It’s a gorgeous day in San Francisco, and I arrived at Moscone West about 11:00 am to find it one crowded place. Still trying to get my bearings, and starting to run into people I know… 
But I was able to bop right into one session before lunch: “Open Source Business Models for Web2.0.” John Roberts, CEO and cofounder of SugarCRM, told us about the non-traditional way his company started: really as a project, then it wasn’t incorporated for almost two years. Funding came even later. “Companies are starting differently these days,” he said. Now, SugarCRM has 100+ employees, 1200 customers in 30 countries, 100,000 users, and 7000 registered developers. How are they 2.0? “We sell subscriptions, not licenses,” he said. “And, as Tim O’Reilly would define it, we trust our users as co-developers.”
Sharing this session with Roberts was Marten Mickos of MySQL. The Web2.0 motto, he said, should be “Fail fast, scale fast” — alluding to how software iterations and testing can be so much faster today. He said MySQL is now up to 50,000 downloads per day. He guesses there are about 30 million developers on the ‘Net today. “That’s 100x my estimate of the number of developers it took to get us this far in the current information society.” He noted that his closed-source competitor has 56,000 paid employees “who go to work each day whether they like it or not.” Whereas MySQL has “50,000 new, passionate amateurs volunteering to help make our product better every day.” Mickos then gave us a rundown of the Web2.0 business models he sees today: (1) do it as a hobby and have fun, (2) get acquired, (3) build traffic and sell ads, (4) build a virtual world and sell premium goods, or (5) build a service and sell subscriptions.
An audience question at the end was interesting, addressed to both speakers: “What’s your revenue per employee?” To which Mickos had this to say: “Neither of us is operating at scale yet. We’re both very popular, but we’re still not at potential as a business model.” Roberts of SugarCRM added: “We’re building our brand.”
Webb asked the question, “How do we design for this generation?” Though he’s a product designer himself, he went on to say later that Generation C is capable of building products of their own, being so into social networks and mashups and things — so one wonders then why we need product designers? But that’s just the pixel side of the equation. We still need people with design sense to help us sculpt things made out atoms — plastic or whatever. Products are getting smarter and more social, with all kinds of networking capabilities, of course. And we have “new paradigms for interaction,” said Webb. He cited widgets, for example, which he said is such a great paradigm, “it shouldn’t be limited to just the desktop and web.” A key point Webb made is that experience is what counts to this generation, and “how do we design for experience?” He said in his wrapup that experience should be “treated as a design surface,” and that all of us in the room are the right people to address these new design challenges. One nice thing the O’Reilly people pointed out to us in the description of this session was that “people have been paying for plastic longer than pixels.” So, the business model is there! 🙂 It should be an exciting future for product designers, whoever they may be.
Similarly, games are made up of games — lots of little ones are in any good game, he said. Building games is about good “interaction design.” Then he ran us through a quick lesson in designing for fun, or applying game design to, for example, social media applications. He said you should have statistical features and opportunities for competition. “Never start an interaction with no context,” he said. And the participant must be able to prepare for the next encounter. Users should be able to solve challenges with a choice of tools, he said. “Reward them with different feedback. Variable feedback keeps things lively. And it should be visible to everyone.” Raph closed by telling us to check out his book site for more: 
Magic is a good metaphor, “a useful abstraction … because it does not cripple — it explains.” Magic to him is about the interaction you have with an object. 
Recent Comments