Web 2.0 and "peak waste"

Tim O'Reilly writes a thoughtful commentary on the evaporation of false wealth in the technology industry, wealth spawned and eventually spurned by an overindulgent consumer culture. Quoting his son-in-law, Tim writes that perhaps we've reached the "pinnacle of waste in our consumer culture," and can now move on to "[w]ork[ing] on stuff that matters."

I agree, but I'm slightly surprised to see Tim writing off the wasteful technology industry, an industry that he has in part encouraged over the past few years with a heavy emphasis on Web 2.0 and all the superficial "value" that it has created. I'm not suggesting that Tim has explicitly encouraged such waste, but rather that his ideas have sparked an avalanche of rubbish business models and technology and, most importantly, have done little to actually foster the individual's role in creating value.

Tim's emphasis has been on the social web, encouraging lightweight business models and technologies that facilitate content creation and harness others' work but do little to emphasize quality content creation (and may actually do the inverse). I don't fault Tim for not coming up with the answer to the Web's failure to invest in quality, but I'm struck by the discordance between his posts on waste and comments like this. For example, speaking of Chinese factories, Tim writes:

I've often wondered: "What do they think of us, so rich that we can afford to spend money on so much that is useless!" And now we find that perhaps our wealth too was rooted in illusion.) And even when it comes to consumer electronics, we've built a throwaway culture rooted in waste.

But doesn't this also largely describe the rise of the "amateur class" that Nick Carr derides and Tim implicitly (and sometimes explicitly) celebrates? A Web so chock-full of silly, superficial speech that quality content can't rub two dimes together?

Indeed, I would think that if Tim is concerned with discovering value in our post-peak waste world, he'd be investing more time in figuring out how exceptional content will get financed in the Web 2.0 world, rather than in the technologies that make it easy to borrow content but impractical to fund the development thereof.

I'm not suggesting that Tim doesn't "get it." Indeed, perhaps I'm mostly criticizing a world that gets his vision wrong.

But I do believe there's a disconnect between the hype around Web 2.0 and the reality of getting paid. It was horribly telling that one darling of the Web 2.0 crowd - Digg - was recently exposed as gigantic revenue hole: money goes in, but little comes out. The service that elevates raises the least-common denominator of content, and thereby helps to suck money out of quality content creation, can't make money itself.

In other words, Web 2.0 popularity doesn't necessarily mean very much in the real world that requires payment for value.

A favorite passage from T.S. Eliot's "The Wasteland" comes to mind:

Here is no water but only rock
Rock and no water and the sandy road
The road winding above among the mountains
Which are mountains of rock without water
If there were water we should stop and drink
Amongst the rock one cannot stop or think
Sweat is dry and feet are in the sand
If there were only water amongst the rock
Dead mountain mouth of carious teeth that cannot spit
Here one can neither stand not lie nor sit
There is not even silence in the mountains
But dry sterile thunder without rain
There is not even solitude in the mountains
But red sullen faces sneer and snarl
From doors of mudcracked houses

             If there were water

And no rock
If there were rock
And also water
And water
A spring
A pool among the rock
If there were the sound of water only
Not the cicada
And dry grass singing
But sound of water over a rock
Where the hermit-thrush sings in the pine trees
Drip drop drip drop drop drop drop
But there is no water

Not in the wasteland, and little in much of the Web that Tim has promoted over the years. I'm not suggesting that there can't be, but while we (rightly) celebrate the value that Google and its ilk provide in harnessing collective intelligence, we should also be promoting a Web that actually uncovers and helps to fund ever greater levels of intelligence. Otherwise we risk enduring a technology culture that celebrates the amateur while impoverishing talent.

I don't think that's the world that Tim wants, but I do think that's what the Web has done with his vision.

[timoreilly]

Matt -

You give sideways notice to the fact that the web 2.0 you're criticizing isn't the one of my vision, but you still make the straw man the centerpiece of your response. It seems rather silly to me. I believe that Web 2.0 has added huge value, and that time and the recession will strip away services that don't add value.

As to getting paid, models will eventually work themselves out. I think people like you are always in too much of a tizzy about that. Take publishing, or the music industry for example. The sad reality is that most musicians and most writers didn't make much money under the old system either. There are always huge successes and many failures. Don't be so quick to conclude that there are fewer winners in the new internet content models. I suspect the ratios are probably constant, both in terms of content creators, and content aggregators (publishers) of various kinds. They are just different ones.

At any rate, I see some hope in the idea that as consumption goes towards bits, we actually can save some of the wasted energy and money that goes to disposable stuff. Disposable bits are arguably a better environmental tradeoff.

