Cambrian Era: Culling and Evolution of Social Media Startups

I continue to think it’s interesting to draw parallels from natural sciences and what’s happening to the social industry, and also how communities behave and grow. From the five eras of the social web (my inspiration was the stratification of this beach cliff), and watching the enterprise software players (my inspiration was spending a day at a tropical aquarium), there’s yet a third metaphor to explore.

The Cambrian explosion is still hotly debated between creationists and evolutionists, a period of time when millions of species proliferated in a relatively short period of time. This explosion, in theory, gave a tremendous amount of deviation of species that paved a way for the creatures who developed the right features to quickly adapt to the changing environment. Despite the millions of species created, only a few survived and evolved to the modern species we now know.

There’s a lot of similar things happening within the startup space, we saw an explosion of startups appear in this second wave of the web, yet this graphic shows that many are going extinct, and a few were acquired by other organisms. What caused this explosion? At least two factors: Injection of VC money into the developer community, and the low barriers to entry for startups to get going. Opensource development software is virtually free, there are many platforms people are building on top of (Facebook platforms is like an operating system, with instant users), and the need for a large data center can be ‘offshored’ to the cloud.

As the industry matures, we should expect some of the few startups to mature, take the lead and become the dominant species, same as what we saw in the first web wave with weather.com, ebay, craigstlist, google, yahoo, and others. There were thousands of companies that didn’t make it (I saw this first hand as I worked at the massive web host Exodus in Santa Clara). Going with this metaphor, it’ll be interesting to see which companies develop the features of long term monetization –something we haven’t fully seen across the industry –that will foster an increased chance of survival.

Back to you: Aside from generating revenue, what are the key features these young species/companies need to develop?

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16 Replies to “Cambrian Era: Culling and Evolution of Social Media Startups”

  1. Using the Cambrian explosion as a metaphor isn’t the best choice, although in popular belief it is of course a ‘fact’. As where weapons of mass destruction in Iraq…

    The fossil record is spotty at best. And it gets worse going back in time. As a result the Cambrian explosion is more of a hoax than a reality. To add injury to insult, species proliferation is also partly due to paleontologists that want their name in the big book of Linnaeus. Not often realized but o so true…

    These two factors combined will paint a markedly different picture of our Cambrian ‘explosion’ and subsequent mass extinctions.

  2. Marc

    I’m very aware of the debate on the theory of the era. Yet I think that draws some interesting points to what’s happening in the social space –years from now we’ll also scratch our heads based on some of the ridiculous startups we see today.

  3. Jeremiah,
    There are definitely a lot of odd-shaped species out there in the social media space. But even more astounding is the number of odd-shaped species with funding… Which will lengthen their evolutionary branch in a rather creationist way 😉

    As a matter of full disclosure I have a master in paleontology although working exclusively within online recruitment. Where I spot a lot of future fossils; thanks to my highly trained paleontological eye.

  4. Jeremiah, thanks for the post, you’ve stimulated some really interesting lines of thought for me! (maybe i will put together a blog post today…)

    From my college days studying neurobiology, another metaphor also occurrs to me: the emergence of “brains” to power the “organisms” that survive after today’s Cambrian Explosion simmers down.

    The metaphor goes like this: If companies can indeed be considered as organisms, then today we have the beginnings of web-based “neural nets” — variously referred to as “enterprise 2.0” and “collaboration software.” As you are well aware, there’s a lot of interesting stuff happening in this space. Yammer, for one very easy example, powers Twitter-like messaging services behind the firewall (in this metaphor, “firewall” is essentially parallel to the human skull that surrounds the brain). On a very rough approximation, the messages that float on Yammer or Twitter are akin to Action Potentials propagating across set of neurons (http://en.wikipedia.org/wiki/Action_potential). Like tweets, action potentials can hit multiple neurons at once…due to the way that neurons connect with each other — most (but not all) neurons in the human brain connect with many other neurons, both in the dendrites (inbound signals) and the axon (outbound signals). This is just like how people on Twitter typically follow many other people (inbound), and also have many followers (outbound).

