The Next Generation Web

After 3 years and 2 months here in Redmond, it's time for me to get back to my roots in the entrepreneurial world.  My last day is today, March 14.

It has been very interesting to be "an entrepreneur on the inside."  I've met interesting people, visited interesting places, and had a great time talking to customers and folks in the marketplace throughout my time here.  I'll save the full-on Microsoft detox and observations about the Web industry for my new blog... I hope to see you there.

I'll also chronicle the day-to-day establishment of my new startup Notice Technologies.  Notice Technologies builds useful Facebook apps (perish the thought.)  We will also do "Bain" or "McKinsey" type business consulting for Social Media and Internet Marketing.  I intend for the Chris Treadaway blog to be the "open kimono" of our company and our efforts over the next few years.  Those of you who know me well know that I'm an open book.  I don't intend to change.

So thanks Mom, Dad, and the other two of you who read this blog regularly (just kidding... kinda).  On to the next adventure!

So on two separate occasions over the last three days, I heard analysis so ridiculous I was forced to write a quick blog entry.  It pertains to the iPhone SDK and the impact of Kleiner Perkins' $100m venture fund for iPhone apps.  First of all, let me preface my comments by saying that 1) I love the iPhone, but 2) I think Apple's business model of taking 30% of revenue for iPhone apps is stunningly greedy and will ultimately prove to be unsustainable.

I don't typically comment on the mobile business but I do frequently comment on the impact of market dynamics on web developers.  A few folks I know in the industry suggested that the iPhone is at a disadvantage because since it is a single platform, it doesn't have the reach of the remainder of the highly fragmented mobile phone industry.

The truth is that couldn't be further from the truth.

Web developers & entrepreneurs want simplicity in their app development cycle.  I'd give up a lot of the target market if I had a simple and single way to build & test my app.  In fact, I know a lot of developers who haven't built mobile apps due to the complexity involved.

Fortunately the market is moving towards simplicity with the iPhone SDK, Microsoft's plans for Silverlight on mobile devices, etc.  But simpler is better.  And as entrepreneurs and developers make business decisions, my guess is that they'll evolve *away* from the fragmented mobile device market and they'll embrace emerging centers of gravity over time.

I hope everybody out there is doing well.  I've been noodling over predictions for 2008 for awhile, but it has been an "interesting" start to the year for our group so I've been busy with customers, partners, and other folks within Microsoft.  So here goes... I won't go too deep into any of these as any of them may prove to be an interesting blog post later in the year.

1) Tech proves to be resilient compared to the rest of the world economy -- other areas of the world economy will suffer, but companies continue to make technology investments in both marketing and infrastructure.

2) Facebook overtakes MySpace as the premier social network destination -- improvements in the Facebook API and the comparatively strong user experience will push Facebook over the edge.

3) Paradoxically, Facebook will have problems appealing to older generations -- I don't think 2008 is the tipping point for boomers & older demographics necessary to truly take Facebook mainstream.  Maybe 2009.  Naturally the Facebook user growth rate will slow but most folks in the tech press will make this out to be an execution problem that Facebook management will need to solve.  What can I say... it sucks to deal with the law of large numbers.

4) We'll see a handful of great success stories from startups that use utility computing models -- I know a lot of you startup folks are using AWS in a variety of great applications, but this is the year that the utility computing model goes more mainstream.  You should know that we're paying attention. ;-)

5) China will fascinate us with the 2008 Olympics -- I became a believer after visiting last January.  The Olympics will give people around the world an opportunity to learn more about what is happening there.  Hopefully we'll be able to bring it to you ;-)

6) The term "Web 2.0" will become dated -- Web 2.0 has had a good run, but it's coming to an end.  Early money is on Web 3.0 as being the new term but in my humble opinion, that is lame.  We shall see.

7) Designers increasingly become first class citizens in the web development world -- Not an altogether bold prediction here, but we're in the middle of a megatrend around user experience that probably has another four or five years at minimum.  Big advances in this area continue.

and finally....

