The last decade has seen the birth and rise of internet behemoths dominating markets: eBay in second hand good, Amazon in commerce, Facebook in social media, Google in search etc.
It’s been a game of scale and winner takes all. Now there’s talk of Web 3.0 and big data.
I think the next wave of the internet will be about descaling to address an increasingly discerning and sophisticated user. The next generation of successes will be the ones that pick and verticalise these behemoths bringing more choice and more personalization to the customer. Focusing on quality content and taste rather than scale and.
And the reason is simple. Consumers want choice. Sounds obvious. How is that different to 10 years ago you may ask?
Well. 10 years ago, the internet was that alternative choice. By and large, people using the internet regularly were still early adopters. The internet was the alternative choice to what they knew: buying and selling things on the high street, sending snail mail, dating offline, communicating and socializing the good old fashioned way. The internet became that ‘other way’ of doing things with room for one or two big players in each field.
But now, things are changing. For one: those early adopters have become a hell of a lot more sophisticated and discerning. They’ve been online for a decade.
Second, technology has made browsing a lot quicker and easier online and on mobile. People use that to compare and snoop around. Window shop like in the offline world.
Third: the number of people coming online is exploding. The internet is entered its mass adoptions phase, leading to traditional household names like Blockbuster and HMV to go bust. Choice is no longer between the offline and the online. Choice is between the online and the online.
The market is therefore becoming more fragmented and more demanding.
Mean time the incumbents haven’t evolved much to focus on delivering more specialist, quality goods and services tailored to them. They’ve remained largely ‘one size fits all’. The sheer volume of content is making it harder and harder for the customer to find what they want, and mean time the customer is becoming more demanding more sophisticated and more segmented.
If the incumbents have done something well, its leveraging the network effects of these early adopters to reach scale and dominate their respective space. But can they maintain that with mass adoption and an increasingly sophisticated customer?
eBay is too big to curate anything meaningful any more. Amazon serves a great intent-driven service and so does Google. So long as you know what you want you’ll find it. Although that too is getting more littered with crappy content and fake imposters.
For the first wave of internet adopters that’s success. You cant find what you want offline, or its too costly or time consuming and you go online and get it in a snap. But this does not mirror the real world as we know it. Intent is only a small part of the equation. Serendipity, curiosity, impulse, trial and error, consultative advice from the specialist, the friend or the shop assistant – all form part of our experience.
There is a myth that the internet and technology at large is here to reinvent the offline world. To somehow make it better. I think that’s a myth. Its here to mirror it.
Facebook has high hopes of delivering a more impulse-driven experience but I think its far from it at this stage. And I have my doubts whether a social network that’s already becoming crammed with irrelevant content will be able to deliver that targeted focused experience that a customer wants. My newsfeed is becoming more junkie by the day.
So I think the next wave that we are seeing crop up today already, from vertical flash sales sites, to niche curated content sites, and specialist marketplaces are all about serving a more discerning customer who’s been monopolized online and is now looking for more choice and more quality.
The good news for us entrepreneurs is that our life just became easier. We don’t need to come up with that big innovative ground-breaking idea anymore. We just need to find a customer segment that’s tired of trolling through the eBay’s, Craig’s lists, Facebook’s, Match.com’s of this world and deliver a very focused, very narrowly defined and very personalized experience tailored to that customer group.
That sounds like a niche business. But lets not forget eBay started with stamps, Amazon with books, Facebook with Harvard collage students etc. They just overgrew themselves and focused on scale more than on delivering that magic that defines their early days consistently and to more customer groups.
That’s what the next wave of big wins will do.