Is Twitter the best Web 2.0 concept ever devised?

Twitter is a social networking tool that facilitates group instant chatting. While this may seem trivial and that it panders only towards young adolescents' desires to constantly be in contact with friends, the reality is that Twitter offers huge benefits to business people and entrepreneurs in terms of both networking, marketing and information sharing.

If you haven't heard of Twitter, have a look at Vinny Lingham's useful post here, as well as this Lost Art of Blogging post on why its so great and how to effectively use it.

But now the main issue - for those who don't know [ie mainly people that don't yet use Twitter], Twitter has had some major scaling issues for a while now [several months at least]. These have resulted in problems that include:

• serious downtime of all functionality
• im/gtalk updates not functioning
• mobile site not working

As a point of comparison, this is like having the newest Nokia or Samsung cellphone but only being able to use the sms functionality and nothing else - ie. it leads to a highly frustrating user experience.

Even ReadWriteWeb had a lot to say about the perilous place this web 2.0 "wonder" [you wonder whether it will ever work properly] has found itself in. Charl Norman had a decent suggestion for the M&A guys over at Google recently that could help solve these problems, but it's unlikely that that would ever materialise at this rate.

Negative aspects aside though, think about these problems for a minute... what would this type of thing do to just about any online business? Or any business for that matter? Quite frankly, there's only one logical consequence - Game Over. Power off. Do not pass go and do not collect R2,000,000. Complete and utter anhilitation of the business. Yes, Twitter has pretty much messed everything up. And yet, Twitter continues to exist, and is still used. A lot!

The only consumer brand I can think of with such pulling power is Coca Cola - imagine if their entire distribution network failed and you could only buy Coke once every couple of weeks. Chances are that most people would still buy the Coke every two weeks rather than switch to another product.

Totally befuddles the mind. I honestly cannot comprehend why people still use Twitter. But that's just the way it is. And this leads me to ask what I asked in the title - Is Twitter the best web 2.0 concept ever devised? Not the best web 2.0 business, certainly. In fact, I don't even know if they have a business model at all [and I'm not the only one that feels this way. It could even be that they've missed the opportunity totally]. But surely for an internet site that barely works to still be able to attract masses of users, there must be something special about it!?

I asked a question on Twitter a little while ago about whether it is worthwhile buying the company [in this state] at a good price to apply a decent business model. Needless to say, there were no responses.

I think Twitter was down again.

You can follow me on Twitter here.And here is the satwitter wiki with a list of all the other South African suckers that just can't say goodbye to this bitter-sweet lexicon of web 2.0.

Local relevance. Global excellence.

Why not? Many companies have proved it, and in fact it’s the way that businesses have grown throughout history… starting off small and growing from there by taking a successful formula and replicating it elsewhere.

It’s funny how some people think this doesn’t apply to technology/internet businesses as well. Just have a look at Justin's comment on this previous post – spot on, and sadly where many local investors fall short. Where’s the vision to see what others don’t see?

Incredibly successful businesses are often built on one key element – community.

Just think of a simple example [I’ll borrow here from muti’s functionality a bit, so please forgive me Dave]:

How often do you go around looking for someone who can help you with handyman-type-work at home, or someone to install a pool-net, or possibly even paint and seal your roof [yes, those heavy rains a while ago bring this clearly to mind]? But you don’t want just anyone – you want someone reliable. Where do you go? The yellow pages and local newspapers are littered with names, and more often than not, the one you choose brings along a suitcase full of shoddy service, leaving you wondering why you bothered in the first place.

Enter a community website listing local suppliers [similar to Muti’s listing of posts] and where community members vote suppliers up or down [with more detail as to who voted and why, to maintain integrity], with tags for the different types of services. Surely this would make finding good people for the job much easier? It offers something for everyone:

• for community members, a trustworthy source of reliable local suppliers;
• for suppliers, a good way to leverage word-of-mouth referrals, where good service really does pay off; and
• for the developer, a great way to reach a focused community and a way to earn revenue while doing so [most obvious way is targeted advertising for that community]

Sounds silly and simple, but if you can make this work in one small community [I would love a service like this], who’s to say you couldn’t make it work in 100 small communities, and then 1,000, and then 1,000,000. And in that case, wouldn’t a “small” investment in making the first one work pale in comparison to the potential rewards to be earned from a locally-global business.

So then how can you say you won't invest in a small business without global appeal? Look a bit further!

Locally, relevant.

Globally… excellent!

Customers vs end-users: who hid my revenue?

Many of today’s tech and internet business are gearing themselves totally towards their end-users, and seem to be forgetting about their customers [the guys who bring in the revenue]… resulting in awesome, well-loved businesses with business models that just don’t work.

The reason for this could be simply confusing the two. With traditional products, very often your users are your customers, therefore it’s much easier to keep both happy.

