The house that Tim built

It’s September 2008 and I’m on Manhattan’s West Side, standing in the foyer of the massive, aircraft hangar-like Javits Centre. The centre backs onto the Hudson River in an otherwise nondescript, rather run-down corner of the City. No matter. This ain’t no sightseeing trip. I’m one of 5,000 people attending the inaugural Web 2.0 Expo New York. There are workshops to go to and seminars to be had. There is endless coffee and cookies and even little packed lunches, served up courtesy of Microsoft.

When Tim O’Reilly’s colleague Dale Dougherty coined the term Web 2.0 back in 2004, and Tim picked it up as a useful meme to throw out to O’Reilly conference audiences, they had little idea how the concept would spread like wildfire through the digital media world.

The term ‘Web 2.0’ came at a time when there was a resurgence in optimism around the web and its capabilities, post the dotcom bust of 2000/01. The phrase isn’t allied to any specific technology, it’s more a hypernim or ‘handle’ (thanks Tom Coates) to capture the various trends that were happening at the time; these were (and still are) creating a shift in the way we use the web.

When I bump into Tim in the Javits foyer at the Web 2.0 Expo, he invites me to come with him as he heads to the hall to rehearse his keynote.

After the run-through, we get some time to sit and chat in front of the main stage. I ask Tim how the whole Web 2.0 idea came about:

“The original idea was that the web was ‘back’,” says Tim. “And we were asking, what are the new rules of business? Those new rules were network effects: you design applications that get better the more people use them, then the applications that work get the most user data. The winners are those that harvest collective intelligence: Amazon, Google…Google is actually harvesting the intelligence of all users.”

So, what does business need to do, today, to make the most of the web’s capabilities?

“Enterprise needs to learn real-time responsiveness to its users. Banks have a tremendous amount of data about their users – but they don’t share it with us. For example, look at the great things being done on Wesabe [a kind of personal finance wiki – you upload your entire bank account and credit card info, and get advice from other users on your spending habits]. Every business needs to be thinking about what data assets it owns and how it can use them.”

What’s wrong with the current business mindset?

“Firstly, that you do things in the back office. Everything should be automated [and tracked]. Companies really need to automate more services and really upgrade their IT staff.”

Tim goes onto explain that all this automation doesn’t mean there can’t be human intervention, if necessary (apparently Google had to intervene manually when its algorithmic search listing for O’Reilly caused O’Reilly Auto Parts and not O’Reilly Media to dominate the front page).

“Secondly, organisations need to be restructured around IT services, like the best Web 2.0 companies. Amazon, for example, has a whole team dedicated to the efficient functioning of the ‘buy’ button.”

“Some businesses are ahead of Web 2.0 in terms of automation. There can be too much of it. Look at what’s happening to the financial markets now. All this was predicted in Richard Bookstaber’s book, The Demon of Our Own Design.”

Who does O’Reilly really admire in business today?

“Look at the growth of Zappo’s [the online shoe store]. It recently hit revenues of $1billion. Tony Shieh, the CEO, has become a hero.

“Jeff Bezos [Amazon.com] is very strategic. He’s thought a lot about how the world is going to change. Who’d have thought that getting into cloud services would make sense, but Amazon web services (providing hosting to Flickr etc) has become a great sideline.”

Needless to say, both Shieh and Bezos are friends.

It’s likely that, in time, the group of very clever people that O’Reilly, Bezos and Shieh form a part of will come up with another very clever label to acutely describe a future zeitgeist.

A few of half-hearted souls tried to push something called ‘Web 3.0’ at the New York Expo. I’m relieved to say it didn’t take off.