The Widget Economy
By Laura Richardson
Remember the time when a widget was simply an abstract concept in your math class? Your teacher probably tried to stump you with a question like this: "A company has ten machines that produce gold widgets. One of the machines is producing widgets that are a gram light. How do you tell which machine is making the defective widgets with only one weighing?"
Widget have since been redefined as downloadable, interactive, virtual tools. But they still have a connection to math—just add up the numbers. Let�s imagine for a moment that you are Brian Deboer. He�'s the creator of an Apple freeware widget called Sudoku based on the popular Japanese numbers game.
- Number of weeks in Apple�s Top Five: Six
- Number of total downloads: 290,000
- Amount of money made from his first �freeware� widget: $50
- Fifty bucks barely pays for Brian�s servers, which make the widget available for mass consumption. But, perhaps more important than the money is the mindshare. Whether on the airplane, in a Starbucks or at work, Sudoku graces the personal lives of nearly 300,000 people. You may not know Brian, but it�s likely that you will. That's because Brian has created the ultimate, addictive, portable experience.
- Welcome to the Widget Economy. It�s the online version of the Experience Economy, posited back in a 1998 Harvard Business Review article by James Gilmore. No longer, Gilmore suggested, would mere service offerings be enough for companies to maintain a competitive edge. Instead, they needed to combine those services with experiences that would foster an emotional attachment between the company and the consumer. Retail outlets like REI built 60-foot rock climbing walls, McDonald�s kept the kids happy with gigantic playscapes, and, let'�s face it, Disneyland has been selling experience since 1955.
- The Widget Economy, like the Experience Economy before it, represents a triumph of affluence, globalism, and multiculturism. You can view job listings in Japan, a live video feed from Venice, realtime quotes from the Australian stock exchange, and homes for sale on the Isle of Wight.
- Even more significant is that while the Experience Economy was able to commoditize the �third space� (the term used by sociologists to describe places other than home or work), the Widget Economy capitalizes on the fourth dimension—that is, our online life. What used to be the physical space of retailers is now the digital space of e-tailers.
- When I asked Brian in an e-mail why he made the Sudoku widget, he responded: �First, it was the challenge and the fun of creating it. Plus, his wife loved playing the games in the paper and was bored when she'�d finished them all, so he decided to make a computer version for her.�
- Thus, widgets are the last layer to make our online life complete. Instead of sipping coffee at Starbucks with your Sunday paper and single Sudoku, you can take your Sudoku widget with you everywhere. And not just one Sudoku, but an infinite amount of fresh content, Sudoku-oriented or otherwise.
- While some widgets, like the Chicken Lickin� Yahoo widget, have limited value and a short �new experience� span, there are plenty of widgets that provide a continuously updated and engaging experience.
Take, for example, the Akamai Net Usage Index for Retail, which enables users to monitor the world's online retail consumption from their desktops, providing realtime insight into the trends of consumers� online buying habits.
Finally, let'�s address the hardcore question: Where is the real �economy� in this? Most widget bloggers and creators agree that widgets are shareware. A recent entry on MacObsver.com illustrates this point: �I won'�t pay money for any widget, unless it changes my life. I just don�t see a business model based on widget-creation.�
But let�s keep in mind that critics once scoffed at the ridiculous notion of buying bottled water. Today those same critics are swallowing Ozarka and their pride. In a similar trend, consumers now pay for the customized experience of �owning� what had been free television viewing by subscribing to TiVo, and exchanging the free radio experience for Sirius.
Will we pay for widgets one day? Absolutely. Widgets will go the way of ring tones, downloadable music, podcasts, and VOD. Any widget that offers an experience deemed not just desirable, but necessary, will be deemed worth the expense.
Consider the eBay Watcher widget, which costs $5 per two downloads. I emailed its creators, Richard �Jordy� Jordan and �Hawk,� his raptor-named coding colleague. I specifically asked them why, with an infinite number of shareware widgets, the eBay watcher widget was launched with a price tag.
�"A huge amount of our personal time has gone into the widget, and it still does," Jordy replied. "It continues to give us some incentives to continuously update and improve on the widget for everyone. We also use this to see if there is really a need for the widget.�"
It�'s clear that Apple, Yahoo! and Google �get� the widget economy. Current value is measured in the emotional attachment and mindshare they receive from coders using their development environments, and in the number of consumers using their operating systems. Yahoo! acquired Konfabulator for an undisclosed price, marking the formal launch of its Developer Network. Eventually, every traditional retailer will have a widget. Retailers like Pizza Hut, Krispy Kreme and eBay already have widgets created on their behalf. I jokingly asked Jordy if he hoped that eBay might one day come knocking on his door. Jordy'�s response? �"We are certainly interested if eBay would like to talk to us.�"
Once widgets pick up momentum not only on the desktop but other platforms, like VW�s Gypsy in-car computer system, the fourth dimensional Widget Economy will become obvious with cafeteria-style widget plans for the masses. It remains to be seen if we would pay for the privilege of a portable Sudoku. And since it�'s really a numbers game anyway, I think I already know the answer.
Laura Richardson is a Senior Design Analyst in frog design�s Austin studio.
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