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Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Archive for the ‘Web’ Category

Web Innovation: Have we seen the best or is it still to come?

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More and more posts about the web I come across seem to lament over the state of the web these days. Specifically these posts suggest that we aren’t trying hard enough to innovate. Some also suggest that we really aren’t innovating on the web anymore, that we’re just creating small iterations on what already exists. In fact Mark Cuban said as much in a post the other day:

Personally, I think Web 2.0 already is tired. When social networking or Twittering applications that are nice to have, but not a need to have, are the best we can do. We ain’t doing much. Lets get real. As much fun as Twittering can be, shouldn’t we all be able to agree that if its the latest and greatest application, the Internet has Jumped the Shark ?

When I first read that section of Cuban’s post I was floored. Then I started to think about it and wondered if he may be on to something. I started to agree with him. There are bigger problems to solve with technology. Why are we spending so much time, money, energy and intelligence on things like Twitter? Do services like Twitter really matter?

After thinking on that for a bit I came to realize that we may simply be in an innovation valley right now. If you were to look at innovation over time you would see that bursts of innovation hit followed by a lull and then another burst. Innovation is cyclical in the way that evolution is. Bursts followed by relatively long lulls, etc., etc.

So maybe the web hasn’t “Jumped the Shark.” Maybe we haven’t reached the limits of what the web can do. Perhaps we’re just in a valley, in the midst of a lull which will head into another burst of innovation.

Looking at things another way I also realized that innovations like Twitter could be the way the web, and computers in general, we meant to evolve from the very beginning. After all in the early 1960s, Robert Fano, at the time MIT’s Ford Professor of Engineering, organized Project MAC at MIT to demonstrate the feasibility of “general-purpose, independent, on-line use of computers by a large number of people” (cite: MIT’s Technology Review Magazine - July/Aug 2008 - p.96).

Fano organized the project because he believed that the power of computers didn’t necessarily lie in their computational power, he believed the power of computers could be found in their ability to connect people and allow for collaboration and the sharing of information. Aren’t these same high level goals that services like Twitter carry forward? I’d say so.

While Twitter may not be a technological marvel it is furthering how we communicate and that is really what computers and the web do best.

Are we in a lull? Perhaps. Are we simply taking the next steps toward better electronic communication? Sure. So, perhaps the future of the web isn’t as bleak as people like Cuban suggest. Of course only time will tell.

Side note: What is disturbing is the lack (and continual cutting) of spending on science here in the United States. Without more research funding we will fall behind and could see our society begin to decline (as many other societies in history have when they promote decadence and push furthering science and learning aside). We need to get money to the people who are working on the breakthroughs that really change the world.

Written by Eric Olson

July 11th, 2008 at 6:03 pm

Posted in Innovation, Web

The Long Tail: Long and Fat or Just Long?

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Anita Elberse, an associate professor at Harvard Business School, recently published a new study in the Harvard Business Review that challenges Chris Anderson’s Long Tail theory. Elberse’s main claim is that the positive feedback loop created by hits will continually perpetuate media companies (movies, music, etc.), and companies like them, as hits-based businesses whereas Anderson’s Long Tail theory suggests that more and more sales will be derived from niche products that make up the tail.

Myself and others in the business have had the inking for some time now that the Long Tail may not be as interesting or profitable as once expected. A lot of startups that launched with the Long Tail as a premise for their businesses haven’t reaped the profits they thought they would (yet at least) and the hits still seem to be a bigger part of business like media as people are able to communicate more efficiently and effectively about the hits. After all, as Elberse suggests, the hits are hits because they appeal to the masses and the stuff in the tail is in the tail because it only appeals to a small base. Put another way, people like to talk about common things when together and if they were consuming more and more from the tail the social nature of consumption would be lost.

I was ready to write a long piece about this phenomenon. About how the Long Tail seems to make a lot of sense given what the internet has enabled but, if one thinks about it, the long tail may not be what the people really want. They may still want common experiences so that they can connect with their fellow people. Thus, hits will continue to dominate sales and, while growth of sales in the tail will continue as well, the growth won’t be as significant as once thought.