Take these examples:

1. As a traditional company, you build a great lawnmower, price it well and sell it to your customer who is then [hopefully] reasonably happy with the price and the performance. Customer and user in one – your efforts are easy to target and the results will speak for themselves.
2. As a tech business, you develop an awesome system to store, tag and find e-mails. The system is online, free and works amazingly well. Your users are ecstatic and use it frequently. But are your customers happy? Well, maybe the first question should be “Who are your customers?” If you follow the traditional internet-advertising marriage route, you sell advertising space on your pages for your customers to reach your users. And if you don’t make it attractive for those customers [however you may choose to do that], don’t expect your customers to be very happy or very willing to part with their money.

Despite what I’ve said above, we can learn from those who’ve been there and done that:
“The company isn’t run for the long-term value of our shareholders but for the long-term value of our end users.” – Eric Schmidt, CEO of Google in Time Magazine, 20 February 2006

Very interesting one. Perhaps Eric’s point is that if they are always aiming to keep their end-users happy, everything else will fall into place. Which it has done so far, so I won’t argue that – but there is one stark difference between Google’s business model and that of other world-wide-wannabees – Google has found an effective way to generate revenue [in their case, also to place adverts] that keeps both users and customers happy. Which is something that many young startups cannot yet lay claim to.

So please keep in mind that there is a difference between customers and users – there’s no point only trying to keep end-users happy when you need to make it work for your customers too. If not, end result = no revenue. Simple.

For some interesting reading on this topic, have a look at the Long Tail post: "What does the 'Media Business Model' mean?", which includes a list of revenue models you can find in the media industry.

How free haircuts could revolutionise the economy...

No, I haven't lost it [just yet]. Just following a train of thought that has challenged me every time I've had a haircut over the last three or four months -

What do you pay for a haircut? R20? R50? R100. Whatever you pay, the price they charge must be worth it to you.

I challenged my barber to really test the value of the service he delivers - what if, for just a month, they stopped charging a fixed price for haircuts, and instead asked customers to pay them what the customer believes the service is worth?

Needless to say, he hasn't yet taken me up on it. I can't really blame him either, because the results would reflect the purest form of honesty regarding the value of his service... and good or bad, this would be quite a pill to swallow. Some customers might not pay a cent and get a free haircut... good for them. Some might pay more than you charge... HEY!

Think about the benefits for a second:

• you know exactly where you stand with all your customers
• customers can never complain about prices or inflation ever again
• the potential for free marketing [word-of-mouth or other media exposure for having the guts to do this] - HUGE
• how can your "competitors" compete with this?

The million dollar question: What if all other businesses ran this way too? Okay so this is just a haircut. How about cellphone service providers. Garden services. Security companies.

The billion dollar question: How could this revolutionise the economy, taking away "pricing-parity" excuses and really delivering value to all people in the country at a relatively affordable price?

And the trillion dollar question: What happens when your competitor starts doing this? How will that change your business? Are you in any way prepared for it?



We can laugh at this now. I can too. But who'll be laughing in 20 [or 10, or maybe even 5] years time when "Freevest" is the JSE's largest company?

Is a blog just a bad business in disguise?

After two related posts relating to blogs for sale, I got to thinking about the real value of blogging. WHY DO WE DO THIS?

Eve Dmochowska's question here relating to a blog for sale had me thinking the answer was obvious, but then to see Adii seriously considering purchasing one here made me rethink it for a second.

Just to take a little step back... I see a distinguishing factor between a great business and a great businessman. You can be a great businessman/salesman/widget-maker-extraordinaire but still not have a great business. One of the marks of a great business is that the system runs regardless of whether the owner/manager is there [ie the business doesn't go home at night when you do]. I've written previously about the great education model that's been built at CIDA - but in reading this article in the Economist ["CIDA remains intimately associated with its founder and chief executive, and there are questions about whether it would survive without him."], it seems that this is even an issue in their hallowed halls.

Building a business away from yourself is largely contradictory to how most blogs are developed - where the personalities involved often become the main attraction, and advertising revenues [see the two examples Adii cites] are the business model. I'm sure we've all seen many blogs simply dripping with tons of paid links awaiting your beloved clicks. Shouldn't a blog be more than this?

That's one of the reasons I don't have any Adsense or other paid-links here. I love writing and want to enjoy it for what it is. Do I want a blog that is widely read and respected? Sure - we all do. What I would also love to do is build an AWESOME, amazing business one day that will change the world!!! But will a blog ever be that? Sure, it can be a part of it, but I don't believe the blog should ever be the business itself.

Please don't take this the wrong way. I know sites that attract lots of eyeballs are valuable. I know there's huge potential and the possibilities are amazing - but there's still quite a lot of work to be done in this particular case. Buying it is a shortcut which many might be able to use well, so if someone is willing to pay over $8,000 for a blog, without any other clear business model built around it [precious few contracts, current relatively low revenue levels, etc], I wish them all the best, and can only say congrats to the high-school going developer. Hey - that's the entrepreneurial spirit!