    Another example of “enterprise brain development” would be a vendor like Spigit, or in fact my own company, I-Nova Software. (I’ll use Spigit as the example here, both to avoid conflict-of-interest, and b/c Spigit is currently much better known to the English-speaking world). Spigit offers a platform that builds a social universe for companies seeking to empower innovation across the enterprise. This is really interesting, because it’s essentially an early attempt to create ganglia — i.e., clusters of “neurons” (i.e., people and their ideas) that group together. In (biological) evolutionary history, ganglia developed from undifferentiated neural nets, and were the precursors to the fully-specialized organs we know today as “brains.” In the enterprise, the analogy would be akin to having a “cognitive” information infrastructure that can rout messages, posts, ideas, etc. from people across the enterprise, and in the process make rational sense out of them. In this way, the system groups people and their ideas into meaningful clusters of affinity (“ganglia”) which are distributed as dense, heavily-connected nodes across the enterprise-wide neural network. In the coming years, this enterprise trend could closely parallel the mechanisms for how and why human brains evolved from simple neural nets through what biologists refer to as “cephalization” (http://en.wikipedia.org/wiki/Cephalization). It’s a very exciting trend to watch…so much so that I’m essentially betting my career future on it…

  5. Chris thanks

    Great metaphor of comparing developing intelligence within a community as a deciding factor. There’s truth there: with so many people creating content, it’s difficult to find out what is important to me. When we look back at the first web wave, this is exactly the need that Google met.

    I was watching some videos online about the Cambrian explosion and it was suggested that the most important feature to be developed that would improve the opportunity for survival, eating, and reproduction was the eye.

    I’m not sure if there’s a direct feature comparison to the web 2.0 startups but revenue is a form of ‘self-sustenance’ and therefore ‘reproduction’ if the company grows.

  6. Not just the Cambrian explosion or the Web 2.0 space – any time a new ecological gap appears, new species proliferate to exploit it and then there is an inevitable shakeout.

    New technologies have this effect in our ecosystem, if you look at the flurry of developments of weird types of iron ships, early aircraft etc you will see huge diversity (I researched these “Innovation Ecosystems awhile ago, here’s a short blog post on it http://broadstuff.com/archives/896-So-thats-what-happened-to-Gopher…….html ). See the note on VC capital replacing conflict as an innovation motivator in IT.

    After reading Meg’s post you refer to above, I took out my 2001 book “The 100 best Internet Stocke to own” – suffice to say we have been here before in teh Internetz. (blog post here http://broadstuff.com/archives/1695-Web-2.0-Where-are-they-now…….html )

  7. Jeremiah,
    Great post, enjoyed it. I like the parallel to the Cambrian. The other aspect of the parallel that is interesting is that in the Cambrian, there was the development of the ability to see. Vision led to major advances in predation, evasion, and competiton, and hence the burst of evolution (at least that’s one theory).

    The parallels with today, and the visibility into the conversations that are happening among prospects, customers, and the market, are striking.

    I wrote a piece exploring that aspect of the Cambrian parallel here:
    http://digitalbodylanguage.blogspot.com/2009/02/twitter-evolution-and-cambrian.html

  8. Having studied some biology in college myself, I think comparing the current renaissance of start-ups to the Cambrian explosion is an exellent analogy.

    As you briefly pointed out on your post, the dark side of Cambrian explosion was the extinction of so many of these ‘new’ species, which had new features.

    Going back to your quesiton, besides generating revenue, I think one of the key features that start-ups need to focus on is market research and assessment of need and demand for the product or idea they are developing. Instead of inundating the users with yet-another-cool-features, I think they should think about whether it satisfies an exisitng need (which is dynamic).

    As you said, eyes were crucial features for a lot of animals that survived to pass on their genes to their offspring. However, there must be so many more features (mainly through mutation) that were introduced to organisms that were not very useful, it not outright counter-productive.

