than your Mom (and he’s keeping a pretty close eye on her too). Seriously — why can’t Bono or the Edge or someone get this guy to sit down and shut up?

McGuinness’s latest rant was a sort of micro version of his speech at the Midem conference in Cannes, in which he said:

“Network operators, in particular, have for too long had a free ride on music — on our clients’ content. It’s time for a new approach — time for ISPs to start taking responsibility for the content they’ve profited from for years.”

This is the music industry’s equivalent of newspaper mogul Sam Zell’s rant about how Google is “stealing our content” and should be forced to pay. And McGuinness thinks that if ISPs don’t cough up some dough, then they should all be forced to do so by the government (something others — including in Canada — have recommended as well). While we’re at it, why not force gun manufacturers to pay a fee to the financial industry because occasionally someone uses one of their products to rob a bank? There is no rational basis for what McGuinness is suggesting, other than the sheer desperation of the music industry.

The same goes for the plan that Jim Griffin has been hired by Warner to try and set up, in which users would pay an “Internet tax” (yes, I realize it doesn’t meet a lot of the technical requirements of a tax, but I’m using the term in the sense of a “forced payment”). The Electronic Frontier Foundation and others have proposed a more voluntary arrangement, in which music fans could pay a monthly fee for the right to download at will, in much the same way that the radio industry was legalized through a compulsory licencing system. That’s something that might be worth talking about — but not with Paul McGuinness.

Props to Michael Geist for holding the government’s feet to the fire for editing the Industry Minister’s Wikipedia entry. Not just because it’s unseemly for agents of the current administration (or any administration, for that matter) to be editing Wikipedia entries directly, but also because what they added was so, well… lame. I can understand removing controversial comments about whether Prentice delayed the proposed copyright legislation as a result of public pressure (which Michael was instrumental in helping to orchestrate). Some of what was written arguably breached the site’s “neutral point of view” requirements. But at the same time, adding phrases like “he is widely praised in both political and private circles, as he personifies experience, confidence and competence, ability and capability” not only breaches those rules, but breaches the nausea rule as well. Lame, lame, lame.

When I first heard about TechCrunch’s new Elevator Pitches site (when a post from Erick Schonfeld popped up in FriendFeed, if you must know), it sounded kind of familiar. A site where entrepreneurs can upload 60-second “elevator pitches” about their companies — so-called because they’re supposed to mimic a pitch you would make to a VC if you met him or her in the elevator? And then it came to me: that’s the exact same model that former Marketwatch columnist-turned-entrepreneur Bambi Francisco uses for her site, Vator.tv.

Vator — which Bambi originally tried to run while still working at Marketwatch, until concerns about a conflict of interest led her to resign — has raised a pile of money from a number of investors, including Facebook backer and PayPal founder Peter Thiel, as well as MySpace founder Richard Rosenblatt, and recently raised a bunch more. While Vator has elements that TechCrunch’s offering doesn’t — it also has interviews with venture capitalists and other newsmakers — they are very similar. Is there room for more than one elevator-pitch site?

As for which is better, that’s a tough one. Vator has — well, it has Bambi, and the equally attractive and smart Reena Jadhav, and has built up a fairly large library of content (although the site could use a redesign). TechCrunch, meanwhile, is slick looking and has already gotten some interesting pitches up; but I’m still not sure about using the “cartoonization” of BeFunky.com for the videos. For what it’s worth, Erick Schonfeld says that the new TechCrunch site isn’t aimed at Vator.

One of the things that often comes up when talking about Web-based startups is the debate over whether you should just launch your company or service and see whether people want it, or whether you should wait until you’ve established a sound business model first. One of the most obvious examples of a company that chose the former, of course, is Google. I remember someone telling me that the first two venture funds that invested in the company were scared to death, because Google clearly had no idea how it was going to make money.

That seemed to work out pretty well, all things considered, given Google’s $180-billion market cap. And Mike Masnick’s post at Techdirt about a Vanity Fair retrospective reminded me that it isn’t just Google: the Internet itself didn’t have a business model when it first started — and that fact, ironically, is what arguably made it so valuable that hundreds of companies are making billions of dollars from it now. As the Vanity Fair article makes fairly clear, the CERN research center came close to filing a patent on the Web and trying to control it, something that would undoubtedly have been a disaster (as one commenter at Techdirt notes, the creator of the Gopher protocol chose that path).

