Web 2.0 -- Trends and Opportunities (Event Notes)

Cupertino June 14, 20006: The Silicon Valley Indian Association (SIPA, http://www.sipa.org/) on Wednesday June 14th, 2006 hosted there monthly colloquium at the HP Cupertino Campus. The topic of this event was “Web 2.0: Trends and Opportunities”.



With a distinguished lineup of speakers whom included Satish Dharmaraj (co-founder/CEO Zimbra, http://www.zimbra.com/), Robert Seidl (CTO and co-founder, Genius Inc, http://www.genius.com/), and Seth Sternberg (founder and CEO Meebo, http://www.meebo.com/). The panel was moderated by John Koenig (president RiseForth Inc, http://www.riseforth.com/).



What is Web 2.0?



A new class of engaging websites, not it is not a standard. In fact is a method for making the web more interactive, and engaging users.



Panel Introductions:



Satish: Zimbra is an open source ajak powered collaboration client founded in 2003, at that time ajak term was not coined yet. We were the early pioneers in doing web2.0 stuff back in 2003. Web2.0 and ajak took off in around 2005.Robert: My CEO at Genius was the chief marketing person at webex. Our aim is to provide sales and marketing tools to people who are outsourced. Provide service on subscription basis. SalesGenius first offering, aimed at sales people. To provide assistance to qualified leads---strategic marketing, rather than going to trade shows and sending out email blasts.Our backend technology is ajak. Our business model is based on providing solutions that is we are solution oriented rather than being than technology oriented.



Seth: We provide a web based messaging client. Ajak is our main technology. We were three founders, started in 2005 with no funding. We raised angel funds a month later. In December of 2005 we were approved for Series A funding with Sequoia Capital.



Panel Discussion



Moderator: How do you see your company perceived different from traditional companies?
From your internal and the external perspective



Seth: We focus strongly in communicating with user. Our model is customer centric marketing. Meebo is available in 48 languages, all this was developed by users through a wiki site. We also have an online forum, this a way to engage users and build community around Meebo.



Robert: Now a days release cycles are much faster than they use to be. Not constrained by physical distribution. Have direct access to customer in software service. Quality wise, things are much tighter than when you used to do the shrink wrap cycle.Sales for larger corporations have an enterprise based sales cycle, which tends to act as a bottle neck, resulting in long time line. Now we have much smaller costs, smaller unit costs and we have trials. Thus allows us to run with smaller sales cycles.



Satish: On development or business side, there are several ways we distinguish ourselves. First we have an open source model. Allowing customers to connect Zimbra to other tools, languages, etc; A Strong open source community which embraces Zimbra. We have not made a single cold call client/customer call. Everyday a customer downloads zimbra, builds it, etc. We don’t know the customers, but all serious people come back for value added support, upgrades, patches and getting the branding of Zimbra.Most open source models revolve around brands. So customers cannot sell Zimbra, but can sell our product under another brand. If they want Zimbra's brand customers will come back and pay a subscription for our brand.All these things break down traditional model of hiring sales heads, regional sales heads, and teams. This leads to interesting types of sales plans, compensation plans, bookings, revenue recognition, and marketing. That is on the business side. End user wants rich client like functionality. Consumers are getting more experienced than businesses in terms of what’s on the web browser. What Zimbra does is managing software on the server server, as apposed to the desktop.



Web2.0 allows us to provide a rich experience to the user/customer. IT users love it, as they don’t have to manage fat client’s servers/desktops. Everything is centralized.



Before Web 2.0 we could not deliver anything any application over web. Now we can deliver rich applications over the web.Zimbra gives away as a open source, and has preferred hosting services.



Question for Robert from Moderator: How do you define web2.0?



Robert: It is a big deal the ability to tie multiple services together. And we can do it in house. Integration is much easier than before. Client capability, nice to have something with enough java script, etc to deliver a rich app now days; It’s much easier to shrink wrap apps now and internationalize apps.Seth: A VC came to our office, "what on earth is web2.0?" I came up with three branches. Moving apps that were traditionally delivered in software are now delivered in web browser. New Versions of old tech: New evolution of a all web dev tech. E.g. Scooby, a new version of evite. They are making it much more public. Has some ajak stuff in it more flashier, more looks like an app. New version of Yahoo, netvibes, etc3. Individual empowerment. Flicker, YouTube, wordpress, blogger.com/ These are websites or technologies which allow anyone of you to publish photos, videos, content.Moderator: New patches to software.