As I sat down to write just that a post came up that intrigued me. The post was written by Anand Rajaraman and summarized both Anderson’s and Elberse’s arguments very nicely which is why I am not going to jump into a similar analysis here (his post is well worth the read). However, Rajaraman doesn’t just summarize both sides, he also proposes that the internet may not create the fat long tail of consumption Anderson talks about in his book. Rajaraman instead theorizes that the internet may actually create a fat long tail of influence.

A long tail of influence. That is an interesting idea and one that can been seen in action throughout a myriad of examples in recent time. It is also something that makes sense when taken in the context of what the internet was designed to do: facilitate communication, collaboration and the easy exchange of data.

Since the internet allows us to be hyper-communicative and easily share our voice with the world it means that any one of us at any time have the ability to be an influencer. This is the power of the web.

This power also taps into Elberse’s data. She found that we tend to perpetuate more hits as time goes on (and that these hits generate more and more of the overall sales) and that only heavy consumers of a particular item will dive into the tail (but those users don’t derive as much pleasure from the tail than from the head - the hits).

It seems that Elberse and Rajaraman’s theories, when put together, may yield some interesting insight into what the web really enables. We can all agree that the long tail on consumption still exists but it is uncertain if it will ever be as fat (i.e. garner as much of the sales) as Anderson theorized. I am leaning more toward Elberse and Rajaraman at this point and am looking forward to seeing more research on the subject.

Side note: See Anderson’s rebuttal to Elberse’s work for his side of the story (Anderson seems to argue that the issue between Elberse’s theory and his has a lot to do with semantics). Also, Elberse makes a point in favor of hits still being overly important where she uses Anderson’s own book as an example of a hit that made a publisher’s year and spawned a whole discussion that people passionately participate in as much today as back when the book was out (bottom line: people like to talk about common experiences with each other and that is just fundamental human behavior).

Written by Eric Olson

July 11th, 2008 at 5:17 pm

Posted in Business, Web

Extension 720 on WGN Radio: The Web 2.0 Show

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Just a quick note to inform all of you Olson’s Observations readers out there that I will be making some observations on WGN radio this Friday from 9pm - 11pm on Extension 720 hosted by Milt Rosenberg. Since I am unsure if a lot of you out there are listening to AM radio (and because a lot of you are located outside Chicago) I want to point out that you can listen live online as well.

This show has had a lot of prestigious guests over the years and Milt Rosenberg is known as one of the top interviewers around so I am very excited, honored and humbled to be asked to come on the show. I should note that this is a panel discussion though, not an interview, so I will be on with a few other top notch guests making the show that much more interesting.

This will be my first time on the air since I stopped doing a radio show with my friends back in high school on the local college radio station (95.1 FM WNRC baby!) and I am looking forward to it. I have always loved radio as a way to communicate and talking about what Web 2.0 has done in terms of revolutionizing communication via one of our oldest communication technologies will be a treat. Who knows, maybe we can even get Milt to start podcasting his shows!

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Editor’s note: I have bee lax in writing on this blog lately due to my new gig, TECH cocktail and my studying for the GMAT. That said, I plan to overhaul the site over the next couple months and start writing more frequently again so stay tuned and thanks for your support over the years.

Written by Eric Olson

July 8th, 2008 at 8:00 pm

Posted in Business, Chicago, Web, Web 2.0

My Visit to skinnyCorp (threadless.com)

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skinnyCorpHarper Reed, the CTO of skinnyCorp, was nice enough to invite Frank and I down for a visit to skinnyCorp HQ last week. I had been dying to check out their offices as I was sure they would be pretty unique (plus I like the guys and their products) but I had no idea of the wonders that were in store for us (it was Willy Wonka style except with t-shirts instead of candy).

skinnyCorp is definitely one of the most interesting companies in Chicago today. Their tag line is “skinnyCorp creates communities” and that they do.

