Tuesday, December 11, 2007

Another Web 2.0 Failure - How do we find success?

One of my best friends co-founded AllAdvantage.com the first go-round (http://en.wikipedia.org/wiki/AllAdvantage) and was involved the second time (www.AGLOCO.com). As of Dec 6, AGLOCO shut down, bringing to a close another shot at making this business model take wing. This is sad to see, but a reality.

I recommend that you also look at the Edgeio failure (http://wiki.edgeio.com/display/ExternalWiki/Home). This is a good reminder that even $6.5MM (that’s what Edgeio raised) in capital does not go very far. So what does this have to do with Local Motors? IMHO, community must be more than aggregating data from RSS enabled sources (Edgeio’s business), community must be based in a human need to associate and build relationships. AllAdvantage exposed the desire to get paid to watch ads, and in truth IT WORKED. But the cash burn was too high to keep up with the revenue model. The second time around, the desire to associate in order to build up shares in a company (instead of cash) was not as high, and the community did not take off. Whether or not Local Motors has what it takes to uncork that human association will remain to be seen. We are betting that a true community of car-lovers is what will seed this development.

Good to be humble, though, and lots of work to be done. I tip my hat to the Web 2.0 graveyard and hold my breath as I walk by hoping not to end up there someday.

I met with Doc Searle’s (http://blogs.law.harvard.edu/doc/) a couple of weeks ago and we talked over a pizza about just this type of issue. Doc is a fine gentleman, author, and a deep thinker about open source. We were there talking a lot about ERP/CRM/ and even VRM (vendor relationship management) and when I told him I was building a community of real car builders, Doc shared a story with me about a market in Lagos (“Markets are miracles” http://doc-weblogs.com/2001/04/03). This story was so thunderous because it was a story about the inability for true markets to be described adequately in the definitional terms of accounting. Instead, it displayed the necessity to describe true markets in the realm of deep personal relationships. I believe that Local Motors car community is just such a market of deep personal relationships.

Good communities do not just have to be about cars, though. For example, I looked at another of Jeff Clavier's (http://blog.softtechvc.com/) investments called Seesmic, and the community connected with me alot(still in closed alpha - which apparently means not available yet). It is a video based community. The community is immediately apparent when you watch the precursor site called www.loic.tv. It is like an underground news community with 2 recognizeable folks called Loic and Vivin. They are catchy and have some memorable shows (http://youtube.com/watch?v=Mw7GAwXRl4o) such as this one about Loic's visit to the White House. Again, to me it is not as memorable as the community around cars, but it shows what you can do even with a self-manufactured community of video clips. Just imagine what we can do with the same type of community around great cars and design.

This makes me think that we should start by chronicling the lives of auto enthusiasts and begin by featuring designers who submit to our site. Everyone who loves cars has a story to tell, No? Stand by for more to follow on this development.

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