Kerabu

I've moved

The new blog is here....

What One Red Paperclip means

I spoke yesterday at the Engagement Alliance's conference on WhatMyspace Means about what a business model arising out of the primordial soup of the social network might look like.

First off, what are the characteristics of a network? A network is non-heirarchical, being composed of interconnected nodes. Which isn't to say all nodes are "equal," just that they're inter-connected, not sequentially connected.  A network is not a collective.  It's not about consensus, but about collaboration.  In a nutshell, a network is a self-sustaining system in which free-acting individual entities form complex, entirely voluntary interdependencies.

What I like about the network model is that there are virutally no barriers to entry. You can enter the network as a node at any time, for any reason.  Your performance determines whether or not you attract rewards in the form of attention, money, contacts, etc., but you need not pass muster with a "gate-keeper," i.e., an editor, banker, investor, in order to launch yourself. 

Failure in this environment brings few if any negative consequences, which gives incentive to those who wish to experiment, or to start enterprises with no obvious monetization model or exit strategy and feel their way along.  In other words, it's possible to launch an enterprise that makes sense even if it doesn't make money.  That is how Craig Newmark launched Craigslist--and let the profit model evolve organically along with the business model.

To illustrate how this works, I spoke a bit about One Red Paperclip, the phenomenally successful website started on a narrow but robust premise:  The site's author, Kyle MacDonald, originally proposed trading a red paperclip for a house.  He is an engaging, witty writer and a true showman, and within months had parlayed the paper clip into a snowmobile, a year's free rent, then an afternoon with Alice Cooper, garnering media appearances around the world along the way.  The site is clearly now a full-time job.

Now, clearly Kyle has "profited" from his highly productive endeavor, without a single dollar changing hands.  But is it a business? Is it a game? Is it art? Is it entertainment?  My point being that One Red Paperclip defies categorization because it is purely a phenomenon of the social network, and as such doesn't fit any category we would traditionally apply to any kind of going concern.

The One Red Paperclip website now hosts bartering forums, where others can trade, the first inklings of an avenue for conventional monetization (aside from the site's many ads). 

What is interesting to me is that the network sensed the genuine value of Kyle's intentions, perceived quality in his offering, and responded with both collaboration and attention, feeding and encouraging his growth in an entirely organic, symbiotic process.

From this I can extrapolate some very rudimentary emergent characteristics of the social-network-based endeavor: 

leadership without a heirarchy
collaborative, not collectivist
profitable, though not necessarily monetized

After the MySpace event, Adriana Cronin-Lukas and I were talking about how the very idea of a "business model" may be growing obsolete, and that we may need to re-learn how to conceive, plan and launch a business in a more intuitive, organic environment.  It sounds a bit too good to be true--the network as a business incubator that rewards authtenticity and creativity above all else?

What I like about this idea is that a web based "artist" like Kyle could start dozens of these kinds of "stunt" web sites, just for fun, with no opportunity cost whatsoever, in an environment where successes can be large or small, but always profitable because of the low opportunity costs.  The concept of risk is rendered virtually obsolete.  The reward comes from striking the right notes at the right time, and is entirely positive.

The moral to the story being: When you have nothing to lose, everything is gain.

What MySpace Means, in London

My friend and blogging partner Jackie Danicki have met up in some odd places. Last January we got together for a weekend in her hometown of Chillicothe, Ohio, where over coffee she mapped out her idea for a  marketing think tank focused on helping business catch hold of the leading edge of web 2.0, social networking, blogs, etc... the upshot of that conversation being that today I'm in London, where yesterday Jackie's Engagement Alliance held a well-attended conference for marketeers, journalists and assorted curious onlookers on the topic of What MySpace Means: Lessons for Every Brand.

Adriana Cronin-Lukas raised an interesting and deeply optimistic point about how social networks, when threatened by any form of regulation, are extremely adept at performing their own damage control by simply mutating, reforming, or cropping up elsewhere.  You can't keep a good network down.

Scott Norvell, London Bureau Chief of Fox News, was a refreshing "old media" voice.  Perhaps because Fox is doing so well, growth-wise, he embraced the idea of the blogosphere's function as both a media watchdog and media resource. 

The Guardian's Victor Keegan was particularly fascinating, being equally well-versed in old media and new, and he touched on one of my favorite topics, wondering why there was as yet no "eBay for banking."

Antoine Clarke talked about the regulation of pharmaceutical speech and how social networks are making advertising bans in the UK obsolete (prompting the day's most contentious audience reaction).  The debate focused on whether or not consumers were competent to evaluate pharmaceuticals--i.e., we need to be protected from ourselves.  To which I always think of arguments about how "competent" we are to evaluate our political leadership, for example, or the foods we eat--goodness, should be "protected from ourselves" on those scores, too?

