Groundswell and Monetizing Web 2.0 Technologies
Facebook’s recent announcement about their new ad formats inspired me to finally write about Groundswell and the great work that Charlene Li and Josh Bernoff are doing at Forrester to define and cite actual business uses for social media and web 2.0 technologies. And perhaps going further back last week’s news about VC funding for widgets slowing down got me thinking about this again.
I’m happy to say that the book has proved to be a very useful tool, with all the press on the subject of social media many clients are curious. The book has a lot of in-depth and thoughful pieces on companies that have used social media and achieved success or failure.
As the conversation about how the hundreds of Web 2.0 companies will monetize their products or in the case of Facebook and YouTube capitilize on the ability to attract a large audience continues Bernoff even provided some evidence in a post on the Groundswell blog on companies that are making a business out of their web 2.0 technologies.
The fact is, it’s incredibly hard to make money as a Web 2.0 startup aimed at consumers.
There are hundreds of these companies, and they all clamor to brief us at Forrester. Each has its own twist on blogs, social networks, ratings, user generated video, or whatever. It’s hard to get people to pay attention to a new tool, and the value of the tool depends on lots of participation.
The amazing thing is that there are a class of startup companies making good money right now from Web 2.0. They’re not flashy and they don’t grow like mushrooms. But they’ve got all the business they can handle and they are growing. I am talking about companies that serve corporate social application needs. This isn’t the typical Web 2.0 business paradigm, since serving corporate customers means lots of client service, which is people-intensive — it doesn’t lift off miraculously like a pure technology startup. In fact, in many of these companies, the technology itself is positively mundane. But the startups grow because they deliver value for which they can charge a premium and get customer loyalty. The customers of these companies don’t defect when something shiny and new comes along, because they like the service they’re getting.
