The thing that will keep Web 2.0 plays from being successful is the very thing that made them what they are today: geeks.

There has been a growing amount of chatter about this lately, and today there was a good conversation on the topic, started by Umair at Bubblegen.

While he correctly defines the problem (“geeks [need to] think outside their own box of geekery”), Umair uncharacteristically offers a solution that is too complex, ironically geeky, and, frankly, unnecessary:

The challenge, of course, is for geeks to understand that it’s exactly this value equation they should be disrupting, not ignoring: making marketing, branding, advertising not evil. That they’re evil doesn’t mean you should ignore them – it means you should be destroying them and then redefining them.

The solution has nothing to do with redifining, destroying, “lowering the evilness”ing, or working towards anticonsumptioning.

Those are geeky.

When the problem is geek the solution is simple: down-geek. How does a Web 2.0 venture do this? By paying attention to, and executing in, all three stages of a start-up: innovation, commercialization, and scale. Many companies, especially Web 2.0 plays, pay little-to-no attention to the second stage – commercialization. It’s this lack of focus, at a critical stage, that leads to failure. By refocusing attention and properly executing throughout this vital stage, Web 2.0 companies can avoid the problems that plague, and ultimately doom, Web 2.0s.

Let’s examine the players in Web 2.0 and how they assist a start-up through two of the stages:

• The geeks are the entrepreneurs. Part of being a geek means the complete mastery of Phase 1 Innovation: Ideas. And thanks to falling costs (computers, software, …) geeks can more easily complete Phase 2 Innovation: Idea to Product on their own.

In Web 2.0 entrepreneurs are capable of completing Stage 1: Innovation on their own with little input from anyone outside of the team (generally a thriving hive of geeks)

• VCs are still VCs. While this is changing in Web 2.0, it’s happening at very slow pace and only within a small group of firms. VCs are still playing the role of a traditional VC – eagerly waiting to invest their funds, sit on a board, and collect cash upon exit.

In Web 2.0 traditional VCs will invest in start-ups and guide companies through Stage 3: Scale.

Stage 1 easily completed by being geeky. Stage 3 easily completed with the help of traditional VCs.

What about Stage 2? Historically, for a number of reasons (not the focus of this post), commercialization was not very important, occasionaly not even necessary. This has changed. Commercialization is now as important as the other two stages of a start-up. Ignoring this stage ensures the failure of the firm. Unfortunately this statement is being proven on a regular basis by Web 2.0 companies. And, really, I don’t think they can help it.

Why? Let’s revisit the opening line of this post: The thing that will keep Web 2.0 plays from being successful is the very thing that made them what they are today: geeks. Tremendous innovation is occuring and the instantaneous adoption by geeks of these innovations has been truly remarkable. To commercialize these products the start-up would have to question, challenge, and test everything that could be considered “Web 2.0″. And that is a practically impossible task for geeks.

Refresh: Commercialization is the stage of “Providing Proof” – proving value propositions, clarifying positioning statements, figuring out correct foothold markets for penetration, etc.

Can you blame the geeks for failing?

• Instantaneous adoption of your product – would you question anything?
• Product feedback flowing from early adopters – would you ignore it all, upsetting your current customer base?
• Geeks network with other geeks, and herd thinking in a community focused on similar passions can cloud judgement. When every conversation you’re exposed to is positive, would you be clear minded enough to ask the tough questions and answer them appropriately?
• Would you be able to challenge the things which appear “most true”?
• Would you question and test everything that you’ve learned about traditional business practices and start-up strategy?

That’s what you need to do in the commercialization stage. While it’s difficult to do in any market segment it’s nearly impossible for geeks to do within the Web 2.0 realm.

Commercialization is testing everything about the product, positioning it properly, and making it “whole” (Umair, hilariously and accurately documents two of the many areas that a Web 2.0 company needs to focus on: needs & usability. I bet with the number of Web 2.0 companies, and the challenges they face in the commercializing phase, we’ll be enjoing a lot of new verbs shortly).

This is the hardest stage for a start-up to complete. Maybe because it’s not on their radar, possibly because it’s difficult, potentially because of lack of experience. Most likely because what’s required in this stage (especially in Web 2.0) is counter-intuitive and hard to swallow, let alone stomach.

How does a company navigate through this stage? You would think VCs could help. Some innovative ones can but we know that most won’t/can’t. This will gradually change, as the dynamics of venture capital changes.

I’d give you some tips, but unfortunately I can’t blog those… you can always ping me to chat.

Different visitors provide different value. Not a breakthrough thought, but one that’s important to realize.

A great discussion started, and continues, between myself and Kevin Kent Newsome following my post on a peculiar observation in my RSS vs traffic stats. Kevin Kent continues the conversation today with a long post that has a gem of a paragraph tucked in the middle:

“Some of your readers will become your friends… We trade ideas, comment on each other’s post and generally carry on a conversation. That’s a wonderful thing and it’s one of the main reasons I keep doing this. But the other 98% of your readers don’t know you from Adam’s housecat. To them you are just a name in an RSS reader with a post or two to be scanned.”

In the short history of this blog, I’ve met some great people. I mean, I’m shocked that I’ve come across such great people because of this blog in such a short amount of time. I like that. They’ve pushed my thinking, challenged me, pointed out flaws in my thinking, made me laugh, elevated my thoughts. On and on. I love that. These would be the 2% that Kevin Kent describes. These people have kept my thinking at my margins and are helping me accomplish the number one reason I started this journey – I wanted “a place to … develop [my] thoughts and ideas”. Thank you Kevin Kent, David, Eric, Fred, Chad, Daniel, Eric, Philipp and the others who have helped push my thinking beyond where it would be without you.

