Above Photo: Like analyzing the rings on a tree stump, our natural environment gives us clues on where we’ve been, and where we’re going.
Have you ever noticed a set of patterns in the industry that come in sequence? A series of startups getting funded, or acquired in rapid sequence? Or perhaps, a series of software suites that offer you the chance to be a lighthouse early adopter client with all the bells and whistles at a low cost? For the astute, you may be noticing a natural pattern that our industry goes through, every year. Just as our bodies, the planet, and weather go through natural rhythms and cycles, technology markets also have their own set of cadence and flows. While the below patterns aren’t universal, I’ve observed over the years the software space has it’s own natural rhythm, and I’d like to share my industry observations.
- Winter VC vacations influences market moves. Strangely, much of this stems from when VCs go on vacation. I’ve been spending more time on Sand Hill road, to understanding how their funding impacts the market years out. VCs have competency in guiding a company, influencing direction, and brokering a sale. The second half of Dec is often the quiet period from Sand Hill as many a VC takes an extended vacation. During this time, deal flow comes to a crawl, and people spend time with their families. It’s very difficult for a startup to quickly sell if their investors and board of directors are away. Brands also prepare their budgets in winter, and ready for purchasing or renewing contracts, causing an influx of resources in software startups.
- Spring spurs funding and acquisition talks. In the second and third month of the year, we start to see some checks being written, and I saw two B rounds funded in my own space, and a handful of others. Often, the corp dev leads start the acquisition hunt in spring, and I witness many a CEO and CTO touring up and down highway 101 where the large blue chip software companies are located, in hopes of striking up partnerships or posturing for a sale. Teams from both sides often end up at local events, or even at meetings in my office, so I can see this particular cycle, first-hand. Buyers of technology are in roll-out mode of their annual plans, and aligning software to their business goals including campaigns, new product launches, or system integration.
- Summertime focuses on lighthouse customers. A lighthouse customers is an early adopter of a technology that a tech vendor will want to feature in marketing efforts, conferences, and as a customer reference during sales cycles. While last year had a rash of M&A in 2012, we should expect more acquisitions to occur around summer, so the large blue chip software companies can complete their suites, and onboard lighthouse customers. For companies that made mass acquisitions last year, they’re often tearing down the software and rebuilding it in the native software stack, they also onboard lighthouse customers. This is an opportunity for passion brands to cut deals with software vendors at lower cost, but expect to be amplified and used as a customer testimonial in Fall.
- Fall vendor conference season fosters solution selling. Solution selling is the practice of combining multiple pieces of software, services, and strategy to offer increased value-add to buyers. These solution messages are the primary banner being waved as the large software vendors initiate their conferences. Often these conferences feature the newly on boarded lighthouse customers and made their acquisitions they prepare for the culmination event which is to tell a solution-based story on stage at their own conferences. The lighthouse customers from the prior bullet can use this as an opportunity for low-cost marketing as the vendors want them to tell their story, or will reference the good work the customers have completed. Expect this above cycle to continue to repeat.
Buyers of Technology Must Watch Market Nuances.
So there you have it, VC vacation schedule can actually influence how brands are featured on stage at a large conference in the fall. Buyers of technology must understand the rhythm of the space as it will impact the level of service they will receive and pricing of software and services. It’s important that buyers also know the relationship of the investors of a vendor they choose as they help to indicate a pattern of a company seeking to go it alone to IPO, or a player seeking to be purchased by a larger player, forcing the brand to consider a suite of services that may not be compatible with their existing stack. System integrators and digital agency shops must also follow these dance moves, as it will cause rifts in technology integration, which yield both pain, but business opportunities to integrate for brands at a cost. Brands seeking low-cost marketing by leveraging a vendor to tell their story should cozy up to software suites right after an acquisition, in hopes of being featured on the main stage of the software vendor’s fall conference and webinar series throughout the year.
What patterns and cycles do you see in business that have greater ramifications to business? Leave a comment below, let’s have a dialog.
Thank you Lithium CMO Katy Keim for spurring me to write this.
Update Dec 29: I posted a Taxonomy of Tech Bloggers in response to the growing conversation.
That’s right. We’re at the end of an important period. The tech blogosphere as we know it, is over.