    So for start-ups, making sure that their products and features will satisfy some kind of demand is crucial (unlike pets.com, flooz.com, and mvp.com during the late 90’s). I think this goes for almost any project in general… like in SEO it’s stupid to go for keywords that nobody is searching, and for social marketing, it’s pointless for companies to reach out to popular bloggers whose focus is not your industry (but do so just because they are popular).

  9. Jeremiah,

    Interesting thoughts. Especially interesting was your comment about the eye as the winning Cambrian anatomical feature. This hits on the $64,000 question: “Which features of today’s startups are geared best for the digital economy?” The best answer I can think of is: There is no way to know. Not yet, at least. Web-enabled human society is still in its *extreme* infancy. Almost by definition, it takes several generations from a societal “big bang” before society has collectively worked through all the newness and decided on the long-run winners.

    As an example, think about the Industrial Revolution. Although James Watts’ steam engine was invented in the 1760s, it was 100 years before the US completed the First Transcontinental Railroad (http://en.wikipedia.org/wiki/First_Transcontinental_Railroad). And only once this happened did anyone have the core infrastructure for coast-to-coast shipping and logistics — the economic foundation (historically, at least…) for the modern industrial corporation — a more advanced “organism” than was ever before possible. And it wasn’t until 1-2 generations after *that* (i.e., approaching 1900) that it was clear who the “big winners” were — Carnegie, Vanderbilt, Rockefeller, JP Morgan, etc.

    This reminds me of something I was listening to on NPR the last time I was in the US. Scientists recently discovered the first known all-female species in the world (http://news.nationalgeographic.com/news/2009/04/090417-female-ants-picture.html). This, of course, led to lots of quasi-feminist speculation about whether the male gender is becoming obsolete. But the scientist interviewed on Fresh Air made a very trenchant observation: it’s WAY too early for any such speculation. Sometimes these anomalies (“innovations”, if you will) become meaningful and game-changing. But in 99.999% of cases they are evolutionary dead ends — failed experiments by Mother Nature. And given the slow grind of evolutionary time, it often takes 1000’s of years before the verdict comes in.

    The same, too, can be said of many companies today. Many of today’s startups look incredibly promising now, but 3 years from now they will be dead and their technology and business models long forgotten. Others will limp along awkwardly until their moment comes — until there’s a place in the ecosystem for them — and then they can become tomorrow’s giants. And then there are yesterday’s giants — mega-corporations like GM and AIG that have been limping along for many years, already fading into obsolescence but nonetheless sticking around while so many promising upstarts have burned brightly (but briefly) and then disappeared almost overnight.

    The world is messy and confusing, and Mother Nature usually leaves a lot of garbage sitting around, just in case it’s useful sometime in the future. So it has been for the speciation of biological organisms since the beginning of life on earth. And so it has been (and will continue to be) also with the speciation of socioeconomic organizations such as enterprises, governments, non-profits, etc.

  10. Jeremiah,

    Thanks for both the “Five Eras of the Social Web’ and this post. Both increbibly insightful. As a marketing guy they inspired a few thoughts about that treacherous topic called “The Future of Social Media”…

    Facebook, Twitter and Friendfeed (sorry MySpace) are in a dead heat race to make the most of the rapidly approaching real time web. Each offers their own, unique package of connectivity and information based on different ideas about how to foster organic human interaction and generate sustainable business growth. Even Google has joined the pack as more and more people use Twitter and Facebook to find information or news rather than search engines.

    Yet as anyone who dabbles in social media will tell you, connectivity and access to information are no longer the problem. In fact, information overload is fast becoming an issue.

    As real time communication becomes a reality, social media will be recast as curation. That means the very same Facebook, Twitter and Friendfeed we now use to get information will be reframed as filters.

    Yet it™s not a knock out competition. Right now we each choose Facebook, Twitter or Friendfeed depending on our preference for how we like to connect with others and information. In exactly the same way, these social networks – and others that aren™t even created yet – will provide of spectrum of choices for how we like to filter information. Our considerations will be the same as ever – how much connectivity we want, our tolerance for exposing our private lives, our comfort level with technology and time constraints.

