"Crystallized Attention"

2005-04-19T23:26:00-07:00

The digerati are all abuzz about Fred Wilson's recent seed funding for del.icio.us, the popular social bookmarking/tagging service. What's especially interesting is that Fred himself concedes he has no real idea of what the business plan for his new investment might be (see Funding Del.icio.us):

The question everyone asks is "what is the business model". To be completely and totally honest, we don't yet know. This was a seed investment and none of the investors put up very much capital. Joshua retained complete control of the service and is going to focus on making it better. That is all anyone wants to see happen right now. In time it will become clear what the business model should be. And there are a number of them to choose from for sure.

Now, this has attracted some snarkiness and derision from those of us who remember the dot-com boom and the days the hype subsequently died. But I think Fred Wilson is acting smart here. It's hardly a stretch to see that del.icio.us is a wonderful nimble platform for people to build things and there are some great web technologies at work behind the scenes too. It is becoming more feasible to work within a browser and choose sites like you would normally evaluate software packages. So, it's easy to see that Del.icio.us is likely to become part of the future user's toolset (like word processors and such today) and I think Fred's seed investment is mainly to ensure that when that big thing happens he has VIP access.

I found this entry of Seth Goldstein Media Futures: Alchemy to have an excellent analysis of why sites like del.icio.us might turn out to be more than just toys in the long run (it's also where I got the quote in the title about del.icio.us). Seth seems to be a very smart guy, and he is the person who introduced Joshua Schachter, the creator of del.icio.us to Fred Wilson:

This is consistent with what I see happening online, where meta-data (information about information) is creating significant economic value, from the many millions of Google and Overture keywords to the emerging class of Flickr, Del.icio.us and other tag-driven systems. Our browsing, clicking, searching and tagging behavior are the base metals which alchemists like Josh are turning into precious datastores.

I would underscore that what we are seeing here is a change in the Internet model of consumers. In the early days, the idea was that advertising revenue would drive the business and consumers were valued as passive eyeballs, essentially a broadcast model in a new medium. But as we have seen in Wikipedia, with Flickr, and with Del.icio.us, there is real stickiness in sites that let users create, moderate, and control the content. And there is a real market for services that allow people to manage the metadata for things in their lives without imposing extra restrictions. So, Flickr makes photo sharing and classification easy, but more importantly, it makes it fun. Ditto with del.icio.us for bookmarks. Yes, eyeballs are still important, but I think part of the Web2.0 experience is valuing the brains of the user as well.

Of course, Seth has noted all this too and suggests "it would seem that there is simply no way to create long term sustainable value online without engaging consumers in the act of media production." And yet, he notes that even the seemingly open players like Yahoo and Google are creating their own complementary suites of products so that users are limited to creating only within a particular company's sites. Will this turn the web into another AOL vs. Prodigy situation, or will there be independent and cross-provider toolsets for us to use? I suppose time will tell.

Nimble Code: "Crystallized Attention"

"Crystallized Attention"