Looking Ahead to 2006

As I wind things down for the holidays I find myself looking forward to 2006.

Big things are in the horizon: 2006 is going to be the year of UnAccounting™.  I’m pretty excited.  I’ll bet 2ndSite hits 100,000 users too…  January is going to be a mad, mad time as we have projects all lined up, AND I just finished the first draft of my next essay.

Have a wonderful holiday!  Enjoy your time off it you take some.

Holiday cheers to you from North of the 49th.

2ndSite Makes the GREAT WEB 2.0 SOFTWARE List


2ndSite just made Dion’s list of great Web 2.0 applications in the Online Business Software category!  Very exciting.

The last list has been blog fodder and has been viewed by over 125,000 readers in the last 7 days.  It’s a real honour to be referenced alongside some of Web 2.0’s biggest hits in this consolidated list

Dion is a pretty big wheel in the Web 2.0 community and a member of the Web 2.0 Workgroup

Thanks Dion – this is fuel for Team 2ndSite!

More on Sustainable Competitive Advantages in Web 2.0

Some weeks back Dion Hinchcliffe made an interesting post regarding how businesses can make Web 2.0 a commercial success. He suggested one way this will be achieved is through sustainable competitive advantages such as patents. He touched on Amazon’s “One-Click” patent and I commented back:

Amazon’s “one click” patent has always blown me away…not so sure everyone will be able to pull that sort of thing off…congrats to Amazon. Smart. Smells like the Patent officers may have been asleep at the switch that day though. If too many patents are put through that influence/restrict “usability” like one-click, healthy competition online will be jeopardized. Yes I know this is the purpose of patents, but I hope the patent office gets wise to the ensuing effects of granting too many “usability” patents like “one click”. The real purpose of patents is to encourage R&D spending by giving the incentive of a sustainable competitive advantage to companies that INVEST in trying to find a “break through”. This usually costs a lot of money. Patents like “one click” (and I have NOT read the patent details) seem like legal artistry, not the result of real R&D investment. I’ll bet they spent more on legal bills than R&D for it, but again I have not read it so I could be dead wrong.

I just came across the VERY SCARY patents Amazon has secured. Like “One-Click”, I have not read the patents, but the gist of each is clear in the article:

The [first] patent covers methods of forming circles and marketing to them, for example, by showing one person looking at a book detail page and who else in the circle has bought that book. The second patent covers a method of discovering and delivering as search results related products from multiple categories, such as books written by Steve Martin, as well as DVDs of movies in which he appeared.The third patent is the real kicker. It covers methods for encouraging consumers to write reviews of items they’ve purchased by determining the optimal times to send them e-mails or reminders.

Again, these patents are scary in that they affect usability and general business process. On the bright side, I gather Amazon has had a hard time defending “One-Click” (feel the joy). Apparently Amazon sued Banes & Noble over it and lost. I wish that was more widely known because I think “One-Click” makes some developers refrain from building the best suites they can.

This is a little righteous, but I think Amazon ought to be ashamed for even trying to patent these things, and I am glad that the truth is they are having trouble defending these patents. I guess we’re still looking for the sustainable competitive advantages in Web 2.0

Re: Office? What's An Office? by Corante

I just posted the following as a comment to, “Office? What’s An Office?“.  I figured I’d post it here too:

Have you seen what I Cringely has to say about the software landscape?

“And unless Google comes up with an ecosystem to allow their survival, that means all the other web services companies will be marginalized. There will be startups and little guys, but no medium-sized companies.”

I think this is really interesting.  As the founder of a web services company that competes with Intuit Quickbooks (and Blinksale for that matter), I’d like to believe this, and the fact is I can because we (like Basecamp and Blinksale) are living it.

The more people turn to the web, the less desktop software they will buy.  The incumbent desktop software providers, Microsoft, Intuit, etc, have relied on costly distribution models and established reseller networks as competitive advantages.  For example, when you go to Best Buy, how many accounting packages can you buy? 

Online, more and more offerings are available everyday and the landscape is becoming wider and wider.  This is going to make it really hard for the incumbents to leverage their distribution models as a competitive advantage.  Influencers are no longer only large retail chains and resellers, they are blogs and communities, etc.  You have to stack up across a whole sea of product feedback. Most people go to a few providers’ websites before purchasing….you can’t do that at Best Buy…and when you search online your next competitor/negative review/angry customer’s thoughts are always just a click away.  This is one reason I think service matters a lot these days.

The web as a PLATFORM and a DISTRIBUTION model has real implications for the market.  Giddyup.

Michael McDerment
Founder 2ndSite Inc.


Google Music search is arriving.  It’s released, but I can not find a link to the main URL.  Thanks be to Dave Winer who apparently shares the same tastes in music as myelf. Little Feat might have been my first search.  Aces.

Bonus: If you share our tastes (see Dave’s post), here is something more contemporary that you might like.  If you can see them live, do yourself and favour and get yourself there (sadly looks like you’ll have to wait a bit though as has apparnetly Jim caught pneumonia…).

An Honest Account

Toronto-based VC Rick Segal posted a forthright account of the VC opportunity assessment “process” today.  It’s an excellent document for anyone trying to raise capital because you can’t read this thing and fail to see the effort that goes into getting the venture capital relationship solidified.

