I’ve been thinking about Digg and Delicious and why they’ve taken off (just like everyone else) and I realized that they have a few things in common.
1. They’re both based on some type of simple operation. Both of these are easy to implement on the backend (but of course difficult to scale in large numbers). Digg just has to store a small ranking increase. Delicious has to store a link and a tag.
2. They’re easy for people to use. With Digg you click a button to contribute to the ranking on a post. With Delicious you just click on a bookmarklet.
3. You can own the data. Digg and Delicious aren’t open systems and don’t let other people access the data. If you think I’m wrong try to write a competing system and get access to the data. It won’t happen. I’m not necessarily saying this is a bad thing. If you were to write a system and it were to grow to the size of Delicious or Digg you might do the same thing (power corrupts).
The question for future entrepreneurs is whether you can duplicate this formula. Find a simple operation, that users can understand and you can implement quickly, and then lock down the data.
While the technical issues resolving easy of implementation (#1) will help you get off the ground quickly this will end up hurting you in the long term due to low barrier of entry. Of course if you embrace #3 you can lock out competitors from the data and own the market.