After the coffee break and Bradley Horowitz is on the stage talking about social interaction. He says we have to move beyond the term “user” and turn them into “people”. He has a model for interaction where there are three types: creators, synthesisers and consumers and the ratio is 1:10:100 He sees his role as trying to make the ratio 1:1:1. The internet is democatising production.

He gave some examples of where Yahoo! was adding features which encourage people to interact with content:

“Interestingness” is a feature which has been added to Flickr since Yahoo! acquired it. Up to then the pictures were ordered by date. What makes a photo interesting? “We could have used voting, but we chose to look at things like how much it has been looked at, saved as a favourite, blogged about – implicit behaviour. This means it’s less susceptible to gaming, it was able to be used retrospectively on everything in the library “

Turning users into taggers. “Tagging is magic” – it’s not a new concept but what’s cool is that it is so easy. I can invent words. ZoneTag is a project where information from camera phones (location, time, identity) is used to auto tag. TagMaps is a research project which crosses a tag cloud with a map. This has been further filtered by time to show night views, for example.

Clustering using co-existence of tags in the system.

Pipes: He gave an example of wanting to find an apartment near to a day care centre. Currently this is difficult but with Pipes you can extract data from Craig’s List and Yahoo! Local and create a service to answer the question. “Pipes is moving you from a world where people sample to one where they synthesise”.

Q&A: he’s asked if there will be an API for Groups. Eventually, he says, but he says another big Yahoo! service will have an API released very soon. He wouldn’t say which …. even when pressed….

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Pitch.tv – mobile social network
Helio – social networking enabled phones
Twitter – A global community of friends and strangers answering one simple question: What are you doing? Answer on your phone, IM, or right here on the web!
Threadless – t-shirt designs submitted by users, rated by users, bought from the site
BarCamp – ad-hoc, self organising conference
programmable web – resource site for web based APIs
Getting Real – an online book from 37 Signals
Powerset – natural language search which runs on Amazon services

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Werner Vogels has just presented the Amazon suite of web services which I didn’t blog as it’s been done to death by now. However, in the Q&A he described the Amazon approach to web development – the services are built on many small services which are built and maintained by small “Two Pizza teams” – teams which you can feed on two pizzas. He says they developed the web services EC2 and S3 after perfecting the approach on their own services. He says all the services can be used by Brits except Mechanical Turk “because of labour laws”.

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Jason Chuck is a programmer who works with the Google geographic products – maps and Earth. He says it has been amazing how many things have been added to Earth by mash-up makers. He cited fboweb which shows real-time flights into US airports. He points out the Google code pages which list all the API workshops.

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T J King of ThinkFree is on. He’s talking about the online product which offers online word processing, spreadsheets and presentations which are completely compatible with MS Office. They are working on monitising with contextual advertising, he says. He announced that ThinkFree had released a free API mashup for blogs which will allow Office documents to be viewed online without having to have Office installed.

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Matt Ogle and Anil Bawa Cavia from Last FM, which tags itself “social music revolution” , spoke about how they built the business. Matthew starts with some stats: 15 million tracks being played and “scrobbled” (metadata sent to the servers), 10 million artists, 70 million tracks, 700,000 tracks which are streamable, 145k artist wikis.

The service works like this: user listens to track, metadata sent to server, other tracks with similar metadata recommended to user, user listens…. The more you listen the better it gets, they say.

The early growth lessons: don’t overextend, make sure revenue scales with usage, involve users in the web application’s story. They recommend putting the blog at the forefront so that there is an open conversation. People prefer to be told the bad news than no news at all. People will be more likely to tolerate your problems.

Anil takes up the story of growing up. “People trump process”, he says. Have simple process and good people. Take simple tools and customise them. Radiate information across different channels in the company. “We use IRC to communicate across our office which we customised.”

He recommends opening up the product as a platform so that users and companies can extend the power of the product. This is a key way to harness critical mas”.

“Openness is the key to web apps.”

Matt is back on stage. He talks about Scrobbling data – it’s “attention data” . The server knows when you listen, when you stop. It’s a kind of “spyware” he says, but people will accept that if there is a real benefit to it. Then it’s called “myware” – spying on yourself.

The social web – attention aggregators – is where the action is.

Some examples of what they do with attention data – a custom “Time Out” for your tastes and your area; blog recommendations based on your taste.

