Breaker Labs Blog

3W Newsletter, Issue 3: Characteristics of 3W Apps, Part 2

In this Issue:

• What you missed
• Characteristics of 3W apps, Part 2
• Two Articles
• One Book
• Fun YouTube video
• Power tip: MailChimp

What you Missed

Well, I warned you all that this would be an “occasional” newsletter :). I’ve had a great start to the New Year – losing some weight (more on this below), working on new ventures, and trying out new technology. But it’s time to get back on the 3W newsletter horse.

As a reminder, in previous editions I made the case for why we are and will continue to see a Third Wave [1] and then I talked about some of the characteristics of 3W apps [2]: specifically that they will be “pan-Internet” (or what others have more cleverly called “Cloudtop.” See Anil Dash’s post on this.[3]) and “applied social.”

Characteristics of 3W apps, Part 2

Here are some other characteristics that I believe we are and will see in 3W apps:

Aware. 3W apps will know a lot more about you and will behave accordingly. Intellectually creepy but practically convenient, your app will know your gender, your preferences, where you are, who your friends are, what you’ve done, what you’ve bought, etc. They will know what the weather is like where you are, what the traffic is like where you are going, and whether your flight is delayed (which it is). The “real world” knows most of this stuff and puts it to good use, so will the virtual world.

Easy. Dot com sites weren’t the best UI/UX (eBay, Amazon) as they spent a lot of development cycles under the hood. Web 2.0 sites made a leap forward in ease-of-use, but many of them were designed for the net savvy and the nerdy. The iPhone blended the reliability and ease of use of a consumer electronics device with the flexibility and extensibility of a computing device. It’s no longer acceptable to make a trade-off between power and ease-of-use. 3W apps need to be both. They need to be intuitive, non-techy, and require no data entry. With so many digital options, ease-of-use is now an essential, not optional, capability.

Fun. Fun isn’t just for games anymore. And games aren’t just for fun anymore. Life is short, and so are attention spans. Those apps that are fun and functional will beat apps that are functional but not fun. Addiction is a powerful force that drives much consumer behavior and consumer apps are figuring this out. Games can be casual “entertainment snacking” played in short bursts on phones, [4] rather than long sessions in dedicated consoles. Frequent flier miles and SPG points are games and “gamification” has existed in various forms through the ages. While gamification in and of itself is not a business model [5], it is a useful technique that can be put to good use if applied properly [6].

Two Articles

I thought this was a great piece by Dave McClure on Tech Investing Trends for 2011. Here are his trends. If you want to read more on any of them, I highly recommend you read the full post [7]:

1. (Way too many) Groupons, social games and photo-sharing apps

2. Commerce and coupons for location-based services (LBS), aka “The $5 check-in”

3. Crowdsourcing: The Web-enabled mass assembly line

4. URLs for IRL: enabling the Internet of “things”

5. The Emergence of global languages and geographic arbitrage

6. YouTube killed the video star: Distribution and monetization of online video

7. More iPads, iPhones, iOs Apps and more Android on the way

8. Design is the new black: The growing importance of user experience and design

9. Family 2.0: Apps for kids and grandmas

10. Facebook is dead. Long live Facebook.

On the other side of things, perhaps, is this article in the The Gurdian (UK) about Sherry Turkle’s new book, “Alone Together,” in which the sociologist argues, according to the article, that all this social network-based communication is “a form of modern madness.”[8]

Turkle's thesis is simple: technology is threatening to dominate our lives and make us less human. Under the illusion of allowing us to communicate better, it is actually isolating us from real human interactions in a cyber-reality that is a poor imitation of the real world.

But Turkle's book is far from the only work of its kind. An intellectual backlash in America is calling for a rejection of some of the values and methods of modern communications. "It is a huge backlash. The different kinds of communication that people are using have become something that scares people," said Professor William Kist, an education expert at Kent State University, Ohio.

The article lists the various “backlash” books about how technology is making us ruder and more stupid, etc. I have yet to see any evidence that there is a meaningful backlash in any measureable way, though I believe there is a genuine, understandable, and important unease at these new behaviors. While I find most of these backlash books fairly predetermined in their angst, I think smart entrepreneurs developing 3W apps should see the shortcomings in the status quo of digital communication, popular backlash or not, and see those as opportunities to build services that are better. In other words, I don’t see these shortcomings as permanent or inherent flaws, but more as problems that the next generation of entrepreneurs has an opportunity to solve. 