How to structure... [The big chief]

Regardless of the idea, products and services, employees and all the other aspects of a business, one of the key areas is how to structure it. With a large number of possibilities around, this can also be a creative part of the business and deserves some decent thought.

I'd like to have a brief look at some of the possible structures in the never-ending quest to find the best.


Since we live in an economy where informal businesses are quite prevalent, its only appropriate to start with probably the most common structure... what I like to call "The big chief". Yep, you guessed it ->

Our business mogul to be owns 100% of his business - "It's all mine" he thinks as he sweats through the startup process, smiles through the growth phase, relaxes during the maturity phase...
... and sweats again when he needs to sell the business.

Where to now?

This, to me, is the glaring weakness in this business model. And this is on a best case basis. It assumes that he is somehow able to attract and retain top talent in today's environment [lets face it, without any long-term incentive, nowadays every man and his dog is willing to jump ship for a slightly bigger remuneration package]. In fact, not being able to get or keep top people may just sink this ship before it even gets out of the harbour.

So on the scales then...
Pro -> If you can make it work, and successfully find a buyer at the end, you'll be stinking rich [more so than sharing it with anyone else].
Con -> Chances are quite good you can't, you won't and it won't work.

I'm sure there are a lot of people out there who would disagree with me. Fine - that's your opinion. If greed ["he who dies with the most toys wins"?] and infinite selfish wealth accumulation is the object of the game, count me out.

My view - I'd rather have 10% of something than 100% of nothing [plus how awesome it would be to see the others with the remaining 90% enjoying theirs]. 'nuff said.

Creating markets... oh what a beautiful thing

So many people and business leaders are always talking about market share... and how to go about growing this figure. It can be a painstaking exercise, for sure.

But you gotta love the cowboy approach - CREATE MARKETS. That way, no competition, no price leaders, no rigid rules as to how to do business... you just do it.

One of the runaway winners in this category has to be Second Life who's founders took the challenge head on. It may have taken 6 years to actually realise and understand exactly what market they were creating, but they did it.


This article on Inc.com's "How I did it" archives delves a little into the story behind Second Life with CEO and founder, Philip Rosedale. Its absolutely fascinating, and much like the Google story, shows how the business was started with a [vague] idea and passion. The passion led them to build the "product" they believed in... and the rest, as they say, is history.

What I love about this business:
- built on passion
- created a new market where none existed before
- proved that a sound business model can be developed [even if it takes six odd years] to match an awesome product, if you look hard enough - ie, don't do something because it can make you rich, do it because you love it and you're driven... the rest will sort itself out.

Again, much to learn from this. Sounds much like the adage that most people decide what they want to have, let that determine what they must do, and that in turns drives what they will be...

[ HAVE - DO - BE ---> highly unsuccessful approach ]

... rather decide who you want to be, let that drive what you do, and in the end you will have what you should.

[ BE - DO - HAVE ]

Time to stop living back-to-front and start doing it the right way.

And oh yes, way to go Philip!

The times, they are a-changing...some more

The times they are a-changing [1]

What's that they say about death and taxes? The only certainties in life are... well, I can think of one other big certainty which makes life worth living, but other than that, its pretty close.

Looking at people's needs, you would probably say with fairly high certainty that doctor's will always be in demand, as sick people (of which there are many) need doctors. Well, according to this Fin24 article, that's not necessarily true. The article talks of how the landscape is changing for regular GP's, and goes on to explain how the entire business model is changing, with the main driver of this change being... you guessed it - attempts to reduce medical costs.

So does this mean that value means nothing? I have always taken the view [although not always easy to do] that cost is not the main focus, rather value is. The old economic conundrum about price vs quality comes to mind here.

Does this mean that value is out the window? As we advance technologically, [not just good but excellent] systems become commonplace and barriers to entry in many industries continue to dwindle... it seems cost is becoming a very large focus indeed. Having trained as an accountant, its easy for me to see why this is important, but something within me balks at the thought of every decision, every business being concentrated on minimising costs.

Just think of what we would be missing out on if this were the case.



Or is it just me?

Lesson in this [one of them, anyway] - in the changing times, cost has become a large driver for many businesses and decisions. We have two choices: accept it, join the hordes and beat that supplier down... or face it head-on and try to prove that value still has its place - after all, if you can deliver an excellent product or service, surely someone will be willing to pay for it?

Wolves in sheeps' clothing

Problems, problems, problems...

Every day seems to be greeted by volumes of new ones arriving on our doorstep, taking the wind out of our sails just as we seem to be seeing the end of our "old" problems.

Does this sound familiar to you. Certainly, an easy mindset to slip into in a challenging environment. But that's not what we're here for, is it?