Whether as a result of persuasive argument from Sir Tim Berners-Lee and his colleagues, or simply because CERN couldn’t see the commercial applications of such a system — or because the research center was about research — the early building blocks of the Web remained open, and thereby helped to create a platform whose value is effectively unmeasurable, but is certainly well into the billions of dollars. The same goes for AT&T, which literally didn’t see the value of a packet-switching system, and thereby missed an opportunity to be involved at ground level in the development of the Internet. Thank God for that.

Some choice quotes:

— “I get credit for a lot of things I didn’t do. I just did a little piece on packet switching and I get blamed for the whole goddamned Internet, you know?” (Paul Baran, who developed packet switching and later invented the airport metal detector)

— “The culture was one of: You find a good scientist. Fund him. Leave him alone. Don’t over-manage.” (Leonard Kleinrock, networking pioneer)

— “I went over to Charlie Herzfeld’s office and told him about it. And he pretty much instantly made a budget change within his agency and took a million dollars away from one of his other offices and gave it to me to get started. It took about 20 minutes.” (Robert Taylor recalls when he got the idea for Arpanet)

Continue reading “The early Internet: No business model”

Catherine Holahan has a piece in Business Week about eBay and the decline of the company’s traditional auction business — or rather, the increasing growth of its non-auction “Buy It Now” business, which she says currently generates almost half of the company’s revenue. Nick Carr (always eager to pronounce something dead) asks whether eBay was “just a fad.” Some fad: eBay has a market cap of about $40-billion and year-over-year quarterly revenue growth of about 24 per cent. But it’s certainly worth asking whether its business model is evolving toward something non-auction based.

If anything was a fad, it was probably the idea that the eBay auction model could be applied to almost anything — that online auctions could solve virtually any problem, from disposing of human organs to getting rid of all your life’s possessions after a divorce. In that sense, eBay was seen as a giant hammer, and everything started looking like a nail. But it’s been known for some time that the auction model works for some things and doesn’t work for other things. And if you think about it, one of the main downsides to the auction model — as my friend Mark Evans notes — is that it can be a gigantic pain in the ass.

The auction — whether it’s the English style (used by Sotheby’s, etc.) or the Dutch style (known as a “reverse auction” because the price starts high and comes down) — is a method that is best used for goods that are scarce and for which there is plenty of demand, such as paintings by the Group of Seven or tulip bulbs in the 17th century. Some products on eBay might fall into that category, but certainly not every single one. And the other requirement for an auction model is time — something many prospective eBay buyers don’t have a lot of.

Does the increasing interest in the Buy It Now option mean the online auction is dead? Hardly. But not everything is a nail.

So Mixx — a Digg-like social news app — has been bragging to anyone who will listen that its traffic has doubled to a million uniques a month in May, and it is getting lots of love from its mainstream-media partners, including USA Today, Los Angeles Times, the New York Times, Reuters and Slate. But is a million uniques good or bad? That depends on who you ask (or whom, if you’re going to get all grammatical on me). Marshall Kirkpatrick at Read/Write Web isn’t impressed, since that’s a lot less than the 26 million uniques that Digg gets every month. Erick Schonfeld at TechCrunch seems a little more impressed, and Nick O’Neill over at the Social Times blog says that it’s nothing to sneeze at.

Nick has a point when he says that 200-per-cent growth in a single month is pretty impressive, although it’s worth noting that such growth rates aren’t unheard of when a site is coming from a small base. My ability to bench-press 350 pounds increased by 200 per cent last month as well, but that’s because I was able to do three of them instead of just one. Marshall’s point seems to be that Mixx should be seeing even more growth given some of the top-tier names that are adding Mixx links to their news stories. As the Washington Post notes, many of those connections come from Mixx founder Chris McGill’s former ties to Yahoo and USA Today (McGill has responded to Marshall’s post).