The most famous of their communities is threadless. Threadless is a community based t-shirt site. Designers (and even non-designers) can submit t-shirt designs to the site which are then put up to a vote. Once the community votes the scores are tallied and the best shirts are produced for sale at the threadless site. The winning designers also get paid if their shirts are selected.

Being a t-shirt junky I was naturally drawn to threadless but the other skinnyCorp communities like ExtraTasty (cocktail recipes) and I Park Like An Idiot are also a lot of fun.

Needless to say the office visit was a blast and Frank and I are now entering into the ThreadLe Manss 48 Heures race in May. It is a 48 hour pinewood derby run off. What could be more fun than that? Have I told you how fun these guys are? If you can’t participate but want to watch the action you can do it live on May 16 and 17 via threadless.com.

For more skinnyCorp fun times and a tour of their facilities check out the segment from SomewhatFrank TV below.

Written by Eric Olson

March 4th, 2008 at 9:53 am

Posted in Chicago, Technology, Web

Media Overload: 10 Tips to Reclaim Your Sanity

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The conversation on media overload has happened time and time again on the web so why not start it again on this blog? I mean, I did just write about multitasking so it seems to fit in nicely with the flow right?

The basic idea, for those that haven’t come across any of the myriad of blog posts out there on this topic, is that there is simply too much media coming at the average person each day.

I know I have had to declare feed reader bankruptcy more than once over the past year or so. The bummer is that I probably missed a lot of great stuff but, even if I had “read” it, there would have been too much to take in and I would have just skimmed most of it anyway. I would have lost the value of the good stuff while spending too much time on the stuff I didn’t need.

So what is a person to do? Here are 10 tips to help you reclaim your life and still know what you need to know. (Disclaimer: These things worked for me but your mileage may vary. I am, after all, a fallible human being who may have missed or overlooked something.)

