A rant from a Googler comparing Amazon’s focus on a platform vs Google’s focus on products. Fundamental.
Photo by The Rocketeer on Flickr
Remember the bad old days of blog networks. Like when I was at b5media championing the idea of content as the great savior of the Internet, the bellwether of future journalism, the dawn of an era of online advertising as the dominant (and only) truly valuable means of creating revenue online?
Yeah… so about that.
I was wrong.
I was wrong about the idea of wide adoption of online advertising as a primary revenue source for the long tail. I was wrong about content not being a commodity. I was wrong to think that successful online startups could have successful advertising models. I was just wrong.
As recently as this week, AOL laid off it’s “freelance writer” staff as part of the recent Huffington Post acquisition and subsequent roll-up of AOL properties.
All you people thinking you can make money online using the standard advertising/content model… well, think again. You’re not.
Advertising is a commodity. Commodities, by definition, are resources that flood the marketplace, diluting the individual value of each resource. Advertising online is dominated by “remnant” advertising, which is cheap commodity advertising that costs the buyer little to purchase in bulk (think Adsense) and results in little payout to the publisher. There’s very little real money in commodity advertising. The real players are getting paid on direct sales advertising targeting big sites with high payouts (Think Apple taking out prominent advertising space on the New York Times for tens of thousands of dollars).
Content is a commodity. There are millions of bloggers. Millions of publishers. Hell, just this week, I migrated a site to WP Engine that had 11k+ sports blogs. Content is a commodity and, by definition, not valuable.
But if you want to keep thinking it’s valuable, go for it. You keep writing blog posts and giving yourself some sense of value. While you’re at it, take a look at the sky and convince yourself it’s actually orange.
Content companies are not likely to generate enough value in today’s economy. Certainly not for any kind of acquisition or exit.
I was wrong. I’m man enough to admit it.
In today’s internet economy, the real value and, in my opinion, the only viable model for successful online business is in product. Products. Real, tangible products. An iPhone app. A digital goods marketplace. A software product. A social network, perhaps. Something that has measurable customer acquisition and a real exchange of monetary value. You know, like the good old days where I pay you for something that I can, with certainty, validate receipt. I give you $30, you give me a text editor application for my Mac. I pay you $15/mo, I get an online invoicing service. I pay $0.99 and get a car locator app for my phone.
Content commoditization strategy says, I do something for you, Mr. Advertiser (put some code on my site), and you may pay me something if anything productive (click, action, impression) comes from it and, oh yeah, there’s no real measurements or guarantees for said exchange. Keep churning out content and page views will pay me.
No. That’s not how it works anymore. Why do you think Netflix built their model on a pay-for-service concept instead of intro/outro/in-video advertising? Why do you think Amazon continues to diversify their product offering with no real advertisement and certainly no content? Need a server? You can have 10 for cheap. Need music? We’ve got that covered at a competitive rate and now you can play it from anywhere. Need toilet paper? We’re partnered with retailers across the country to provide any essential product you might need and you can even have it shipped free if you pay for this other service we call Prime…
See? It’s product… not content. Content is becoming significantly less valuable.
Time to pivot.
Our world today is diluted. The lines have blurred. Everyone has bought into this concept of community – that everyone has something for everyone and we’re one big happy family. Specifically, the concept of the “technology community” which is a term that has come to mean anyone who has a blog, uses social media or Twitter and engages online in some way or another.
Though this has been a trend that is akin to the frog happily boiling in an ever increasing pot of hot water, the reality struck me today as I saw this Wall Street Journal article about how Facebook and Zappos approach hiring. Facebook, of course, is the social networking platform that has become the largest social network on the planet and Zappos, the sexy company that was just acquired by Amazon and has made its name, not on selling shoes – its core business – but in its company culture and parties.
In the WSJ article, the writer begins with the statement, “For fast-growing technology start-ups, there are many approaches to employee hiring and retention.”
While Zappos is a great company, and their acquisition by Amazon (which is a technology company) certainly places them in the ranks of great Internet success stories, they are a glorified shoe store, using eCommerce, web marketing and buzz to execute on their core business. They are not a technology company.
This is not a pissing match over labels. If calling a company a technology company when they are not was harmless, I wouldn’t care. The reality is that it is a harmful trend that is hurting the real tech community. This is not about Zappos. This is about the hundreds of people who hang out on the social networks, using the technologies built by real technology companies and technologists, and who call themselves technologists because they use the tools.
These are the people who go for job interviews that they are not qualified for hanging their hats on social media experience.
Being in social media does not make you part of the technology community.
The real technology community is made up of developers, I.T. architects, and even highly trained engineers with C.S. degrees. For the record, I have neither a C.S. degree or any degree at all. However, I have been slinging code for 10 years now and it continues to be my primary business, despite public speaking, book writing and social media engagements. I am a technologist. A marketer or a salesperson may be highly trained marketers or sales people, but they are not technologists in most cases.
Here are some thoughts. These are common. I’m not simply being a little over the top.
- The most you know about memory leaks is when Firefox crashes. Do you know why? Can you debug it? Do you understand the concept of a memory leak and why it happens?
- You don’t know how or why an API is important. If you have to ask what an API is, you’re not a technologist. You don’t have to know how to use it, but know what it is. If you don’t know why an API might be important, you’re also not a technologist.
- Your evaluation of a good website is based on the UI and layout. Great design is important and great designers are hard to find. That doesn’t make them technologists. Though there are some who straddle both worlds extremely well. A website is not just a website because of the appearance. It’s about how data is used. Remember this video?
- It doesn’t matter if a site is built in a compiled language (Compiled PHP, .NET, etc) or not. Yes it does. Why?
- Your approach to business does not include principles of Object Orientation as understood by developers. OOP is huge with developers. Ask any Java, Ruby or Python developer. Can you apply these principles to business too? They do apply…
- The most exposure you’ve had to XML is RSS. And at that, the most you’ve had is adding a feed to Google Reader.
- Your idea of working for a web startup is as ‘community manager’. Yeah, there are some great community managers. They are people people, not technology people. Additionally, community managers are meant to be liaisons between users and developers. Stop calling yourself a tech person if you’re a glorified PR person.
Again, if this was simply a matter of labels, it would be no big deal. Social media expert? Go for it… Everyone is a social media expert. Entrepreneur? Unless you’re building the product yourself, you’re probably not a technologist. Businessperson? Sure. CEO material? Quite possibly. Don’t call yourself a technologist.
You’re HURTING us. This market is filled with people looking for work right now. And recruiters are out in force looking for the one person who can fill the role of two people and save their client money. So by you walking in the door and taking jobs you’re not qualified for simply because you can do some marketing, strategy and you know how to hack on a website, you’re hurting this industry of highly qualified, professional people.
Stop carpet-bagging on our industry and call yourself what you are. You are highly qualified marketers. You are highly qualified journalists. You are highly qualified business development people. You are not technologists.