Why is “Innovation in Assembly” worth millions?

Picture: Paul Bica

Picture: Paul Bica

How could Innovation in Assembly lead to a multi-million dollar success story?

Maybe we should ask the recently successful 17 year old Nick Daloisio. His summarisation mash-up was just sold to Yahoo for an estimated $30 million.

What is Innovation in Assembly?

Tim O’Reilly attributes success in Web 2.0 to some common patterns. One of these,  Innovation in Assembly suggests that while the early technology success came from assembling hardware in innovative ways (think Dell computers), the Web 2.0 wave of success comes from innovative ways of assembling and offering services.

…. Web 2.0 will provide opportunities for companies to beat the competition by getting better at harnessing and integrating services provided by others. (O’Reilly, 2005)

One early adopter of this approach and still a leader is Twitter. Their innovative assembly was apparent from their original concept and early challenges back in 2004 through to launch in 2006 with broadcasts to the internet.  

In its basic form, Twitter is a public message service which allows people to send messages up to 140 characters. But that is just the beginning. After that, people can then follow others, utilise the information, and analyse the traffic on topics. The Twitter site has some clear explanations for tweeters, readers, business success stories and community causes.

The modern Twitter might have morphed from being a broadcast tool to a media digest tool but it is their strong participation in the burgeoning API (Application Programming Interfaces) space that gives it real Innovation in Assembly success and identifies it as one of the API giants

Picture: Vinoth Chandar

Picture: Vinoth Chandar

What is Twitter doing so successfully that gives it an estimated 250 million unique monthly visitors and ranks it as the second most popular social networking site after Facebook? Probably, ticking all the boxes for best practice in the Innovation in Assembly pattern.

How does Twitter deliver on Best Practice?

* Twitter not only offers an extensive range of API’s to their service but clearly delivers their core business strength through API’s based on the significant API traffic indicating the high value placed on the Twitter service.

* Twitter follows best practice in API’s by supporting the developer community with blogs, forums, and documentation and draws on Web 2.0 principles of open development and supporting their customers by implementing API’s in developer friendly REST.

* Twitter implements the best practice of offering the smallest unit of service which enables their customers to remix the service in user-centric ways.

* Twitter uses their platform to build customer trust and loyalty by giving advice and status on the platform and also lives their customers experience by ‘eating their own dogfood‘ and making Twitter.com a  client of their own API.

Picture: Rosaura Ochoa

Picture: Rosaura Ochoa

What API problems has Twitter experienced?  

Any organisation utilising API’s needs to carefully avoid the quicksand, and Twitter has had their own problems.

* Users of Twitter needed to develop and protect their own product, while exposed to changes from Twitter. A simple list of ‘my favourite Twitter sites’ circa 2008 demonstrates those who have survived, retired and gone missing in action. Open development is a competitive space and not for the feint hearted, but at least you can learn from the journey of others.

* Twitter itself needs to carefully consider their offering and their users. Since launching in 2006, Twitter had built up a large developer community with their first version of API’s so their changes in the Terms of Service in March 2013 upset some customers and killed some sitesTwitter may have changed their API for strategic or practical reasons, but these need to be carefully considered and managed.

Overall, Twitter has survived early start-up challenges, maturity changes and is still going strong. There must be some good lessons there for any business!

Twitters Britt Selvitelle explains the opportunity to harness the passion of innovation through Twitter in this Tedx video “Innovation of Twitter through scaling the back end architecture”.

UPDATE 13 April 2013: Twitter buys music app from Brisbane startup.

UPDATE 11 April 2013: Business Insider did an investigation of the Summly sale to Yahoo with some interesting insights on Innovation in Assembly and the start-up journey.

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Related Posts:

Innovation in assembly – Twitter API: blog by Faisal HaKami

Innovation in assembly – Twitter API: blog by Audrey Oliveira

Innovation in assembly – Twitter API: blog by Ebracadabra

Innovation in assembly – Twitter API: blog by Edie Cheng

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O’Reilly, 2005. ‘What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software‘.
Retrieved on 23 March 2013 from http://oreilly.com/pub/a/web2/archive/what-is-web-20.html?page=1

Financial Review, 2013.  ‘How to avoid social media death‘. Retrieved on 25 March 2013 from http://www.afr.com/p/boss/how_to_avoid_social_media_death_ZQZSUjnPKo59lBobf0VngK

Is LinkedIn a site worth recommending?

