Constraints and Rules
I believe web services benefit from doing less, not more. I believe that allowing the users to stitch web apps together to get increased functionality is better than a web service trying to do everything for everyone. The Facebook app ecosystem is one proof point of this approach.
Evan Williams and Jack Dorsey, founders of Twitter, have talked often of the "constraints" that are built into the Twitter app. You can only post 140 characters in a single message, for example. And because Twitter didn't have desktop client when it launched, a number of them were created and they are probably better than anything Twitter would have created. Same with the iPhone apps like Twinkle and Twitterific.
I think developers of web apps need to think hard about the constraints they are going to apply to their service when they create it. And they need to build an api early on so others can take up where they left off.
But what about when the constraints are dictated to you? This happened last week in the Twitter world when the company finally decided to stop paying a huge monthly bill to provide sms following services in countries (like the UK) where they don't have a direct relationship with mobile carriers that allows them to avoid paying for that delivery. Twitter has now constrained their service in a way they really don't want to constrain it. WIll some third party come to the aid of the users with a solution that Twitter didn't think of? That would be great. More likely, Twitter will cut a deal with the UK mobile operators and mobile operators in other parts of the world. I am not sure if these kinds of constraints are good or bad. It's too early to tell.
And then we have the example of web-based music. Pandora is in the news because they claim they cannot afford the compulsory license they owe music rights holders for the playing of streaming music on the Internet. The CEO of Pandora is threatening to shut down the company if they cannot get relief. And he says that 70% of his $25mm in revenue goes to the music rights holders. The compulsory license for streaming audio is a huge constraint in the web music space and there is no question it is harming innovation. There are solutions, for example Pandora chooses to not run audio ads in their streams like you hear in the car on the way to work in the morning. Our portfolio company Targetspot could provide them that form of monetization today if they wanted it, but it's up to each web app developer to decide how they want their service to look and feel (and sound). If Pandora believes that their service should be free of audio ads, that is their decision. But the constraints of the compulsory license makes it very hard to deliver an audio ad-free experience to their users cost effectively.
It's ironic that 8tracks launched this week in the midst of this controversy. 8tracks is a streaming music service that was built with the very constraints that Pandora is dealing with in mind. David Porter, the founder of 8tracks, has been in the web music business for a long time and is intimately familiar with the rules (ie constraints). So he built a streaming music service that enforces the definitions of "internet radio". You cannot put more than one song from each artist into your mix. You can't see the song lists of the streams before you play them. Etc. Etc. And so his service has been constrained in ways that may or may not be good for end users. We will see. Here's a mix of my top 8 tracks this week. Let me know what you think.
I believe constraints are key to building great web apps. I am not sure about rules that are dictated by the market or government. But the reality of the place we are in is that we have to deal with them. And the best entrepreneurs will figure out how to play these rules to their advantage.