  1. Clean out your feed reader: Go through all of your feeds and really examine them. Keep the feeds of your close friends, close industry buddies, top 3 - 5 sources for industry news, the “thinkers” feeds who write lengthy but very meaty essays (i.e. Paul Graham) and the feeds relating to your hobbies and interests. Remove feeds that are redundant (you don’t need to read every tech blog since most of them cover the very same stories), feeds that you only find something useful in once in a blue moon and feeds of things you think you may want to try at some point in the future. Try to stick to 25 feeds or less in your feed reader.
  2. Get some OPMLs: Ask your close friends and industry contacts for their OPML files since you may find a few feeds you really should be reading but hadn’t heard of. Don’t go crazy though. Remember that all of this is supposed to lessen the amount of news you take in.
  3. Get Google Reader: If you haven’t started using Google Reader start now. Import your new scaled-down OPML into Google Reader and also add your contacts to the shared items feature of Google Reader.
  4. Start paying Attention to the shared items feature: This feature allows you to see what your friends and contacts using Google Reader are sharing. This will help fill in some holes you may miss with your scaled down feed list. You will need to watch this too as some folks will share too many things for you to keep up with and you will have to turn them “off.”
  5. Sign up for FriendFeed: FriendFeed is a great new service. I am not sure it is fully open yet but apply for a beta login if it isn’t. FriendFeed allows you to create a single feed of all of your stuff from twitter updates to your blog posts to your flickr photos to your shared items from Google Reader to random things you find on the web (via their bookmarklet). Then you can “subscribe” to your friends’ friend feeds and take a single feed of all of your friends friend feeds (woah, say that 10 times fast) and add it to Google Reader. This way you can keep up with all your friends stuff in one place and skim it quickly. You probably want to limit your amount of friends to 10 or so depending on their activity level.
  6. Use Instapaper: This is one of my favorite new services. Instapaper allows you to quickly and easily save stories on the web to one place for reading later (via a bookmarklet). Sure, some would argue that delicious does this but Instapaper is even simpler. No tagging or anything to worry about. See a story you want to read but don’t have time now just click the bookmarklet and it will be waiting for you along with any other stories you added when you sign into Instapaper later and have time to sit and read through some articles. You could look at it as a way to create your own “Sunday” paper. This will allow you to still read the longer thought provoking articles you want to read but never have the time to read when you find them. I feel like people spend too much time reading the day to day “quick” news bites instead of the longer thoughtful articles that really help to expand ones thinking.
  7. Find some good sources that capture most of the daily news: I like to hit Techmeme a couple times a day to see what people are talking about and then I hit a couple news sites like CNN and the New York Times. If there are stories I find on there that really get me going I simply search for more news about those particular topics to get as fair and balanced as I can. For example, rather than reading every tech blog in existence (which causes overload and doesn’t add much value since they all cover the same stuff) you can simply read a few sources (i.e. Techmeme, etc.) and research things that are important to you a little further in order to not fall into the trap of not consulting enough sources and having a skewed view on something.
  8. Get a little help from your friends: Inevitably if you have friends in the industry you will hear about things/stories from them and then you can check into those stories if you haven’t already. Rather than trying to filter all of the news yourself let your friends help. Isn’t more fun to talk about things with your friends anyway? Note: Google Reader shared items and FriendFeed are both pieces of this idea.
  9. Try magazines (and even books): Yes, that’s right, print magazines. The good ones like Harvard Business Review, MITs Technology Review, Nature, etc. have great content in every issue and you can easily run through a magazine in a few hour sitting (perhaps more if there is something you really want to dive into). This won’t be timely news but it will be thought provoking and longer term stuff that should be a part of any media diet. Plus, you can read magazines anywhere making better use of your downtime (same goes for books). Yes, I know you can read media on your phone and such but if you are like me and don’t care for reading lengthy articles on a tiny backlight screen a magazine is the way to go (I may be burned at the stake for even talking about print media but what the hell… I think it’s a valid part of the media landscape and has its place).
  10. Ummmmm: I didn’t really have a 10th item but I thought I should round things out.

Since I have started using this approach I don’t think I have missed anything that I really wanted to check in to and I have eliminated my media overload. It may or may not work for you and some will think I am crazy for saying that less is more when it comes to media intake but I think if done right you can capture all the knowledge you need to by being strategic about your media intake.

Written by Eric Olson

February 1st, 2008 at 6:02 pm

Posted in Media, Web

Book Review: Six Degrees

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Six DegreesReading Time: 6 minutes 30 seconds

Do you ever wonder about Milgram’s six degrees of separation experiment? Or about the spread of disease? Or about the spread of products and marketing messages? I am sure most people reading this site have thought of one or more of these things at length at one point or another. Specifically I am sure that we have all thought about how products, mainly consumer web products, spread and attract more users.

The typical themes we run into as we delve into the idea spreading space come from books like the Tipping Point or The Influentials. These books state that it is a small group of people, Gladwell’s connectors and Keller’s influentials, that cause a product to spread virally or in other words cause a cascade (since products don’t technically spread virally most of the time but that is a whole other post).

However, none of these books take a look at the science and math behind networks. In other words, they don’t really provide any hard evidence that the theory of influentials is actually how things work.

Enter Duncan Watts and his book Six Degrees: The Science of a Connected Age. Watts, a mathematician-turned-sociologist currently on sabbatical from Columbia University and working at Yahoo! Research, was unsettled by the lack of actual testing of things like Milgram’s Six Degrees experiment and the idea of influentials and how they are the cause of viral product adoption. He was so unsettled in fact that he has spent the last decade studying the science of networks.

The last decade of his thoughts comprise the bulk of Six Degrees in which everything he has worked on is put into layman’s terms. Watts uses easy to grasp examples and personal narratives to help the reader understand the mysteries behind networks. The book is very conversational making it very approachable even for people with no science background.