Four Trends Show the End of this Era:
Like the film industry, the Golden Era is the emergence period, when fresh innovation in a new medium is born. New techniques, revolutionary content, and different business models emerge as innovators pioneer a new medium. I first had this discussion with Chris Saad, which triggered some thinking on my end. I asked some of the foremost tech bloggers of their opinion, and found four clear trends on why the Golden Era of Tech Blogging is over, here’s what’s shaping this change:
Trend 1: Corporate acquisitions stymie innovation
Over the last few quarters, there’s been considerable acquisitions of organized blogs (which are more akin to news sites now-a-days), most notable, we’ve seen Techcrunch, who claimed annual revenues of about 10 mil a year, being acquired by AOL. Yet these purchases are quite common, as AOL has acquired Engadget in 2005, and also Huffington Post in 2011. Just two weeks ago, another larger tech blog that has enterprise focus Read Write Web was just sold to Say Media. What typically happens when these acquisitions happen? Often the star talent, or founding team is pressured out, takes a back seat while corporate business development teams match existing advertising inventory to a new found audience –forever changing the DNA of what created these startups. Lastly, acquisitions often force a conservative mindset over startups, because the purchase is focused on strengths of an asset, the mindset of ‘don’t break it’, keeps the culture to focus on the status quo. As acquisitions occur, innovation decreases.
Trend 2: Tech blogs are experiencing major talent turnover
Perhaps they were forced out, or maybe they saw the writing on the wall, but lately, we’ve seen a major change up in the all-star lineup of tech blogs. Just a few weeks before the acquisition of Read Write Web, the Senior Writer, Marshall Kirkpatrick separated ways (edit: he’s still writing at RWW, part time) now focused on building a product and company called Plexus Engine. Furthermore, Editor-at-Large of Mashable, Ben Parr separated ways from Mashable, yet continues to blog on his personal site. The most discussed exodus is a majority of the Techcrunch staff leaving, from founder Michael Arrington, CEO Heather Harde, top writer Sarah Lacy, and star journalist MG Siegler. Yet despite this loss, they acquired Eric Eldon, Josh Constine (both of Inside Facebook) and Sarah Perez (formerly of RWW) into the Techcrunch fold. Ben Parr himself listed out in greater detail all the people movements in the tech blogging space, there’s no doubt a shakeup occurring. The talent shakeup is normal after several exits occur –with new stars moving on to new business models.
Trend 3: The audience needs have changed, they want: faster, smaller, and social
First of all, congrats if you’ve read this far! I’d assert you’re one of the few. I asked Ben Metcalfe (former MySpace and BBC) his opinion, and he says: “Attention is too fragmented now. There are just so many blogs/news websites/sources vying for your attention that you can’t read them all and build up the kind of relationship that you once could when the size of the universe was degrees of magnitude smaller.” As attention spans wane, readers want smaller, shorter bits of content, and this is why we’re seeing the growth in behaviors that social networks provide: commenting, sharing, images. I heard from Robert Scoble, who’s noticed a shift that, “…when I write something on Twitter,Facebook, Quora, or Google+ I get immediate feedback. I get thousands of views very quickly and get distribution through things like Google’s Currents or Flipboard readers. Blogging seems to have struggled in some of these areas.” As a result, content needs are smaller and shorter, as I’ve noted in the rise of inforgraphics. Even the content strategy of Mashable is changing, their new direction is more akin to digital lifestyle –not just social media.
Trend 4: As space matures, business models solidify –giving room for new disruptors
This is a normal business trend in any new industry: New entrants, formalization of a new business models, and a series of business exists. Unless these authors been able to make blogging part of their business model, sustaining blogging is a challenge. Yet, let’s look at the data, in Technorati’s state of the Blogosphere for 2011 they reported that despite bloggers are publishing more, “Overall, fewer bloggers reported this year that they are making a living via their blogs.” In fact, this maturation of the tech blogosphere is a aligned to a normal cycle of industry maturing, emergence, many fail, some develop disruptive business models, and some exit. I heard from father of the Social Media Club, Chris Heuer who told me that “Blogging, and Social Media broadly, is past adolescence and into young adulthood, maybe even getting ready to go off to college. Going by our early measure of where are we compared to the dotcom era, I’d say we are about 2000, but without the irrational exuberance.” I agree with Chris and to illustrate this point, I’ve noticed that long gone is the scrappy new media entrepreneurs like Arrington who built a decent sized empire, cashed out, and moved on to to a traditional industry like venture capital.
