Friday, November 07, 2008

Micro-startups in a Collaboration and Coordinating world

SV200709Image by Simon Cast via FlickrIn Jason Calacanis’s recent email missive, he explores where the value for start-ups lie. Two points “The Age of the Micro-startup” and “The Try Everything Era” touches on the long on-going battle between features versus products. Put succinctly, many start-ups are little more than a feature (albeit useful) and in and of itself not a sustainable product.

Jason’s theme is that the high capital efficiency of today’s web will allow features to blossom and expand on existing services. I remain sceptical of feature companies’ (micro-startup in Jason’s terminology) as a standalone going concern but I see the value that these micro-startups can create in a collaboration and coordination world.

Collaboration and coordination platforms will enable micro-startup’s to create value by increasing the overall value of the platform by adding functionality. The advantage for the micro-startups is that the value of their feature is increased by being coordinated with various other features allowing users to achieve a goal. The value of the whole is more than the sum of its parts. Further they get access to a framework that simplifies coordination and business operations (e.g. getting revenue).

For collaboration and coordination platforms also benefit from the multiplicative effective as well as allowing features to be added to the platform cheaply and in response to demand. While they could build a lot of the features, the development resources needed that would limit what and how quickly new features can be rolled out. Micro-startups form a eco-system that is self organising about what to build and the resources to devote to it.

This differs from existing platforms, Facebook and OpenSocial, in that these platforms are about building micro-apps that have little to no coordination with other applications on the platform. The applications are standalone. These platforms essentially act as a hosting service with access to a social graph.
Coordination and Collaboration platforms are about coordinating actions (features) in order to achieve something. Achieving a goal is going to produce greater value in the long run and produce more value producing companies than simply tapping a social graph.

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