Web 2'0 Startup Kit

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Web 2.0 Startup Kit

• Professor Amy Shuen, CEIBS
• www.amyshuen.com
• Author, Web 2.0 A Strategy Guide

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Do I need a Web 2.0 business plan?

• No, because ROI and time-to-money isnt key in
  hard times.
• No, because late-comers like Google rarely use
  network effects to win their competitive races
• No, because Flickrs first business plan for a
  game company ended with photo-sharing
• No, because VCs like Sequoia will call you if you
  have 30M users in 12 weeks like Meebo
• Yes, because I want to start a profitable and
  sustainable business quickly while preserving
  cash, sweat equity reducing risk.

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What is Web 2.0?
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Why Web 2.0, Enterprise 2.0 or e-Government 2.0?

• HUGE--available Web 2.0 market size
  demographics of web mobile users
• BETTER, CHEAPER, FASTERproducts, services,
  experiences--Web 2.0 ROI cash flow curve
  compared to Web 1.0 offline
• GLOBAL REACHengaging monetizing the long-tail
  online
• SOCIAL INFLUENCE1-3 percenters rule, not 80/20
• ONLINE NETWORK EFFECTSnew business models
  capture 5 kinds of network effects to win
  competitive races
• OR
• ALL OF THE ABOVE

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HUGE--available Web 2.0 market size
What about mobile broadband?
Est. 2015 using 200 growth/5 years
Userscombinations (customers, public, private
sector knowledge workers)
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Entrepreneurship 101ROI and the Start-up Cash
Flow Curve
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Which ROI and cash flow curve would you choose?
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Some hard numbersJotspot, Excite CDRom S/W
100K
3 Million
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Flickr, Shutterfly Photo Store
100K
30 Million
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ROI Barack Obamas campaign?
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ROI Collective User Value Multiplied
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ROI Multiple Revenue Streams, APIs, Knowledge
Content Shared
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ROI Multiple revenue streams why sharing can
be profitable

• Flickr Revenue Model
• Subscription and per user time-based economics
• Ad-based and per eyeballs/clicks/impression
  economics
• Transaction fee and per transaction economics
• Volume and price per unit-based economics
• Licensing and syndication fees and
  royaltiessite-based economics
• Single stream, multiple stream, interdependent
  stream, loss leader
• Freemium and n-sided markets

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ROI Six Interactive User Strategies that impact
the cost structure

• Open up digital content to global user
  interaction
• Create better search through user-generated
  information and tags
• Discover and explore through online groups,
  crossing boundaries
• Catalyze and amplify group social network effects
• DIY self-service syndication
• Digital ecosystemthird party developers

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ROI Reducing Investment by changing the Flickr
cost structure
What are the new cost economics of SaaS, SOA,
mashups, cloud computing?
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ROI Return on Social Influence of active 1-3
percenters online
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ROI Return on Collaborative Innovation
If youre not a web or digital company? Goldcorp
the ROI of Collaborative Innovation
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Disaster Reliefinstantly 100x more users, 100x
more partners/volunteers

• Some speedy idea-sharing crowd-sourcing
• Red Cross Iowa mashup
• InSTEDD Google.org Burma Disaster Relief
• BlogHer Hurricane Katrina Relief
• ObamaCycle.comrecycle campaign gear
• Kiva.orgp2p micro-lending
• But maybe no power, logistics or communication

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Seeing Network Effects Everywhere
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Webkinz Stuffed toysvirtual world

• Parent buys 15 stuffed animal, kid gets free
  code to website for stuffed animal pet.
• Kids can buy extra stuff set up house for
  stuffed animal pets online with points earned
  at games.
• Kids can learn, interact, game shop w. friends
  and other players.
• Certain items are available to stuffed
  animal-pet owners of 15 pets or more.
• Limits on play-time online per day.
• Trading cards available.

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Whats new about Web 2.0 business models?

• Up to 5 kinds of network effects
• Multiple per-user revenue streams, new ways to
  monetize combine network effects
• 2-sided markets and collaborative innovation
• Social Influence Exponential customer and
  partner acquisition at low cost with viral
  marketing web distribution of apps
• All of the above

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Q What is Web 2.0 Strategy?
A. Thinking Exponentially
ROI-Invest, Influence, Innovation
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Where to put Web 2.0 in your business plan?

• Concept, business model, funding
  requirementsSlide 21 cashflow curve
• MarketingSlide 5 6, Slide 18-20
• Competitive Collaborative positioningComparativ
  e ROI Slide 17
• Products, Services, PartnersSlides 12-15
• MilestonesSee Web 2.0 Cashflow Curve
• FinancialsSee Web 2.0 Cashflow Curve

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Web 2.0 Cashflow Curve What will your ROI look
like?
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What will you do with Web 2.0?

• What are 3 things you could tell/sell the
  nations first Chief Technology Officer about the
  right infrastructure, policies and services for
  the 21st century?
• How has your thinking changed about measuring the
  ROI of Web 2.0? About your business and business
  plan?