(Image: Nan Palmero)

(Image: Nan Palmero)

They say that great Web 2.0 organisations understand how Data is the next ‘Intel Inside’.  On that basis, is LinkedIn a Web 2.0 site worth recommending?

Tim O’Reilly identified 8 core Web 2.0 patterns in his article “What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software”. This week, I am looking at LinkedIn in relation to O’Reilly’s pattern “Data is the next Intel Inside” . This concept is based on the idea that “Web 2.0 serves as a platform for users to accumulate content that everyone shares“.

LinkedIn has developed their application as a professional networking and recruiting platform.  Individuals and companies can add their own information which is then available to other individuals or companies. It is based on the 6-degress of separation concept which highlights the value of your network.  I have stepped through some Best Practices to see how LinkedIn applies them. So lets take a look inside.

Own a unique, hard to recreate source of data. 

The LinkedIn dataset is truly unique since it was built by the users themselves and is not available anywhere else. It could be recreated by a compilation of resumes from users and recruiters but nowhere is it found all in one place. LinkedIn has also established significant ownership driven from their default privacy settings.

Enhance the core data.

LinkedIn has made their core data better by enhancing it. Explicitly, they enhance through user recommendations and skills endorsements. Implicitly, they track and report usage (e.g. how often a user has come up in searches, how often a user is viewed).

Allow users to control their own data.

LinkedIn does allow users to control their own data and their are plenty of sites with advice on how to do this. They also allow users to view and export their data. Despite how counter intuitive this seems, it gives the user more control and more confidence in the site.

Make some rights reserved, but not all.

LinkedIn has walked a fine line between giving users all data rights and giving users no data rights. There is plenty of advice from LinkedIn on what you own and what they own – if you can wade through the User Agreement.

Linkedin imageDefine a data strategy.

I believe LinkedIn is very aware of the value of their data – and has grown a very successful business from it. They got negative feedback from their user data changes in 2011 and had a more user-friendly attempt in 2012.

Own the index, namespace or format.

This Best Practice is worth considering if you can’t or don’t own the underlying data, but this is not a big issue for LinkedIn since they significant data ownership.

Design data for reuse.

O’Reilly says not to overlook the value in operational or organisational data. One great example is Coke using their stock control data . There seems to be no public information about this in relation to LinkedIn.

Outsource or supply data access management.

Again, there is not much public information about this in relation to LinkedIn.

You would think that any organisation that follows Best Practices, would have solved all of their problems.

Unfortunately there are some data issues and debates that every organisation, including LinkedIn, needs to consider.

I think LinkedIn has clear data ownership based on their strong User Agreements, refined over their 10 years in business, so this is not a problem for them.

LinkedIn has now overcome the start-up challenge of getting enough data to get started.  With over 200 million users world-wide, they have plenty of users to provide user content.

The Open Data Movement is something LinkedIn should watch since their business model relies on data ownership. However, since they have enhanced their core data with new features (events, groups etc) they are less susceptible due to this data diversification.

The Concerns with Copyright is less of a issue for LinkedIn since most of the content is user created and they have User Agreements clarifying ownership. 

So, is LinkedIn a Web 2.0 site worth recommending? 

I believe LinkedIn has clearly focused on this pattern for successful Web 2.0 applications.

Their data is core to their business and they seem to have addressed most areas of Best Practice quite strongly. They have not avoided issues around user data privacy, but based on the large number of users and small amount of bad press they seem to be managing this quite well.

My advice to a business looking to succeed like LinkedIn in the Web 2.0 arena is – take a good look at how LinkedIn has implemented “Data is the next Intel Inside”.

My advice to users of the LinkedIn application is – take some professional advice from LinkedIn’s founder… and be aware of your LinkedIn privacy settings.

If you want a quick personalised tour, take a look at this video to see how your content is of value to you and your network based on the ‘6 degrees of separation‘ concept.

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Related sites:

“I can’t get this data out of my mind” about LinkedIn – blog by Matt Low

“Harnessing Collective Intelligence” with LinkedIn – blog by Eman Alsheheri

How does TripAdvisor rate in social media?

