I had argue eons ago that eBay is THE first web 2.0 companies - that eBay’s most important asset is not hard assets (buildings, computers), nor its employees (certainly not me), but its community . . . and THAT is the defining characteristic of a web 2.0 company.

eBay’s “travails” with its own community are now beginning to be repeated in other companies as web 2.0 startups begin to gain critical mass. In an ironic way, these events validates and empowers the past direction, decisions, and strategies of eBay and further proves that scaling a network effects is not as simple as just seat back and let the community grow.

Jeff Nolan alerted me to user revolts at youTube over heavy handed management of its community. Miel, a power user of YouTube has “quit” youTube. In his own words.

Okay. I’m out of YouTube. I refuse to use the service any longer. Recent changes made it very obvious they don’t want users with large archives. The site is very very slow and I have over 30 pages of videos. Browsing to page 28 took me exactly 12 minutes, whereas before the interface update I could just click the page I wanted to see. Turns out a few of my uploaded videos were rejected due to inappropriate content, which I totally don’t get, because nobody got killed, no nudity was shown and no dirty language was in it. It didn’t feature any stolen music and I didn’t sing. Then why is it inappropriate? Because some puritan mind flagged the movie in the hopes it would make the world a better place? Well I’ve had it with these random rejections. I don’t take it anymore. There is totally no way to defend you against this, you get no warning at all if a clip has been flagged, you just have to come to the conclusion whilst browsing your video archive. This particular clip was uploaded in September last year. It’s been on there for months, and all of the sudden the content isn’t appropriate anymore?

more here

Ofcourse Miel’s buddy, Nathan, joined in as well and thus the ripple grows. . .

Don Dodge has a really good analysis of MySpace’s and youTube’s problems from a very “technical” (and important) perspective. However, from the community perspective, the issues are much more holistic and emotional. To the community, it is a matter of OWNERSHIP rather than moralitie, ethics, or legalities. It is about the community believing their contribution to the success of the company entitle them to a say in the directions and decisions of the company.

Many of these companies can learn much by studying eBay’s past. That these web 2.0 communities will

1) “unionize” to gain greater influence
2) Increase heterogeneity and fragment to create conflicts between groups (which companies will have to manage)
3) An “elite” class of power users or influential mavens will develop
4) Community will increase sophistication of their method of influence to the company relying on press, lobbies, and other media (beyond venting on BBS’s or blogs)

And, these web 2.0 companies will respond in many the same way that eBay has.

1) integrte the “voice” of the community into the producment development process
2) create far reaching and powerful customer councils to influence and guide company decision making
3) “co-opt” hopefully in a good and productive way for the community these leaders through customer councils or even hrie them as employees
4) Build entire departments to do community outreach as big as many companies scale their PR/Media departments
5)and ofcourse, repeatly screw up by attempting to “manage” the community rather than listen, enable, and scale

And in the end, there will always be times when the best interest of the community conflict with that of the company. When that happens, (at least once a year) the true mettle of the company will be proven.

(Unfortunately, as mentioned by Adam Nash in the comment section of a previous post, by tightly integrating yourself into a particular segment of you customer base, it leaves open opportunities for competitors to target underved, small, and but rapidly growing segments to gain marketshare)