Thursday, August 17, 2006

Biz Dev in the Web 2.0 World

AKA Biz Dev 2.0.

Web 2.0 is starting to change the nature of business development in the online world. Not long ago, the business development process for joint efforts between companies looked something like this:

  • Step 1: A brilliant idea for a joint effort between your product and company X's product.
  • Step 2: Find contact information for company X.
  • Step 3: Continue to pester contact at company X trying to get them to return your voice mail / email.
  • Step 3a: This step will likely involve a rousing game of ping pong as you are passed back and forth between several people at company X before finding the “right”person.
  • Step 4: Possibility 1 - Both of you agree that it is a great idea and want to start immediately or
  • Step 4: Possibility 2 - Company X laughs at you. ... Return to step 1 with company X's biggest competitor, company Y.
  • Step 5: The lawyers enter the room. Negotiations, paperwork, and legal matters suck all of the coolness out of the idea along with a year out of your life (and possibly resulting in more gray / less hair in the process).
  • Step 6: Build something slightly less cool than what you envisioned before the lawyers entered the room.

The new process for web 2.0 companies?

  • Step 1: Get a copy of company X's API.
  • Step 2: Build something cool

According to Caterina, this is exactly what happened with QOOP and Flickr:

Several companies -- probably more than a dozen -- have approached us to provide printing services for Flickr users, and while we were unable to respond to most of them, given the number of similar requests and other things eating up our time, one company, QOOP, just went ahead and applied for a Commercial API key, which was approved almost immediately, and built a fully-fleshed out service. (Quote from

Here is a similar take and a few more examples from a VC in New York:

But we have witnessed some interesting things happening in and around open apis, rss, search, crawling, embed code, widgets and mashups that suggests there's a new way to do business development. Here are but a few of the interesting things we have noticed:

  • YouTube makes it flash video player available via embed code on MySpace and their traffic takes off.

  • TripAdvisor search engine optimizes its service and becomes one of the most popular travel services.

  • Technorati hits delicious' api for its tags and builds the web's most succesful tag search service.

  • Indeed crawls the Internet for jobs and builds a popular job service overnight.

  • Kayak crawls the Internet for flights, hotes, and cars, and builds a popular travel service overnight.

  • Qoop takes Flickr's API and builds a Flickr printing service without ever engaging with Flickr's team.

  • Netvibes takes a few RSS feeds and builds a start page that looks as complete as MyYahoo overnight.

You get the picture. These days it's often better to just take what's already freely available on the Internet to integrate with other web services. (Quote from A VC)

OK, so maybe it is not quite that easy. For every YouTube or, there are probably a dozen that did not make it. There is an element of luck or buzz or viral promotion that makes it difficult to predict which will make it and which will go down in flames.

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