Drew Curtis, the founder of Fark, makes an interesting point in the Washington Post story: he says he doesn’t think social-news services such as Digg and Mixx are a great fit with mainstream media sites. “Most people don’t bother with them because they’re either lazy or they just don’t care,” he says. A little harsh, but pretty close to the truth, I would argue. Mixx may have no trouble attracting social-news junkies — although I find it cluttered and don’t see much in the way of community there (something Tony Hung mentions as well) — but will many of those come from the links at CNN or USA Today? I’m not so sure.

Some details of the back-and-forth between Microsoft and Yahoo have come to light as a result of the unsealing of documents in a shareholder lawsuit against the battered Internet giant, as Eric Savitz details at Tech Trader Daily. One of my favourite moments is where it emerges that Microsoft offered Yahoo a whopping $40 a share back in January of last year, but then CEO Terry Semel turned the deal down. Nice call, Terry — that’s right up there with taking a pass on buying Google in 2002. Of course, Terry still has most of his $71-million in options or whatever, so he’s probably doing OK. Other shareholders, not so much.

In a nutshell, the complaint argues that Yahoo co-founder and CEO Jerry Yang and the board of directors deliberately created blockades aimed at resisting Microsoft’s offer, rather than taking a deal that was clearly the best one available — and arguably fully valued as well. One of the big sources of criticism is the fact that Yahoo planned to sweeten its severance package system so as to create a giant poison pill, one that would have added billions in extra costs should Microsoft have been successful. Microsoft supremo Steve Ballmer cited similar fears as one of the main reasons he withdrew the takeover bid.

I don’t want to get into a whole song-and-dance about copyright and the merits of the “fair use” principle (for that, you can see this post and related posts), but I thought it was interesting to read about the response by cartoonist Jim Davis — creator of the Garfield comic strip and the associated merchandising empire — to a site called Garfield Minus Garfield, where panels from the original strip are posted with the central character removed. According to the New York Times story about the site, Davis thinks it is fascinating:

“Davis, the cartoonist who created “Garfield,” calls himself an occasional reader of the site, which he calls “fascinating.” He says he is flattered rather than peeved by the imitation. “Some of them really work, and some of them work better,” Mr. Davis said.

In fact, the Times goes on to say that the cartoonist, who has been drawing Garfield for about 30 years, found that the site (which was created by Dan Walsh of Dublin) prompted him to take a different look at his body of work. In a Washington Post piece from a couple of months ago, Davis thanked Walsh for doing what he did. Obviously, he has become a gazillionaire from Garfield and can afford to be magnanimous, but it’s still a refreshing response in an age where artists like Prince are sending out C&D letters by the boat-load trying to lock down their content and prevent anyone from altering or using it.

I don’t do this a lot, but I just thought I would point out for those who might be interested that the Globe and Mail — which happens to be my employer — has removed the pay wall that used to block access to a lot of the paper’s online content. All of the columnists are now free to all readers, as are the horoscope and the crossword puzzle (which, as most journalists know, are the features that most readers really want). As the announcement on the Globe’s home page describes it, this means that all of the paper’s columnists “can join the fray and add their talented voices to the freewheeling conversations of the Internet era.”

Why did the paper decide to drop the wall? Without going into too much detail, my understanding is that we did it for the same reason the New York Times did: while the Insider Edition (as we called it) made money for the paper, the number of subscribers who were opting to pay for that content wasn’t growing, or at least wasn’t growing quickly enough to make it a very attractive business. Eventually, I think, senior editors decided that we would be a lot better off opening the doors and allowing people to link to our pay-walled content.

I haven’t seen recent numbers, but within a few months of the NYT dropping its wall, traffic to the site appeared to have surged. Whether the Times has been able to monetize all of that new traffic — and thus make up for the lack of a pay wall — is something I don’t know. But at least now they have a chance to grow that instead of managing what had become a slow or no-growth business, and so do we (the Globe continues to have a subscription product online, now known as Globe Plus, which includes the finance site GlobeInvestorGold and an “e-Edition” of the paper; access to the archives will also still cost a fee).

