Brad Burnham asks "What's Next?"

Brad writes a great post on the Union Square Ventures blog asking "What's next?". In it he explains that innovation moves up the stack and that we are now at the 'data' layer.

"In the early days, the central value proposition in the computer business was hardware. Later, it shifted to systems software, then applications software, and then networks. As more software functionality was delivered to a browser over the Internet, the basis of competition shifted from features to service level metrics like reliability, accessibility and security. I believe that today, at least in the area of consumer web services, we have already moved on to a new focus of competitive differentiation based on data."

I am glad VCs are starting to ask these questions. It shows they are thinking beyond 'me too' services.

He goes on to write:

"One way to look at that question is to argue that we have arrived at the end of history. The progression to date has been up the stack in a classic architecture diagram, data is on top of that stack, and nothing sits on top of the data. I disagree."

I disagree too Brad. Here are a few more layers to think about.

Once data is structured and syndicated, the next job is to:

1. Aggregate - And I don't mean like a feed reader. I mean like Edgeio and Vast
   
   
2. Personalize - Using Attention Data
   
   
3. Visualize - Using all sorts of techniques. With Touchstone we are using escalating alerts. The more personally relevant the content (from step 2) the bigger the alert.

Show me the money (or the pain)...

When you are in a startup that has any sort of visibility investors will always approach you. So having spoken to more than my fair share you start to hear certain patterns in their line of questioning. Some have already realized the growing problem that faces users as information explodes and attention dwindles. Some, however, ask a common investor question… “Where is the pain?".

Let me rephrase it in a few other ways…

What problem is your product solving? Is that problem causing pain in user’s lives? Is it so painful that they would they take time out of their life to try your product? Is your product so good, and the pain so great, that they would change their behavior to use it? Do they NEED you?

Because need creates demand and demand needs a supply. Sounds almost like drugs.

As Rod Tidwell would say from Jerry McGuire - Show me the MONEY!!! Or in this case, "Show me the pain, and the money will follow".

There are many answers to the question of pain when you are talking about a product like Touchstone. You can use all sorts of industry buzzwords that refer to trends that are emerging... things like 'the Long Tail’, ‘Publishing 2.0’, 'Participant Created Media', 'Syndication', 'Information Overload', 'Attention Deficit' and so on...

I have been guilty of using these phrases many times... As I have admitted before I have a problem.

I agree pain is important when it comes to building a high-growth startup - especially if you want to cut through the noise in this increasingly crowded marketplace where everyone is trying to make the next YouTube and Digg.

Cutting through noise, however, is exactly the problem. It is the pain. The volume is increasing. Can't you hear it? If you can't hear it then you are not listening. Chances are, however, if you’re reading this blog you are listening all too well.

You could argue that users - your typical Jon Doe - don't hear it yet. I would argue that there is a growing number of users every day that stop watching TV and start watching YouTube and BitTorrent. There is a growing number of users every day that are starting to read, write and remix the blogosphere and flickr and facebook and youtube and they are not going away.

Some could argue that those users are coming, but in the mean time John Doe is happy to read the local newspaper. Have you heard what's happening to the local newspaper recently? They're being decimated.

Mark Cuban recently suggested something new to save Newspapers - More Content and RSS.

Can you imagine it. Your local newspaper becoming a clearing house for every piece of gossip that happens down the road?

Forget newspapers; what about when every school, golf course, company, employee (etc etc) start publishing content and packaging it in RSS. No wait, they are already starting to.

That is rivers and rivers of content that an increasing percentage of the population is becoming aware of and coming to grips with. When you are drowning in a river, pain is everywhere.

Add to this the pain of keeping all your devices up-to-date and trying to fit some productivity in amongst all that news reading – and you are ready to black out.

What about Publisher pain. I (along with many others) have already mentioned how publishers (particularly newspapers) and broadcasters are hurting as users flee to online, time-shifted, personalied alternatives. Don't they need a way to strengthen their brand and monetize their users? Their shareholders are definitely feeling that pain.

In all this discussion of pain however, people have forgotten to ask about pleasure. But that's a post for another day.

Sounds like there might be a pain looking for a solution.