Conscious unbossing as a professional’s career choice and conscious unbossing as a leadership philosophy not only have no intersection, but can be detrimental in implementation. When does it become reckless leadership?
How much do you challenge the directive? If project managers are always going to go along with what they are asked or told to do, then there really isn’t a lot of point in them being there.
The delivery metrics across your large-scale transformation program look strong. The closure report is signed off. The steering committee congratulates the team. And then, quietly, the organization continues doing things the old way...
Software people are always enamored by numbers separated by dots, whether it is Oracle 10.1.3.1 or WebLogic 9.2 or Java Runtime Environment 5.0 or IE 7.0.5730.11. The higher the numbers after a version of a product or a service, the more advanced and powerful it is supposed to be.
No wonder Web 2.0 was waiting to come along. After all, Web 1.0 was such a big success (even though it imploded later). Many fortunate people made huge amounts of money, whereas many not-so-fortunate ones lost their shirts. The clearing of the cloud of dust after the implosion of the initial Web had to uncover something to take its place that would continue to challenge, feed the greed and pump the adrenaline of techies and entrepreneurs.
A 2004 brainstorming session between O’Reilly Media and MediaLive International uncovered one such thing and named it Web 2.0. Since its inception, the meme--a term coined in 1976 by Richard Dawkins to refer a unit of cultural information transferable from one mind to another--has been quietly spawning a bubble, which so far has gone relatively unnoticed. Despite its flight under the radar of many, not all is well or smooth in the Web 2.0 world. Powerful people are fanning the waves for its success, and then there are many doubting the prediction of its doom and the bursting of the bubble.
Money Talks
Reports by firms tracking global venture capital activities indicate that Web 2.0 firms are becoming hotter amongst the VCs. VentureOne, a leading venture capital research firm, says that in the first half of 2006, 49 Web 2.0 companies based in the United States received $262.3 million in equity infusion from VCs. At this rate, the group is likely to double its 2005 funding level.
Another study by PricewaterhouseCoopers and the National Venture Capital Association puts the money going into Web 2.0 firms during the first three months of 2006 at $870 million, up from $786 million the quarter before. Obviously the two reports use different definitions of Web 2.0 firms, with VentureOne defining it more narrowly than PricewaterhouseCoopers.
O’Reilly laid out elaborate criteria--seven competencies--for dubbing a company Web 2.0. Some people define Web 2.0 as a collection of technologies offered over the Web, which make possible a new set of products, services and business models. For its report, VentureOne considered a company to be Web 2.0 if its business model revolved around user-created content, networking and collaborations. These companies used applications like podcasting, tagging, blogs, social networking, mashups and wikis based upon technologies that included AJAX, RSS, SOA, CSS, XHTML, Atom and rich Internet applications.
PricewaterhouseCoopers defines Web 2.0 companies more broadly. It included many non-consumer companies in its survey, like network infrastructure companies Riverbed and Netli, arguing that they help facilitate the Web 2.0 experience.
Easier to Start, but Revenue Still Eludes Most
It is much easier to start a Web-based company these days. Not only is the hardware cheaper, but the open source has made infrastructure software more accessible and easily deployable. However, there are conflicting viewpoints about the efficacy of the utilization of these advancements within the Web 2.0 domain.
On one hand, an argument can be made that technical and business innovations have made it possible for these companies to start generating revenue much faster than their predecessors. VentureOne says that more than half the companies that received funding in the first half of 2006 were generating revenue.
On the other hand, there are major challenges facing these companies. True to the saying that “God goes with big battalion,” successful Web 2.0 companies need to have bigger sites and operations. Big sites require big, expensive infrastructures. They are also costly to operate and generate many other types of expenses including legal, which create big hurdles for these sites to produce positive cash-flow.
An indication of the lack of revenue is that this category is still without much liquidity activities and IPOs. Most of the activities is in the mergers and acquisitions area. MySpace was acquired by NewsCorp for $580 million, YouTube was picked up by Google for $1.6 billion and UK’s ITV bought Friends Reunited for more than 28 times its earnings.
Some see a silver lining even in the lack of revenue-generation capabilities of Web 2.0 companies. In Fortune, Adam Lashinsky writes that although almost no one currently in the Web 2.0 world is making any money (except Google), it could be a good thing for investors. Lashinsky thinks that despite big talks, Web 2.0 is really all about “the Google” and is really the reincarnation of the frothy bubble of Web 1.0. He argues that the popular exit strategy of Web 2.0 ventures of getting bought by others--even though the capital markets are receptive to IPOs--is because they are more features than business. He says that the lack of revenue generation-capabilities of Web 2.0 companies could be a blessing in disguise for those investors who are bubble conspiracy theorists, as they may pass these opportunities and not get burned.
The jury is still out on the viability of Web 2.0. Many Web 2.0 applications hold a lot of promise--and also face big hurdles. Like most technology advancements, Web 2.0 is accompanied by a great deal of hype. Without such hype, no trend can truly realize its full potential. Great hype brings with it the talk of a bubble. Whether this bubble will burst or will have a soft landing, only time will tell.
