Web 2.0 for the Traditional Company

Over the last few years the Internet has been flush with changes. The evolution of technology is on par with the rapid growth reminiscent of the dotcom era. From this tremendous growth in technology a new term has surfaced, in an attempt to package a collection of tools that empower the user to provide feedback and build community, the online marketer has coined the phrase – Web 2.0.

Web 2.0 technologies, which enable user-generated content and feedback, have empowered customers to “talk back” to manufacturers, suppliers and retailers in ways that are changing the marketplace.

Originating in social networking sites including MySpace, Flickr and Facebook, these methods of interaction have spawned tremendous growth in user-generated content online.

This mashup of technology is changing the manner in which business is done. Side-by-side comparisons of products by different manufacturers, customer reviews following editor reviews in industry web sites provide street-cred to products that consumers and businesses used to purchase without an impartial viewpoint.

Although slow to adopt, the residential construction vertical cannot turn a deaf ear to this customer feedback and we have an opportunity to manufacture better products, deliver better services and adjust our message to speak to the opportunities presented us.

Harnessing the Collective Intelligence
The central principle behind the success of the giants born in the Web 1.0 era who have survived to lead the Web 2.0 era appears to be this, that they have embraced the power of the web to harness collective intelligence.

Hyperlinking is the foundation of the web. As users add new content, and new sites, it is bound in to the structure of the web by other users discovering the content and linking to it. Much as synapses form in the brain, with associations becoming stronger through repetition or intensity, the web of connections grows organically as an output of the collective activity of all web users.

Yahoo!, the first great internet success story, was born as a catalog, or directory of links, an aggregation of the best work of thousands, then millions of web users. While Yahoo! has since moved into the business of creating many types of content, its role as a portal to the collective work of the net’s users remains the core of its value.

Google’s breakthrough in search, which quickly made it the undisputed search market leader, was PageRank, a method of using the link structure of the web rather than just the characteristics of documents to provide better search results.

eBay’s product is the collective activity of all its users; like the web itself, eBay grows organically in response to user activity, and the company’s role is as an enabler of a context in which that user activity can happen. What’s more, eBay’s competitive advantage comes almost entirely from the critical mass of buyers and sellers, which makes any new entrant offering similar services significantly less attractive.

Amazon sells the same products as competitors such as Barnesandnoble.com, and they receive the same product descriptions, cover images, and editorial content from their vendors. But Amazon has made a science of user engagement. They have an order of magnitude more user reviews, invitations to participate in varied ways on virtually every page—and even more importantly, they use user activity to produce better search results. While a Barnesandnoble.com search is likely to lead with the company’s own products, or sponsored results, Amazon always leads with “most popular”, a real-time computation based not only on sales but other factors that Amazon insiders call the “flow” around products. With an order of magnitude more user participation, it’s no surprise that Amazon’s sales also outpace competitors.

So where does an old world company fit in?

The Offline Giants
Mega-corporations have the resources and collective intelligence to emerge on the scene with a presence that most would envy, but often times the attempts made are less than salient. A mega-brand, Harley Davidson, has a unique opportunity to promote a sense of community on their online property through the use of Web 2.0 technologies. Their customer is particularly evangelical and if allowed a voice would likely take off.

A couple of methods they might consider are an idea center and a trip center.

Idea Center
Custom bikes have long been the desire of bikers worldwide. In effect the customer bike builder is the R & D lab for Harley Davidson. They likely are tapping this creative channel offline, but extending the idea submission online through a Digg-esque interface would empower visitors to comment, rate and share the ideas with their friends. The on-property loyalty index would skyrocket. Imagine capturing the imagination of all of those corporate folks who seek to “live the life” of the Harley Davidson brand.

Trip Center
The trip center is an interactive map where the visitor can pot their course and attach photos of their ride. Similarly those who might travel the same highway would scout their trip and attach photos, swiftly becoming a mashup of the open road. Visitors can leave a tale of the trail behind with text, video allowing other “friends” to comment and make suggestions onthe next ride.

An entrepeneur in the Boise, ID area said,”I wish I had 1/10th of the budget some of these larger companies have to spend on their online properties. I certainly wouldn’t be buying advertisements in magazines because the potential for buzz online is so much greater.”

I believe he was right.