One Book

I’ve been reading the “4-Hour Body,” by Tim Ferriss [9] (author of the 4-Hour Work Week). Here’s a very brief review:

It’s wide but shallow. It covers everything from how to lose weight (fat), to how to gain weight (muscle), to how to increase testosterone, to 6 minute abs, to how to lift 500lbs, to how to hold your breath for 5 minutes, to how to live off 2 hours of sleep a day, to various sexual techniques & positions, to much, much more. But while there are some good details, if you want to really dig in deep in one of these areas (such as a slow-carb diet) you will find some big gaps in information.

Many of the things are impractical. A lot of the things are just stuff normal people won’t do. For example, once you learn what you need to do to survive on two hours of sleep a day, you almost certainly won’t do it.

It’s still worth buying. The book is about becoming “superhuman” and doing things you thought were beyond yourself. While many of the things are impractical, it’s inspiration to read some of the stories and odds are you will find something – probably a couple of things – that inspire you to be better.

For me, it has helped me with a new diet, helped me with new exercise routines (kettlebells), and helped me fall asleep (the NightWave blue light actually works for me [10]). I’ve lost around 10 pounds so far this year – halfway to my goal – and it was the book that got me started. (I also thank Rob Reid who turned me onto LoseIt – a calorie counting app – which has helped me curb my eating significantly.)

I say, buy it. Thumb through it (it’s not a book you read from cover-to-cover). Pick an area you want to work on (diet, exercise, strength, sleep, sex). And be better than you are now at it.

Fun on YouTube

I enjoyed Mike Tompkins’ a cappella version of Dynamite. [11]

Power tip: MailChimp

I use MailChimp to send out these emails. It’s an awesome product and it’s free. If you want to start a newsletter, I highly recommend it. [12]

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[1]  The first issue of the 3W newsletter: http://blog.breakerlabs.com/2010/12/welcome-to-the-third-wave.html

[2]  The second issue of the 3W newsletter: http://blog.breakerlabs.com/2010/12/3w-newsletter-issue-2-characteristics-of-3w-apps-part-1.html

[3]  Anil Dash’s great post on the “cloudtop”: http://dashes.com/anil/2010/09/cloudtop-applications.html

[4] http://online.wsj.com/article/SB10001424052748703945904575644940111605862.html

[5] http://www.gravitybear.com/blog/archives/243

[6] http://gigaom.com/2010/11/26/gamification-needs-to-level-up-heres-how/

[7] Dave McClure’s top 10 tech investing trends for 2011: http://blog.500startups.com/2011/01/15/top-10-tech-investing-trends-for-2011/

[8] Backlash? http://www.guardian.co.uk/media/2011/jan/22/social-networking-cyber-scepticism-twitter

[9] Be better: http://www.fourhourbody.com/

[10] If you sometimes have trouble falling asleep (such as too much going on in your mind) try this: http://www.nightwave.com/

[11] Dynamite: http://www.youtube.com/watch?v=qjCLQaTFXx0

[12] MailChimp is a great email product: http://www.MailChimp.com

 

3W Newsletter, Issue 2: Characteristics of 3W Apps, Part 1

In this Issue:

• What you missed
• Feedback Prize
• Characteristics of 3W apps, Part 1
• Power tip: TypePad
• Fun YouTube video

What you Missed

In case you missed the first newsletter you can read it here: http://blog.breakerlabs.com/2010/12/welcome-to-the-third-wave.html

The short version is: we are entering a third-wave of Internet companies and applications but we haven’t settled on exactly what that is or what it will mean. The purpose of this newsletter is to help figure that out.

Each wave emerged on top of the infrastructure built by the previous wave. Just as the PC boom enabled the Internet boom, each wave of the Internet has led to a new one. The three Internet waves I see are:

(1) Dot Com – the basic infrastructure of the Internet

(2) Web 2.0 – the social and participatory infrastructure of the Internet

(3) Third Wave – what we are building right now on the new infrastructure of the day

To understand the Third Wave (3W) we need to understand the raw materials that are now available to build things (and I listed many of those). Social and mobile are the big ones, but by no means the only ones.

