Everywhere I go these days, people are telling me about their ventures and new ideas to build a company. I feel like I did in the late 90s, when the New Economy 1.0 was thriving. The big cities are pushing their incubators and setting up funds to finance new ideas; major events like Vienna's Pioneer's Festival appear. And all the cool people seem to not be interested in going into consulting or investment banking any more (who is surprised ...?). But some things seem to be fundamentally different in comparison to New Economy 1.0. More concretely, business models, technology, ideas and the people doing it are incredibly more advanced in this New Economy 2.0 than they were 12 years ago. What has changed?
Last week, Christian Eder from Weavly.com came down to Vienna to discuss his business model with me and my Internet Economics class at WU. His first words were that "you can't make money on advertisement". With this statement, he excludes right from the start the biggest mistake made back in 2000. Weavly allows people to re-mix, cut and create their own videos with soundtracks using YouTube material. Why not have people pay a few cents? Why not ramp up companies that provide their promotional content for free and pay when Weavly's user base makes their promotions go viral with other peoples' creations? Weavly is a good example of one breed of new ideas around: end-user programming and content mashing; which means all kinds of plug-and-play applications that help people be creative with their computers without the need for real programming skills. These ideas often involve re-using the incredible amount of content already available on the net.
Mobile phone apps
The second breed of ideas is mobile phone apps. The huge difference in comparison to the late 90s is that we now have an installed base of powerful and colourful smart handsets around as well as the necessary bandwidth and affordable data-tariff structures. Unfortunately, the mobile app world is falling partly into the same 'advertisement-will-pay-the bills-trap' that we saw in 2000. But not all of them – after all, people got used to paying some Euros for the stuff they really want on their phones. As micro-payment schemes thrive, this willingness to buy will increase.
The third trend that I find interesting is the high number of business models around life-logging: Monitoring your health, monitoring where you went during the day, monitoring your steps, monitoring your friends and then putting some good machine learning on top of this data to help you interpret who you are, how fit your are, what you really do and how you can get better. People have an incredible desire to dig into the self. And mobile applications, fed by sensor data and empowered by personal agent software, can address this.
The only question is where the personal data used on these services is collected and secured and who controls it. A Silicon Valley start-up recently came down to visit me with the idea to host personal data on their own US-based and highly secured servers; advertisers could then push ads to mobile phones based on the company's knowledge from the personal data... As you can imagine, I wasn't too happy about the idea. European start-ups that use personal data vaults or identity management, like connect.me or Qiy, propose a different architecture. The idea is that people log personal data under their own (potentially even local) control and then have software that interprets that data for them. Doc Searls, author of the recent tech-bestseller "The Intention Economy" puts another idea on top of this model: The personal agents work for us, going out and getting us the stuff we want to buy; this model effectively dismisses the traditional advertising and retail industry.
The fourth trend I finally see is social entrepreneurship. Somehow we have reached a point in society where we are so much questioning the traditional business world's ideals that entrepreneurs seriously think about how to do things differently: They use waste like old fire hose material to produce posh handbags, they enhance digital signage systems with information for the deaf, they promote people sharing their work efforts directly and without mediators, etc. Some countries have set up national funds that explicitly promote and finance such social ventures, such as UnLtD in the UK. Corporate social responsibility finally becomes real, albeit in a different form and with the notable caveat that many big corporations may not be in that game.
Taking all these trends together the New Economy 2.0 seems to be all about empowering people; their creativity, their learning and their control in flat direct relationships. This is seriously different than New Economy 1.0 that was all about selling and informing people top-down and hence little more than a direct translation of the traditional hierarchical business world.
Last but not least, it seems to me that more than ideas, business models and technologies have changed since the late 90s. It is also the people. I still remember listening to all this hyped 'kids business' in 2000. Now I have the impression that the mix is better. The youngsters with all of their good ideas, power and enthusiasm are joined by experienced managers who have dropped out of the devastated corporate world and put their knowledge and experience behind the new ideas. This is a great trend. It promises to make the Internet Economy 2.0 a different story for Europe. (Sarah Spiekermann, derStandard.at, 12.6.2013)