8) The "Echo Boom" begins -- Startups will heat up significantly in 2008.  Look around at all the web innovation sponsored by the major tech companies -- Silverlight, AIR, Google's Android, Windows Mobile, the iPhone SDK, Sharepoint, Facebook, OpenSocial, Amazon Web Services, Windows Live, etc.

All of that represents just a sampling of the things being developed today... millions if not billions of dollars of investments made to improve web experiences.

I don't necessarily believe that we're going to have a boom like we had with Windows software, then later with the Web.  But I do think we're entering a period where developers have *a lot* of choices and *tons* of opportunities to make a lot of money if they can build successful applications, web services, or experiences.  I really think the boom is just beginning especially for disruptive small businesses.

What do you think?

If I've learned one thing from being at Microsoft for almost <gulp> 3 years now </gulp>, it is the fact that Microsoft offers a lot to MBAs and freshly-minted undergrads interested in developing or furthering a career on the Internet.  Every day, we rationalize how software and the Web will play together - by talking to customers, partners, startups,other business groups within Microsoft, etc.

So I'm naturally passionate about returning to campus to have open & honest conversations with students about what they are doing, what they see, and so on.  This week I'm in Austin talking to MBAs.

This year I have been struck by the intensity & passion with which technically savvy students express their appreciation for Facebook and LinkedIn.  Social networking is *the* way that people get to know each other quickly in a campus environment.  I guess that's necessary given that business school lasts only 21 months in total -- it is handy to have a resource where you can learn about your classmates quickly without having to ask a lot of questions.  In some contexts, that can be a bit creepy.

I think the big implication here is one that has been alluded to in a number of places.  Social networks are becoming the way that people can passively share information about themselves.  This is a big, big deal that will continue to have broad implications on how we socialize.  Let's start with a simple example -- birthdays.  It is very difficult to keep up with birthdays.  We used to have "birthday books"... or at least my wife used to maintain one... where important birthdays would be written down for use year after year.  Now if you expose your birthday on Facebook, all your Facebook friends need to do is login to remember that you're turning 37.  Another example is contact information -- think of all the things we do to alert friends to address, phone number, job, or e-mail address changes.  Again, if you're exposing your data to friends, they'll get a notice when you make a change in your life.  The same situation applies to some degree to LinkedIn.

These are a few early & admittedly simple examples of how Facebook helps us manage our lives.  But as Facebook continues to mature, grow, and reach new demographic groups, I suspect that it will help us manage our friendships in more meaningful and productive ways that we can't even imagine today.

But enough of the aside... the students I spoke with talked to me about all the things they think are possible with social networking.  I'm not talking about students from the software or internet industries though... I'm referring to students with background in oil & gas, consumer packaged goods, retail, etc...  future business leaders who will come and go and make business decisions in middle management and in their personal lives.

Maybe I've become a bit of a zealot, but I'm sold on social networking.  The fundamentals are in place for deep changes in how we interact and how our online & offline worlds collide.

So many of you who know me well probably know that I tend to "call 'em as I see 'em".  You also probably know that I spent some time in 2002-2003 on an internet marketing business where I helped small businesses learn how to use Google Adwords to more efficiently spend their marketing dollars.  I am, and always will be, a huge fan of the Internet as a marketing channel.  It's a perfect channel for generalists -- to succeed you really need an odd combination of skills from marketing to finance to operations and finally development.

Given that setup, let's talk about Microsoft's recent investment in Facebook particularly in context to other activities going on at the company.

I won't recap all the news/analysis that has propagated through the Internet on the story.  Instead, I'll ask you to consider how the world is different now than on May 17, 2007, the day before Microsoft acquired Aquantive.  Microsoft held approximately 10% share in search.  Facebook had 20 million active users and 0 developers...the Facebook API did not launch for another week. :-) 

Now fast forward to today.  Microsoft has acquired Aquantive and its Atlas ad targeting technology along with Avenue A | Razorfish.  Now the investment in Facebook gives the two companies 4 years or more to figure out how internet advertising works best for all parties (users, advertisers, technology providers, etc.)