 

Feedback Prize

The feedback prize this time goes to Jory Des Jardins, who left the first comment on the companion blog[1] and raised some great issues. For those of you who don’t know Jory[2], she is the co-founder and President of Strategic Alliances atBlogHer, Inc. and writes a fantastic blog, “From Here to Autonomy,” [3] on the entrepreneurial life. Her blog, like her life, has taken a slight diversion as she became a mother this year (congrats!) and so her site is now also a great source of insight and humor on early parenthood.

Jory points out some important issues & questions: [4]

• The participatory wave of Web 2.0 has lead to huge information overload and 3W will have to tackle that issue; such as through better customization.
• That raises the privacy question, as we will have to learn how to customize without intruding.
• What will the cultural shift of the Third Wave be? Web 2.0 brought a new emphasis on transparency and listening to your customer or reader. How will 3W change our culture as we search for better customization, adjust to the inevitable backlashes, and establish privacy conventions?
• “Businesses and Media will completely embrace customers' reactions and feedback and be able to react more in real time.”

Great topics to tackle in future editions. I’d especially love to hear your views on Privacy in 3W.

 

A Look Back

For Jory’s contribution, I’m sending her one of my favorite editions of Red Herring. Red Herring Issue 55 was our 5^th Anniversary Issue, published in June 1998,[5] and it featured Jim Barksdale on the cover in front of a red curtain, exiting stage left – a metaphor for Netscape’s surrender in its battle against Microsoft. Even in the summer of 1998, four years after Netscape was founded, we were still talking about the building blocks of the Internet (remember the browser wars?) rather than what we were going to build with those blocks. The issue’s major focus: Java. The single dot com app (though we didn’t use “dot com” back then) that got attention in that issue: Hotmail (freemail – woohoo!). Amazon, eBay, and Google weren’t even mentioned in that issue – the last one hadn’t been started yet :).

Issue 55 was a major redesign, crafted by the famous magazine designer Roger Black, and was our “pivot” (though we didn’t use that word back then either) from an insider Silicon Valley finance magazine to a “Business of Technology” magazine – a business magazine, first and foremost, focusing on what we thought was the most interesting part of business: technology, innovation, and entrepreneurialism. Technology, we felt, had moved from a vertical industry to something that touched all of business, and this issue was our adjustment to that reality.

Incidentally, there is also a fascinating contrast of two economists in that issue: Paul Krugman and Julian Simon. Krugman makes some fascinating predictions about technology and the economy. Can you guess how many predictions he got right? I wrote about it here: www.r21.org.

Anyway, thanks Jory!

Now: back to the Third Wave.

 

Characteristics of 3W apps, Part 1

Last time I outlined many of the building blocks we now have to build 3W apps. This time I want to explore what that will mean for the characteristics of a 3W app. I will briefly call out two characteristics in this issue, and next time will explore several more.

Pan-Internet.

The first two waves were browser centric. The Web isn’t dead[6], but 3W apps won’t be as browser-centric as the prior two waves. We will see “apps” emerge instead of “sites” and they will be designed from the ground up to take advantage of the new world, where the browser on your Mac or PC is only one interface along with others: phones, facebook, tablets, email, sms, IM, laptops, etc. Pan-Internet doesn’t mean web sites with iPhone apps tacked on, but rather apps that are inherently everywhere you need them to be.

Applied Social.

Many of the Web2.0 apps were more “community” than “social,” in the sense that you interacted with community members, more than friends. Blogs, wikis, Yelp, Digg, etc. were great ways of generating “community” involvement but rarely did you actually know people in the community. Social networking (Facebook) and social sharing sites (e.g. Flickr) are inherently social, of course, as are microblogging (Twitter) and geo-tagging services (Foursquare), but most of these services are social for social sake. You are social so that you can be social. This narcissistic form of “social” is fun and in some ways useful, and it built a huge infrastructure, but it is only one form of social. 3W will build on this platform and expand into “applied social” by using the social graph to address existing needs. Where do I visit? What do I buy? What do I listen to? What do I watch? What do I do? While dot com had large sites and search engines to answer these questions, and web 2.0 tapped into the community for these questions (Yelp, Digg), 3W will tap into your social graph. It’s YOUR friends, not “the community” who will guide you.

What do YOU think the key characteristics of 3W apps will be?

Power Tip: TypePad

The first power tip: if you are looking for an easy web site solution and a great blog platform choose (what else): TypePad. TypePad powers the Breaker Labs site and newsletter archive and it works great. TypePad has the best customer support in the industry so you are never left out in the cold.