Anil back on. Monitising attention: microchunkit , free it, syndicate it, monetise it. In Last FM’s case they sell labels the chance to pay to have music played to a very targeted audience, and they provide really detailed feedback of what listeners liked, and what they didn’t.

He spoke about tag cloud moderation. The principle is censorship is not acceptable. But by weighting tags by attention then those people who listen to a particular artist count more than those that done.

Matt is back. The future for Last FM?

More:
growth, streamable music, ambient findability, personalisation (things you can do with your data)

Less:
interfaces (rationalise and streamline), barriers to entry (collaborative filters have a cold start).

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Ben Holmes from Index Ventures spoke about the venture business. First some stats: in the States there was $25.7bn venture money in 2006, with 1,446 transactions with an average transaction size of $10.5m. In Europe the equivalent was €4.1bn with 867 transactions with an average values of €14m. Around 55% of investments are in IT with a rapid increase in web application development.

In Index’s case the mechanics are as follows: about half of all investments lose money, a third break even and a sixth make (lots) of money.

What a good VC will add: advice and strategy, hiring, partnerships, profile and PR, internationalisation, trusted service provider relationships and exit optimisation.

He outlined the basic deal terms, which he admits many entrepreneurs find offensive:

• target 20-35% ownership (enough to make a difference)
• board representation
• liquidation preference (to make sure the exit is big enough)
• participation rights (want to be able to maintain stake)
• element of reverse vesting (owners lose equity if they bale out early)
• certain control and veto right (to stop a low-value exit)
• option pool
• period of exclusivity to close legals

He says the main reasons for not raising VC money are: it’s a feature not an application; the market size is too small; the owner’s motivation isn’t financial. “We spend out time looking for teams which have done amazing things with no money.”

The pitch to the VC, he says, should ideally be a 20 page Powerpoint presentation covering:

• product
• market
• business model
• team
• competition
• product roadmap
• technology overview
• business development
• financial status

Update: there’s a great mindmap of the whole presentation uploaded to Flickr.

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Simon Wardley from Zimki talked about commoditisation of IT which he characterised as “yesterday’s hot stuff becomes boring”. There is no competitive advantage in having you own infrastructure, he argues. What is needed is an environment where you can build what you like, and pay for what you like. He would say this, of course, since that is what Zimki is.

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Tara Hunt, of Citizen Agency, asks the question: what makes a community? The characteristics? personal homepage/profile; personal content creation; the ability to interact with others’ content; the ability to befriend and share content. The benefits: heightened customer loyalty; self-policing; amplified by word of mouth; better feedback; stronger and more interesting filters on content.

Three levels of communities: 1. lightweight social processes (low-barrier social involvement like voting and the recording of personal participation);
2. Collaborative information structures (enhanced by social participation); 3. High end end collaboration (groups using systems to make sense and share complex materials)

Common themes:

• sense of fun and play (the founders very publicly have fun, playful messaging and images on the side)
• keeping the dialogue going (“eating their own dogfood” – “it’s amazing how many people don’t use their own product”, answering your own customer support emails, greeting new customers and introducing them to others – “being the host of a party”
• wouldn’t it be awesome if…. (taking an experimental approach to development, throw away the business plan and embrace the chaos, )
• the power of the word of mouth (built-in a variety of ways ot share early on [rss, copy and paste urls etc], adding more on-ramps (email, SMS etc)
• involve community in decisions (listen to your users and be flexible, let the community create the content and make the decisions)
• simple platform to build on (building blocks – tools built be experts but used by non-experts eg. WordPress [users add extensions] Flickr api, focus on one function well
• Compelling stories
• rewarding of community members (feature super users, more privileges)

There are four characteristics of successful communities that she identifies:
Feelings of membership (creation of community boundaries, perception of emotional safety) Personal profile pages, allowing for lots of personal and group expression.
Feelings of influence (being able to influence the group, feedback responsiveness, rule enforcement) Include forums, chat, comments etc
Integration and fulfillment of needs (feeling of being supported by others, reward of being and member, such as status, shared values, feeling of competence) Karma points etc
Shared emotional connection (personal investment of time and resources, high quality, frequent interaction) Add face-to-face opportunities
The bottom line: building communities is hard work and can take a long time to build.

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Mike Arrington says the biggest single opportunity around now is to build good impressive applications on top of Adobe’s Apollo platform which enables rich on/offline applications to be built quickly and easily.

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