Upon my research on the latest info on creating a web 2.0 platform and the business of starting it, I stummbed upon one of the best books out there,Web 2.0: A Strategy Guide by Amy Shuen. I was reluctant to at first after purchasing many books on the topic but don’t go into detail about the process of a startup. After reading the description on Amazon, I wound up ordering it and dove right in.

The author, Amy Shuen has an impressive background and education with a MBA from Harvard Business School and a PhD from Cal Berkeley. One thing that caught my eye was her role in founding the Silicon Valley Strategy Group whch created $100 million strategic venture fund. Having this type of background shows me she knows what it takes to create innovative companies rather than just studying their models in the classroom.

Amy stresses the fact she wants to teach budding entrepreneurs the strategy and philosophy of creatng web 2.0 communities rather than the technology that goes into them. This is the essence of what I need to learn and grasp rather than the coding and design of a web 2.0 application.? Don’t get me wrong, that is an important factor; after all it is the product.? As with any type of business, you need to determine if it is a viable solution to a problem and this is at it’s core, Web 2.0 technology.

As with my web 2.0 idea, people need to figure out if this solution works and there is a place on the overcrowded web 2.0 movement. She explains there is a highly unlikely scenario where someone will create the next Facebook but they can create solutions that compliment it’s functionality. A great example would be Friend Feed. This utility tracks activity and feeds that into Facebook for your friends to see. Great tool, I use it myself. I understood this but my idea revolves around? vertical that isn’t out there and expands on the Facebook and social networking concept.? I realize I’m not reinventing the wheel with my concept but expanding on those ideals that were created by such platforms as Facebook, MySpace, and Friendster. The concept of user generated content which gives users the flexibility and stage to express themselves and connect with others whether it be with people they already know or will soon meet.

Amy uses a few case studies to explain how their platforms engage the visitor and draw others in. She uses Flickr, a popular photo sharing site, acquired by Yahoo in 2005. It details how customers themselves help build the site, as old-fashioned “word of mouth” becomes hypergrowth. The book demonstrates the power of this new paradigm by examining how Flickr, a classic user-driven business, created value for itself by helping users create their own value; the concept of sharing their personal photos with others and using a platform to express their thoughts on various topics.

One of her other case studies that painted a new picture for me on social networking was on LinkedIn. She explains it’s beginning and the notion of the Six Degrees of Separation model.Prior to this concept, I’ve only heard of the “Six degrees of Kevin Bacon” model in college and thought it was just a joke but the orgins of the concept seems very powerful. The notion of using a first connection to “link” to another and opening up that 2nd tier connector’s connections. LinkedIn uses the model that only those who are connected through a 3rd link. This keeps the network relevant to those who only share connections through friendship or business. This concept keeps the community relevant and invites more of a connection. Amy did a great job of explaining how this concept has elevated LinkedIn as a pioneer.

After thinking and understanding this concept and applying it to other platforms like Facebook and Myspace I understood now why Facebook and LinkedIn are wildly popular and Myspace has lost market share. Users are connections with those that have something in common, whether it be through existing friendships or professional reasons. These communities stay very personal and relevant to one user rather than th concept of Myspace ‘which does the opposite and has the user lost in a myriad of profiles and it’s up to them to find others. Another reason Myspace, lost the race is plain and simple: It became to corporate after the acquisition from Fox Media Group. It’s understandable that it’s purely a money machine for Rupert Murdoch but old media doesn’t understand the Web 2.0 movement, it’s about the community and not the platform. Myspace has become overblown with flashing banner ads and poputs, slow load times and page customizations. (I admit, my Myspace page is full of pukey colors). On the other side, Facebook and LinkedIn keep a simple look with suttle, indiscreetly placed ads. This portrays a platforms that connects users rather than selling advertising space. To me, this is a major reason of the hypergrowth of these two platforms.

Amy then goes into businesses like Amazon who tap into the web as a source of indirect revenue, using creative new approaches to monetize the investments they’ve made in the Web. Amazon’s innovative way of helping their competition sell their products through Amazon’s platform and collections fees for every sale. Jeff Bezos, founder of Amazon understood that his successful business could indirectly create a new revenue channel through helping his smaller competitors rather than focus on keeping books in stock themselves. I’m sure when he thought of the concept many economists thought he was crazy but whose laughing all the way to the bank?

Anyone thinking of creating new wealth using the Web 2.0 philosophy needs to read this book.? It will open your eyes to existing ideas you have and make you realize there is a better way of existing technologies. You don’t have to be a Harvard MBA or Computer Science PhD from MIT to build a platform but that one idea, if it’s viable, could potentially be the next disruptor in the Web 2.0 front!