From Web 1.0 to Web 3.0

I am sure you have heard about the Web 2.0, and recently the term Web 3.0 has popped up all over the place.

But since the web and its evolution is a difficult to predict process open to discussion by millions of people, it’s hard to find an explanatory approach that provides a clear picture over what the Web 1.0, 2.0, and 3.0 actually are.

However, if we invest some time in studying the history of the web, there is a red line crystallizing in the mist that reveals a clearer picture of the past and future evolution of the web. It looks like this:

Web 1.0

When the internet appeared for the first time as a broader mass media phenomenon – I would locate this first phase between the years 1990 to 2000 – most people used it as just another media channel. Professionals who understood the technology behind it created websites, and the rest of us visited these websites. While this new media channel was in most respects pretty similar to TV and magazines, it had one new and exciting twist: users could now access every webpage in the world instantly.

If I was in charge of assigning a tagline to this phase of the Web, I would call it “user generated choice”. Because now, everyone could access everything in just a mouse click.

Web 2.0

If a web historian had to compare the years 1990 – 2000 to the years 2000-2010, and tell us what the most obvious difference in the way we use the web and its influence on our lives was, the answer would be surprising: it’s not advancements in Ajax, Flash, PHP, or any other software technology. The biggest, most powerful change that took place in the Web was of social nature. It was a change of society, and how people interacted with each other. Suddenly, within a few defining years, hundreds of millions of people suddenly started to not only passively consume media, but to actively create content. At the heart of this civilizational revolution was a small, nearly insignificant technical twist in the design of websites. This twist was to allow not just editors, but everyone to upload and publish content of any kind to a new breed of Web 2.0 websites. It’s not even technology that changed – it simply was a new idea of how to use the existing one. This new idea, in combination with a higher penetration of high speed internet access in most developed countries, has led to the unprecedented explosion of content and content-centric interaction known as the Web 2.0. Consequently, the most famous tagline describing the Web 2.0 is that of “user generated content”.

Web 3.0

If you live in the Bay Area and Silicon Valley, the odds are high that you are completely annoyed that I even mention the Web 3.0. But if you live outside this little, slightly self-referential bubble of Web thought leadership, you might hear the term for the first time. The reason is that despite the ubiquity of definitions for the Web 3.0 inside the startup community, none of it has made it out into the world. The reason is simple: they are either tech-centric, or not thought through. Like the Semantic Web. You cannot simply make up definitions. They need to be in-line with the historic background, social logics, and human interests.

The most common paradigm, the Web 3.0 as the “Semantic Web”, has three major weaknesses: first, it’s not clear what it really means other than a web that is somehow “smart”. Second, it is inconsistent with the nature of the Web 1.0 and Web 2.0 as social phenomena rather than technological advancements. And third, as a consequence from that, it lacks a sharply defined social value such as Web 1.0’s user generated choice (all content suddenly becomes accessible with a single mouse click) and Web 2.0’s user generated content (everyone becomes a publisher!).

A decent definition of the Web 3.0 must relate to the historic trajectory laid out by the Web 1.0 and Web 2.0, build on the achievements of both, and show a paradigmatic improvement over the Web 2.0.

To understand how the Web 3.0 transcends and improves the Web 2.0, we first have to understand what the problem with user generated content is. While it has empowered everyone to publish and share knowledge, arts and entertainment with everybody else, its actual impact falls short of its revolutionary potential. Of the over 30 million people who try to professionally web-publish in the US alone, only a tiny fraction – below 1% – actually manages to make a living off its efforts. This, in return, means that only this tiny fraction can actually commit the time and resources to the creation of high quality knowledge, arts and entertainment that pushes our society forward. I call this 99% failure rate of the web 2.0 the web 2.0 dilemma. While the quantity of content has exploded, its quality has not.

