A few weeks ago, Fred Wilson wrote a great essay on Point Solutions vs.
End to End Solutions and I've been slowly working on my own thoughts on
this topic.
His thesis is that "end to end solutions aren't going to work as well
as highly integrated but separate services that build and hold
emotional connections with their key users."
To me, Fred asks this question of web
companies: what are you really good at? For Google, it is search. For
Flickr, it is photo sharing. For Craig's List, it is community
classifieds. For delicious, it is content saving and sharing. He
points out that in a world of open standards and APIs, the user can and
will roll their own personal, unique web experience. When we think
about successful Internet companies, I think it is fair to say that we
all tend to think of our favorite specialists.
EBAY is putting this question to the test. Given the price it paid for
Skype, it’s admittedly hard to tell whether EBAY has a grand vision of
supporting all of the world’s communications needs or simply inserting
world-class technology into an existing business. If you believe what
they say, that “Skype will accelerate commerce on EBAY”, then they
really do want to stay really good at one thing - putting the world’s
buyers and sellers together. I believe them. (Sometimes I think EBAY
ought to have been the one to have bought Overture and made it clear to
the world that brokering anything online, including advertisements, was
its domain.)
I find that companies are often distracted away from specialization
when they are fortunate enough to build an enormous user base. After
all, in the consumer Internet world, a loyal and committed user base is
the key to revenue for even the smallest of companies. It is no wonder
that there is a push on the part of the largest Internet
properties to become super-communities in order to satisfy every need
of every user , and attempt to attract more.
This trend has even started to carry over into more
traditional businesses. Last week, I attended a Churchill Club
breakfast at which Jonathan Schwartz made comments that some really big businesses are starting to realize that their online services are about aggregating people, so they are evaluating
ways to capitalize on their “communities”. He suggested a
not-so-distant future in which we could see Citibank Online enter
telephony and auctions as a competitor to EBAY. I think that idea is
pretty dangerous and distracting for a financial services specialist like Citibank (and I’m sure many
Citibank directors would agree).
The idea plays into a future where us users will be left with 15 or 20, or fewer,
massive communities to choose from in order to satisfy our needs.
While Sun might benefit from that environment, I do think it is counter
to what is emerging on the web. Fred writes about how Ning, the new
social software builder, is making it even easier for users to build
and create point solutions to satisfy the needs of specific users and
groups. You should also check out Chris Anderson’s take on the concept.
As Fred describes, by putting the ability to create point solutions in
the hands of the every day user, there are some serious forces against end-to-end
solutions.
There is a simple and perhaps obvious passage buried in a book I am
reading called “Personal, Portable, Pedestrian: Mobile Phones in
Japanese Life”, edited by Mizuko Ito, Daisuke Okabe and Misa Matsuda
(2005):
Communities and societies have been shifting toward networked societies
where boundaries are more permeable, interactions are with diverse
others, and linkages switch between multiple networks (Wellman 1997;
1999; 2001; Castells 2000). Hence, many people communicate with others
in ways that spread out across group boundaries. Rather than relating
to one group, they cycle through interactions with a variety of others,
at work or in the community.
I repeat it here because it leads me to believe that it is impossible for two persons to relate to the same set of groups, which makes the idea of
end-to-end solutions even more difficult to accept. Sure Google, Yahoo!, MSN
and AOL each have massive user bases and they do their best to create
sticky applications, but I've yet to hear of any person, let alone a group
of people, claim their fettered loyalty to any one of them (as hard as
AOL and Yahoo! now are trying to fling the shackles at our legs when we
download any piece of software). Most people I know are most satisfied when they engage with
each of the services for particular purposes. The big players therefore face a dilemma: the more open
these large portals become, the more at risk they are of setting users
free from their applications; the more closed they become, the more
likely users will be frustrated in their need to interact
with others outside a single network.
Tom Evslin is starting to describe this problem perfectly in the
context of self-interest, and he has me waiting with bated breath for
his own answer to his question: “Does the conflicts of interest between
users who want to be on the largest possible network or interconnected
system of open networks and network providers who want to retain value
for themselves by remaining closed means that we are doomed to walled
gardens? Nope. Stay tuned for why not”.
I believe much of the pressures against walled gardens come from the fact that we as users are
exponentially increasing the number of interactions we can and
want to maintain on the web. In this post, I talked about the
idea that our social networks, or at least the overlapping portions, need to become more portable and the solution must emerge outside of any single "community". Instead, the larger players seem to
think that they should be the ones to solve the increasingly obvious user
pain points around social networking and identity authentication. I am really waiting for a company (or perhaps better yet, a movement) to come
along to make this arena the thing that they are really good at.
So like Fred, I do see connected point solutions as the best scenario for users, although I do wonder if it is the most likely. Despite some emerging forces, I suspect there is the same nagging thought at the back of the
mind of everyone interested in web 2.0 that Fred’s friend might
ultimately be proven right – that stitching together a variety of point
solutions in order to create and manage one’s own web experience will
not appeal to the mainstream user. In reviewing Microsoft
Live earlier today, Tim O’Reilly wrote this: “you have to realize that for
ordinary users, it may not work that way. Even a configurable portal
like MyYahoo or Windows Live is a stretch for many users.”
For a while, I suspect we will see a few big Internet properties attempt to make the end-to-end solution their specialty.
