Yesterday Greg Linden asked Is Web 2.0 nothing more than mashups? In that post, he makes the following claim:

Companies offer web services to get free ideas, exploit free R&D, and discover promising talent. That's why the APIs are crippled with restrictions like no more than N hits a day, no commercial use, and no uptime or quality guarantees. They offer the APIs so people can build clever toys, the best of which the company will grab -- thank you very much -- and develop further on their own.

I believe that a lot of folks are wondering about that too. They're more than a little suspicious of companies like Google and Yahoo! opening up APIs. (Amazon and eBay can't hide their profit motives, so nobody even wonders about that.)

Related to that, Fred Wilson asks When Is A Market Really A Market? He's focused specifically on on-line advertising, but his questions apply equally well to lots of other on-line "markets" as well.

So, I believe that right now, we have a marketplace, but itís a nascent marketplace. The thing that gets me so excited, though, is that is so clear where all of this is headed.

I claim that these two discussions are actually related by the notion of a platform.

The platform is what you must build today in order to create a new on-line market. To be clear, the process goes something like this:

  1. Build new "open" platform
  2. Get critical mass (this is where mashups start to come in)
  3. Add financial incentives, creating a marketplace
  4. Profit!

That leads me to ask the only unasked question so far. In the Internet of 2006, what's it mean to be (or create) a "platform"? What is a platform? Is one necessary to create a new marketplace online?

What do you think, based on the evidence we've seen so far?

Posted by jzawodn at December 01, 2005 02:32 PM

Reader Comments
# Ramana Kovi said:

I follow over 100 startups in web 2.0 spaces that includes highly touted Technorati, Pandora, Sphere and Zimbra. Half a dozen are so companies in the hundred will bring value to table as an added enhancement to an existing product lines.

To create a business which can scale as a stand alone business you need a platform on which you can add value incrementally. Not only business needs to scale, technology needs to scale (This is even harder).

This is not 1995, you need to have lot of IP (Entire IP Portfolio of GYM) in order sustain as a business. Most of the web 2.0 companies are noice in IMHO. Building a web platform is not an average startup model. This is the model where VCs like Vinod Khoslas and John Doerrs of the world will thrive and Others ( Like Fred Wilson of the world ) will miss it because they wont see the value immediately. Iam yet to see a company currently out in the market which can survive as a stand alone business.

on December 1, 2005 04:30 PM
# Charles said:

In discussions with a friend, we finally hammered out a working definition of Web 2.0.

The significant feature of the world prior to Web 2.0 is the real-world metaphor. Successful products had practical equivalents in the real world that were easy to comprehend. For example:
Google -> card catalog
email -> Postal service
static web pages -> books and magazines
e-commerce -> retail stores

The significant feature of Web 2.0 is the complete disjunction between reality and the software. Programs have no functions that are analogous to any existing real-world applications.
Folksonomies - WTF?
Wiki -> WTF?

None of the newly created Web 2.0 services are comprehensible to general customers, as they are almost impossible to explain to nontechnical audiences. They are non-obvious (and usually impractical). They all have business models that cannot be evaluated by any rational means, as they have no operational model that can be evaluated by conventional means.

on December 1, 2005 04:59 PM
# grumpY! said:

why is there so much debate on this (non)topic? there is no "web2", there was no "web1", there will be no "web3", the entire concept is a fallacy. services come and go, new ideas emerge/get recycled, its just a continuum of ideas that either get synthesized into the mainstream or not. what of it? because the concept is meaningless, the topic can never be closed, and there is absolutely nothing to be gained from consensus. i'm not saying there are not great ideas out there, but they have been emerging continuosly (along with bad ideas) without regard for this hackneyed notion of "eras".

as far as i can tell so far its beyond just navel gazing, its the new narcissism (put on meth by the advent of blogs).

and now it is in the meta stage, where we are talking about talking about web2.

when you spend your evenings debating the undebatable, maybe its just time to have kids.

on December 1, 2005 10:34 PM
# Shrikant Joshi said:

You've put it in a way that would not go down well with some, but there's some truth in it.

The hype over Web2 has grown so much that it reminds me of something in H2G2-5 by Douglas Adams.

We don't yet know what it is, but as soon as we know, we'll give it a name that none of you guys can understand and then claim it as our own.

IMO, "Platform" is just one such word.

on December 2, 2005 12:09 AM
# Joe Hunkins said:

I'd suggest no, you don't need a *new* platform to create a viable market because we've only scratched the surface of potential of current platforms. Humans are not very well equipped to exploit the full potential of technology - we are just too challenged so it takes a long time to adapt to new potentials.

However you certainly need a critical mass of users, which I'd call "community". Because communities tend to be more stable than technologies, and people are better at developing "habits" than "innovations" I speculate community will lie at the heart of the success of companies that are still around in 2015.

on December 2, 2005 02:34 PM
# Elijah Blue said:

I'm getting dizzy, and I'm beginning to think all you guys who were around during 'the bubble' have some sort of mental disorder.

This is natural stuff. Web 2.0 is a label (and a good one) to indentify the next wave of innovations that are kicking in now that we're recovered from the bursting bubble.

And it is about community (always has been, always will be). Before computers, hell, before recorded history, it's been about community (Tribes>Kinddoms>Democracies, just community.. albiet more refined as time goes on).

We're just using the tools to create more robust communities for people that know how to use the tools.

Man.. you VC types are getting both overly self-referential and you're developing really bad cases of echolalia.

Get on with it. INVEST (isn't that what you're supposed to be doing?) and quit worrying about what something really 'means'. If there's a business there, and the founders and explain it reasonably well, and it can make profits (especially if it takes it away from old world businesses like newspapers or radio), hell, take flyer and invest in it.

You're supposed to be the risk takers right? Take some and quit all the mental masterbation (alone, and with each other).


on December 3, 2005 11:22 PM
# Dave McClure said:

i believe the actual business plan is:
1) make Web 2.0 underpants
2) ... (what is #2?)
3) Profit!

see more on Yahoo's Web 2.0 world domination plan here:

ps - and for more about Jeremy's Web 2.0 underpants, see McManus' application for a job at Yahoo here:

- dave mcclure

on December 5, 2005 12:02 AM
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