It’s interesting to look at some of the more than 180 comments that have been posted on the story since it went up first thing this morning: while most are of the “thank God you finally saw the light” variety, there are some who are less than enthused. One commenter says:

“I’ve long since found online alternatives to the Globe’s old ‘insider’ features. You can’t shut us out for a few years and then expect us to come back just because it’s free. You’re not the only game in town, and you’re going to have to offer us something genuinely new and original to get us to come back on a regular basis.”

Some commenters wish that we would go even further.

The Twitter guys have been getting a lot of flak over the past few months (and rightly so, in many cases) for the unreliability of their app. But I think they should get some props for opening up and talking about what’s going on over there. Granted, this newfound desire to engage in dialogue (or damage control) should have come a lot earlier, at least in my opinion, but at least they are doing it now. They’ve even managed to foil Mike Arrington’s attempt to start a late-weekend bitchmeme by asking some rather pointed questions of the company.

Although they kind of dance around the specifics a little in their responses, Jack Dorsey and Biz Stone of Twitter seem to more or less confirm many of Mike’s suspicions about their architecture — they admit, for example, that the company is restructuring the way that the system functions, and have brought in some big brains in order to do so:

“We are currently taking a new approach to the way Twitter functions technically with the help of a recently enhanced staff of amazing systems engineers formerly of Google, IBM, and other high-profile technology companies added to our core team.”

I’m not a database guy or a system analyst, but it seems pretty obvious that the structure Twitter has isn’t capable of keeping up with the company’s growth, and may not have been designed properly in the first place to support what has become a gigantic multi-user chat service. In one of the posts on the Twitter dev blog, the company effectively admitted as much. Is that former chief technologist Blaine Cook’s fault? Who knows. But it has to change, and quickly, or Twitter could wind up losing much of the momentum is has gained so far (Michael Krigsman has some good advice on how to proceed).

I was talking with a friend of mine (who is a systems and database expert) about Twitter on the weekend, and he made the point that while startups shouldn’t try to forecast all the ways in which people might use their service — a point that Daniel Burka of Digg made during his recent design presentation at meshU — they still need to pick the right architecture early, or they will be in for a world of pain. In other words, remaining flexible is a good way to approach user-interface design, but not necessarily a good way to approach the design of the actual system structure that makes your service work.

This is one for the irony file, right up there with the news that Napster is trying to remake itself (a third time) as a no-DRM download service, about half a decade too late. It seems that Metallica — the band that, more than any other, became known for its opposition to Napster and everything that the Web stood for — just launched a new site called Mission Metallica, which offers fans all kinds of special features, including the ability to hear tracks from the new album before it comes out. The site was developed by Ethan Kaplan, the head of technology at Warner Brothers Records, and his team there.

Ethan, as some of you may recall, was one of the “keynote conversations” at mesh 2008 a couple of weeks ago, where I talked with him about the future of music and the Web — and he talked about the idea that music is no longer primarily about selling an artifact (i.e., a plastic disc) but is more about the experience (if you want to read more about mesh, including Ethan’s keynote, check the links here and also this post). Not long after leaving Toronto, Ethan said he was working on the launch of a really major site and a few days later the record company launched Mission Metallica, and Ethan posted a message to Twitter saying:

For those that read my keynote coverage: Mission Metallica is one of the things along the lines of “experience” vs. “artifact”

Fans who sign up for Mission Metallica (and presumably are added to some sort of mailing list) get access to a host of special features, including video of the band writing and recording the band’s ninth album — which is due out in the fall — as well as what are described as “riffs and excerpts” from the album, new and archived photos of the band in the studio, “unique live tracks,” commentary from the band members and the chance to win tickets and passes to every show. All of this is free, according to the release. As the band describes it in a post at Metallica.com, it is:

“our way to bring you in and share with you not only the writing and recording process that’s been taking place in the last 18 months, but also what’s ahead between now and when the record is in your hands. And instead of waiting and releasing some “making of the record” additional DVD in a bullshit deluxe package when the album comes out, we figured why not let you be part of it up front?”