[Matt Asay]

I tried reworking the post (several times) to avoid criticizing you directly, but I do ultimately lay some blame at your door for encouraging a too-often hollow Web 2.0 boom. This could have been unintentional - you've perhaps been experimenting toward an ideal solution, just as the rest of the industry has - but I'm surprised by the apparent lack of ownership of the problem. At least, part of it.

I buy the fact that in any early market, lots of froth will be created and money will be lost. Fine. But we shouldn't be proud of that, and we should be quick to apologize for leading people into the froth (as I've done for the past six months on this blog relative to open source. I was wrong in some of my assertions, and I have been consistent in admitting this).

And then there's the payment problem. It's not that I don't see value in (online) social collaboration and I think you've been dead on in terms of calling out where value will migrate (data), but I also worry that much of Web 2.0 is about aggregating lowest-common denominator social interaction, and not enough about figuring out how to actually create higher-order communication.

Google makes nothing. It helps us find much. That's valuable, but I'm very, very worried that ultimately it will only help us find the chaff among the chaff. For example, as a book publisher, it's encouraging that you're not overly concerned by this, but I worry about the disappearance of media like newspapers. Blogging is nice, but without the raw material of real journalism, what good is blogging?

It's true that I get worked up about monetization (something that you've critiqued for years :-), but that's because it connects back to value creation, in my mind. If no one is willing to pay, no one will be wiling to create. At least, not enough. My "boring" enterprise software business makes more money than Digg, yet Digg consumes an inordinate amount of time and attention. Is that a good thing? I don't think so.

Web 2.0 is an interesting concept, but it's not new, and it's destroyed more value than it has created thus far by diverting resources from real businesses that actually help solve problems. Ultimately it may prove to be of tremendous value. You've been right more often than not, so I'll trust you here. But I think you have a duty, given your insights, to help us avoid wasting so much money/resources on our way to that end point.

[timoreilly]

Matt -

You clearly haven't really read or at least understood much of what I've written about Web 2.0. The companies *I* celebrate as the key exemplars of Web 2.0 -- Google, Amazon, Ebay, Craigslist, Wikipedia, Flickr, del.icio.us, and newer sites like twitter -- have all created enormous value. The new web 2.0 sites that I celebrate (and invest in) are also creating lots of value. I'm thinking of wesabe, instructables, tripit, amee, path intelligence - all are building real businesses with real value.

Re blogging, you're repeating a canard. Yes, a lot of it is reposting stuff from mainstream media, but a lot is not. In our space, look at sites like Techcrunch, Mashable, and ReadWriteWeb, which are just out-competing the old vertical industry media, and turning into real businesses. They're doing original reporting. Same will emerge in other spheres. Already is.

Not to say that there won't be losses, but don't mistake change automatically for either good or bad. See how the world is always remaking itself, with winners and losers in every revolution.

Tarring web 2.0 with the brush of all the failed startups who wrapped themselves in its mantle is like doing the same for open source.

Do you really think that Google has "destroyed more value than it has created thus far by diverting resources from real businesses that actually help solve problems"?

[Matt Asay]

In terms of dollar volumes, of course Google has destroyed more value than it has created...so far. But I'm optimistic on Google, because it has simultaneously shown that it can re-invent some of that lost revenue. It's just that what it has done - give away a lot of value (its own and others') and charge for advertising - hasn't worked for many others.

As for your prototypical examples of Web 2.0, I don't think many of them fit your own model very well. Nor would I call out the investments as classic examples because, true to investing's nature, some aren't very good, including some among those you've listed.

Your best example - Google - doesn't actually fit the Web 2.0 mold, I'd argue (<a href="http://www.roughtype.com/archives/2008/10/what_tim_oreill.php">with Nick Carr</a> - and yes, I've read your riposte to his argument and remain unconvinced). Even if we grant the central Google product as inherently O'Reillyan (Web 2.0), most of the rest of its products very clearly don't.

Craigslist and Wikipedia fit your model better, but don't make much money, though by choice. I'm not sure that Flickr or Amazon really fit your definition, either, though yes, I've read your take on why people like Amazon more than BarnesandNoble.com (and find it unpersuasive - I use it because it was first to market and has the bigger online brand, and I suspect that this is why others do, too, and not because it has better book reviews and what-not).

In short, I think those that the most successful Web 2.0 companies aren't 2.0 at all, at least not in any pure sense: they are 2.0 light with a healthy dose of 1.0.

Ironically enough, open source has proved to be much the same. My error in open source was assuming it really was a completely new world with new rules. It's not. I suspect that the most successful web companies will be those that learn from your Web 2.0 lessons without becoming overly religious about them.

Separate question: looking back on Web 2.0, what would you have said differently? Anything in particular that you believe needs revision? Or did you get it right the first time?