I went last, jet lag and all, talking about what business might look like when the MySpace generation grows up.  I'll post more on that a bit later....

Showtime at the Smithsonian: The opposite of privatization?

The Smithsonian's entrepreneurial impulse to exploit new media for profit is a healthy one, at root.  The Smithsonian is already a quasi-private entity, where most staff is on the public payroll, while most executives are paid with privately solicited donations. It could conceivably, like the U.S. Patent & Trademark Office and the federal student loan agency Sallie Mae, aspire to becoming a self-supporting entity within the government. 

So of course, the institution is taking a lot of flack for its deal to produce on-demand, for-pay documentaries in conjunction with Showtime.  Congress has even joined in, cutting the institution's funding while citing the high executive pay as an excuse.  The deal is bad, but not for the reasons being stated in editorials.  It is bad because of an anti-competitive clause that gives Showtime first-refusal over the 'right' to fund documentary projects seeking to use Smithsonian archival material.  Far from privatizing the Smithsonian, this makes Showtime a de facto government agency.  Forcing documentarians to seek funding from a single source in order to pursue a creative project based on national archival material is an awfully pink concept, and the kind of move that gives privatization a bad name.

Cross-posted on Samizdata.

The only question now is, Horde or Alliance?

My son, Tyrone, is 14.  He's starting high school next year, and has entered that shadowy realm of the teenager where I cannot follow.  Or can I? 

I was watching his face yesterday while he played World of Warcraft, and grew fascinated by what I saw as total engagement.  When he finished, we had the longest conversation we'd had in months--about his life in the game.  He is an Ork Shaman, and a charter member of his guild, it turns out.  He used to earn a living by mining and skinning, but now makes his way as a middle man, buying shamanic stuff low on auction and selling it high.  He gets that he could be making more if he'd invested in learning a craft, but is okay with the trade-off he made. He is clearly an entrepreneurial type.  All of this information made me quite proud.  And I decided that, if I want to spend any meaningful time with him over the next few years, I'd better get with the game.  So, next week I plan to start playing.  How I'll find the time now that iTunes has added the current seasons of both 24 and the Shield, I have no idea.  My, I've become a bloodthirsty creature.  But in the interest of good parenting....

Yesterday at TechDirt

Jackie and I spent our Saturday at TechDirt Greenhouse in San Jose. The idea: early-stage entrepreneurs who ranged from venture-backed cos with a launched product to college kids with a fresh batch of home-cooked Ajax gave five minute presentations, followed by small group discussions aimed at generating constructive advice.

One of the groups I landed in was charged with discussing the "new" business model for 2006 (result: "organically grown"--ie., "97% investment dollar free!"). The group also disagreed with Andy Kessler's assertion that every business has to scalable to the moon and back--the web needs its mom and pop dry-cleaning shops, too.

Another session dissected topix.net, at which point I briefly (and annoyingly I'm sure) dragged out two of my rickety soapboxes: the one about how I don't think the news aggregator is the killer new media app everyone else thinks it is, and the one about "information overload" being a myth:  Analogy: Do you sit around fretting about the fact that there are six billion people in the world, and how will you ever sort through them? Of course not. Another analogy: Do you walk into Borders and suffer a panic attack over how many books there are? Of course not. So there are a lot of blogs now--you'll get used to it. More importantly, as Umair Haque said, if you're under 18, you're already used to it.

I was very curious to hear Umair keep making quietly prophetic references to MySpace. He thinks we're not talking about this consumer end of 2.0 enough--and I agree. I'd like to see Umair, who is the Robert Venturi of Web 2.0 architecture, to write a "Learning from MySpace" manifesto in the spirit of  Learning from Las Vegas (that's Venturi's 1972 book about the significance of architectural kitsch, not the movie about the drunk and the hooker).

Tags: techdirt greenhouse, techdirtgreenhouse

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Social Software as Experimental Philosophy

From Clay Shirky's talk at Etech (via Ross Mayfield):

Social software is the experimental wing of political philosophy, a discipline that doesn't realize it has an experimental wing. We are literally encoding the principles of freedom of speech and freedom of expression in our tools.

The philosophical experiment is also structural, I think. We don't talk enough about how our communication tools shape what it is we end up saying with them. I can't cite the source, but I remember once reading the remarks of a book editor who was talking twenty years ago about the impact word processing was having on the American novel. He said, in essence, that the quality had improved greatly at the paragraph level (all that fiddling and deleting and rewriting), but that the overall structure of novels seemed to have suffered a bit from authors trying to keep hold of the big picture through the tiny window of the screen. (If my timeline is correct, the short story blossomed around this time.)