The reason for this dilemma can be easily identified: earning money with user generated content is extremely difficult – even if you provide high quality content. The reasons are mainly of technological nature: while user generated content platforms work pretty well, user generated media business platforms do not exist. You can create content, but building a business around it requires technical skills 99% of the creative population lack. From building a unique looking publishing outlet over integrating monetization streams such as ads, e-commerce, subscriptions and affiliate marketing tools to doing your digital marketing campaigns and financial controlling, user generated business seems to be a distant vision. In short: as of today, the key problem is that content quality and potential is not correlated at all with the skill set required to set up a successful media business in the web.

But exactly in this problem lies the gigantic opportunity of a new Web infrastructure. An opportunity so great it can easily keep up with the opportunity that led to the web 2.0. Think about it: back in the Web 1.0, we had millions of people who had the motivation and content to publish online. But they were held back by a technical obstacle – the obstacle of creating a webpage. Once this obstacle was removed by new user generated content platforms that made web – publishing and sharing super easy, we saw nothing less than a world revolution.

I deeply believe that today, we stand at the brink of a second revolution which is similar to the Web 2.0 revolution, but much more significant in terms of social and economic impact.

It follows exactly the same pattern: millions of people are ready to do something – to build valuable media assets in the web. They have the skills, knowledge and content, and they have the will to provide the world with a sea of new mindware that could change every aspect of our lives. But they are held back by a technical obstacle: the lack of easy-to-use business platforms that allow them to set up their own small media business around their expertise. What is lacking is something that tens of thousands of successful Web 2.0 users have already figured out and implemented. Revenue streams such as advertising, affiliate marketing, premium content, e-commerce build around their topic. Marketing tools and technologies – from social bookmarking over facebook and twitter integration. Analytic tools to track visits, sales and revenues, and bring it all together into powerful media controlling.

If we utilize this knowledge, automate it, and turn it into simple-to-use user generated business technology, we get the perfect storm: on the one side, an innovation economy that is hungry for refined knowledge and mindware; on the other side, tens of millions of people ready to turn their passion and expertise in high quality media products and live self-employed, more self-fulfilling lives; and finally an ubiquitous Web that holds all the technology components required to make this happen.

Out of the many potential definitions for the Web 3.0, this one – a Web in that everyone becomes a knowledge entrepreneur – is the most economically and socially powerful, far reaching, and tangible. It’s a multi-trillion dollar knowledge industry that will change the way we live, think and progress. It will unleash a content revolution that turns the gigantic masses of user generated content into millions of profitable user generated knowledge businesses. This web 3.0 is nothing less than the key to turning our society into a true, full scale knowledge civilization by providing the missing link: the economic infrastructure that enables economically feasible mass production of knowledge goods and mindware. This is why I believe the Web 3.0 will be about user generated knowledge business, and it will be so very soon.

Maybe you think that’s all too much, and I am crazy. If so, guess how many people would have believed 15 years ago that by simply allowing people to write random texts on websites, a few websites would transform human culture and the media industry more fundamentally than anything ever before in a comparable time scale. Take this Web 2.0 effect and multiply it with a global, multi-trillion dollar potential and a world adapted to rapid change.

The Web 3.0 will come, it will make everyone a knowledge entrepreneur, and it will do so very soon.

Ref:sophotec.com

The economic feasibility of a trillion dollar web 3.0 knowledge industry

Tens of millions participating in the Web 3.0 lead to a trillion dollar industry

In “From Web 1.0 to Web 3.0”, I elaborated on the idea of user generated media business as the next phase in the internet evolution. In this Web 3.0, a new breed of user generated knowledge business platforms will allow everyone to easily create a full scale small media business without any technology or media business knowledge.

No expert doubts the technical and conceptual feasibility of the Web 3.0. The innovation process is easily explained: pull together the existing, success-proven blueprints and components in Social Media marketing, content monetization, and media product creation into simple to use web tools, and automate as much of the underlying business processes as possible.

