John Battelle On Building A Better Boom

John Battelle makes a strong case that the Web 2.0 resurgence is not a bubble, but represents a structural change in economics, technology, and society, and that in the final analysis, Web 1.0 led to a tech boom and bust because critical factors weren’t in alignment then which are now:

[from Building a Better Boom - New York Times by John Battelle]

But regardless of all this deja vu, we are not in a bubble. Instead we are witnessing the Web’s second coming, and it’s even got a name, “Web 2.0” - although exactly what that moniker stands for is the topic of debate in the technology industry. For most it signifies a new way of starting and running companies - with less capital, more focus on the customer and a far more open business model when it comes to working with others.

And ubiquitous broadband, wifi in every cafe, and incredibly cheap hardware and open source software, which has made the cost of entry for innovators almost zero.

He addresses the notion that the web is an application platform — although he doesn’t use the Web OS term — and the missionary zeal that seems to pervade the Web+2.0+osphere (yes, you saw that here first). People involved in this movement — and it is a movement, having a lot in common with others, like open source, emergent democracy, and those who are trying to keep governments away from Internet regulation — are, as John puts it, “decidedly missionary - from the communitarian ethos of Craigslist to Google’s informal motto, “don’t be evil.”“

His final point isn’t as compelling to me as those that precede it, but may help to convince finance types: it’s not a bubble because there is little public financing through IPOs. That may come back to haunt him — and us all — if that bubbilicious model begins to be used.

But the natural economics of Web 2.0 development argue against that. I was just on a tour, talking with a handful of Web 2.0 tech start-up founders, and the tendency is to stay small, almost humorously small. At Mary Hodder’s Bloqx, for example, three developers were crammed into a room no larger than a large closet. Jason Fried of 37 Signals advocates keeping teams small, not just from a desire to reduce the burn, but to increase the likelihood of less features creeping into products. This week, I saw the same reflected in the jampacked three-room office of Podcast.com, where Scott Beatty, the CEO, described the company’s plans to the ‘rolling beta’ model of developing more and more rich services, which rely on small, agile development coupled with an obsession with end-user experience.

It’s an austere and highly philosophical era — which John only tangentially touches on — but one that is likely to lead to very different outcomes that Web 1.0. I believe that it’s also a generational thing. These are either young veterans of the Web 1.0 mess, or those that witnessed the fall out of “irrational exuberance” from afar. And they are at least going to make new mistakes, if mistakes are to be made.