The second largest web-conference in Europe was held last week in Amsterdam. Around 1000 Internet-professionals, startups and academics got together for the fifth time in one of the most relaxed conferences I have ever attended. It seems to be the modus operandi in the Netherlands – many things including credit cards, taxis, or schedule of the conference - do not work, but with a smiling face and great attitude everyone ends up happy. And in the end everything will be sorted out quite fine.

The conference speaker roster was not the most impressive. However, there were a number of great presentations from some unexpected speakers. Also, during the conference I started thinking about the future of web-conferences at the time of real-time web. Especially us tech-enthusiasts are very hard to surprise with anything new and thus many (myself included) came out of the conference with not much news to share with anyone. This said, I am very content with the conference delivery and there are some interesting insights I want to tell a bit more in detail.

Real-time location based services

For the past year there has been very much buzz about real-time location based services. Leading the wave are Foursquare and Gowalla and there has been a lot of speculation on which of these two will win the race for users, just like Twitter won the race of microblogging a few years ago. An excellent presentation by Joe Stump from SimpleGEO (an LBS itself) argued that location is not a war or a gold rush to be won. Instead companies (and individuals) should go beyond the ”check in” –functionality and innovate new services. Foursquare has only around 500 k users worldwide and the ”war” has not even started yet. Moreover one could argue that the time of “one service to rule them all” is coming to its end.

Social media and responsibility

Continuing from the last remarks of the previous chapter, there was a feeling in many presentations and table discussions that the “Follow me on Twitter!” -hype is not that attractive anymore. Facebook announced recently its latest World conquering plans and people were not too excited with that. Instead, there were more and more interest in the ownership of ones social graph and activities within social networks. If there would be a change of tide here so that you could claim ownership of your social network, it would end the gold rushes for the new fads. Instead there could be a plethora of new services all utilizing the social network owned by people themselves and doing the one thing extremely well. Here I must admit is quite a bit of wishful thinking in addition to weak signals from the conference. On the other hand, Robert Cailliau, the co-founder of World Wide Web, expressed his worry towards social media services very well; “they are like religious extreme groups: very easy to get in, but extremely difficult to get out.” You can try to delete your Facebook profile and see for yourself.

Startup bootstrapping

The Next Web presents a number of startups and provides quite a few of them the opportunity to present their business at the main stage between keynotes. I think that is just awesome. And even better is that there were very good startups presenting. Also some keynotes like the one from Tom Werner, co-founder of Github,  concentrated in the startup-dilemma and here the key message was very interesting: bootstrapping can take you a long way in today’s business environment. This emphasizes the thing that I have heard from other sources as well; the traditional venture capitalist model is not working anymore. Startups can get robust development tools for free from the Internet (legally), hosting services are very well scalable and there are ways of making money from day one. Startups today need only tens or hundreds of thousands financing to get a viable product out instead of tens of millions offered by VC’s. All this is once again generalization, but that was the feeling at the conference.

All in all the conference was a very interesting experience in the sense that there were not that many new things but the atmosphere indicated quite pragmatic and cautious approach to the changes happening in the Internet. Social media hype got many laughs although twitter was actively and very effectively used as a backchannel of the conference. My reading of the presentations and the talks with people is that we are taking breath right now before something new – good or not so good – is happening in the industry. ”May you live in interesting times”, as Robert F Kennedy once said, is a good way to end this report.

Every time there is a new phenomenon, two groups of people emerge. The advocates predict new world order and teach the less civilized part of the population all about the new tools and ways of making business. Not far behind follow the second group, the antagonists that predict the doom to all those believing in sudden changes. 

Social media is definitely in the peak of hype at the moment and a classic phenomenon that attracts both advocates and antagonists. I must admit that I am a social media junkie myself – just give me a hint of a new service and I’m all in. At the same time I am rather critical to new business opportunities and thus have managed not to take sides in the debate of whether social media brings us to the garden of eden or gates to hell. 

The Internet business is not what it used to be in the ”good old” hardware and software times. Business models have become complicated consisting of free services, open source software and user-generated content. At the same time the amount of users has become a meter of success to services. There’s nothing wrong in that compared to the brilliant services of the 90’s that had great business models but no users. However, the leap from a free service with millions of users to a profitable business is still a long one.

On the other hand, we can criticize the criticizers as well. All kinds of doubts have been presented about the viability of the business reminding and warning about the horrors of the Internet bubble in the late 90’s. Then again, if we think what has happened with Facebook for example, the evidence is convincing; the amount of users have grown from 30.000 to 300.000 in Finland alone in less than 4 months. Over 50% of the Facebookers go there every day and many of them prefer spending time in Facebook to watching television. These are sound arguments against those saying that nothing changes. The impact in media behaviour is imminent and denying it is short sighted. 

I would not put my millions, if I had them in the first place, to social media services. Not anymore, because I’ve heard taxi drivers talk about Facebook. However, looking back to the actual dot-com bubble, the Finnish market was different; undeveloped venture capital market, huge amounts of money easily available and businesses based on future expectations and market share instead of sound business models. In Finland another Internet bubble is still far away and instead of predicting doom we should figure out why so few Finnish companies break internationally even though they are in the forefront of development. 

That’s the thing we are doing our best to help with in the DIGIBUSINESS cluster programme for the next six years.