2. Users must be treated as co-developers, in a reflection of open source development practices (even if the software in question is unlikely to be released under an open source license. )The open source dictum, "release early and release often "in fact has morphed into an even more radical position, "the erpetual beta, "in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly or even daily basis. It's no accident that services such as Gmail, Google Maps, Flickr, del. icio us, and the like may be expected to bear a Beta" logo for years at a time Real nitoring of user behavior to see just which new features are used, and how they are used es another required core competency. A web developer at a major online service emarked: " We put up two or three new features on some part of the site every day, and if users don't dopt them, we take them down. If they like them, we roll them out to the entire site. Cal Henderson, the lead developer of Flickr, recently revealed that they deploy new builds up to every alf hour. This is clearly a radically different development model! While not all web applications a developed in as extreme a style as Flickr, almost all web applications have a development cycle that is radically unlike anything from the PC or client-server era. It is for this reason that a recent ZDnet n't be able to beat google: Microsofts bu everyone exploring what's new in their computing environment every day While Microsoft has demonstrated enormous ability to learn from and ultimately best its competition, there's no question that this time, the competition will require Microsoft(and by extension, every other existing software company to become a deeply different kind of company. Native Web 2.0 companies enjoy a natural advantage as they don't have old patterns(and corresponding business models and revenue sources)to shed A Web 2.0 Investment Thesis emphasizing keeping data private, Hickr/Napster/et al. make it publc It's not tust disagreeing to be dsagreeabb (pet food! ondine!), it'sdisagreeing where you can build something out of the difference. Hickr bulds communes, Napster expensive but consdered critica to get mething valuate br fee that was speed ad breadth Napster gave upon the idea of the catalog (all the songsthe something very akio(usng your opponents force against them)in saying"you2. Users must be treated as co-developers, in a reflection of open source development practices (even if the software in question is unlikely to be released under an open source license.) The open source dictum, "release early and release often" in fact has morphed into an even more radical position, "the perpetual beta," in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis. It's no accident that services such as Gmail, Google Maps, Flickr, del.icio.us, and the like may be expected to bear a "Beta" logo for years at a time. Real time monitoring of user behavior to see just which new features are used, and how they are used, thus becomes another required core competency. A web developer at a major online service remarked: "We put up two or three new features on some part of the site every day, and if users don't adopt them, we take them down. If they like them, we roll them out to the entire site." Cal Henderson, the lead developer of Flickr, recently revealed that they deploy new builds up to every half hour. This is clearly a radically different development model! While not all web applications are developed in as extreme a style as Flickr, almost all web applications have a development cycle that is radically unlike anything from the PC or client-server era. It is for this reason that a recent ZDnet editorial concluded that Microsoft won't be able to beat Google: "Microsoft's business model depends on everyone upgrading their computing environment every two to three years. Google's depends on everyone exploring what's new in their computing environment every day." While Microsoft has demonstrated enormous ability to learn from and ultimately best its competition, there's no question that this time, the competition will require Microsoft (and by extension, every other existing software company) to become a deeply different kind of company. Native Web 2.0 companies enjoy a natural advantage, as they don't have old patterns (and corresponding business models and revenue sources) to shed. A Web 2.0 Investment Thesis Venture capitalist Paul Kedrosky writes: "The key is to find the actionable investments where you disagree with the consensus". It's interesting to see how each Web 2.0 facet involves disagreeing with the consensus: everyone was emphasizing keeping data private, Flickr/Napster/et al. make it public. It's not just disagreeing to be disagreeable (pet food! online!), it's disagreeing where you can build something out of the differences. Flickr builds communities, Napster built breadth of collection. Another way to look at it is that the successful companies all give up something expensive but considered critical to get something valuable for free that was once expensive. For example, Wikipedia gives up central editorial control in return for speed and breadth. Napster gave up on the idea of "the catalog" (all the songs the vendor was selling) and got breadth. Amazon gave up on the idea of having a physical storefront but got to serve the entire world. Google gave up on the big customers (initially) and got the 80% whose needs weren't being met. There's something very aikido (using your opponent's force against them) in saying "you