Satish: Believe in a big way about enterprise mash up.Web20 platforms, there is not going to be web20 platforms. Yes there will be a platform for ajak development platforms. IBM Zimbra has just initiated an open ajak imitative.Robert: One thing that is not so great of web20 is that tech is evolving so fast. Hasn’t evolved to a point where it is mature or perceived as something enterprise corp. want to endorse as their platformModerator: Is web20 more about content, services, business process



Seth: No it’s not just about content. Tech behind doing a heavy ajaks website is very difficult to do. Technology scaling large volumes and demands is hard to do. Also a lot about web20 is about user empowerment. Empowering users by putting platforms out there for them to take advantage of.Moderator: Which big companies get this?



Satish: IBM gets it, was involved in business side of java with sun. Open ajaks---IBM invited others to join ajak initiative Google gets it very well; Firefoxs browser is faster than IE. Microsoft gets it....but they are more threatened by ajaks and web20. Basically cannonalize there product. Diminishes value of OS, which Google and yahoo are out to do. Companies that don’t get it run of the mill businesses and enterprises across America. Consumers get as they use, may not understand it. Business on the other hand are still trying to struggling to where it fits inRobert: Not easy to move to the new sales model, from the old. Google as a large array of technologies, with lots of data--not monetized as yet. From a monetization prospective precise are still missing. From that prospective Google doesn't have a marketing model(s) yet---its free.



Moderator: What you might see as some nice opportunities for people to start a business?



Seth: love utube, we also share board member with utube. utube a service to upload video and share it with anyone. Trends: internationalization is very imp from people perspective. Mobile, everyone talks about mobile---funny our users don’t talk about mobile much



Robert: (1) some way of monetizing what you put out there for smaller companies and pieces of services (2) tool kits.



Satish: general trends and ideas that might be funded--i am biased to opensouce co's and b-models. This model is here to stay .Linux is pretty mainstream; most datacenters have linux running somewhere. MYSQL getting a lot of momentum in enterprise systems. Middleware, aps...that stack is getting filled out soon. Network monitoring app.Never do an app for the sake of being open source. What you do has to be innovative enough that solves your customer or end users problems. And should be hard for your competitors to replicate.



Robert: Hardware is completely commoditized. The lock that software holds presently prevents hardware from moving faster. With zimbra like apps, things could change. Will give Microsoft a run for the money. Data transfer from laptops---transferring your content to a new laptop is a bottleneck due to propoertary software. Now if your on the web browser then you don’t care about local software---but a new laptop and throw away your old one.



Q&A:



Question: AJAK vs Flashflash has advantage its same on all browsers. but pre-2005 was all about graphics and moving fonts and text around. Only recently they have dev apps -- macromedia flex 1.0 visual basics, flex 2.0 visual basics for web.Places where flash is better than Ajax’s, and places where Ajax is better than flash.



Ajax JavaScript has openness than flash where adobe is closed. Google yahoo has gone Ajax way want to embrace open standard and open programming ways.



Question: Application



Web2.0 aps are any rich UI app you generally see on the pc.



Question: Marketing



-- Find new way of doing things



--viral marketing, blogging, etc. Far better than old sales models and techniques.



Question: What types of apps



--documenting, spreadsheet, word processors can be down on browser



--things memory centric need to be done in app.--end result now will always end up as a web interface.



--however if its memory infective or something that needs to right to your local file system, it will need to be done locally first.Question: Monetizing web20



--embedding modules you charge for. Such as search tool and charge for search made



--partnering with carriers for sms.



--sell subscriptions



Question:



Apache tomcat is platform for web20Xml http serversAjax is purely client side, not server side. you deliver Ajax through zip file. Protocols b/w Ajax front ends and back ends could be propitiatory.



Question:



Security issue with Ajax in a way its probably cumulatively safer to do things via browser than through 20 - 30 client apps.



Question: Hardware



--$600 pc can run all ajak apps. --but memory need to have anough memory



Question: third world activities for web. sales through web



--one answer get close to customers



--let customers drive relationships, what genius is built on



Question: when to get vc money



Seth: initially they didn’t need--its hard to take vc money lots you have to do, as they slow you down



--if plan is grow big, flip it fast, then don’t take vc money.



--be really clear on what you want to do



--want to do a business or a quick flip



--not bad to do a quick flip, probably much safer bet in current climate.



--Find right vc partner is a huge deal, painful board meetings.



--Good VC characteristic: have they been an entrepreneur in the passed? That is a safer bet typically than b-school/investment bank vc’s



--In addition to having a good b-model get a good team before launching a product for VC funding



--meebo didn’t have a good team for VC funding



---were great professionals but not credible for VC funding before launch



--if meebo team was like Satish (zimbra) team composition then they would get money before launch.



--team members for pre-launch vcs are credible people from top visible positions or former entrepreneurs-vcs look at three things: (1) Team is really imp (2) marketability of product--is this something that can sell, reducing market risk (3) reducing execution risk.