I've been to trade shows where people have asked me "how is Microsoft relevant to the Web?"  I think that question is being answered now.  Combine these latest moves with some of the other great work (ex. 1 | 2 - especially Gatineau) going on in Redmond, and it's a much different world than when pay-per-click (PPC) advertising was the only game in town.

As those of you who know me well know, I am a *huge* fan of social networking software.  In business school, I floated a business plan to forcibly create a social network by mining users' Outlook contacts pretty much by force.  Didn't work so much...something about personal data being sacred.  :-)  I helped classmates sign on to LinkedIn in 2003 at a time when social networking was in its relative infancy...and fortunately today I know what is going on with the 100+ people from my class who I knew well.  I also tried (unsuccessfully) launching a social network of entrepreneurially minded people across the business school and the college of engineering.  I maintain profiles on Facebook and LinkedIn, and I use them both all the time to find out what people are doing.  It's a long-winded way of saying that I'm huge fan of social networks and I do believe that social networks are the future of how we will communicate, keep up with friends, share our lives, be marketed to, etc.

For instance, have you ever gotten a social network invitation from "that guy"?  "That guy" or "that gal" can come in many forms:

• Father Wayback -- the person who hasn't talked to you in 20 years, but finds you on Facebook & decides that your relationship is all of a sudden relevant again,
• Dr. Acquaintance -- the person who you know & like, but it isn't like you're calling them when you are bored on a random Thursday night,
• Mrs. "Seriously?" -- the person who you wouldn't regard as a friend at all in any context,
  
• Mr. "Who" -- the person who you don't remember despite hours of racking your brain,
• Captain Obligation -- the person who becomes your friend not because he/she really wants to be your friend...but rather the person who *has* to be your friend for some artificial reason,
• Miss Second degree -- the friend of one of your friends who you never spoke with, but for some reason wants you to be their friend.
  

Given that it is currently so hard (not to mention rude & expressive) to deny or ignore a friend request, I find that my Facebook friends list is really a mish-mash of all of these + people I'm actually really close to.  The funny thing about it is that my closest friends aren't on the system yet.

I have always tried to maintain some level of integrity in my LinkedIn profile -- I set up a rule early that I would only accept friend requests on LinkedIn from people I know well.  There are a few exceptions but for whatever reason, Facebook isn't as high quality a list.  Maybe I regard LinkedIn as a more "serious" network and Facebook as more of a lifestyle network.

The second problem I have with Facebook is the fact that the system has introduced me to a number of my wife's previously anonymous ex-boyfriends.  Not that I care, but these people now have names, lives, faces, profiles.  I've found scumbags, used car salesmen, and a few perfectly reasonable people.  Sadly I'm just scratching the surface.  I seriously thought about creating a Facebook group called "Thank you Facebook for introducing me to all my wife's ex-boyfriends", but I ultimately didn't want to give any of them that satisfaction. ;-)  Fortunately these guys are still largely anonymous to me, though I know deep down inside that I *will* run into at least one in the business world at some point later...and he'll have that 'twinkle' in his eye...and I'll get vomitous and perhaps later want to punch a hole through a wall.

Problem #3...a younger colleague at work who I really respect pointed out a huge flaw in the system.  Let's call him Bob to keep this anonymous.  Anyway, both of us are friends with a few senior folks at Microsoft who have had long illustrious careers in the software/computer/internet industry.

So Bob says to me..."Chris...do I really want <insert senior person's name> to see pictures of me funneling a beer?  Do I really want him/her to see pictures of me hanging out in a bar with red eyes and a goofy grin on my face?"

Great point.  Surely we need some way to expose certain information from our profiles to certain 'groups' of people.  If Facebook is going to be both a business and a social networking platform, access to & control of information will become key.

Finally, I probably have the same gripe about LinkedIn as many of you who use the system.  LinkedIn is just about the same as it was when I joined 4 years ago.  Most innovations from them have come in the form of new ways to monetize me (gee thanks) as opposed to making the data & the experience stickier and more addictive.  I think LinkedIn could be *fantastic*, but they need to keep improving what is a great system to compete long-term.

