The ranger of a virtual dog park, an Internet entrepreneur-turned-venture capitalist, a story scout, a “fake engineer,” and a word-of-mouth marketer are among the Penn players in a movement known (by some) as Web 2.0.
by Susan Frith | Illustration by Anastasia Vasilakis
In many ways it was the standard “old-school magazine courtship,” recalls Larry Smith ASC’91. The Manhattan-based editor met a woman at a cocktail party—tall and thin, a bit intense perhaps, but a “regular, put-together New Yorker.” He asked if she did any writing.
A little, the woman said. She was thinking of going back to school.
Two glasses of wine later, she leaned in and confided, “Actually, I’m a dominatrix.”
A grin spread across Smith’s face as he pondered the editorial possibilities.
“She doesn’t look like Xena: Warrior Princess. She could work on Wall Street and you would never know,” he says.
Although the woman’s identity remains secret, many of the ordinary and, ahem, pain-producing details of her life have unfolded in an online diary at Smith’s magazine by the same name (more later on the title). In response to its popularity, SMITH magazine (www.smithmag.net) may bring fresh installments to readers’ mobile phones a few times a week.
In some ways Smith’s magazine resembles a gigantic cocktail party to which everyone is invited to come, listen, and contribute their own personal stories. If domination isn’t your preferred cocktail, you’ll find an 83-year-old’s recollections of being shot down over Berlin, a web comic about people affected by Hurricane Katrina, tales of embarrassments suffered in the pursuit of love, and the ironically captioned slideshow of a soldier twice deployed in Iraq. It’s this democratic, participatory quality that Larry Smith believes lies at the heart of a concept called Web 2.0.
The term was coined by the computer-technology focused company O’Reilly Media in 2003 to refer to a turning point for the Internet in the wake of the dotcom bubble burst of 2001. (One of its brainstorming sessions on the topic reads like a fashion magazine’s what’s in-what’s out list: Web 1.0 is Ofoto, Britannica Online, and personal websites. Web 2.0 is Flickr, Wikipedia, and blogging. And so on.)
The definition of Web 2.0—and whether it’s even a meaningful concept—has spawned much debate. But as the Internet matures, many companies that capitalize on one or more of these facets have received or claimed the Web 2.0 label:
- Social networking. Websites are building online connections between people with common personal or business interests.
- Sharing. Services and applications that were once isolated on individual sites are being shared and mixed across the Web, with the result that you can find YouTube videos imbedded in a political blog, for example, or Google Maps “mashed up” with Craigslist real-estate ads on Housingmaps.com.
- Collective intelligence. As more people use sites and Web applications, contributing their own information to them, the better they become.
- Accessibility. With a high-speech connection and no knowledge of HTML, the average person can easily start a blog, post pictures or videos, and be an active participant on the Internet rather than simply a recipient of its content.
Smith is one of at least several Penn alumni who—whether or not they believe in the Web 2.0 concept—stand in the center of the action. “I could not believe more that Web 2.0 is intrinsically a change in how we view, use, and think about the Internet and media overall,” he says. “Web 2.0 is not so much a revolution as a return to the original core values of the Internet as a democratic, participatory medium. Only now it’s even better as the average person (with broadband) has incredible and often free tools at their fingertips that enable them to use the medium as its creators intended … Everyone can now be both a consumer and creator of a site like SMITH … And tools like RSS and places like Digg and Newsvine mean that it’s now easier than ever for SMITH stories to spread like pollen across the net.” (For those more accustomed to getting their information above the fold of the newspaper, those are essentially sites that allow users to submit and vote on the day’s top articles or blogs and a technology that provides automated updates from one’s favorite websites.)
For Brett Hurt WG’99, CEO and founder of Bazaarvoice, Web 2.0 represents a rediscovery of word of mouth and “the underlying shift of power to consumers. The Internet truly becomes the global village where people truly can talk about a product or service or person in a positive or negative manner, and everybody has access to that,” he says.
Hurt cites a cautionary tale about the Kryptonite company, which had to recall its bike locks after a blogger wrote about picking one of them with a Bic pen. The item was picked up by other blogs until the story caught the attention of the mass media and the company could no longer ignore it, he says. Three years later, the top results of a Google search on Kryptonite bike locks remain references to that picked lock.
“This is an example of what Madison Avenue and others are trying to grapple with,” Hurt says. “One individual on one blog has that kind of power.”
Community Builder, Ted Rheingold
Cyd is ecstatic over her new boyfriend, whom she just met offline. “His name is Otis and he’s sooo handsome and sweet!” she tells her cyber diary. Of course one has to question the judgment of anyone whose favorite hobbies include playing with new trash bags.