 

Fun Clips

In case you’ve not seen the Gregory Brothers, check them out.

They do “Auto-Tune-The-News,” such as:

Legalize Pot; Elena Kagan: http://www.youtube.com/watch?v=jbc2NaLuv1A

And they do hilarious auto-tuned manipulations of popular YouTube sensations, such as:

Bedroom Intruder http://www.youtube.com/watch?v=hMtZfW2z9dw

Double Rainbow http://www.youtube.com/watch?v=MX0D4oZwCsA

Backin Up, http://www.youtube.com/watch?v=qIoG4PlEPtY

Tornado http://www.youtube.com/watch?v=m50n4hqx1Ho.

Enjoy!

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[1] Find the Breaker Labs newsletter archives here: http://blog.breakerlabs.com

[2] Jory Des Jardins’ LinkedIn profile: http://www.linkedin.com/pub/jory-des-jardins/0/130/144

[3] Jory’s blog, From Here to Autonomy, is at: http://www.jorydesjardins.com/

[4] Jory’s comment: http://blog.breakerlabs.com/2010/12/welcome-to-the-third-wave.html#comments

[5] The Internet Archive, bless it, has preserved Red Herring Issue 55 here: http://web.archive.org/web/19980610083702/www.redherring.com/mag/issue55/toc.html

[6] “The Web is Dead,” Wired hyperbolized in August. They make a good point about how we are using many other apps on the Internet outside of our browser, but they fret too much about corporate control and used a misleading chart to suggest the web is declining, when it isn’t. (They measure relative bandwidth, not total time spent.) I also think they are too dismissive of HTML 5. It’s worth reading, but with some healthy skepticism. http://www.wired.com/magazine/2010/08/ff_webrip/all/1

 

 

Welcome to the Third Wave

Welcome to the “third wave” – a new generation of Internet companies and applications. Just what the “third wave” is, however, is still to be determined. In pitching his new “sFund,” John Doerr wrote: “we’re on the third wave now. This is about the social web.”[1] Previously, when pitching the iFund, Doerr described the “third shift” as “interacting fluidly on full and fast screens with vast information stored locally. And that will start a third renaissance of software.”[2] Later Doerr described the three waves as (1) microchip & PC, (2) the Internet, and (3) social, mobile and new forms of commerce.[3]

Michael Arrington talks about the third wave and the “Age of Facebook” and marvels at how Zynga (not Google, Amazon, AOL, Compaq, Electronic Arts, Genentech, Intuit, Netscape, or Sun) is fastest growing business Kleiner Perkins has ever invested in.[4] Gravity.com sees the waves as “Theirs, Ours, Yours” emphasizing the shift to personalization.[5]

The New York Times, in a story rife with anecdotes, quotes, and truisms but bereft of any useful trend data,[6] has already cried “bubble!” noting that the “enthusiasm for social networking and mobile apps has venture capitalists clamoring to give money to young companies.”[7]

Bubble or not, I think it’s clear that we are at the beginning of a new wave of Internet applications for a simple reason: there is a new infrastructure upon which to build them. Whether you accept Doerr’s first construct that the three waves are web, iPhone, iPad, or his second construct that the three waves are PC software, Internet software, and social software, (or my construct below), it is a certainty that entrepreneurs will build new things on the foundation that now exists that simply wasn’t available for these earlier waves.

The purpose of this newsletter is to explore this new wave – the ideas, the innovations, the technologies, and the companies – to not only understand it better but to shape it while it’s happening.

A New Foundation

I see the three Internet waves as being (1) Dot Com, (2) Web 2.0, and (3) Third Wave (3W). The dot com wave brought us ISPs, web browsers, directories (Yahoo), search engines (Google), ecommerce (Amazon), marketplaces (eBay) while it commercialized and globalized an academic network. On this infrastructure exploded countless companies and new technologies that expanded the participants in and possibilities of the Internet.

While the dot com wave was in great part about highly funded web sites that were accessible but impersonal, it laid the foundation for the participatory wave of Web 2.0. The OSS revolution and countless technical innovations made developing Web 2.0 sites an order of magnitude less expensive than dot com sites. The cornerstones of this new “read write web” that ushered in “UGC” were blogs, wikis, social networks, and “sharing” sites of all kinds making it easy to share photos, videos, and 140 character musings. As Microsoft was to PCs and Google was to dot com, Facebook is to Web 2.0.

