Web 3.0: kamikaze business
Near the end of the Second World War, Japan began turning some of its aircraft into massive piloted bombs. Packed full of explosives, once in the air these planes would be unable to even land.
Their human pilots had one mission: blow up. Preferably by ploughing into enemy sea vessels, of course.
It was a tremendous and ironic admission on Japan’s part. Unable to win the war on traditional terms, the country and its soldiers needed to make the ultimate sacrifice: self immolation. Kamikaze.
That same sort of mentality seems to be gripping the business side of the technology industry these days.
Companies like Google, Facebook and Apple have grown into monstrous, seemingly unstoppable business behemoths. Startup businesses can’t possibly compete, much less beat them. The odds of success are against them from the start.
So instead of approaching business from a traditional standpoint, startups are adopting a kamikaze mentality. They don’t even plan to succeed. They plan to launch and crash. Preferably into the pocketbook of Google or Facebook or Apple, of course.
Arguably the most successful proponent of the kamikaze school of business was Instagram. This simple, free mobile photo sharing app was recently acquired by Facebook for $1 billion.
Instagram was never intended to be a successful independent business. Its goal was not longevity. It didn’t even have a business plan.
It’s not like Instagram lacked strategy, however. Its founders knew where the mobile industry was moving. Being young and lean, they moved fast and got out ahead of it.
They knew that quick, easy, instant photo sharing was going to form the cornerstone of mobile experiences, and they executed on that better and faster than anyone else.
And before Facebook or Google had even recognized this reality, Instagram had 30 million users. The company had quickly become an unstoppable force, an airplane packed full of explosives hurtling through the air, as planned.
Of course, it had no way to land, and only limited fuel. And so before it dropped from the sky like the dead weight it was, it pointed its nose at Facebook and braced for impact.
The resulting fireball was spectacular. Facebook killed a threat and Instagram’s investors made a killing.
This week we observed arguably the most prominent and ludicrous launch ever of a kamikaze business: Airtime.
The brainchild of the daring duo who delivered us the ill-fated original Napster service, Airtime is Chatroulette with a chaperone.
Chatroulette, of course, is that infamous Russian web-based video chat service that’s all about random introductions. You log in and end up face-to-face with somebody somewhere.
Only, with Chatroulette it’s not likely an actual face you’ll encounter. You’ll probably end up staring through a webcam at a particular other (male) body part.
So the secret ingredient in Airtime is an outsourced censorship service that monitors your chats and shuts you down if anything even remotely phallic shows up. Much more Facebook-friendly, in that privacy goes out the window.
Oh, and in that it depends on your Facebook ID.
Oh, and in that one of Airtime’s founders was the first president of Facebook.
See where I’m going with this?
Everyone knows Facebook needs, and is probably currently developing, a live video chat service.
Google Plus, after all, has Hangouts.
So Airtime isn’t a business. It’s a $30-million dive bomber aimed at the Good Ship Facebook.
Its investors are betting that Airtime can reach a critical mass of users and become the de facto social video chat site before the lumbering giant Facebook can get its proverbial doo-doo together.
It’s not like Airtime would ever become a competitive threat to Facebook. They just want to become a big enough bother that the giant will expend the financial resources required to squish them like a bug.
And if it was worth $1 billion to squish Instagram, how much would a user-rich video chat service fetch? The initial $30-million stake that Airtime’s investors made is peanuts.
Assuming Facebook goes for it. Only 18 per cent of Japanese kamikaze pilots hit their target.
Acquisition as an exit strategy is nothing new in business. What is new is adopting it as the sole strategy. More and more businesses in the tech industry are launching without any plans to land again.
It’s kamikaze business. And we’re going to see more of it as the giants of tech grow ever-more impregnable.
Andrew Robulack is a writer and consultant specializing in technology and the internet. Read his blog at http://www.geeklife.ca