Cyd, you see, is a pug, and thanks to Dogster.com founder Ted Rheingold C’92, she and her owner have the opportunity to make plenty of new friends.
Rheingold’s three-year-old company (that’s 21 in dog years) is expected to net $2.5 million in 2007 due to the enthusiastic patronage of pet lovers. (Cat owners can curl up at the company’s feline-focused site, Catster.com. Together, the two sites attract three-quarters of a million visitors each month. With opportunities to corral virtual pals for your dog or cat, they resemble an animal version of the social-networking site MySpace.)
Rheingold, who morphed into a web designer after a stint in international development, started to notice all the people popping out cell phones to show off pictures of their dogs and cats several years ago. He also observed how his wife, frustrated over apartment pet restrictions, tried to get her fix of furry faces from the Internet. “I thought it was funny no one had made a good webpage for dogs, and it just kept feeling like the right idea,” he says.
So what possesses a person to chronicle their pet’s every skunk sighting, vet visit, and birthday party—or to spend actual money on virtual presents for other people’s animal companions? Rheingold points to people’s busy, often disconnected lives. “People love their animals so much and they don’t get to spend as much time with their dogs as they want. Even though the dog doesn’t really understand it, I think it helps the human to know they’re doing something for their dog” by dedicating a space to them, he says. “To have someone come to your webpage and in the voice of their own dog to say, ‘Oh my, what a beautiful dog. You must be very lucky,’ to read a message like that is like opening up a surprise gift in the mail.”
And it’s not just about cyber meetings. Dogster and Catster users take their shared interests offline as well. Rheingold described a recent “meet-up” on the South Carolina coast of 100 members and dozens of West Highland Terriers.
One thing that differentiates the site from others that haven’t become profitable is that making money has been a focus from day one, he says. Much of Dogster’s profits come from the extra services sold on the site, such as enhanced pet pages and virtual currency to spend on “treats” for favorite dogs or cats.
Dogster wouldn’t have been possible 10 years, or even five years, ago, notes Rheingold. “In 2003 most people didn’t have a digital camera and in 2004 it was the Christmas of the digital camera.”
Like Larry Smith, he sees in post-“gold rush” businesses such as his own a recommitment to the original premise of the Internet and the potential for sharing information like never before. “That’s starting to get watered down in a pond of some not-so-good projects, but I think there’s still a lot of really great things being done,” Rheingold says. “I think every week we’re going to see web applications that are going to make a room full of people go, ‘Wow, why didn’t we think of that?’”
Today Rheingold and his wife live in pet-friendly digs with Moxie, a Chihuahua-terrier-dachshund mix they adopted from the San Francisco SPCA. In Dogster spirit they post her pictures and videos on the site (www.dogster.com/dogs/Moxie). As of late July, she had 98 pals. “She’s pretty popular but we kind of keep it on the down low,” Rheingold jokes. “I’d like to be able to respond to every friend and message and email that comes in.”
Web Cultivator, Josh Kopelman
If you’ve got a start-up company, Josh Kopelman W’93 is one of the folks you want to sit next to on the airplane—or, in Web 2.0 fashion, meet through the professional networking site Linked In. As managing director of First Round Capital, Kopelman has invested in a number of companies that have become Web 2.0 buzzwords, such as the social bookmarks manager del.icio.us, the website discovery service StumbleUpon, and the collaborative-website hosting service Wikia. “But I really don’t say I’m going to look for the best Web 2.0 companies, I just want to look for the best companies,” he explains. He also doesn’t find the term very useful. “I’m a believer that Web 2.0 has become so distorted that it basically means any Internet business that got started after 2003.”
If politely brisk in a phone interview, the busy Kopelman is more expansive on his blog, whose title (“Redeye VC”) plays off his “coastally challenged” status as a Philadelphia-based venture capitalist. “Eighty percent of my portfolio is in California, so I get to travel a lot,” he says. Philadelphia makes sense for him because “it’s a great quality of life and my family is very happy here.”
Kopelman was a Wharton undergrad when he founded an online reference and research service called Infonautics, which was bought by Prodigy. For him there was nothing particularly scary about starting a business as a student. “You can’t really mortgage your dorm room and you don’t necessarily have the same obligations you have later in life. My true cost was giving up on-campus recruiting,” he says.
As it turned out, that wasn’t such a hardship.
In 1999 Kopelman founded the discount marketplace half.com, which was sold to eBay a year later—for $350 million, according to Wikipedia. On the heels of that success, he helped found an anti-spam hardware company called TurnTide, which later sold to Symantec. “I’m not a statistician, but I realized the odds of my fourth company being anything other than a spectacular failure were against me,” Kopelman says. “So I decided I’d rather try my hand as a venture capitalist.”