The Future: A New Era to Emerge
Tech blogging isn’t dying, it’s evolving. This is a normal part of any industry, and here’s what tech bloggers themselves told me:
An opportunity for new stars to emerge
Now, with the major talent turnover, there’s an opportunity for a new media model to emerge, and along with it new stars: “The tech journalism space has changed considerably in the last few months, but there are new stars that are taking up the roles that the old guard have left behind. The voices, opinions and personalities that define tech are changing. Perhaps fresh minds and ideas are exactly what the tech media world needs.”-Ben Parr
Yet, the rise of personal brands will be harder
Now that the ecosystem is entrenched with corporate owners and mature advertising programs, there will be less room for innovation and new stars to emerge. Why? PR firms know who the established players are, and will continue forge alliances in page views for exclusives. ”Take for example that many of the “big blogs” don’t even link to the primary sources of their posts because they don’t want to send the traffic off-site. How can anyone get discovered if those who have the attention won’t share it?” -Ben Metcalfe
New models to emerge, long form content not the only way
Bloggers themselves know that relying on a single tool isn’t effective, they need a series of tools to use; “blogging isn’t dead. it may have gotten a LOT more social, and it may be less frequent now for those of us who also use twitter / facebook / tumbler / youtube for other distribution efforts, but the overall impact from these platforms together is BIGGER than ever before (and i maintain, also EASIER than ever before if you build it right).” -Dave McClure, who, on a related note, is also on a Blogging Hiatus.
Will mix new forms of media
Yet these top bloggers all agree that a new form of media mix will emerge; “Blogging isn’t dead and still a fantastic tool, there is room for new players and it’s still the best way to build your personal brand IMO. I’m actually planning to go back to blogging much more myself and just updated the template of loiclemeur.com. Also, what is blogging? Publishing a video with your thoughts on YouTube is blogging and that is extremely powerful, each time I do itI get a good audience, even if the video quality is crappy. A video can be much more like original blogging as you can take the time to express yourself in longer form.” -Loic Lemeur, tech blogger, entrepreneur, LeWeb host. Yet, he’s not the only one, Francine Hardaway, VC blogger says “Blogging is a tool, like social media. This year’s new tool will be personal video, which is long overdue.” who also nods to video usage.
Despite the Golden Era of Tech blogging to be over, we should expect a new format, new type of content and new pioneers to emerge, forever changing the new media and tech reporting space. I for one, look forward to it and will embrace it, both out of necessity, and with passion.
- Former Techcrunch and BusinessWeek writer Sarah Lacy respectfully disagrees with me.
- Interesting, here’s some potential info that Sarah may be building the next generation “Platinum” era blog.
- Senior Editor of RWW Richard MacManus gives his quick thoughts.
- Conversation brews on former Mashable writer Ben Parr’s Facebook feed (an example of trend 3).
- Brian Solis comments on the Golden Age.
- Marshall Kirkpatrick, of Read Write Web (Who’s still contributing there) lists three things that can improve blogging.
- Apparently the Gillmor gang on Techcrunch discussed this topic, but I’ve not been able to listen in.
- Poynter questions if were moving into the next golden era.
- Hugh McCloud give a satirical element to the conversation, and makes eight strong points.
- Mentions on NYT bits blog, and Wired chimes in.
- The golden age of journalists noticing new blogs is over –BoingBoing
- Be sure to read comments below, Pete Cashmore, head of Mashable, discusses business models as well as editor of Venturebeat
- Quite a few posts, and tweets here on Techmeme, At this point, I’m going to stop updating this list
The social web is moving beyond just asynchonus relationships to real time information passing.
Take last week, while I was on the phone with my dentist in San Jose and I was in the Peninsula and an earthquake occurred. It originated in San Jose, and the excited office manager told me she’d just experienced an earthquake. 5 seconds later, I felt the aftershock in my own house, and then tweeted out “just felt an earthquake”. Seconds later, I opened the Twitter search tool and tracked all the earthquake mentions, and there were hundreds within 30 seconds. As Steve Gillmor suggests, we could eventually track the origination and speed of an event, from the epicenter to the resulting waves for earthquakes and other events. Oh, and Twitter was faster in tracking than the government’s Geological Survey Earthquake site.
When you think about it, information travels faster on Twitter around the globe faster than the speed of sound. This is also very scary.
Today, Friendfeed launched it’s much anticipated redesign, and it resembles a real time flow of information. It resembles twitter like input screens, then social objects flow down the stream, with commenters chiming in around each object. It’s very hard to keep track.
