Tokyo and tech through the eyes of a split pea

New Context Conference, Day 2

Digital Garage along with Joi Ito hosted a conference titled The New Context covering the future of web 2.0.� I was returning from San Francisco the night of the first day so I unfortunately missed Lawrence Lessig’s keynote, but Gen kindly scored me a free ticket for all of day 2 (thanks Gen!) so that rocked.� I also met Ejovi Nuwere, ex-US manager of Fon and who was in town for a court case against Nagano-ken.

Key speakers for Day 2 included Last.fm CEO Felix Miller, Shinsei Bank Group CIO Dhananjaya (Jay) Dvivedi, Magnatune and BookMooch CEO John Buckman, and Linden Labs CTO Cory Ondrejka.� Each presentation was moderated by uber-networker and Japan web-tech pioneer Joi Ito.

Session 1

Cory’s talk on Second Life was an interesting peek into what we can expect with virtual worlds going forward.� Second Life is not just for computer geeks anymore, as there is now a thriving economy with legitimate businesses popping up daily.� The collaborative platform Second Life has created is interesting in that on the web, most creation is sequential (post –> comment –> post –> comment), whereas on SL it’s very much simultaneous.� Some updated stats on the service:

• users are spending from $0 to $40,000 a month!
• currently simulating a space 3x the size of Manhattan
• 3 terraflops of physical simulation
• SL in August: 200k residents, 420k distinct items sold, 12m p2p transactions, US$12m in internal economy, US$1.75m exchanged, 10k profitable residents
• genders are well balanced (almost 50/50 m/f), with an age range of 13-80yr olds and a median age in the mid-30s.

How is all this economy possible?� Turns out there’s a lot of auction activity going on ala eBay with whatever excess in actual or Linden dollars players may have.� Charity events are also popular – the American Cancer Society recently raised $43k hosting an “online-run” – avatars running in circles :)� Dozens of universities also have land on Second Life.

Session 3

Felix Miller’s discussion on Last.fm wasn’t anything new for those who’ve been using the service.� It was good to hear the train of events which ultimately led to the idea though.� There are now 65 million tracks in the database, creating magnitudes of networking and promotion opportunities.� The Last.fm team recognized that there is already value in knowing what music is played (or isn’t, for that matter), and helps the next step in extrapolating that value.� Big props to Felix and the last.fm team though for getting up and running in Japan – they partnered with Excite and have been going strong for the past two months.� I hope Felix gets a chance to share his Japan Entry challenges in the near future.� Oh, and he shared a cute new phrase in that regard – the Kanji Curtain.

Session 4

John Buckman’s talk on “Consumer Internet Businesses” was interesting as he shared some thoughts on what it takes to build successful internet businesses this day in age.� Covering first his credentials as a serial entrepreneur:

• 1997 – 2006: Lyris Technologies, an e-mail marketing platform which he sold
• 2003 – present: Magnatune, the first and still only fully-online record label, which is also an example of profitable company harnessing the Creative Commons
• 2006 (started five weeks ago): BookMooch – a community for exchanging used books, with already 10k users

he continued with factors one should think about in building a novel web-service going forward, such as how to make money from CC Licenses, how to never need a PR agency, and how to create sharing, non-capital markets and ways to exchange w/o physical currency.

For example in the case of BookMooch, a book-sharing service, sending a book gives you one point since the only the sender pays (for international mailings, you get 3 points for sending 1 book).� So how does BookMooch make money?� Well, it turns out BookMooch relies on a passive payment system – people spend hours creating their book lists in the hopes of getting books for free.� But users are impatient, and eventually decide they want to buy the book on Amazon, giving BookMooch 6.5% of the sale through the Amazon Associates program.� BookMooch’s ability to make this entire process seamless and easy to use is one of its great values.

Magnatune has proven profitable for a number of different reasons, including leveraging consumer anger at the music industry where there’s limited musical diversity and poor quality, high CD prices, angry musicians speaking out against being ripped-off, and our favorite: DRM.� What’s interesting about Magnatune is the market it is targeting: turns out the licensing industry, at $12B, is twice as big in sales as in the consumer music industry, and it’s the licensing industry which Magnatune is disrupting.

Final Thoughts

Having just attended the Future of Web Apps workshop in San Francisco a few weeks earlier, I was curious to see how it would differ from this one and I have to say, I was unfortunately unimpressed with the image and audience.� The content was great, but there was way too much formality — 3-4 suited staff members by the door hawkishly checking your badge (not to mention the 10 other black-suited staff people just standing around looking for something to do), being forced to leave the venue after each session so that they could check your badge again for the next one, and tablecloth on all the tables – that struck me as a bit much.� I would rather the organizers save the money and reduce the entrance fee.� The swag bag was nice, but I didn’t quite understand the whole “clean water” promotion they were doing.� I was almost expecting Al Gore to show up.

Technorati Tags: conference, japan, web2.0