This is a slightly different version of a post I did for the FastForward blog. I covered a bit more on web impacts here. Recently I talked with Elliot Katzman, a general partner of Commonwealth Capital Ventures. Elliot has more than 25 years of high-technology experience and focuses his investment activity in software, internet-related, and new media companies. Prior to getting into investing in internet firms, he was a senior executive at several startups including Myteam.com, a direct marketing/new media company now part of the Active Network. I first asked him how Web 2.0 differs from the Web 1.0 dotcom boom/bust?
Elliot said that in Web 1.0 the vision got ahead of the basic capabilities of the tools. People in the early stages of the dotcom boom/bust thought the capabilities they envisioned would just happen but the state of the tools required huge development investments just to put together the foundation for applications. With Web 1.0 there was a vision of connections but many of the linkages where just too hard to accomplish
Elliot used to jokingly say that Web 1.0 suffered from the Gene Roddenberry. Gene was the creator of the science fiction universe of Star Trek and was also one of the first people to be buried in space. His universe simply sprang for his imagination and primitive special effects. I saw some of this first hand in the pre-web mid-80s. For example, one large industrial carpet manufacturer paid us to develop a prototype of a computer system that allowed interior designers and architects to envision what different carpets would look like in the spaces they were working on. We did the mock up and toured the country, presenting it in upscale venues to great response. It was a lot of fun. But then, in those days the cost to construct it was too great even for this successful firm. Now it is relatively cheap to build and you can see something like this in most hardware stores. It could likely get mashed up to create even more meaningful applications.
Now with Web 2.0 the open architecture, the refinement of web services, and the ability to put together applications through mashups makes the basic development costs much lower and time to market much quicker. More effort can be placed on making the tools actually serve business and consumer needs. Startups can also benefit from looking back at the mistakes and successes of the first generation. I certainly agree with Elliot about mashups. Blogs and wikis have gotten more press but I think that mashups may end up having the most impact, especially within the enterprise. While good business execution remains key to any success, it seems that possibilities for internet visionaries remains greater now and opportunities are less likely to be science fiction.
This ease of development makes new visions more attractive to venture capitalists who can see greater potential and quicker pay-offs for their investments. There is also a potential parallel within the enterprise. In the Web 1.0 and Intranet days, it was often very expensive to implement enterprise and other related enterprise applications. Teams of high priced consultants worked havoc with IT budgets and put a lot of money in the partner’s pockets but often the results were meager. I say this first hand with many budget overruns for efforts that might be relatively simple now. Companies like IBM and Web Ex are moving to provide enterprise tools in this new spacethat should lead to much quicker and cheaper paths to the realization of visions. Home grown efforts will also be more plausible.
Another major difference is the rise of user-generated content, lowering content development costs and increasing participation at the same time. In Web 1.0 almost all content was created by organizations and fed to users. In Web 2.0 over 60% of content is developed by individuals. Elliot provided a great example of user generated content in the work of Myteam.com (now part of Active Network) his former firm, and the world-wide Little League Baseball program. I will cover this example tomorrow.
This post and tomorrow's post were republished in Social Computing Magazine. 
enterprise 2.0 
web 2.0 
enterprise social media
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