One thing I'm going to miss about being at Union Square Ventures is being a part of the conversations that inspire blog posts on Fred's blog. Fred, Ben and Caterina are talking today about something we were talking about at Union Square Ventures for months... the idea that you could, and maybe should, do business development without ever talking to an actual business development person.
We were trying to help get Indeed to be featured on an online social network, and then we noticed Dice.com's functional ads with a job search box on Fred's blog. The social network came back and told us pretty much what Caterina says she told QOOP... use existing inroads to build a path into our service. In Flickr's case, it was an API, and in our case, they said to run a functional ad powered by the information available in their member database.
Feedburner accomplished something similar with Typepad. Instead of doing a distribution deal from a position of weakness on day one, they built their product so that it provided something really useful to the users, RSS stats and ads, that worked with Typepad's feeds. By the time Typepad agreed to integrate their service, I'd say the bulk of the power Typepad users were already using Feedburner. Porting my Typepad feed users over was kind of an afterthought. It became a need to do deal requested by the community which was alreasy using Feedburner. There was no guesswork as to whether or not it would be worth it.
There are a few key driving forces behind the fact that any of this is possible:
- Interoperability: APIs are making "integration" a matter of plug and play versus recoding anything.
- "Open" for business: Even Facebook is opening up... Its one thing to create an API from a technical point of view. Its another to realize that your service can become much more robust and it is in your capitalistic interest to open up to others creating services around you. I mean, where would MySpace be without the Free MySpace Layout Nation?
- Word of mouth: Discovery and viral marketing from the ground up is now a legitimate distribution strategy. I mean, I don't remember seeing any ads or press releases about Pandora. Even my non-techy friends found it somehow and just said, "Wow this is fuckin' cool... Hey, did you see this?" Sure a good biz dev deal can get faster distribution (unless it takes 3 months to do the deal, of course...) but I dunno... Web 2.0 moves pretty fast.
So what exactly is the place of business development on the web?
Well, I'll give you the other side of it.
- API's really only go so far... and they're designed that way, lest you suck the service out of a service. Certain levels of integration, by design, require negotiated business relationships. Its nice, however, when you can only focus on the business relationships that are pulled to the table by actual usage.
- Not all the doors are open. Google's placement and integration into Firefox or XM's appearence on AIM Triton require a few lines of code and hardwiring. Not every site is open, either. I'd love to get avatars into every social network out there, but not all of them are as open as MySpace. I think they'll all become more and more open, but its going to be a long time before I can put my guy in a suit on my LinkedIn profile. (Come on Reid, how cool would that be?!)
- Content. Usergen content is easy to mashup, but unfortunately, if I want to use the Goverator's "I'll be back" as my avatar's away message when I'm on vacation, I'm sure I'm probably supposed to pay someone. Involve licensed content in new and creative implementations, and you're bound to need a bucket of lawyers, some softball bats, and some very crafy and patient biz dev people to get it moving.
Someone just asked me if I do any business development in my current role at Oddcast. I have to admit, part of me wants to say, "Yes, I develop business by trying to be a great product manager." That wouldn't be the whole truth, though, because there are particular relationships where advanced integration with a cool partner would go a long way to creating significant value for users. Still, right now I'm basically head down helping to create and if I do this right, consumer distribution will be a function of user value.
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