I think the same can be said not only for what and how we write, but for what we say and think. Writing online keeps some of the characteristics of conversation, while introducing a bit of the formality of writing. Before this, all was either dialogue or reflection, but never both. Now, well, there's a kind of languid, thoughtful immediacy to it all. Conversation is more constructive and less competitive online, and writing is more concentrated and purposeful, while at the same time less structured than writing for "publication". And because of all that furious linking, there's a sense of passing knowledge along, which makes the communication a lot like older storytelling traditions, to circle 'round a bit.

And to circle back 'round to Shirky's comment: To some extent "freedom of speech" is structural--you can have all the freedom to speak in the world, but if you don't have a tongue, or a pen, or a typewriter, and someone to listen, a lot of good it'll do ya. More tools, more listeners = more/better freedom. We tend to think of freedom, politically, as being about rights, but it can also be talked about as a matter of access. The greatest accomplishment of the internet will be the gradual replacement of the idea of freedom-as-a-right with freedom-as-a-technology. Now that's a political philosophy shift.

Tags: Shirky, Etech, political philosophy, writing, internet, freedom of speech, freedom

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The Piracy Paradox

Tyler Cowen at Marginal Revolution has a take on the fashion industry's knock-off-based innovation economy, based on Scott Cunningham's new paper, The Piracy Paradox:

The authors argue that the fashion sector has more innovation because of its near-absence of copyright protection.  Here is some brief background on the issue.

Fashion is a status good.  You wear a new design if some other people do (it must be focal as an object of status), but not if too many other people do.  You want some degree of exclusivity to your wardrobe.  So let's say a new design comes out.  There will be some early adopters, but then a rapid series of rip-offs from other companies.  Once the rip-offs come, companies invest in making further designs.  Fashion is ephemeral and the rip-offs spur the next round of innovation.

I think it's important to make a distinction here between design and innovation. Innovation, in my book, implies additional functionality, a permanent leap forward, even if slight. Not all design is innovative. Fashion design is mostly non-innovative design. Nor are clothes quite classifiable as art objects, the way poems or paintings are--garments need to be worn to exist, which makes them more like theatre than anything else.

In terms of an economic model, I'm not sure piracy in the fashion industry is comparable to piracy in the music industry. A pirated copy of Lawrence of Arabia offers the same user experience as the paid version. But a pirated Prada bag is not a Prada bag, nor, for the most part, do the real thing and the copy share the same customer base. As I mentioned, fashion is fundamentally an interactive, "live performance"--and to that extent, it cannot be pirated quite the way entertainment can.

There still may be lessons for entertainment here: I think one of the reasons fashion tolerates piracy so well is that fashion houses are far more focused on brand-building than on product. And piracy actually helps build a brand.

Maybe entertainment companies focus more on brand than product. Why do musicians release an album a year? Why shouldn't they release a song a week, and distribute them to subscribers via podcast? Since iTunes started selling TV shows, I've spent around $100 on Battlestar Gallactica and Lost episodes--and it would be double that if I could get 24.  And I'm guessing a lot of customers like me are too lazy or busy to mess with tracking down bootleg bit-torrent files. So the lesson from the fashion industry isn't so much about innovation in product design--it's about old-school innovation in marketing.  Increase revenues by increasing the stream of product--make the freshness of the product a selling point.

Tags: fashion, economics, piracy, knock-offs, entertainment, copyright, IP

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Qumana: is dumb the new phat?

Readers don't care about technology ... it just has to be easy and work, according to Tris Hussey, Chief Blogging Officer for Qumana (I'm using Qumana's blogging software to post this). He goes on to say something I've been thinking a lot about, and says it well:

John Jantsch has some insightful commentary on RSS today.  It's a truism that within a group, new words, concepts, and practices emerge and these become to the keys to entry into the group.  RSS this is one of those things for many Internet users.  Does my mom care about RSS?  No, she just wants an easy way to keep up on my blog (I don't think she reads it often ... that's okay because she's busy teaching Sex Ed in the public schools).  I really like these two paragraphs in this post and I think it says it all:       

You don't do this by trying to convince someone that they "should" know that this is the de facto standard for an RSS feed. Maybe someday, but I doubt it, will mean something to everyone, but right now it says to some, "I'm a blog snob and this is the only way you can subscribe to my blog so, if you don't know what this is then, go away."

What's deliciously ironic is that Qumana has been roundly criticized by these very blog snobs for being a "dumbed down" product. For a good summary of what Qumana is, read Michael Arrington's original, friendly, review.    