That said, Watts’ findings are very interesting making this book a must read. I will speak about his findings on internet marketing here since that is what I think most of us are interested in although he does describe many more areas in which his theories apply.

What’s big revelation you ask? Well, Watts has found that influentials don’t really matter (at least in terms of starting trends - they can make trends bigger though). Yes, you read right, while more and more marketers pour dollars into targeting influentials Watts is saying that all of that may be a waste.

Unsurprisingly there are a lot of advertising industry folks who aren’t appreciative of Watts’ work but his computer models and research are pretty compelling. Even if you don’t think the models he’s built represent society in a realistic way just think about this:

All Watts is really saying is that average people are influentials at any given time in their lives. It isn’t the hyperconnected that are starting all of the trends.

Watts argues that a lot of the cases that support the influentials theory were analyzed after the fact (revisionist history). Gladwell’s Hush Puppies example is a good one. Gladwell says that Hush Puppies broke out in 1994 (5000% growth in sales) because a handful of influential Lower East Side hipsters started wearing them and spread the trend.

Watts, on the other hand, logically states that those hipsters were wearing a number of other items but the only thing that popped were the Hush Puppies. If they were influentials in the classic sense you would think more than just the Hush Puppies would have popped. So, why didn’t anything else the hipsters were wearing pop?

Watts figures that the answer to that question lies with society as a whole.

Watts says that society needs to be ready to embrace a trend and if it is anyone can tip the scales. However, if society isn’t ready no amount of influencers pushing a product can force a cascade to break.

Take a look at this excerpt from a recent article in Fast Company to get an idea of one experiment that Watts conducted. I think it will get the point across:

As Watts argues, there are a lot of ways an Influential could convert the masses. Merely talking to a friend once could infect her with an idea. Or it might take several conversations. Or maybe Influentials are so persuasive they’re like trend vampires, and each victim they bite becomes hyperpersuasive too. Depending on how you define the specific mechanics of influence, you’d get totally different types of epidemics–or maybe none at all. But gurus of the Influentials theory never directly clarify these mechanics.

“All they’ll ever say,” Watts insists, is that a) there are people who are more influential than others, and b) they are disproportionately important in getting a trend going.

That may be oversimplifying it a bit, but last year, Watts decided to put the whole idea to the test by building another Sims-like computer simulation. He programmed a group of 10,000 people, all governed by a few simple interpersonal rules. Each was able to communicate with anyone nearby. With every contact, each had a small probability of “infecting” another. And each person also paid attention to what was happening around him: If lots of other people were adopting a trend, he would be more likely to join, and vice versa. The “people” in the virtual society had varying amounts of sociability–some were more connected than others. Watts designated the top 10% most-connected as Influentials; they could affect four times as many people as the average Joe. In essence, it was a virtual society run–in a very crude fashion–according to the rules laid out by thinkers like Gladwell and Keller.

Watts set the test in motion by randomly picking one person as a trendsetter, then sat back to see if the trend would spread. He did so thousands of times in a row.

The results were deeply counterintuitive. The experiment did produce several hundred society wide infections. But in the large majority of cases, the cascade began with an average Joe (although in cases where an Influential touched off the trend, it spread much further). To stack the deck in favor of Influentials, Watts changed the simulation, making them 10 times more connected. Now they could infect 40 times more people than the average citizen (and again, when they kicked off a cascade, it was substantially larger). But the rank-and-file citizen was still far more likely to start a contagion.

Why didn’t the Influentials wield more power? With 40 times the reach of a normal person, why couldn’t they kick-start a trend every time? Watts believes this is because a trend’s success depends not on the person who starts it, but on how susceptible the society is overall to the trend–not how persuasive the early adopter is, but whether everyone else is easily persuaded. And in fact, when Watts tweaked his model to increase everyone’s odds of being infected, the number of trends skyrocketed.