ImageThe TripAdvisor website is a popular site that allows users to read, raise questions, and provide comments on travel experiences. It was an early adopter of user-generated content and produces ratings on travel destinations and providers based on user content. They are successfully ‘managing the human cloud‘ and utilising a ‘virtual workforce’ – but how are they doing it and why is it successful? 

Companies have increasing opportunities to tap into a virtual, on-demand workforce.

To give some framework, I’m using the pattern  “Harnessing Collective Intelligence” from ‘What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software’. This concept of ‘harnessing the crowd’ means that others outside your organisation provide information to your business that can become a ‘powerful asset’. So, in the spirit of user reviews, this post explores “how does it rate?“.

1. Reward the user first: TripAdvisor allows user to achieve their objectives by either accessing other people’s reviews and comments or  posting their own questions or comments. Their users seem happy, based on their recent milestone of 100 million reviews and opinions. (My rating: 5/5)

2. Set network effects by default: Network effects are critical for TripAdvisor who need a good supply of content and reviews to attract and retain their users. The network effects start to show when TripAdvisor ratings are quoted on other travel booking sites. (My rating: 4/5)

3. Involve users, explicitly and implicitly:  TripAdvisor clearly has explicit user participation covered through their user-created content, and guessing by their advertising they would not be losing the implicit user information around user actions and preferences.  The site has attracted a strong user base and there are good indicators of this increasing. (My rating: 4/5)

4. Provide a meaningful context for creation: The TripAdvisor context of travel is an easy attractor, but I think the loose structure  means posts can end up in the wrong location and “findability” is currently not great. Some users, may be happy to ‘wander a while’ as they plan their trip, but it seems TripAdvisor has identified some improvements with new search functionality  in the pipeline.   (My rating: 3/5)

5. Trust your users:  A true Web 2.0 application must trust the users to provide content and to share control. TripAdvisor allows users to  provide comments, start new threads, and provide advice to other users on where their thread should go. The users also seem to trust each other since the majority of users won’t book a hotel that has no reviews.  (My rating: 5/5)

6. Software design that improves with more users : The goal here is to ensure more users produces more value and benefits not more mess and chaos. Their large user base also gives TripAdvisor credibility in the competitive landscape and means their ratings are actually quoted on other travel sites. (My rating: 5/5)

7. Application that facilitates emergence : This is all about giving the application enough flexibility to change to suit the emerging needs of the users. It means not presuming all features up-front, but instead adding extras in as required. TripAdvisor has some new innovations with stats and infographics for businesses,  advice for hoteliers to increase user engagement and  support for providers under attack. (My rating: 4/5)

So, according to O’Reilly’s pattern of “Harnessing Collective Intelligence”, TripAdvisor should be on your “must see” list of social media sites. But is this the whole story?

There are some issues around the “Harnessing Collective Intelligence” and TripAdvisor has experienced a few of them.

Privacy and liability for individuals: The anonymous posting allowed under TripAdvisor leaves few risks to the posting individuals. However, there is still a chance that individuals associated with the provider could be at risk based on negative reviews or comments.

Privacy and liability for providers: This seems to be causing the most challenges for TripAdvisor. Their policy of accepting all anonymous posts has led to legal battles in Australia and the UK from providers who believe they are the target of untrue, malicious, or adverse commercial attacks. 

Quality, not just quantity, matters: At the end of the day, the site content needs to be credible and reliable. Some comments suggest that if TripAdvisor develops strategies for verifying posts and checking the credentials of posters, then the quality of this site will strengthen.

So, how does TripAdvisor rate as a social media site? According to the Web 2.0 pattern of “Harnessing Collective Intelligence” it gets top-marks.

Their founder journey is a great story about ‘Harnessing Collective Intelligence’ and also explains how they had to fight to retain the value they had built up against big players like Google.

Disclaimer: Bronwyn is not associated with TripAdvisor but she does have a love of travel and is a frequent visitor to their site.

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Related Posts:

How TripAdvisor is using ‘Innovation in Assembly’ – blog by Matt J Low

How TripAdvisor is ‘Harnessing Collective Intelligence’ – blog by Monique Alvis

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Related Articles:

Using the crowd as an innovation partner – HBR.org

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Updated 12/4/2013 – added Related Article on ‘using the crowd’