His favorite part of that job is “meeting with entrepreneurs and hearing their ideas and their pitches.” The hardest part? “Saying no to 99 percent of them.”
Story Catcher, Larry Smith
A decade and a half ago, before undergrads could reveal their Spring Break exploits on their own blogs, there was a Daily Pennsylvanian gossip column called “Street Society,” which provided that helpful service. Of course not everyone was happy about being the subject of the latest dish. “It was page six before Page Six existed [in the New York Post],” jokes its creator, former 34th Street editor Larry Smith. “If I kept doing that, I’d either be the editor of Page Six or dead by now.”
Today, instead of telling tales on other people, he encourages them to tell their own stories, using a variety of tools ranging from videos to blogs to web comics, at his online magazine, SMITH. (The magazine title was chosen not as an attempt at self-aggrandizement, but because it’s a common last name that “represents us all,” according to the website.) Another 34th Street alumnus, Tim Barkow C’91 is the magazine’s co-founder and web designer. Senior editor Rachel Fershleiser C’02 and contributing editor Alex Koppelman C’05 round out the Penn crew.
“What separates us from a lot of reader-generated web magazines out there is that we’re a community curated by professional editors,” says Smith, whose credentials include Men’s Journal, Yahoo! Internet Life, ESPN magazine, and P.O.V. [“Start Me Up,” May 1998]. “So you get the best of both worlds. You get a lot of interesting stories and voices, but you have professional polish on it.”
Before doing that polishing, Fershleiser gets to read quite a few life stories as the coordinator of Memoirville, SMITH’s mash-up of published memoirs and works-in-progress. “You’re going to get a lot of Daddy issues, you’re going to get a lot of coming-out stories,” Fershsleiser says, “but I find for the most part it matters a lot less what the topic is and more about how compelling the writing is and how honest and relatable the voice is.”
One of her personal favorites was a six-part series by Elizabeth Koch, called the “World Tour Compatibility Test.” The author took a trip around the world with her boyfriend, planning to decide by the end of their travels whether they would break up or move in together. “You get these exotic parts where she’s in China eating fried duckbills and then she’s fighting with her boyfriend about some deep-seated issue from her childhood in Kansas.”
“With reality TV and celebrity blogs and whatever else, it becomes so accepted and expected to share the details of your personal life,” Fershleiser says. One’s comfort level with confessional writing may, in part, be generational, she admits. “I used to think about my Google image, but now there’s so much out there I don’t worry about it so much. I’m learning and sort of evolving through the people I work with.”
Though it may seem like everyone’s writing a memoir lately, many potential storytellers don’t consider themselves “real writers.” The magazine is happy to provide a nudge with invitations to tell in a hundred words or less about brushes with the law, celebrity encounters, or the origins of one’s nickname, and with projects like the Six-Word Memoir, Fershleiser says. SMITH is putting the best into a book due out in January, featuring the drastically abridged life-stories of the famous, the ordinary, and the name-sounds-vaguely-familiar.
The two-year-old magazine has yet to make a profit. Smith freelances on the side and most of the other editors hold down full-time jobs to pay their bills. “I think if you’re doing a startup, you’d better be optimistic or you’re in the wrong business,” he says. He extends his optimism to the medium itself, and to the tools that continually make it easier for more people to participate: “It’s a great time to be a media maker.”
Mirror to the Merchants, Brett Hurt
Your finger is poised on the purchase button for that hedge trimmer at the perfect price. But then your eyes wander above the gleaming image and you see the product only gets two out of five stars. Warning bells go off as you click and read a few scalding customer reviews. So you keep looking.
Merchant nightmare? It shouldn’t be, argues Brett Hurt WG’99, founder of the Austin, Texas-based Bazaarvoice. His profitable, two-year-old Internet company brings ratings and reviews to the websites of businesses like Burpee, Petco, and Walmart.
“It’s extremely counterintuitive to put the bad with the good,” Hurt admits. “If you’re a marketer, you’re [taught] only to talk about your products in the most positive light. We’ve been trained on Pavlovian theory: Ring the bell and the dog starts to salivate. But the reality is that consumers today are more like cats,” he says. “They’re very finicky online and are able to zip around and learn all the information about your products, good and bad, through blogs and other networks.”
Because that word of mouth is also a “mirror” of the face-to-face conversations that are happening offline, Hurt says marketers would do well to pay attention to it.
In addition, he says, “We’ve found that negative reviews actually get more people to buy [from a website], because they trust they’re shopping in an authentic environment where the merchant stands behind their products.”