I find Qumana to be extremely smart where it counts--which is in streamlining the small, repetitive motions involved in posting to my blogs. When I click the link button in the WYSIWYG editor bar, the field auto-fills with the last thing I cut and pasted. This may not sound like much, but when you are writing a post with a half-dozen links, cutting the number of clicks per link in half and reducing the mouse-mileage by half as well is absolutely brilliant. Qumana creates exactly this kind of gestural economy throughout. In Typepad, the category default is set to a single category; selecting multiple categories is a chore. In Qumana, you check the categories you want, with no control key to hold down, and no false distinction between single and multiple categories. SixApart should have corrected this annoying hurdle long ago. Guess they're just not "dumb" enough.

It takes a pretty dumb bunny to think that complicated = sophisticated. There are three reasons to write your blog posts in html: it's faster; you can do more stuff; you think it makes you one of the cool kids.  I've had about enough of this geek chic mentality--it fosters bad design. Good design is sleek, user-transparent, dumb as dumb can be.

To trot out an analogy, look at the propagation of the automobile in our culture. Most of us are taught to drive casually, by friends and family. The rules of the road are clear, the design and operation standards cross-platform are virtually invisible, and while there is room for a "professional" class of driving instructions and professional drivers, this isn't a barrier to any one individual's participation in the autosphere.  Now, imagine if certain automotive snobs had insisted that the auto industry limit itself to creating twitchy cars that could only operate on the Bonneville Salt Flats or an indy track, and commercial vehicles so complicated to operate that only "professionals" or true enthusiasts could own cars, and then only as a business.

Now, taking that analogy a step further,conjure an image of all of the technologies in your daily life--phone, blender, dvd player, washing machine--imagine having to invest hours, days or weeks in learning not to push a button, but to code the functionality of each of these items (you probably have unfond memories of doing exactly that with a VCR once upon a time). The idea is absurd. Do you need to live in a world where knowing how to microwave popcorn makes you "cool"? I don't. I vote that when it comes to all technology, we make "dumb" the new "phat," "sick" or "stupid." Dumb is the new good.

The very real problem, however, for entrepreneurs and developers, is the need to capture the snob audience early in the cycle (if I hadn't sworn off of jargon I'd be using the term "early adopter" here, but I'm not gonna do that kind of thing anymore). Being "cool" can count disproportionately in the early stages.

So what does Qumana do after getting flamed by snobs commenting on Scobleizer? They patiently address all bloggers' concerns. They troll blogs for just such comments, and jump in. And they keep a blog of their own that is content-rich enough that it got me to write this very post. You can call it spin, or you can call it engagement. I think it's more the latter.

And now, just for fun, here's an ad from Qumana's network, AdGenta, which I'll write more about later:

Tags: Qumana, blogging, usability, marketing, engagement, RSS, dumb

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Plum: Anti-social networking

A couple of posts back I went on a wee rant about how frustrated I was that I couldn't scribble on my desktop (stickies being close, but not quite what I have in mind). Then I read this post by Plum founder Hans Peter. I couldn't have said it better if I'd written it myself:

I know this may be considered heresy to some in these circles, but I don't need a social network. I have a great social network already. It consists of a relatively small group of good friends and family.Of course there are the people I work too who I naturally socialize with as well. Beyond that I am not looking to connect with lots of new people all the time. Perhaps I should also point out that I test pretty far over on the "i" (for "introvert") scale on the Myers Briggs test.

What I do need and want is to connect or even socialize with knowledge, topics and information. I soak that stuff up. I may even occasionally want to converse a bit with the people behind the ideas and information I like, but that's secondary. What I want is to constantly discover new ideas, new restaurants, new places to go, new anti-oxidants... And then I want ways to remember and remix the stuff I discover and like for myself and for others too.

When we talk excitedly about social networks, I think we need to differentiate between social networks of people and social networks of ideas and information....

I have been given several invitations to LinkedIn, which strikes me as an experience akin to slathering honey all over one's body and hitting a beehive with a baseball bat. ie, not my cup of tea (with or without honey). Like Peter, I am intellectually promiscuous, but a total loner whose hatred of telephones borders on dysfunctional phobia. I also abhor heirarchy--I'm a know-where-everything-is-on-a-messy-desk type. And I want an application, finally, that stops trying to turn me into a well-socialized, folder-dwelling drone (there are the bees again!).

I think that one of the reasons we're so stuck in the mud as a society is that we build all our tools for a single, dominant personality type, much the way we build our tools for the right-handed. I'll be watching Peter's product launch eagerly, as I just want to see what kind of product someone just like me builds. And then, if it's useful to all different types. Secretly, I think it will be.

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