As the old saying goes, problems are just opportunities in disguise. And how much more true is that here in South Africa, where [not problems, but] opportunities abound.

And where do strong business ideas stem from - opportunities, not so?

In my rose-tinted, opportunistic little mind, I can see three huge opportunities for South Africans right now [someone surely said this about the security industry several years back when all anybody else saw was violence - and look what the security industry has done].

1. Energy [alternative energy, to be precise. Yes its expensive right now, but it won't always be!]

2. Transport [my view, thanks largely to driving from Pretoria to Johannesburg on "the busiest highway in the Southern Hemisphere" for much of the past six years]

3. Education [with a total of about 45 million potential "customers", how can this not be an opportunity]

Here is Google Trends' results on searches for these items in SA [education coming up much stronger despite Eskom's not-so-recent um... shortcomings]:



The reason these are close to my heart? Each one has the possibility of significantly changing the quality of life for millions of people.

Next step... what are the AWESOME WOW opportunities in these areas that will make a difference? Anybody?

A new job everyday

One aspect of our society which is now commonplace is to see people alongside the road [everywhere you go] advertising their services as painters, tilers, builders and a variety of other 'professions'. While this is considered by many to be a nuisance, I can't help but look at the flipside -

- everyday, each of these people effectively looks for a new job, with a different employer, a different location, and a different wage/salary.

When last did you change jobs? I recall seeing that changing jobs fell into four of the most stressful events of a person's life [along with getting married, death of a close relative and moving house]. The most difficult part of changing jobs is not necessarily once you know where you're going, but all the uncertainty when you're still looking.

Now imagine looking for a new job every single day.

Here's a thought - in a each neighbourhood, establish a central venue where all such skilled people can go daily, register as available, and possibly even receive a meal. Their details [name, ID number, skills, contact number, etc] would be recorded here. Any people looking for workers with these skills could go straight to this 'agency' and find a tradesman with the skills they are looking for.

It may take a while to become readily accepted, but could provide huge benefits to both sides, including:
For the tradesman: a central destination each day, possibly a meal, credibility through verification of their details, and keeping them away from potential danger at busy street corners and intersections.
For the public: a central source of skills when required, verified details of the individual you're employing and more safety in public areas that work-seekers currently frequent.

This kind of idea would probably require government initiative, but with a bit of creative flair, could also prove to be a profitable business. How? Sale of advertising to a captive market each day; visibility through sponsorship of food, tools, etc; commission on people placed; revenue from transport facilities going directly to/from the venue. These are just off the top of my head - I'm sure there are endless possibilities.

Perhaps it sounds a bit ridiculous. Perhaps it could work.

Collaborative Business Model Engineering [CBME]

I think at this point it's appropriate to insert something I wrote a little while ago, which I believe to be one part of the solution:

"you only have to look to the success of open-source initiatives, such as redhat linux and mozilla firefox, to see that trends in many business models are turning towards open-source collaboration, with many individuals combining their skills, knowledge and experience to achieve one goal, and to provide the next substantial level of growth.

it seems only sensible to believe that bringing together creative ideas from many different sources could well generate the next substantial breakthrough in empowering communities, particularly in poverty-rife third world countries, to provide for themselves and better their own standard of living. to do so will require creative input from many talented people, and the critical debate and analysis to really extract and refine all suitable solutions. this collaboration of talented and creative individuals could generate business models which can realistically be implemented and which are suitably sustainable.

lets say we call it ‘collaborative business model engineering’ [cbme].

would this really work, though?

why not? just take a look at how entrepreneurs have seized opportunities provided by open-source development, such as Mark Shuttleworth with Ubuntu Linux. certainly, their are many benefits to such an idea-generating environment.

for example: in today's information age, ideas (or "intellectual capital", if you prefer) are considered to be incredibly valuable. however, it is this status that has lead to many excellent ideas being effectively wasted, as the "owners" thereof either cannot or will not action them, for a variety of reasons. these reasons include a lack of financing, a lack of skills, or simply a lack of belief in the idea. cbme could provide adequate exposure to a wide variety of skills and experience, thereby identifying and resolving problems with the idea/business model. cbme could possibly provide a forum for connecting willing entrepreneurs with willing financiers. and the discussion and analysis generated by cbme would also ensure that worthy ideas are not merely discarded before being given a fair chance.

in fact, this could be the biggest hurdle to overcome in effectively implementing cbme - namely, instilling the belief in contributors that a sharing of ideas will not result in the world coming to an abrupt end.

however, with a bit of collaboration, innovation and creativity, cbme (and possibly on an open-source basis, just to be a little more insane) could well provide substantial benefits to all participants. ideally, this could also take place in a community environment, providing a feasible method of community upliftment as well.

the question is, do you believe cbme could work?"