Challenges to Navigating the “River of News”
As the web continues to move faster and faster towards real-time (we see this in Twitter and elements of Facebook), it creates several challenges:
If you’re not watching all the time, you’ll miss something
An incredible amount of hay is created with very few needles
Managing these feeds take effort, you have to setup filters, lists, groups, and manage it.
You’re going to get less work done if you watch, and participate in the real-time web.
New Social Tools and Processes to Emerge
If the social web is a ‘river of news’ then we’re going to need new sea-faring technologies to manage it:
Anchors We need more anchors to slow it down and make sense of it, Friendfeed offers a ‘pause’ button that actually freezes the stream, allowing users to navigate the content.
Dams and Distibutaries Dams will stop the flow of content (users will unsubscrbe) and distributary are rivers that split off from the main river, as a result you’ll see a need to use filters and lists to group people in smaller categories.
Maps and Compasses are needed to help guide us to what’s important. Expect digests, analysis, and those who boil down what matters to matter more than ever. Traditional reporters will help make sense of thousands of opinions.
The big challenge: with many of us creating our own rivers of news, who has time to drink it all in?
I want you to start thinking differently about how you get information. As you know from my postings, that trust is highest from our peers, we trust those that are like us, or our friends above all us.
Information delivery is evolving, we’re starting to get information on the open wide web from our friends and contacts (although email has been a medium for a long time).
TrendWatch: Anatomy of MicroMemes, Network Feeds, and MacroMemes:
1) Narrow: MicroMeme
MicroMemes are highly focused and targeted, delivering the information to you that your network and friends thinks is important. A few days ago, I interviewed the founder of Friendfeed, an example of a MicroMeme.
[MicroMeme: Information with your immediate network about what they think is the most important]
[Example: "Three of your friends think this article is great"]
LinkedIn displays “articles your colleagues are reading” as well as other companies. Colleagues are in your direct network, tying news to your social graph.
Upcoming, displays the top events from your friends, to find local events, perhaps a great way to get timely information from your network (per Scoble’s suggestion)
Google Reader recently added a “Friends Shared Items” which looks at gestures to determine what your contacts find is important. I credit Steve Gillmor for leading the theory on Gestures, I’d link to him, but he doesn’t prefer that.
Plaxo Pulse, recently acquired by Comcast, (keep an eye on this, I am) displays information that your network cares about. Picture from Terry Chay’s Flickr photos, used with Creative Commons attribution
Friendfeed, which I’ve already discussed shows information based upon your friends, pulling in all of their social streams.
Facebook’s Newspage (thanks to Jamie, in the comments) points out that it indicates weight of objects from your network such as ““5 of your friends are attending xyz concert on June 15th.”
2) Moderate: Network Feeds
Common in many social networks and feedreaders, they display the most recent information from your network but do not prioritize it based on anything but time. This is problematic over time, as we need to find what’s important in a sea of noise.
[Network Feed: The most recent information from your network, but not prioritized by your friends]
[Example: Today, your friends have joined a group, added a picture and yesterday, your sister went to a baseball game]
Feedreaders like MyYahoo or BlogLines don’t put weight on what your network thinks is important, and therefore just deliver content based upon most recent.
MySpace’s newspage shows alerts based on time, but does not prioritize or look for trends or memes.
3) Wide: MacroMeme
The most common form of how information was delivered for over 100 years is by industry and from an editor that you don’t know, and sometimes don’t trust. Although more advanced forms have appeared with news sites that use algorithms to find out what’s important.
[MacroMeme: Information about the things your industry thinks is important]
[Example: The top news stories today are Microsoft wanting to acquire Yahoo according to the New York Times]
New York Times has no social sorting of your content, nor does it prioritize information based upon your networks’ preferences. It’s sorted at the industry level although it offers various “popularity”.
Techmeme delivers industry related information for the tech industry, but it’s not sorted by social networks, or social preferences –unless you’re one of the few top bloggers that are actively involved.
Google News also displays information based upon industry perspective, but does offer a “popular” ranking.
Each of these information delivery systems serves a different purpose, none is better than the other, but it’s important to know that MicroMeme presentation is a trend on the rise. For many, MacroMemes will continue to be the way that information is delivered on the morning breakfast table, but as the next generation of information cravers arrive, information will start to be sorted by our social preferences.