On the average e-commerce site, less than three percent of visitors actually pull out their credit cards, Hurt says. But when a site posts reviews, customers “can touch and feel and experience that product through other people like them” and that purchasing rate goes up. At the same time, product returns drop because customers know what to expect and are “much less likely to be negatively surprised.”
Hurt, the former CEO of Coremetrics (and creator of a slew of other Internet startups from his days in Wharton’s MBA program), finds a competitive advantage to conducting business from his native Austin. “We’re one of the only Web 2.0 companies here and we were recently rated one of the best places to work in Austin,” he says. “We have a very good reputation in a smaller city that has tremendous engineering talent, and people are generally more loyal here than they are in Silicon Valley because, I think, there aren’t 100 other companies they could go work at.”
And because the cost of living in Austin isn’t as high, work is “intense” but not all consuming, Hurt adds. He’s grateful for his four years out in Silicon Valley though. “You do learn to think big out there because of all your encounters in the entrepreneurial world.”
It was in his hometown where Hurt had his earliest exposure to computers, however. His grandfather, who worked in the math department at UT-Austin, chipped in to buy him one when he was seven. “My mom sat down and taught me Basic programming as she learned it herself.” At age 10 he started his own bulletin-board system. “I was communicating with other geeks from all over the nation, and eventually from all over the world.” It wasn’t a popular thing to do growing up, Hurt says. “But it was my passion.”
Today he shares that passion with Wharton students, returning to the school as a frequent speaker. “Out of everything I did at Wharton, I got the most value out of other alumni entrepreneurs who came back to speak to us and made me realize that if they can do it, I can do it.”
Trendspotter, Scott Rafer
So that’s Wolf Blitzer in the party photo, but who’s that person standing next to the newscaster? An Internet tool that allows you to click on a face and instantly put a name to it is under development by the Danish Internet company Polar Rose. One of its consultants is Scott Rafer Eng’90 W’90, who has managed to found or head up a string of prominent web projects despite being “a chump” about the Internet in its earlier days.
Rafer admits he barely knew what the Web was when he was a Management & Technology major at Penn. Classmates at the engineering school “would be messing around with the Internet in the back of the room and I’d be chatting with a beer in my hand and probably ignoring the whole thing,” he says.
He calls himself a “fake engineer” whose father had to persuade him to stay in Penn’s engineering program several times. “I’m glad I did it because it provided me with a technical understanding I would not have otherwise had. But I’m a sales guy … I could never build things.”
After Penn Rafer quickly burnt out on his first career, investment banking, and started running the Internet products groups at Kodak Hollywood. In 2001 he launched his “first real dotcom,” WiFinder, which helps users track down wireless hot spots around the country.
One of his next ventures was Mashery, where he’s still a director. It addresses some of the technical stresses of the Web 2.0 world: “Part of the criteria for being Web 2.0 is offering your website as a service, meaning that other people’s websites can access your software using their machines,” Rafer explains. “With traditional sites, humans show up at the front door. They do something. They leave. In Web 2.0, humans show up at the front door, but also other people’s Web servers show up at the side door and take a huge amount of resources to do something very productive.”
None of the security features, “the gritty technical stuff that’s been done over the years to make a site safe,” works for that side door, he says. “We’re quickly building a business being the lock on that side door, being a way that sites can offer Web services to those people but do so safely and properly and not have an outage and people breaking in.” Rafer’s had his hand in other projects as well. Search engines like Feedster and Fresher Information? Been there. Hotel finder BookBroadband? Done that. His most recent full-time gig was as CEO of MyBlogLog, a site that allows users to connect with various blogging communities.
When MyBlogLog was sold to Yahoo earlier this year, Rafer stayed on just long enough to help with the transition. “After I come out of a start-up, for whatever reason, I tend to do a bunch of part-time stuff to get acquainted with what’s the latest and greatest,” he says.
That’s where projects like Polar Rose come in. The logistics are still being ironed out as beta-testers forage the Internet for faces. Once it’s released to the public, users will be able to look up, confirm, or edit the identity of a growing number of people on any site, and possibly match those images to others like them across the Web.
If those prospects sound slightly ominous, Rafer argues that the technology is in as good hands as any. “The CEO’s parents were in U.N. refugee management for decades [and he realizes] that if it’s done irresponsibly, it’s going to get political dissidents killed.” The company is working on an opt-out policy so people who would rather keep their names out of the limelight can have their faces blocked from the system. (This would not be an option for public figures like George Bush, Rafer points out.)
Chances are Rafer’s own face will have popped up in more places by the time this article comes out. “Sometime this fall I’ll hop back into my own thing,” he says. “I’ve got 15 lunatic ideas a day as to what it should be.”