How to monetize Web 2.0: The Show-off Economy

Web 2.0 | 2006/07/26 23:46 | Web 2.0 Asia
Looking at recent entries by Ajit and Scoble and Dion Hinchcliffe, it looks like there is now a renewed interest in how to monetize the Web 2.0.

As we all know, all great business models are born by understanding and fulfilling fundamental human needs. And I guess Web 2.0 is no exception here. The defining characteristics of Web 2.0 can be roughly matched with Stephen Covey's four fundamental human needs:

  • To live and love: Social networking
  • To learn: Collective intelligence
  • To leave legacies: User generated content (UGC)
On top of the above, I guess there is one other important basic human desire which the Web 2.0 can capitalize on: the desire to get recognized and respected by other human beings. Or to put it more bluntly, the desire to show off.

Why do people buy a BMW? Because BMWs drive terrific, of course, but that's just part of the reason. The idea of a shining BMW parked on their driveway impressing the neighbors is often what gets them finally write the check.

Why do people produce and share content about themselves? Maybe not all the time, but quite often they do so because they want to show off. For example many people blog because they (consciously or sub-consciously) want the peer community to acknowledge their intellectual capabilities. Also, I observe that most popular Cyworld blog topics in Korea include hip restaurants, new clothes or gadgets, travel experience etc. -- things that can generally show the author's lifestyle and (in some cases) affluence.

If we presume that quite often people blog because they want to show off, then why don't we build a good web 2.0 service around that desire? Give people a way to express themselves in a super cool way, so they can talk about their souped-up cars, newly purchased Armani suits, a book they recently read, or even some intangible stuff like their unique experiences or skills (e.g. Japanese-English translation skills, the ins and outs of travelling in Prague, etc). We can call it "the show-off platform".

On top of this, we add social commerce module, so that other viewers can buy stuff (goods or content) from or through the author. So here I want to coin a new term: The Show-off Economy. I believe any Web 2.0 company that successfully implements this "show-off economy" will reap huge benefits.

A while ago, I took the younger sister of my girlfriend out for a lunch. Just to give you an idea, she's a 22 year old music major college student, who uses the internet but is just as far from the geekery as mars is far from venus.

When I asked her if she blogged, she asked what blogging was. But then when I said "you know, we'll increasingly find information about goods and services through other people's blogs and will likely buy stuff from or through them", she said that's what her friends were already doing, and pointed me to this site:

The girl running the site is not a geek herself, she just displays her own picture in pretty clothes and--you know what--many girls check out this site and buy the clothes from her.

So my girlfriend's sister didn't know what blogging was, but her friends were already actively participating in social commerce.

The show-off economy built on content production, if done in the right way, will spread like wildfire especially amoung the young generation.
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