And just as the dot com boom was built on the foundation of the PC boom, and as Web 2.0 was built on the dot com infrastructure, we are seeing a third wave grow on the platforms of Web 2.0. Zynga is likely the first great company of this wave, growing faster than the great companies of prior waves because it’s growing on top of them.

While necessity may be the mother of invention some of the time, Don Norman points out that technology often drives invention with needs being discovered to fit innovations, rather than the other way around.[8] In other words, build it and they will come. (Or, build it and they will figure out what to do with it.)

Infrastructure for 3W apps

To understand the third wave, therefore, the place to start is the infrastructure & ideas that 3W entrepreneurs have to build upon that prior entrepreneurs simply didn’t have (at all or at least to this extent and in this way):

• Social infrastructure (Facebook & Twitter social graphs; open APIs)
• Smart Mobile infrastructure (smart phones, cameras, location awareness)[9]
• App infrastructure (iPhone/iPad, Android, Chrome)[10]
• Tablet infrastructure (touch interface)[11]
• Gamification infrastructure
• Virtual goods/currency
• Ad targeting/ad networks
• Deals/Social commerce
• Read/write infrastructure (Blogs, wikis, Q&A, YouTube, etc.)
• Plentiful and inexpensive content
• Video upload & streaming
• SMO (social media as distribution channel, augmenting SEO & email marketing)
• Cloud services (Google, Amazon, Salesforce, etc.)
• HTML5[12]
• Other candidates: auto-detection (location, flights, traffic, weather), bar codes, new UI/UX ideas, meatspace meets cyberspace (ShopKick), OCR, freelance services (eLance, 99Designs), contests, streams, intimacy/trust, email parsing, and more!

Your first question, dear reader: what new infrastructure would you add (or take away) from this list?

Your second question: what other aspects of the Third Wave would you like to explore? Here are some topics I had in mind. I would love ideas on other areas (and would especially love a guest post on a Third Wave topic):

• Characteristics of 3W apps & businesses
• Key “problems” that 3W will have to solve
• Major challenges & opportunities of building 3W apps and businesses
• Verticals ripe to become 3W
• A closer look at some early 3W companies
• How are traditional, 1.0 & 2.0 companies adjusting to 3W?
• What would a 3W media company look like?
• How does Groupon & the “Deal Economy” fit into 3W?
• Is there a 3W way to be an entrepreneur? What does the 3W startup look like?
• How to evaluate & start a 3W company, app, or project
• What should we name “3W”? Is it really “third wave” or should we call it something else?

Please hit me with your suggestions!

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[1] http://techcrunch.com/2010/10/21/sfund/

[2] http://techcrunch.com/2010/04/05/john-doerr-the-next-big-thing/

[3] “Doerr said the first wave was the creation of the microchip and the personal computer, for which he invested in Intuit Inc. and Sun Microsystems; the second was the Internet, with his investments including Google and Amazon; and the third is all about social, mobile and new forms of commerce, which Kleiner has aggressively invested in through its main fund and a side pool of capital called the iFund.” http://blogs.wsj.com/venturecapital/2010/05/24/john-doerr-on-the-great-third-wave-of-technology/

[4] http://techcrunch.com/2010/05/23/the-third-disruptive-wave-tcdisrupt/

[5] http://blog.gravity.com/2010/11/17/the-future-will-be-personalized/

[6] This is one of the reasons I don’t read NYT!

[7] http://dealbook.nytimes.com/2010/12/03/a-silicon-bubble-shows-signs-of-reinflating/

[8] “New conceptual breakthroughs are invariably driven by the development of new technologies The new technologies, in turn, inspire technologists to invent things, not sometimes because they themselves dream of having their capabilities, but many times simply because they can build them. In other words, grand conceptual inventions happen because technology has finally made them possible. Do people need them? That question is answered over the next several decades as the technology moves from technical demonstration, to product, to failure, or perhaps to slow acceptance in the commercial world where slowly, after considerable time, the products and applications are jointly evolve, and slowly the need develops.” http://www.jnd.org/dn.mss/technology_first_needs_last.html

[9] http://www.scribd.com/doc/42793400/Internet-Trends-Presentation

[10] http://www.scribd.com/doc/42793400/Internet-Trends-Presentation

[11] http://www.scribd.com/doc/42793400/Internet-Trends-Presentation

[12] http://www.avc.com/a_vc/2010/11/html5-mobile-apps.html