All hail the social graph! 

So I'm here with the junket of folks from Redmond who flew down to participate in what is perhaps the biggest Web 2.0 show of the year, the Web 2.0 Summit.  For me it is somewhat of a factfinding mission -- I haven't done the event circuit for Microsoft nearly as much as my colleagues.  In my previous life as a three-time startup guy, I did, however, attend many an event representing a promising startup desperate for attention and relevance. 

Maybe my memory is bad, maybe being a MS employee changes the game significantly, maybe I don't show that look of desperation, maybe I was involved in the wrong startups...but I don't remember having so many easy & great conversations with venture capitalists.  I dare say most I spoke with were approachable.  ;-)

But in all seriousness, consensus here at the show (not that it is altogether shocking) is that we're in the beginning to middle of Bubble 2.0...a slightly less frothy, somewhat mature bubble where companies compete furiously for a sliver of the $400B global advertising market.  We're back to the emphasis on users, momentum, and any number of metrics that are largely abstracted from earnings (or even revenues for that matter).  Facebook is the trophy 'platform' of Bubble 2.0, with rumors of their frothy valuation & the promise of new opportunity therein driving early stage companies to stunning valuations.  Speed to market is back in vogue, while revenues from paying customers are increasingly an inconvenient necessity.

The only thing that is constant about the startup community is that rules change violently and often without discernible warning.  All of a sudden, yesterday's genius is today's slowpoke.

Don't get me wrong - I'm not complaining.  As in everything, though, there is a cycle.  IMO, this one has a few rounds to go to play out.  It should be fun!
 

Working at Microsoft is probably not unlike working anywhere else.  We're furiously working on numerous projects that culminate in a defining event.  Once such an event passes, we move on to the next.  No rest for the weary.  Such is the software/internet business I guess.

Since my last meaningful post...ok, semi-meaningful...we've had a few such defining events.  First, in early April we announced that we decided to include Expression in MSDN Premium subscriptions.  I won't recap everything around that...but suffice it to say that we heard all the feedback from day 1 and you saw the results.  Hysterical feedback didn't (and doesn't) generally get through the filter -- we are a company of intelligent people making intelligent decisions.  Sometimes those decisions can't be reversed but sometimes they can.  In the end, I'm very glad we changed course on that one.  I can go to sleep at night knowing my MSDN subscriber friends back in Austin can play around with Expression now. ;-)

We announced Silverlight a few weeks later.  It's a fascinating technology that will bring about great advancements in usability, media experiences, and interactivity on the web.  It is a great time to be in our business -- the web experience as we know it is undergoing a fundamental transformation that will play out over the next 5-10 years.  Design, development, and interactivity can and will play together nicely...and users are going to love the results.

So will the business community.  Millions of dollars will be made or lost by providing (or not providing) a great user experience to customers.

As I've mentioned before, my role is broadening to encompass more of Microsoft's servers, tools, platforms, services, etc.  I'll be working to make our offerings clearer to those of you in the business world, whether you work by yourself out of your garage or in a corporation of 100,000.

I'm looking for two people to fill out my team - one responsible for messaging to business decision makers and the other responsible for messaging to technical decision makers.  So if you're interested, drop me a line at chris.treadaway@microsoft.com.

We're always looking for good people...and I'm sure many of you out there would love to be on the cutting edge of the future of software and the internet.

We're now finalizing plans for Mix07...I hope to see you there!  I'll post some observations from the show as well as (finally) some final thoughts on our acquisition of iView Multimedia last year.

You know what they say about the definition of insanity...it's doing the same thing over and over again and expecting a different result.

I guess that's why I should just rip the name off my blog altogether or broadly generalize it.

First some context...one thing you should know about Microsoft is that the company is constantly in a state of flux.  A good % of people here have the job they are in for approximately a year, then move on to another role.  Perhaps over and above that, groups reorganize roughly every year to 18 months.  So if you're trying to work with Microsoft on a business development deal or if you're working for a vendor company trying to sell something to Microsoft, you're probably just as likely to get someone learning his/her job as you are someone thinking about his/her next job.  It's funny how that works but I find it's actually effective.

