Reaction to eBay's PayPal-only Rule: a Lesson in "Web 2.0"

The reaction to eBay's attempt to require sellers only to accept payments via PayPal has reinforced a key tenet of "Web 2.0" - that facilitators provide an "architecture of participation" within which users interact and collaborate to improve the service.

Users will tolerate unilateral acts by the facilitator, as long as they trust that the facilitator is acting to improve the architecture - greater efficiency or more features, for instance - although these are clearly best introduced in response to actual user feedback or user behaviour, either on or off-site. Friendster paid the price for not aligning itself according to users' on-site experience and off-site behaviour.

Firsthand experience at Zopa also taught me that users will even tolerate the introduction of fees to the extent that it's a genuine attempt by the facilitator to achieve financial health and stability.

But eBay's decision to impose the PayPal-only requirement appeared to be neither genuinely facilitative, nor motivated by user feedback or behaviour. It hardly seems critical to eBay's financial health and stability. So users punished it accordingly.

Had users not reacted in this way, there might have been a basis for doubting the continuing validity of Web 2.0 as a description of what's happening in the consumer sphere. But clearly the trend rumbles on.

National Rail's Secret to Great Train Timing

The Long Tail: Define "Head" and "Tail"

Fascinating post by Chris Anderson responding to a Harvard Business Review analysis of sales patterns in the music and home-video industries to see if they support or undermine the Long Tail theory.

In short, depending on your definition of "head" and "tail", the data could be used either way. A somewhat obvious point to make about any stats, but nice to see the pro's slanging it out, and good ammunition for responding to use of "Long Tail" buzz words in pitches.

The slightly longer version is that HBR finds that the "blockbuster theory" holds even for e-commerce:

"A balanced picture emerges of the impact of online channels on market demand: Hit products remain dominant, even among consumers who venture deep into the tail. Hit products are also liked better than obscure products. It is a myth that obscure books, films, and songs are treasured. What consumers buy in internet channels is much the same as what they have always bought."

Hence, even online businesses should focus their resources on promoting hit products rather than obscure products.

However, Chris Anderson points out that:

""Head" is the selection available in the largest bricks-and-mortar retailer in the market (that would be Wal-Mart in this case). "Tail" is everything else, most of which is only available online, where there is unlimited shelf space."

Using that definition, the data supports more "tail heavy" consumer demand on the sites analysed.

View or join the ongoing debate!

Prepaid Cards and Financial Services 2.0

A tip of the hat to Chris Skinner for his giant post on Prepaid Cards as a payment method.

Very timely, given the launch this week of Wigadoo:

"Collect all the money for your trip into an online event account with a virtual prepaid MasterCard®. When you come to pay for hotels, tickets or extras it's all ready and waiting for you to spend."

Chris laments that the banks are not the ones initiating prepayment tie-ups with retailers etc. But this expects too much of banks. As an example, the Wigadoo card is issued by Newcastle Building Society, but there's little chance that NBS could have dreamed up Wigadoo's use case, let alone implemented the user experience and the marketing plan. That's just not what financial institutions are good at, and it's taken the talent and experience of Andy, John and Uma to initiate and drive the whole thing, using angel money and input from the likes of Andy Phillipps and Brent Hoberman.

I've said it before, and I'll say it again: banks will be the back office, not the front, of Financial Services 2.0.

Lifestreaming is Social Networking on Steroids

At a time when the number of social network services is skyrocketing to the point where it's impossible to join them all, aggregating them into a single feed is the next challenge. FriendFeed does it for me.

Welcome to "lifestreaming".