The need for speed - and how it drives innovation

The Internet has become an amazing platform for information and communications. The blogs you read (thanks!), the tweets you send and receive, the videos you watch and share, are all testimony to that fact.

The openness of the Internet has fueled an explosion in innovative online services. Basically anyone can access it, anyone can communicate and anyone can upload content. Nevertheless, online services are only as good the weakest link in the chain, which is typically the user's Internet connection, and sometimes a slow connection is simply not good enough.

Let me illustrate this point with a story about a start-up company. The company:
• started out as a web radio company in 1995.
• saw opportunities in using the Internet to make videos available online.
• was acquired in 1999 by a major search engine company for US$5.7 billion.

What’s the company?
If you guessed YouTube, you were wrong! The company was Broadcast.com, and today it simply doesn’t exist. If you search for Broadcast.com you get forwarded directly to Yahoo.com, who paid quite a bit of money for it at the height of the dot com boom

Broadcast.com had a very similar concept and business model to YouTube, but it failed because of an insufficient critical mass of high-speed broadband users to both upload and download content. Between 2000 and 2007 the number of broadband users in the US increased from 5M users averaging 500kbps to 50M users averaging 3Mbps, i.e., 10x the users, 6x the speed. So it has only been in the last few years that Internet speeds have been fast enough to support YouTube’s business model.

There are other examples. Can you remember the name of the first social-networking site? MySpace? Friendster? No, it was Six Degrees, also back in the mid 90s. Their biggest need was photo uploading which could not be done at the time. Imagine a social network without photos!

So there is a direct correlation between Internet speed and delivering on innovation. Simply put, higher speeds enable innovative new services; slow ones don't. Faster connections not only enable applications that require more bandwidth, but also enable users to run more of them at the same time. Best of all though, faster speeds enable applications to run that have not yet been invented. Bring it on!

This is an excerpt of a talk I gave at CeBIT Australia in Sydney earlier this week.