Interesting isn’t it? Yet, it seems as if this is something we always knew was true but we ignored those feeling because we wanted to believe that we could simply hit a few influentials and things would pop. As we know, the world is a complex place so it stands to reason that influentials wouldn’t be the only cause for a viral outbreak (although Watts does say, and has found, that they do help make things big).

Another case for Watts’ theory that is a little closer to home is the Tech Crunch effect. Arguably the Tech Crunch crowd are the influentials in the tech space and yet, after they all try a product and add thousands of users quickly, the rush typically fades and the product fails to cross the chasm into the main stream.

Surprisingly this all leads to mass media being the best way to get a message out since, if you believe Watts, you want to touch as many people as possible and make your message easily shareable in the hopes that it will be shared and a cascade will ensue. This is, of course, counterintuitive to a lot of top marketing wisdom of the day that says you should target a small group of influentials (of course this doesn’t relate to niche products where very targeted transactional advertising makes a lot of sense - it relates more to products developed for a broad audience i.e. Nintendo Wiis, computers, consumer web apps etc.).

Well, I am afraid this book review has gone on too long. I will close by saying that anyone working in the web space, and especially those in the consumer web space, should read Six Degrees. Whether you believe Watts’ work or not the book will still help to further your thinking on the spread of ideas and products in society.

Written by Eric Olson

January 31st, 2008 at 10:22 am

Posted in Books, Web

DEMO Conference Update: LiquidTalk and Good2Gether

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Unfortunately I was unable to make the DEMO conference this week due to scheduling issues which is a bummer but I will be covering some of the companies I find interesting right here anyhow (with the aid of Frank Gruber who is on the scene). Without further adieu here is the first DEMO update:

LiquidTalk

I was very excited when I first heard that LiquidTalk was going to be at DEMO this year. LiquidTalk is a Chicago based company (yeah, I may be a biased because of that) that has come up with some great enterprise technology that brings new media to the corporation.

LiquidTalk’s core technology allows corporations with large distributed sales forces to easily distribute corporate knowledge to these remote individuals via podcasts. This timely and easy to consume media helps sales professionals stay up to date while they wouldn’t normally be able to be productive (i.e. driving between appointments, on a flight, etc.) which ultimately will help them close more sales.

At DEMO tomorrow LiquidTalk will show off their new BlackBerry based technology for the first time. I have no doubt it’ll be a pretty sweet demo as their prior demo of their iPod technology at TECH cocktail a while back was a lot of fun.

From all of us in Chicago - good luck guys. Make us proud!

Good2Gether

As you guys know I am a sucker for a good social venture (aren’t all social ventures good… clearly I should use a thesaurus more often) and this looks like one.

The idea behind Good2Gether is to bring together not-for-profit organizations, volunteers, the media and large corporations with what it calls a “philanthropic social networking service.”

The issues Good2Gether addresses are:

Corporations are always looking for ways to make themselves look good in the eyes of the world via supporting not-for-profits but they often have a hard time finding them (and of course the not-for-profits can use the support).

Media companies have a lot of eyeballs and not-for-profit websites do not. Media companies are also looking for good stories which they could potentially get from the not-for-profits.

Not-for-profits are always looking for volunteers and but, due to in part to poor websites, volunteers who want to help are often left out in the cold (I can say this has happened many times to me. I want to volunteer my time but find it very hard to do so.)

Good2Gether aims to alleviate all of these issues through their product which will bring together all of the groups that play in the not-for-profit space and help them find ways to interact.

Good2Gether has already landed a handful of the top media outlets in the country along with a number of large not-for-profits and corporations so it seems they are off to a great start. I am all for this application and I really hope they are able to keep up the momentum.

Just imagine seeing a news article about a natural disaster with a Good2Gether box listing opportunities for the public to help right next to it. You click an opportunity and you are brought to a page that allows you to easily apply to volunteer. Large corporations will also find it easy to donate and send employees to help and the media can even get a story out of all the people brought together via the web to help out in a disaster. Not bad at all.

Written by Eric Olson

January 28th, 2008 at 7:38 pm