Who "Owns" A Web Service

The obvious answer is the company that built it. Google owns google.com. Facebook owns facebook.com. Craigslist owns craigslist.com.

But throughout the day yesterday I was reminded that more and more these days, the users have a significant degree of ownership in these services and the most successful companies will leverage that sense of ownership and respect it.

My day started yesterday with the realization that twitter’s migration from joyent to verio had not gone well. Their problems continued for good parts of the day and the users were annoyed and rightfully so. Dave Winer expressed a lot of that frustration and the questions that everyone had on their mind in this post.

It would be easy to take posts like Dave’s as "busting chops." But I think more than anything it expresses the love that he has for Twitter. Like the love that I have for my children. When they screw up, it bums me out and I want to help them avoid making that mistake again.

Brad and I went to lunch with Umair yesterday. Umair is one of the most profound thinkers about society, the economy, the web, and where we are all headed. I read him religiously and always end up with more questions than answers. I got a lot of those answers at lunch yesterday.

And one of them concerns this exact same question. You cannot build a successful sustainable business in today’s society and economy unless you treat your customers as owners. You do not need to give them shares in the business. Those go to the people who stay up all night trying to move from joyent to verio and people like me who risk capital in the hope that they can get it right.

But users are stakeholders in your business. More than stakeholders, in this world of peer production, personal expression, viral distribution, etc, the users are contributing significant value to your business. They must be respected and treated with a lot of value back.

It’s not surprising to me that craigslist and google, two companies that benefit greatly from the data we freely contribute to them, choose to make vasts portions of their service offerings free to their users. The value transfer between companies and their users must be fair and equal. I think google and craigslist have done as good of a job of getting that balance right as any anyone. And look at the value creation that has resulted in their businesses.

Treating your uses as owners is not going to be an easy transition for all us to make. The profit motive is hard wired into our capitalist brains. But we need to keep the profit motive in check. I am not advocating socialism. I am advocating the kind of decisions like the one google is making by taking billions of dollars of annual profits in their search and keyword advertising business and reinvesting them in new free services like gmail and google maps. They will eventually monetize those businesses, but I am sure they’ll do it with the respect for the users that they have shown in their core search business.

More than money though, I am advocating a respect for the user. That means being transparent with them about what’s going on. And it means including them in the ongoing development of your product and service. I like to think of open source as the ultimate new business model. Not everything can and should be open sourced, but if you use the open source model as your frame of mind, then you’ll be a lot better off.

As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the times they are a-changin’.

#VC & Technology