Web 2.0 Runs on Focal Points
I’m borrowing the term focal point from game theory. But my point is web 2.0 companies don’t become interesting until their community becomes a focal point for an important segment of society.
It’s like being a watering hole. You’re the place to be, a gathering point. People can gather anywhere, but around the watering hole seems to be a natural place. And once that trend starts, it self perpetuates for a while.
Now watering holes are pretty good focal points, especially if:
1. They are the only source of water around
2. They are communal/public property
3. Water remains highly useful
Now point 3 seems a little silly but bear with me. I think that successful Web 2.0 websites are a lot like watering holes. They just need to monetize. The water is still free, but they try to make money off of numerous side benefits to being a watering hole. Often they try advertising, sponsorships or other ideas. Some even let people set up shop near their watering hole (think of the iPhone app store).
You can see that MySpace lost on point 1 when Facebook got big. But I’m surprised at how little resources some Web 2.0 companies use to try and remain a focal point in society.
I’m also surprised at how often people with large bankrolls, venture capitalists, investment banks etc assume that something will remain a focal point. Sometimes these things just come and go. Think about all the clubs that used to be hot, but now aren’t.
I think bars and clubs are another interesting case study of focal points involving social status. “The place to be and be seen” is an aura some Web 2.0 sites have as well. But that’s a post for another day.
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