There are two other concerns I stumble upon rather frequently: First, the phrase Web 3.0 is annoying to some people, because it sounds like an overused marketing term. My answer to this is: if something swims on a lake, makes quak quak, and looks like a duck, it IS a duck. Even if everyone else calls everything else a duck, too.

The second, more relevant concern is the economic viability of a web in that everyone can become a knowledge entrepreneur. The argument against it is as simple as powerful: no one needs 30 million (and even less 300 million) people who produce content. There simply is no demand for that kind of stuff. If 30 million people are supposed to make a living off web publishing, meaning they earn $30,000 or more a year, we are looking at a new economic sector with a size of $1 trillion a year. That’s $1 trillion someone else has to spend on this content. That’s roughly the size of the global car industry. Based on all economic evidence, that sounds like a silly idea.

So let’s dig a little deeper into the economics of the new Web 3.0 knowledge market. First, on supply side, we don’t have a problem. There are indeed over 30 million people in the US alone who are highly motivated to become full time knowledge and media producers: bloggers, filmmakers, consultants, academic staff, and basically everyone with special skills and expertise who wants to publish.

When it comes to the demand side, the insight comes with a simple twist. Maybe you remember from economics 101 that we can differentiate between two kinds of goods: consumption goods, and investment goods. The market potential for any kind of consumption good is defined by the consumer need (and budget) for this good. Cars, hambugers, pants have a clearly defined, limited market potential, because at a certain point we (the market) have enough of it.

While each individual consumption good is limited in its market potential, the total market potential for consumption goods is not. Every product or service caters to a certain need, and every concrete need is satisfied at a certain saturation point – but the human mind as a whole can never reach a point of full saturation.

It’s an insight of deep meaning: at the point at that we as a species wouldn’t “want” anything anymore, we would stop growing, start drifting, and vanish from the face of the galaxy. The fact we made it so far points to the fact that our minds have an inherent mechanism that doesn’t allow us to reach a point of full satisfaction. Since economic growth represents an increase in need satisfaction, and out needs are endless, economic growth potential is endless, too.

So let’s take a look at the second class of goods, the investment goods. They are slightly different in nature: no one buys an investment good to satisfy a consumption need. Investment goods are purchased to produce other goods. Typical investment goods are machines, financial services, energy and consulting services.

Different from consumption goods, investment goods don’t necessarily have a fixed market potential. Because they don’t just cater to a certain given market need, but enable us to open new markets and production potential for other goods.

Within the species of investment goods, there is one especially interesting species: the investment goods (and services) that are designed to create innovation and progress. They represent a special breed, because their market potential is necessarily unlimited: innovation and progress means the systematic identification and design of new market opportunities. As we have seen before, these opportunities are naturally unlimited. In return, this means the market for innovation and progress tools is only limited by the effectiveness of those tools themselves.

And now, think: what exactly are innovation and progress tools? It’s a little bit of software, but at its core, it’s mindware. It’s the stuff that allows our brains to work in new, more effective ways to do things better and grow faster. In other words: knowledge. When people get new knowledge which enables them to think more effectively, they start to create a piece of a better world. As long as there can be a better world, getting there will create a positive value difference, which translates in economic growth.

The reason why I am convinced that the web 3.0 can unleash a trillion dollar industry is because tapping into the mind potential of people does not simply open another random consumption goods market. It means creating a limitless supply of fuel for human progress. It is the ancient dream of creating a wisdom society – a society in that everyone is concerned about progress for all and improvement of everything. In that every human mind is aligned to the mission of individual and common progress in all its’ facets.

Only that this time, it’s not a dream. It’s a technological infrastructure ready to be assembled as of now, and an economic incentive system in that everyone becomes richer by delivering more effective mindware to everyone else. A free market and production system for human mindware. A web in that everyone becomes a knowledge entrepreneur. It’s a big, paradigmatic leap that will change human history in a more fundamental way than anything before.

This is why we can call it the web 3.0.

Ref:sophotec.com