In that spirit...about a month ago I was approached to take a new job on the same team to manage Microsoft's business value messaging for the web stack -- our tools, technologies, platforms, services, etc.  It's a broader role than what I have been doing as Expression business manager although I will continue to work on Expression quite a bit.  The goal is for us to better communicate the variety of web offerings we have so companies of all sizes (startups to large enterprises) can at least understand what we have & how to incrementally add to it to achieve business results (improved efficiency, more opportunities, lower total cost of ownership, better reliability, higher profit, etc.).

To give you a better idea of the problem, look up "Microsoft Web Technologies" on a search engine and see what exactly comes up.  If you're anything like me, you're probably going no further.

So I promise you simplicity...I also promise that we'll market the right parts of the web stack to the right customers.  If something doesn't make sense to a particular market segment, we're probably not going to spend a lot of time adding that tool/technology to the value proposition.  The right tool for the right customer in the right environment.  That's the philosophy. 

In the meantime, if you have any ideas of what I should name my blog, please let me know...I'd like to stop changing the name of my blog every time my responsibilities change ;-)

One of my colleagues and business school classmates Christopher Griffin forwarded me an interesting article from the New York Times on the "online disinhibition effect." In layman's terms, it is our willingness to be rude to people we don't know personally on e-mail or in public forums.  Simply put, we won't say things in person to people that we'd routinely say in an e-mail message.

Interesting article.  I highly recommend it as someone who has been both a victim and a perpetrator of the online disinhibition effect.  It's enough to make you think twice about what you send out to people.

On a related note, a blog post from Ryan Stewart of ZDNet made the rounds over e-mail here yesterday.  Maybe there is something to this "effect" after all... ;-)

Forest Key, our Director of Product Management, and I took a two week Asia trip to visit customers, partners, and MS folks at the end of January.  The first stop was China...Beijing and then Shanghai.  What a trip...I'll be blogging about this for the foreseeable future.  First...a few random business thoughts on China...

Let me start by saying that China is loaded with opportunity...not unlike what Professor John Doggett has been preaching evangelically for quite some time now.  (Quick aside, but in my long list of missed educational opportunities, missing his class has to be at or near the very top.)  But I digress...

The scale of China is truly something to behold.  Beijing and particularly Shanghai are massive cities.  There are people everywhere.  Traffic, while managed reasonably well, makes just about anything you've experienced in most other parts of the world seem insignificant at best.

The scale, infrastructure, and bustling activity makes their 10%/year growth numbers seem almost conservative.  There is construction everywhere.  Skyscrapers of 30-40 stories seem rather insignificant and the most modern buildings would be treasures in any of the world's greatest cities.  It feels more like a thriving capitalist wonderland than a centrally planned economy devoid of opportunity.  It's just unreal.

Below is a shot of me, Leon Brown (our "troubadour" in Singapore - Asia Pacific marketing guy), Forest, and Nigel Burton (China Country Lead for DPE) in Tiananmen Square.  (By the way, Beijing was frigid - freezing temperatures but with a nasty 40 mph wind seemingly everywhere.)

But back to my business observations...China is a vast country full of resourceful, brilliant, and entrepreneurial people.  These people have access to a relatively inexpensive labor force in country that is likely to persist for at least a generation, but more likely at least a hundred years.  For the most part, the infrastructure is pretty good - good roads, good utilities, good broadband access.  It's ripe for continued business & entrepreneurial success.  All the elements are there.

Other quick observations on China:

• Alongside/in/around the beautiful skyscrapers are a lot that need renovation.  I can see a real business opportunity there long-term.
• The 2008 Olympics (in Beijing) will be China's coming out party.  People around the world who have never had the pleasure of visiting the country will begin to understand the unlimited potential of China in coming years.
• You have to get a foot massage while there - I was walking on air after getting them beat up for almost 90 minutes.
• English language is pervasive in the business community, but the food is definitely distinct!

Next:  who we met with and a Shanghai tour gone awry...