If you sign up for the Platinum level membership, you get: early access to the album on midnight of the release date, with a CD or vinyl album, along with high-quality (320kbps) mp3 files of every track, as well as the ability to download video clips of entire live shows, contests and so on. The high-quality downloads can be bought for $11.99, the CD plus the downloads is $19.99, the downloads plus the Platinum package is $24.99 and the CD plus the downloads plus the Platinum features is $32.99. If that’s still not enough, you can get a limited-edition package of five LPs, along with the CD, the high-quality downloads, a special lithograph and the Platinum features — all for just $124.99.

This tiered approach is similar to that taken by Nine Inch Nails frontman and mastermind Trent Reznor, who offered his recent Ghosts I-IV album as a series of downloads-plus-CD packages, along with a deluxe boxed set that included a Blu-Ray DVD, a CD, autographed items and other features for $300. Reznor later said that he sold 2,500 of the special sets, pulling in about $750,000 — almost half of the total $1.6-million he made on the album. Take that, Radiohead.

So Twitter has been up and down more than a (insert not-safe-for-work metaphor here) over the past few months, senior technology managers have suddenly departed, and fingers of blame have been pointed at the service’s architecture, including the use of Ruby on Rails. But the real problem, it seems, is Robert Scoble. Well, maybe not Scoble specifically, but “super users” like him who have tens of thousands of followers and follow tens of thousands of people (Leo Laporte of This Week in Tech is another one). On the Twitter development blog, Alex Payne says:

“The events that hit our system the hardest are generally when “popular” users – that is, users with large numbers of followers and people they’re following – perform a number of actions in rapid succession.”

The Scobleizer isn’t taking all this well, however. On FriendFeed (which seems to be his new social network of choice), he says that Twitter blaming him is “bulls**t,” and that the service was having problems long before he came along with his thousands of friends:

FriendFeed is 1000 times more reliable. Twitter was going down before I even got popular on the service. Their architecture has always sucked and everyone knows it. They’ve never been able to get a handle on the quality of their service and now it looks like they are blaming their top users.

To be fair, the comments from Alex Payne don’t seem to be pointing the finger of blame. It sounds like a simple explanation of why the system goes down so much. Although he says Ruby isn’t to blame, it seems fairly obvious that the service’s architecture has had “scaling” problems, where handling hundreds of thousands of events ties it in knots. As MG Siegler notes in the VentureBeat post, Twitter has to effectively rebuild its system while it is still running — something that other companies have described as “repairing an airplane in mid-air.”

Maybe the $15-million that the company is said to have raised from Spark Capital and other venture funds will help with that task. So should Twitter limit the number of friends you can have, the way Facebook does? Some people seem to think they should.

There seems to be a theme developing around the topic of comments, whether they appear on a blog or on FriendFeed. It sort of started with a conversation about the ongoing issue of fragmentation — in which comments appear on blog posts but then also appear at FriendFeed (and in multiple places on FriendFeed, as commenters on my post noted). Then Hank Williams (no, not that Hank Williams) wrote a post about how comments might even be considered copyrightable content, and Josh Catone wrote one at Read/Write Web about comment ownership — at which point, Steven “Winextra” Hodson launched into one of his trademark rants about how comments are not content.

I’m going to have to disagree with Steven on this one, however, at least from a legal standpoint (although I am not a lawyer, and don’t even play one on TV). As some of the commenters on his post at FriendFeed note, comments on blogs meet many of the tests that would likely be required to qualify as copyrighted content. Whether anyone would be dumb enough — or stubborn enough — to actually pursue such a claim is a separate question, of course. Still, as Mark Trapp points out, most mainstream media sites have a “terms of use” policy that says you effectively allow the site to use your comments, which they wouldn’t have to do if they weren’t legally required to.

I think Steven’s point was more that comments shouldn’t be thought of as copyrighted content, and that they should function more like a conversation in a bar or on a street corner — and I would agree. Legally though, I’m pretty sure they would be considered published content, and are therefore “owned” by their creator, unless he or she gives up that right to the blog or service that hosts them. So could Robert Scoble sue Rob La Gesse for deleting his from FriendFeed?

Update:

Michael Beck points out (on FriendFeed) that these questions have come up before, and points to a discussion here, and also here and here. Meanwhile, Daniel Ha of Disqus — the comment aggregation system I use here — has drawn up a prototype for a “commenters’ bill of rights.”