As the world financial crisis has gotten gradually worse over the past few weeks, I've been pondering what this means for the web. ReadWriteWeb as a publication focuses on technology - web products and trends - rather than business and VC happenings. So with the exception of one of our feature writers Bernard Lunn, who has written a number of great posts on how entrepreneurs can survive this period, we've generally kept out of the Credit Crisis discussion thus far.
But we're clearly now at a point where the financial problems of the world will have a big impact on where web technology is headed. Indeed, it looks like we've arrived at one of those giant inflexion points - where one web era is usurped by another.
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Editor's note: Looking back over 2008, there were some posts on ReadWriteWeb that did not get the attention we felt they deserved - whether because of timing, competing news stories, etc. So in this end-of-year series, called Redux, we're resurrecting some of those hidden gems. This is one of them, we hope you enjoy (re)reading it!
Of course this last happened when Web 2.0 was coined by O'Reilly Media in about 2004. Luckily not long before that ReadWriteWeb was born (early 2003). So ReadWriteWeb has been documenting Web 2.0 ever since. Over the past couple of years, we've been focusing on other, perhaps more meaningful, trends - Semantic Web, recommendation technologies, websites becoming web services, Mobile Web and more. We've documented these meta trends in a number of big posts, some of which are in our Best of ReadWriteWeb page and copied here:
- Web Technology Trends for 2008 and Beyond
- What's Next on the Web: a ReadWriteWeb Toolkit for 2008
- 2008 Web Predictions
- 10 Future Web Trends
- 10 More Future Web Trends
The Welcome Return of Innovation
Although we'll continue to see the success stories of Web 2.0 grow and perhaps prosper - social networking, mashups, user generated content, etc - now is the time for innovation. I'm not stating anything revolutionary there, because it's an old cliche that tech innovation thrives in times of recession. Nat Torkington of O'Reilly Radar put this into the context of Web 2.0 recently:
"During boom times, companies direct development and occupy great talent with at best evolutionary improvements over the state of the art. Companies are great chasers of new things, but aren't great at making new things. A recession means technologists cease to be paid vast amounts to duplicate the work of others. The Great Tech Bust of Ought Two gave us 37Signals, Flickr, and del.icio.us and there's a strong argument to be made that many companies spent the next six years chasing what they created."
So we can expect to see a welcome return to web innovation in 2008/09, along the lines of what Flickr and 37Signals created back in the early days of Web 2.0. However, web entrepreneurs will need to make adjustments due to the economic climate. Many people have already noted that a re-focus on the bottom line of your business is key, which we discuss below. But perhaps just as importantly, as Nat pointed out, there is an opportunity to take more advantage of open source technologies and cheaper cloud computing infrastructure.
Yes, Tighten Your Belts, But Open Your Minds Too...
In the past week some high profile VCs have been preaching belt tightening as the primary response to the economy. More than a few people have expressed cynicism about this advice, given the hype and party-throwing days of Web 2.0. New York VC Fred Wilson wrote a post today, partly in response to a comment Bernard left on his blog, in which he defends the advice he and other VCs have been giving since the financial crisis got going. Basically that advice has been to batten down the hatches, reduce spending and, in Fred's words, "act responsibly and make sure we all survive to fight another day".
It's all common sense advice, especially since Web 2.0 has been predominantly about consumer apps. I'm certainly no economist, but it makes sense that in a tight credit market, consumer spending will reduce - which will impact heavily on consumer web apps, and trickle through to other parts of the ecosystem.
But I'd love to see technologists, entrepreneurs and VCs take a longer term view of this crisis as well. Sramana Mitra wrote a great post at Forbes outlining some of the opportunities for innovation. In an "Open Letter to the Leaders of Silicon Valley", Sramana first gave some background on the innovation that led to Web 2.0 and followed up with a challenge to create technology for education, health care, social security. As an example, she wrote about these opportunities in healthcare and education:
"As the smart-phone movement marches on, led by Steve Jobs' iPhone, can we not create seamless bridges between doctors, patients and insurance providers that can reduce the $250 billion expenditure in health care administration?
And on the Internet, can we not create a body of standardized content and methodology for teachers all over the U.S.--or the world--that includes parents in the process and engages children via "edutainment," the same way MySpace and "World of Warcraft" engage kids?"
Tim O'Reilly has been on a similar mission ever since his speech at the Web 2.0 Expo earlier this year, for startups to tackle 'big challenges'. His core message is to "work on stuff that matters."
What's Next... Let Us Know in the Comments!
We at ReadWriteWeb have been covering mainstream web applications and things like health 2.0 this year. But we've only just scratched the surface, just as have most startups and Internet companies. As the troubles in the economy begin to affect the tech world, we'll be re-doubling our efforts to document what we hope is an exciting new era of web innovation. There are tough times ahead, but equally there are opportunities.
In the best spirit of Web 2.0, let's start by asking you to comment on what opportunities in web technology you forsee over the next year or so. Please leave a comment and let's get a healthy, optimistic - but realistic - discussion started. To provide a bit of inspiration, I've embedded below our stock presentation What's Next on the Web? Web Technology Trends for 2008 and Beyond (circa December '08).
Note: click here and then click 'full' (bottom right) to view full screen and enable the links inside the presentation.
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