Taking off the blinders
Yesterday, VCMike wrote about what he called the TechCrunch Ecochamber Disease. The idea is that VCs and entrepreneurs can get blinded by the things that are interesting in their own little world, rather than focusing on what is important to the broad market. If you go back to the initial Internet bubble, this is one of the drivers of the big tech run up. There was some initial adoption of various Web services. This initial adoption was at a pretty rapid clip as initial adoption goes. Everyone assumed that the rate of adoption would stay very rapid, into the broad market. Whoops.
The Internet has had a huge impact on communications over the past 12 years or so. It just didn't happen in 3 or 4 years. The valuations of the Internet companies were inflated because they assumed that broad user behavior would change very, very quickly. It rarely does.
This is the marketing concept that I first heard about in the business classic, Crossing the Chasm. Geoffrey Moore discussed the problems with assuming that early adoption would turn into mass adoption on its own. He also gave various strategies on how to move into the broad market. In the unlikely event that you haven't read it, I would strongly suggest it.
I think that a lot of Web technologies are overhyped because no one is thinking about how they cross the chasm. Many times, the core technology may need to get embedded in something else in order to enable broad adoption. An example of this is Tivo. Tivo's core technology is great. They have an easy-to-use UI for recording programs and playing them back. People who owned one tended to love them (including me). But, they never got broad adoption of their own boxes due to the challenge of educating users on why they needed a DVR and installation challenges.
The cable and satellite vendors had already invested huge amounts of money in their customer relationships. It was only when Tivo embedded their capabilities into the set-top boxes of these types of vendors (or the vendors developed their own) did the DVR capability become more mainstream. It simplified the installation and became, over time, embedded in how people watch TV. It took years, and it took a big investment. Ultimately, Tivo didn't reap as much of the benefit of this as they probably should have.
Services like Twitter may suffer the same fate. I like Twitter, but haven't really found the indispensible user for it. For me, it is still interesting, rather than important. However, I think that the core capability of having controllable broad instant messaging can be real important. It just has to get shaped and embedded into the right broad market service in order to really catch on. Like Tivo, a lot of people outside of the tech industry hear about Twitter and say "why would I want that"?
If you are starting up a web service that you think can have broad applicability, make sure you listen to a broad range of users, not just your techno-centric buddies (like me). Taking off these blinders can give you some insight into how you need to get your service embedded into something that users really want.