[credit provider=”Flickr: Jonan Basterra” url=”http://www.flickr.com/photos/pixelydixel/4103141197/”]
Tumblr is the little engine that could. Despite getting much less media attention than juggernauts like Twitter which got started around the same time, despite a very painful growing period (which seems largely over) where the site experienced serious downtime because of scaling, Tumblr is talking about raising money at a $800 million valuation, as we reported.That’s actually very cheap.
But it also shows that in the web economy, design matters a lot. As we’ve been arguing for over a year now, Tumblr’s edge is that it is such a design-centric product. Tumblr is a blogging platform, in a world where there have been blogging platforms for well over 10 years now, and yet it is still growing like gangbusters and turning into a huge social platform that will one day be as big as Twitter, and maybe even Facebook. What explains that isn’t superior technology, or hype, or anything else–just an excellently designed product.
Now that the “technology stack” of the internet has been built up and commoditized thanks to cloud computing and open source software, startups will find their competitive advantage less in hard technology and more in product design and other factors. The fastest growing internet company right now, Groupon, is based on sales and editorial, not technology. Although there is heavy technology involved in making huge games run smoothly, Zynga’s edge is also based on design. Not graphic design, which is on most Zynga games is pedestrian, but designing a product that keeps people hooked and sharing with their friends (and paying).
And this is not just true of consumer software: as the “consumerization of the enterprise” takes holds, design will also be crucial for enterprise products as well. We can already see this with the success of things like Yammer and iOS devices in the enterprise, where these products are seeping in not through buy-in from CIOs but from employees acting as consumers and picking the best-designed product.
No one makes this more obvious than Tumblr, and Tumblr is getting richly paid for it.