What I'm Reading
By Arnold Kling
Books on start-ups (start-up porn?). Robert Cringely’s Accidental Empires, which covers the pre-Internet personal computer boom. I re-read my own Under the Radar, which covers Web 1.0, as it were. Sarah Lacy’s Once You’re Lucky, Twice You’re Good, which covers Web 2.0, and her Brilliant, Crazy, Cocky, which covers what she sees as the next wave, which is entrepreneurship in emerging markets.
Gosh, my writing is really inferior. I enjoyed Cringely’s and Lacy’s books much more. My guess is that some of it comes naturally to them, but you can just see the better craftsmanship.
Just as the books arrived, I watched The Social Network, the movie about Facebook. I really liked it. The only thing that bothered me was the portrayal of Larry Summers, which I thought was 180 degrees wrong. In real life, he slouches, he speaks slowly, and he is not one to pull rank.
I found myself rooting for Zuckerberg, and I had no sympathy for the guys whose idea he stole (if the story in the movie is true). Can you imagine what would have happened if they had been in control? It would have held him back completely, and nobody would have ever heard of any of them.
Incidentally, Zuckerberg did just about everything I say in my book cannot be done. That is, he focused on creating a viral Internet site, without worrying about how he was going to obtain revenue. He did not focus on sales at all.
Once You’re Lucky really takes off when she gets to the chapter on Zuckerberg. His story is just cool. How many people can say that they turned down an offer to buy their company for $1 billion?
One of her chapters is called “The Nontrepreneur.” It is about Evan Williams, who founded Twitter. I read today in the WSJ that Twitter is looking for a $7 billion valuation, but still without going public.
Anyway, I think a lot of these social network sites might be in danger with the new Google+. I looked for one feature in G+, and they had it–a way to differentiate groups of friends. On Facebook, I find it really annoying that I have to group people who are my closest friends with people who see me at folk dancing with people who have never even seen me but follow my writing. As David Weinberger put it years ago, “friendship is not binary.”
It strikes me that Google could be today’s Microsoft. They don’t necessarily do things well the first time, but they keep hacking away until they have something that can drive out the competition. We’ll see.
For what it’s worth, I think the Web 2.0 stuff is a bubble. The value to consumers is there, but the way to monetize it is not. Advertising does not cut it. Somebody recently joked (or was it not joking?) that you have more chance of being killed in a terrorist attack than clicking on a banner ad. In any case, if you divide the total valuation of Web 2.0 firms by the true value of all advertising on the Web from now until the end of time, my guess is that you get a number greater than one–possibly by an order of magnitude.