Happy belated new year!!!  I've had a wacky start to the new year, hence my silence.  My apologies.

A few quick observations & thoughts I've been meaning to share with the world:

The next big thing in software is WPF & WPF/e.  No doubt about it.  I've spent most of the past two weeks looking at innovative applications that have been created by companies in Asia who are using our new technologies.  The apps have simply blown me away.  I'll share some of the best of class with you over coming weeks.  All I know is that if I were to leave MS anytime soon, it would very likely be to go do something with these technologies.  It's the next big thing.

On the plane ride back from Narita, though, I thought through the implications from a business perspective.  I believe that three classes of venture-fundable startup opportunities will emerge over the coming 24 months:

• Content applications that work just as well online as offline - the New York Times Reader is a fascinating "pioneer" application.  Thanks to the app, I read the NYT on planes just as I read it in the office.  You have to check it out & let your imagination run wild about the possibilities that this type of user experience can allow.
• Line of business applications that are actually usable.  For example, at MS we have an incredibly clunky expense report application that people *dread* entering information into.  Technologies we are rolling out will make it easier for designers & developers to create more usable applications that work with existing databases & information systems.  Entire companies will be created around improving LOB applications necessary to make the corporate world run more smoothly.
• On the subject of usability, we're at the beginning of a renaissance of usability in the Internet -- existing sites & portals will gradually morph into something between a web site and an application.  Over time, users won't know the difference aside from things being a lot more intuitive & meeting needs in a much better, more elegant way.

There is also an emerging opportunity for small consulting firms to bring knowledge of these new technologies in other fields...media, interactive design, advertising, etc.  When corporations and advertising agencies begin to see the types of things our technologies can allow, a lot of "client" business will open up for companies who have developed an expertise in WPF & WPF/e.  Not a venture-fundable opportunity perhaps, but something that will nonetheless make some people a lot of money.

It really is a new wave in application development somewhere between where the web is today and where client applications are today.  It's an exciting time that is sure to unlock billions, if not trillions of dollars of new shareholder value.  I really do think we're at the beginning of the next new thing.

On another note, Kevin Bier, Group Manager for Expression Media, has just launched his blog.  I've worked with Kevin extensivley for about a year now -- primarily on the iView Multimedia acquisition.  So I'm probably qualified to say that Kevin is perhaps one of the nicest people you will meet in our industry.  He's smart, thorough, and a class act.  So, I encourage you to check out his blog.  He has some good things to say, he'll entertain you, and he's very likely to act on your feedback when/where he can.

Next - adventures in China, Korea, and Japan - interesting places & interesting times; thoughts on our acquisition of iView & Expression Media.

So our office party was Thursday night..great timing too because it happened during one of the worst storms to ever hit the Pacific Northwest.  My colleague Ian Peacock and our wives drove back to Seattle from the Eastside just about at the beginning of the height of the storm at around midnight.  For those of you familiar with Seattle, yes, that was driving across the I-90 floating bridge in my SUV, which *did* get tossed & thrown about in the 60 mph wind gusts.  Good times and not scary at all. ;-)

Fortunately, all is well though it looked today like almost all of Bellevue was still out of power and the Microsoft Campus is still dark for the most part.  It was one heck of a storm, and still is for a lot of people in the Pacific Northwest.

So I'm lounging around getting rid of my head cold, and I picked up John Stossel's Myths, Lies, and Stupidity... that I checked out from the Seattle Public Library a few weeks back.  If you can get past his libertarian slant on pretty much everything, he has some interesting observations on business in Chapter 3.  It's loosely substantiated Milton Friedman/Michael Douglas as Gordon Gekko "greed is good" free-market economics.  I'm not sure I agree with all of it, but I do think competition is a good thing, especially for the customer.

Other gems in the book are little-known facts like the following:

• approximately 20% of the world's marriages are between cousins,
• if you put the entire world's population in the state of Texas, the population density there would still be less than New York City,

It's a good read if you are in need of a book to quickly run through in an hour or so...I wouldn't take the time to read every word, but it is handy for a quick alternative and cynical perspective on all that we've been told.