(Originally posted on my Flatburger.com Blog) A long time time ago, the word ‘marketplace’ was used to describe “an open area of square in a town where a public market or sale is set up.”1 It was the place where transactions physically happened, and merchants could openly compete for someone’s business. An important point here is that almost every town had one. While of course that definition has not changed, in today’s online world, companies like eBay have brought new meaning to the word. eBay, and companies like it, have enabled those same local merchants to come to these online virtual marketplaces and transact with people worldwide.
eBay has done a great job of leveling, or ‘flattening’ the playing field to allow all merchants to compete on an equal footing. They provide a simple place for merchants to go where their success is based on the value of the products they can provide relative to the cost they provide them at. They also provide a simple place to go for consumers to find whatever ‘it’ is they are looking for to fulfill their unique wants and needs. Commerce can’t get much easier than that. Or can it?
As our world economy advances, more and more new types of things are being traded by people online every day. Note that I say ‘trade’ in this case, and not ‘commerce’ as I did with eBay, and that I say ‘people’, not ‘merchants’. Trade happens when two people(s) have something that the other person(s) need or want. While in the commercial part of the world, one of those things is generally money, the definition of a marketplace online expands to include “any sphere considered as a place where ideas, thoughts, artistic creations, etc., compete for recognition.” 2
Without getting too philisophical here and saying that this blog itself is a marketplace where ideas and thoughts are being traded in exchange for your time and feedback, I do want to talk about one category of idea / thought / artistic creation that I work a lot with, which is computer software. Whether is open source, closed source, or some combination of the two, millions of software applications are traded every day. Some are traded in exchange for:
- Potential for money
- Potential for selling services and support for it
- Potential for person to click on an advertisement
- Potential for collecting usage or personal information
- Potential for ego boosting or reputation building
- Personal satisfaction
I say potential for many of the above exchanged commodities due to the fact that software can be easily copied and is thus often traded void of any of them, as in piracy; legal, moral or otherwise. While one of its’ greatest weaknesses, this ‘non-rivilrous’ nature of software applications is also one of its’ biggest strengths. Software is a virtual commodity. Unlike the majority of products sold on eBay, it does not suffer from the drawback of having to ship it anywhere. Instead, it can be downloaded, installed and used almost instantly. A great potential and need for a different type of marketplace exists as a result.
While software is used to cater to long tail markets, why is it that software itself has yet to really capitalize on the potential hundreds of thousands of unique vertical needs out there? The technology exists to do it. I would be willing to bet that for every single vertical need out there, someone has already written a piece of software to fill that need. Why then are so many millions of end users not having their needs met yet? I think it’s because it’s too hard to make sense of it all. I consider this tragic because there are so many opportunities to make peoples lives easier and accomplish more in less time through the use of software designed specifically to fill an individuals unique needs.
If I have a particular software need right now, there is no real efficient mechanism for me to find that unique application. If I am lucky enough to wade through the millions of search results in Google and find something that might be useful to me, I have very little basis on which to make a decision as to whether or not that application is going to fill my needs. Is this company trustworthy? Are they going to abuse or improperly manage my credit card information? Are they going to install a virus or spyware on my computer? Are they going to support the product if I need help? Does the application even work as advertised, or at all?
The Internet enables someone in their basement to appear as professional as a large multi-national company. That is not the problem, as I have purchased and used many software applications from basement dwellers that are more professional and provide better product and service than companies 100 times their size. In fact, it is the smaller companies that focus on filling a specific need that are the key to this long tail of software users. The problem is, large or small, free or paid for, there is no easy way for someone to guage the quality of many applications or the creators of them. There is no way for a user to easily decide whether or not it is worth trading their time and / or money to acquire and use an application. Add to that the general complexities of Installation, Upgrading, License Management, EULA’s, Open Source, Closed Source, etc. and you see why it’s enough to make a seasoned software engineer want to cry, let alone a general end user.
Putting all of those things together and you can start to see why current attempts at creating software marketplaces have not been as successul as they could be. When it comes to software, I have a fundamental problem with the word market’place’ altogether. My ideas, thoughts, artistic ability, and money, are all ‘here’, with me. Why do I have to ‘go’ to some other ‘place’ to exchange them with someone? People talk about these general concepts of Web 2.0 and making internet software more personalized, but I think these things need to happen to the actual process of creating and trading software itself as well.
Trade happens between two people or groups. While a trade might be brokered by some third party or technology, there should not be the need to go outside of my current workspace to acquire an application to fill my needs. Whatever platform I am currently using (Windows, Sharepoint, DotNetNuke, etc.) should allow me to easily find applications to plug into that platform. It should then give me information in a common format to easily understand what the application does and what I need to do to use it. It should allow me to quickly determine whether I can trust an application or application developer, large or small. It should provide the tools required to facilitate communication and trade between creator and user, buyer and seller.
The ability to connect those who need something with those who can provide it is the key to any marketplace. When this ‘flat’ software marketplace comes to be, it will open up the opportunity for an application developer to focus on a particular vertical niche in an economical way, and provide high value for low cost. I would predict an explosion of both software creation and use because of this. This will be driven by the ever increasing world wide pool of talented developers being able to focus doing what they do best, developing. It will matter much less the size of the company or the size of the marketing budget, rather what will determine the success of a company or an individual is their ability to identify user needs and create quality software applications that fill those needs.
