Web 2.0 Startup Lessons

I gave a presentation at the DemoCamp 19 in Toronto on my experience in founding/running a Web 2.0 startup over the past few years, and what I think we did right and where we screwed up. My idea was to share some experiences which other entrepreneurs in the consumer web space might find useful, especially those not in Silicon Valley. Folks in the audience seem to have really liked it, and Albert Lai (Kontagent, BubbleShare) remarked that this was the best case study he had seen about a startup’s ups and downs. So I’m posting it here. Check it out:

This was a quickly assembled presentation for DemoCamp’s special ‘Ignite’ format. I have been asked to repeat it elsewhere, and would update it with a better version when it happens on www.varunmathur.net / Techvibes.

Toronto’s Uncork Solutions announced today the launch of WineAlign – an online service to help Ontario consumers make more informed purchase decisions at their local government wine stores. The web service provides wine lovers with access to professional reviews from multiple critics on the web or from their mobile device.

Wines are listed by “critical consensus score” which guides consumers toward wines that are generally well reviewed and currently in inventory at their local store. In addition to being able to search for specific wine types and varietals within a specified budget range and geographic region, WineAlign contains interactive web 2.0 social networking features that allow users to create their own profiles, tailor results to suit their own taste preferences, establish personal cellar inventories, provide their own wine ratings and dialogue with other wine loving friends.

WineAlign currently contains over 2000 objective wine reviews from top independent critics including Toronto Life magazine. Reviews from multiple critics for hundreds of additional wines will be added on a bi-weekly basis. The service also offers a convenient “New Releases” feature that provides consumers with previews and multiple critical ratings of upcoming New Release wines on a bi-weekly basis.

Select recommendation sections can be accessed from Smartphone devices through m.winealign.com.

What is Web 2.0? Is it a sideshow for small companies or a worthwhile strategy for the mainstream? KPMG hosted a session last night in Vancouver on The Corporate Adoption of Web 2.0. The evening session introduce some of the core concepts behind Web 2.0 for an audience that may be familiar with the terms but not with the core principles and whether they have value for large companies.

One featured speaker was Mike Sikorsky, CEO, Cambrian House, Calgary who addressed, “How crowdsourcing is changing the way companies do business.”

Sikorsky, in his inimitable style, explained the difference between two ways to tap into the crowd: “implicit” is by people clicking on links and “explicit” which is by deliberately voting in response to a posed question. Thus, people may be contributing to the wisdom of the crowd without being aware.

He distinguished different methods of pplication: from tapping the wisdom of crowds (which can be quite passive), to participation (which requires a crowd of interested people) and commerce (where there is some potential to make money). Sikorsky gave examples of larger companies (such as Starbucks) that are integrated crowd participation into their websites.

Another speaker was Leonard Brody, a partner of Vancouver success story, NowPublic, who focused on “The truth about user generated contents and the future of news.” Brody gave his customary candid and insightful views on his sector and the web in general.

He noted that the news business has been devastated by the internet. The challenge for traditional news organizations, such as newspaper chains, is that the source of news is no longer controlled. Brody explained how it’s all about eyes and ears and experience. For NowPublic the assumption is there is almost always somewhere to record the news when it happens. Their objective is to build the next generation of Reuters/AP.

In this fast-changing environment it is hard to define new companies. NowPublic is a good example. They are often referred to as a “citizen journalism” site. Brody points out that this is a term invented by journalists. He explained that NowPublic is not in the news business – they are instead a “global news intelligence network.” They have cracked the code on how to gather information.

NowPublic functions because society has evolved from a “witnessing population” to a “participating population.” People are involved in the process. Brody notes that, “The events of our time will be captured by amateurs.”

Another insightful comment was that our society has gone from “hyper local” to “hyper personal;” in other words, geography is not the determining factor in what people are interested in. Instead, they want news that relates to their interests. As an example, Brody cited Facebook which dominates news feeds—people only get the news that they think is important.

One of the issues that come up around Web 2.0 is to determine why people are involved. Brody admitted that if it was just about money, then the tasks of companies would be easer. However there are varied motivations. The list according to Brody: money (this is the smallest); vanity and ego; discussion about a specific issue; accidental bystanders; and people who are simply nuts (the last was a crowd favourite).

This KPMG event session is a positive development that reflects how web principles are seeping into the mainstream. This is a standard method of the diffusion of innovation. The new ideas typically appear on the fringes and then work their way into the mainstream. This is the path to “intrapreneurship”—innovation within larger organizations.

As with innovation generally, it may be a game changer in some contexts and in others it can be an additional tool. As I point out in ePreneur, Web 2.0 principles, such as crowdsourcing, may be the basis for a company (such as Cambrian House or NowPublic), but they can be a strategic tool of implementation for other companies.