You are the reason I get a thrill writing this stuff – I’m eager to hear how you’ll respond; how you’ll fill in the gaps in my thinking; how you’ll call bull when needed; and, most importantly, how you’ll advance my thinking.

What about the other 98%? (They probably scanned the first 2 lines and moved on (hee hee) – so I could say screw you, but I won’t). They add value beyond simply providing nice traffic stats to study. I am going to continue to monitor traffic for a single reason – to make sure that I’m still adding valuable content. It was a goal of mine after all. This group is valuable as a proxy to help keep me on track and honest about my signal/noise ratio.

A new goal with this blog is the result of these thoughts: increase the 2%.

Not in absolute terms, but in percentage terms. I don’t care what happens to traffic so long as the number of people who fit the mold Kevin Kent describes is always increasing.

I will continue to focus on start-up strategy: innovation, commercialization, and venture capital but I’m still going to post about things I love (music, books, …), thoughts that won’t leave my mind, and many other unfocused things I figure the people in the 2% will enjoy getting a better understanding of who I am. It may force traffic to drop, but that’s okay so long as the 2% figure is always growing. That’s the real value.

David talks about the need for “clinician-scientists [hoping] to advocate their research findings” to read and familiarize themselves with Moore’s theory of crossing the chasm.

I’ve been thinking about the process of how to best introduce significant ideas and I think many of the elements of Moore’s thesis apply.

Then I started to think that most of the elements of the theory apply to introducing… anything!

Whether you’re trying to introduce a high-tech product, a fruit (ala Seth Godin’s Purple Cow), or an idea to a market you should always single out your target market and build a suitable marketing strategy.

Are you fresh out of school? You’re introducing yourself to the world – approach the next steps of your life with strategies analagous to “crossing the chasm”. Same for starting a blog, starting a club or organization, starting a company, or advocating research findings.

What do you think? Am I way off base here? Can you think of an example when you’re introducing/launching something where it doesn’t make sense to follow the strategy?

[Bonus: I was fortunate enough to spend the weekend in San Diego with my Dad. Driving back up to LA last night I heard a great song on the radio: Dark Side of the Cop - Shaky Little Rules. You can listen to a stream of it on their web site. Click on "music" and then on the car picture (third one down) --- the text in the photo should say "Summertime blues got in line with the others / Five guys in a car with imaginery lovers"). I wasn't going to share this because of the nuisance of tracking down the stream, but the song is too good. Wouldn't it be more beneficial for the group to let their music spread free and wild at this point?]

Two posts caught my eye today – they touch on topics that have been spinning around in the back of my mind for a week or two and I believe, just recently, I have found a connection between the two.

Jeff Jarvis discusses blog design and comments that “blogs have already become prisoners of their format… the problem are the templates”. I’ve been struggling with my template for a number of reasons. There are posts that I would like to have on a “front page” and others that I would still like to publish, but that I would like to have on a “page 2″. Also, my template doesn’t format properly in IE – my sidebar, popular posts/feedburner feed/flickr/… appears at the bottom of the page rather than in its proper place.

While slightly annoying, I didn’t think that either of these issues were too critical. I figured most of my readers read my content through an RSS reader or were using a browser other than IE.

This leads me to the second post I found interesting. Steve Rubel discuss various meme trackers. (I still cringe at the word “meme”)

I’ve been picked up by a number of the trackers over the past few weeks and they have helped significantly drive a large number of visitors to my site. Interestingly, the traffic that is being driven hasn’t resulted in a sizeable increase in subscribers to my feed. This seemed a bit odd to me and I’ve been thinking about it for the past week. I think I discovered the reason the other evening.

How are these two posts/thoughts connected? Oddly (or should I not be surprised?) most of the traffic coming to my site from the trackers are individuals using IE.

My mind hasn’t settled on why this is the case and I didn’t want to share this finding until I had collected my thoughts on the situation. But given the conversation that is starting around the two topics, I figured I would share what I’ve found and ask you for your input and thoughts.

Any idea why the traffic from these sites is from users surfing with IE? Any thoughts on the comparitive “value” of these visitors (I have an opinion, but don’t want to share it yet)?

(and if you can find where I broke my template, I’ll owe you one )

Daniel Popov has added a lot of value to my posts on the changing Venture Capital industry through thoughtful comments, and all of them should be read by anyone who found my posts interesting (aside: when is someone going to find an elegant way to direct readers to key comments?). I’ve been processing everything that he has shared and am aiming to address some of his points in future posts.

In one of his comments Daniel shares the following:

When I read this I started nodding my head in agreement – it made sense that this would be a valuable service for VC’s to offer their portfolio companies: finding, establishing, and managing a relationship with an offshore ‘body-shop’ yields best results when the relationship (trust, communication channels, …) has time to mature and develop. This relationship development is a better fit for a VC firm than for an entrepreneur. A service like this not only acts as a competitive advantage for attracting and negotiating with start-ups, it also helps the ROI as it drives down costs for portfolio companies.

I’m a young guy who is just thinking through all of these ideas for the first time and I believed that this specific thought made too much sense to not be happening already.

So I went looking.

And here’s what I found: the Venture Capital Journal has an article from September 2004 titled “Outsourcing Is In” that discusses the issue. The article talks at length about the venture capital industry’s interest in investing in Business Process Outsourcing (BPO) firms. Not only do VC firms like the potential returns from the sector, but the VC firms are leveraging the investments to help their portfolio companies cut costs.

Not only are VC’s developing strong relationships with offshore “body-shops” — they’re investing in the offshore companies themselves! A foreign investment in an offshoring firm that then is leveraged throughout the portfolio. Outsourcing/offshoring keiretsu? Interesting to say the least.