Paying for Web 2.0

December 2, 2005 at 4:59 am | Posted in Startup, Uncategorized | 4 Comments

My buddy “Mike Down Under” has an interesting post on Web 2.0:

Web 2.0 – $9.95 per month

I’ve been thinking about writing this post for some time now and today I saw a post from Michael Arrington that touched on what I’ve been thinking for a while.

So it’s Web 2.0. we’re all pretty much decided on that. We’re seeing lots of very cool things popping up,  mashups of services and access to technologies that are really quite awe inspiring. We are fast reaching the point where we feel we *must* have these sorts of tools to conduct our daily internet use.

Still, what I find glaring me in the eyes is that there is still a very strong mentality that we shouldn’t have to pay for things on the internet.

More…

Well clearly people don’t like to pay for things.  That’s obvious but I don’t think its all of it.  I think a big part of of it is:

  • Simplicity of transaction
  • Trust

Simplicity.  One of the main reasons why I use Amazon is that I **generally** don’t have to re-enter shipping info, credit card, etc.  And it keeps your shopping cart across sessions.  That makes commerce so simple.  At least it used to.  I used Amazon yesterday to buy the new 37 Signals book and I lost my shopping cart twice, had to re-enter my address and my credit card info.  It was so **jarring** that it didn’t even feel like Amazon.  One of the main reasons why I no longer like to buy from PC Connection is that they idiotically persist in using a session based shopping cart.  And that’s saying something since in 2000 I spent well over $1,000,000 with them at the height of the dot com boom.  80 proliants, EMC storage, cisco gear, etc.

Trust.  Now I founded a web 2.0 company and let me ask you this — who among the Web 2.0 crowd would you think will be here in a year? Now for me trust breaks down to:

  • If I use it can I get my data back?
  • If I give them $$$ will I get my value out of it?

I could go on and on about this one but trust is one of those fundamental things that is:

  • Hard to get
  • Easy to lose
  • Damn near impossible to recover from

Let me give you an example of a web service that I would gladly pay $20 per month for: Photo Backup. Yes there lots of online backup services but I wouldn’t pay any of them for the privilege.  But if Google or Yahoo offered it?  **Damn**.  Yeah I know intellectually that these guys can screw me over just as well as anyone else.  And I also know that I’m likely to get better customer service from a web 2.0 company (test this — IM one of the Feedster founders, me, at Feedster2003 with a Feedster problem and see if you get a response).  But that’s largely irrelevant unfortunately.  There’s simply a trust factor that both Yahoo and Google will be around a long time.

So if you can’t solve the trust issue maybe you can make the transaction process easier.  And I know that Dave McClure would say “Paypal”.  I’m starting to be a bit dubious on this actually.  The constant phishing attacks and paypal spam I get EVERY day bit by bit make me scared of paypal.  And I strongly doubt I’m the only one.  Perhaps there’s an opportunity for a Web 2.0 version of PayPal.

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4 Comments »

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  1. speak of the devil:
    https://addons.mozilla.org/extensions/moreinfo.php?id=1538

    – dave

  2. Thanks for expanding on my post, it’s the sort of thing that I was hoping would come from it.

    I’m not so convinced on the paypal thing either. It’s great to offer it but for me, it’s all about gut feel. You instantly get a feeling about a company as soon as you start browsing their site/trying out their product. Probably one of the best examples I can think of is the $1.99 domain companies. They ofter paypal most of the time but how many of them simply just give you the creeps!

  3. Thanks for expanding on my post, it’s the sort of thing that I was hoping would come from it.

    I’m not so convinced on the paypal thing either. It’s great to offer it but for me, it’s all about gut feel. You instantly get a feeling about a company as soon as you start browsing their site/trying out their product. Probably one of the best examples I can think of is the $1.99 domain companies. They ofter paypal most of the time but how many of them simply just give you the creeps!

  4. Thanks for expanding on my post, it’s the sort of thing that I was hoping would come from it.

    I’m not so convinced on the paypal thing either. It’s great to offer it but for me, it’s all about gut feel. You instantly get a feeling about a company as soon as you start browsing their site/trying out their product. Probably one of the best examples I can think of is the 1.99 domain companies. They ofter paypal most of the time but how many of them simply just give you the creeps!


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