As an aside, this is an excellent example of “breaking through” as I touched on in the ‘finding your voice’ piece.  Basically, Rick’s post is going to save him time and help entrepreneurs set their expectations.  This piece captures Rick’s voice as honest, approachable, and transparent.  I’ve never done business with him – or met him for that matter – but he’s done well in communicating these attributes because they matter in business.  He also makes it clear that he is not interested in “wasting your time”, something that really matters to entrepreneurs and something the Canadian VC community is repeatedly accused of – often by self admission.

The Validator is Invalid

There has been lots of debate about what Web 2.0 is, and this tool proves it.

I typed in http://www.secondsite.biz and was a little downhearted when I saw 2ndSite got a 3/33 score.  With a sigh I punched in http://www.basecamphq.com.  Turns out Basecamp gets a 4/33.  Maybe I’m reading this thing wrong…

Certainly I’ve come no closer to understanding what Web 2.0 is all about thanks to using this tool.  I guess this is another example of the trend-surfing clutter that is polluting the Web 2.0 landscape and wasting my time.  No offence to the guys at 30 Second Rule.  It’s a humorous little tool they brought to life, so hats off for that. It’s just so many of the “Web 2.0” apps do nothing…but clutter.  I don’t see this stopping and I reiterate that the trend of itty-bitty apps that do very little will continue, and users will have to slog through piles of it to get to what they need (read the second half). I’m going to write another Web 2.0 essay soon…not sure the solution to clutter will be in that one though, but we’ll see…

Dispelling the Myth of Cheap Development

Thanks to Richard McManus for a great summing up of Web 2.0 this week.  One thread that really caught my attention is the first I have seen that addresses scalability of web 2.0 Apps.

Scalability is both a development and a growth issue – especially for many of the ultra viral community type tools that are making waves in Web 2.0 today.

There is something I find shocking about Web 2.0 – shared environments.  Many early stage web 2.0 apps are developed in and run shared hosting environments – it just blows my mind.  We were certainly boot strapping when we built 2ndSite, but we weren’t fooling around.  We went straight to the best managed hosting provider available and implemented a number security safeguards.  Given the nature of the information we store, I could not live with myself otherwise…but that’s me.

But with regards to this issue of scalability, I’m excited that it turns the notion that it is cheap to develop a web app on its ear.  Maybe they are cheaper to “code”, but they are not necessarily cheap to run.  Developers that think they should be cheap to run, or who skimp on hosting ought to think twice.  I think all this hints at the fact that may web 2.0 apps are not being run like business and I don’t think that is a good thing for the consumer..

There is an old adage: “Buyer Beware”.  I hate to say it, but it’s as true as ever with Web 2.0 apps today. Internet users need to beware of the service provider they choose and service providers need to communicate what they REALLY offer.  Call me old school, but I like a good service with REAL support.  Without that, I’d “be-wary”.

I keep trashing business models

I mentioned how I came down against Adsense context advertising as a business model.  Last week I came down against entering search in the Globe and Mail feature because new entrants would need real value-adds to get me to leave Google, Yahoo! and Microsoft.  Those value adds may be coming, but so are advances at GYM.

So with these things on my mind I came across this article on Dion’s blog which addresses revenue models in Web 2.0.  It echoes many sentiments I included in building real businesses.

I often like Dion’s posts for what they DON’T answer.  In this case he hints that new revenue models that will be emerging in web 2.0.  Chances are he’s right. Any clue what they’ll be?

Choosing Your Voice: Be Casual?

Blogger.com founder Evan Williams just released his “10 Rules for Web Start-Ups” .  Nothing earth shattering within them, but they are concise and a good read.

Rule #3: Be Casual

Something I wrestle with at 2ndSite is the tone of our communications.  When Evan says “be casual”, he is literally talking about your business and the services you provide.  I’m extrapolating here because I want to discuss tone.

Many successful web services today maintain a very informal tone with their corporate communications. At 2ndSite we are going to be working harder at “breaking through” with our communications.  What is “breaking through”?  It is reaching through the monitor and speaking to the heart of the end user so they know you know them.  When you “break through” you connect with your user and their world slows a little and their relationship with your deepens.  It’s a subtle and powerful thing.  Photos help.  So do case studies and testimonials.  I believe breaking through is highly important in persuading people to use your service.  At 2ndSite our voice is straightforward, professional and honest.  I do not want to change these qualities one bit.  Is our tone dry?  I’m not certain, but I don’t think so.  Can we liven up our tone and still retain its straightforward, professional and honest qualities?  YES, I believe we can, but it will take some work.  Is our current tone the best one for our business?  Great question.

2ndSite is a billing application.  We handle sensitive records for our clients and we take that responsibility very seriously.  We believe our current tone meets the expectations of our target audience.  The question gnawing at me is, “can we lighten things up and make the relationship we have with our users more enjoyable?” I’ll bet we can, but how and what is the cost of a misstep?

I do not think “being casual” is necessarily for us.  Maybe it’s for you, but it is not necessarily for 2ndSite.  This speaks to Evan’s Rule #11:

#11 (bonus!): Be Wary
Overgeneralized lists of business “rules” are not to be taken too literally. There are exceptions to everything.

So those are my questions.  I’m searching for answers.  Feel free to chime in.  Chances are if you read this blog, you have a blog or you run a business.  How have your strategies and your positioning influenced your tone?  Has your tone evolved since you started?  If so, how?