    So, in a sense, the same technology that allowed us to deep dive into cyberspace to connect and share in unprecedented ways, will now serve to carve out boundaries for the penetration of that information into our lives. They will be seen as tools that allow each of us to shape negative spaces for ourselves in which we are not in communication, cannot be reached and have nothing to share.

    These spaces are the cyber equivalent of ˜going outside for a walk™. Obviously in today™s connected world the ability to communicate has nothing to do with your physical distance from others. Instead, one must increasingly carve out invisible boundaries in black space to define the limits of you as can be experienced by others.

    The subtler differences between the same dynamic in cyberspace and the physical world is that our choice for information is much wider on the web, the available content is therefore much more specific to our personal interests, and, now, the filtering tools are far more sophisticated. Yet the net result is the same “ a space reserved solely for ourselves in a world where our real and virtual lives are increasingly blurred.

    This reframing of purpose is important because, even though the user experience may be the same, the dynamic in our relationship with technology and information is headed in the other direction.

    This shift is not linear but part of a larger cycle. The next few years will be characterized by unlimited information, unprecedented connectivity and pride in curatorship. No doubt technology or human ingenuity with then provide a further redefinition of how we live that will initiate the next iteration of this cycle. For new technology must always engage with certain timeless qualities of the human condition that include the competing needs for privacy and connection.

    Thanks again for all your great work. It has important impact on the future of marketing.

  11. Adaptation trumps fitness. That’s how startups steal marketshare from established players, and small organisms can kill much larger and more complex ones.

    So the question becomes what makes a company adaptable? Some thoughts come to mind:

    * A low burn rate
    * Access to advisors with a broad range of experience
    * Flexibility of revenue models
    * Ability to assess and react to constant changes in environmental factors (e.g. transparency in building brand trust) and competitive factors (e.g a competitor accessing quality talent at low rates overseas)

    The major change for startup companies right now is an era where money and debt were cheap, to an era where money and debt are expensive. That leaves less slack for waste and mistakes, which is why investors and startups that can’t deliver the goods are dying off. We don’t know yet what will replace them, but those that want to succeed will take a hard look at what caused the failure and what the new conditions are.

    PS – Despite the above stated issues with the Cambrian Period, the debate is largely between scientists and creationists. That’s an important distinction from “evolutionists”.

  12. I think during every boom you get efforts that don’t have the best intentions in mind which sometimes cause things to crumble eventually.

  13. Jeremiah,

    All of these biological and scientific comparisons get me thinking that you should try to arrange a discussion with Kevin Kelley. I really enjoy reading/listening to you both and think there could be some very interesting thoughts that come from the two of you together.

  14. Hey Jeremiah. I love this post! As a biologist by training (incl. a grad degree), I have also been interested in parallels between living systems and social media. We sometimes hear of the “social media ecosystem” for example.

    My three examples are:
    1. How the the theoretical cognitive limit to the number of people with whom one can maintain stable social relationships might apply in social media networks.
    2. How social media is subject to the principles governing all living systems.
    3. How the principles of r and K selection (biological reproductive strategies) can help us assess and implement strategy.

    You can see them collected here:
    http://www.twitterthoughts.com/social-media-news-analyses/category/biology

  15. Jeremiah,
    There are quite a few comparisons of the web 2 explosion with the Cambrian explosion (Tim O’reilly) has done this. What I like about your comparison is that you also talk about causes – low barriers to entry, open source, VC funds, building on early “species” etc.

    Even more interesting is the comments “ecology” – the extension of your post to survival and the analogies to intelligence and the eye.

    There has been much talk about the web developing as developing intelligence – like a baby it is moving into the sensory motor stage where it is beginning to integrate senses and actions – this will be a new explosion – I guess we are anticipating this as the web 3 explosion.

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