Kerabu

I've moved

The new blog is here....

Finally, an organizer I can use

Maybe if I had one (or several) of these things, I'd be better organized about posting here?  I don't have a calendar app., and I resist any kind of heirarchical organization so much that my desktop looks like a Microsoft pinata  exploded over it.  And I willfully refuse to change, until someone comes up with an organization system that mimics nature--where objects can be embedded in a three-dimensional, reticular system searchable by sight, sound, memory, sentiment, taste smell... ah, life.  But seriously, doesn't this organizer look like the very definition of the perfect relationship?  A messy, yielding entanglement of flexible support capable of absorbing, holding--and releasing--anything. 

Heck, I don't want to buy this, I want to be this.  Even if it's name is Harry. 

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....

Warbotics

Chris Yeh points to India's announcement of its intention to become leaders in robotic weaponry.  "Actually, it might end up being a good business opportunity--outsourcing the control of robotic killing machines to Indian call centers.  Either that, or pull a 'Last Starfighter' or 'Ender's Game' and get people to participate in controlling the robots using a sophisticated game," Yeh writes.

The devil's advocate on my shoulder thinks this is a splendid idea.  Throughout history we humans have made progress by creating shorthand and shortcuts.  Money is one such development.  So is language, for that matter--a system of symbols for conveying compressed versions of one person's experience to another... In the long view, it only makes sense that we would eventually invent prosthetic conflict.  If my robot kicks your robot's ass, isn't as good or better an expression of my superiority than if I roll up my sleeves and do it myself?

One of the problems I've always seen with non-military solutions is that they almost always ignore the facts of adrenaline and testosterone and their roles in human behavior and decision making, including conflict.  "Peaceful" conflict resolution is an oxymoron for a reason.  Warbotic engagement seems as good a work-around for the testosterone problem as any....

Balancing the French National Budget: Doom, or Warcraft?

It's official:  France is now a video game.  A good idea, poorly executed, from the sounds of it.

Virtual government is the future. I think we should scrap the whole lame, sucky diebold voting machine idea as being way too gigapet, and move to a more robust gaming platform.  I'd like to see elections decided in a format resembling a combination of American Idol, SimCity, and Ender's Game.  Let the politicians compete for by running a virtual country, populated by voter/players.

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....

China's not-so-great wall

Techdirt points to a story in the Toronto Star about three Canadian hackers who have created a software work-around for China's "great firewall."  The subtle irony is that the hackers' solution, called Psiphon, is inherently cooperative:  "Psiphon takes the concept of a third-party computer doing the work yours can't because of censorship, and protects it by relying on trusted friends and close family, to create a program the creators say is nearly fail-safe." One has to love the idea of the failure of the enforced, monolithic collective inspiring genuine, entrepreneurial cooperation. The fact, as Techdirt points out, that three hackers are able to out-perform a cast of 30,000 censors also suggests another truth:  that freedom is always cheaper and more efficient than opression.

Cross posted on Samizdata.

Why five goods still don't equal a great

Brad Feld links to Tom Evslin's post about why a great programmer is worth fifty good ones:

I was consulting to a development manager at a tech company.  He told me that the CEO, his boss, wouldn’t give him the salary and option freedom he needed to close a great programmer he’d found.  Salary would have been 20% above what he had approval to offer; and, thanks to the new accounting standards for stock options, he didn’t have the authority to offer options.  He lost the potential new hire and had to settle for someone merely “good”.  Ironic thing is that he had several open positions so, once he gets through hiring several people, he’ll end up paying more in the aggregate than he would have paid for the superstar – and probably won’t get as much productivity.

Why do we persist in evaluating productivity as if the only model for productivity is the assembly line?  Creative work is anything but incremental--it's in fact inherently exponential.  If Einstein could accomplish a civilization's worth of "work" in a single calendar year (1905, while he was "working," incidentally, as a patent examiner), why don't we recognize that it's more efficient to value productivity on the content of the contribution alone?

Curiously, the only "jobs" now valued in this way are top-level executive positions, where the results are indeed measurable in company earnings, and where all measurements indicate that an investment in higher salaries has no positive effect.

Shouldn't it be the other way around? Let executives "earn" their salaries in the form of a profit share, but make capital investments in talent.

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What MySpace Means

What will marketing look like in ten years? Or five, for that matter?

Let me be more specific:  What will "marketing" look like in a world where all 6.5 billion human beings have a web address as surely as they have a physical one? 

When every person is a brand, we will have officially entered the post-brand era, in which the basic model for creating one's identity will be entrepreneurial.  For a sneak preview of what lies ahead, run don't walk to What MySpace Means, a one-day event being held by the Engagement Alliance on June 21st, where yours truly will be presenting on what MySpace can teach companies about cultivating an online culture, particularly at the internal level.

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Inventors: Artists in search of an art form

If I've been scarce here lately it is because I have taken on a new consulting job, helping a high-tech hardware startup manage what is turning out to be an avalanche of IP. I cannot discus the particulars of the technology, but suffice it to say that this company, which recently completed second round financing to the tune of $6 million, will be papering the town with provisional patent applications over the next year or so.

Inventors are a lot like artists. They have identical creative processes, including the highs and lows, aha!s and fallow periods. What differs is that their "art form" has no fixed means of turning the creative act into a durable artifact. What I mean is that when your metier is having ideas that can later be turned into "methods and apparatus," to use a bit of patent lingo, a great deal of the execution of your work is beyond your control, and beyond the reach of your skills. What is the invention? Is it the finished product? Is it the idea itself? Is it the patent? What is the inventor's medium? Writing? Drawing? Prototyping? All of these are imperfect manifestations of the valuable contribution itself. In short, inventors are like artists without an art form.

My job, right now, is to attempt to build up a methodology that can support an inventor's native processes, to get the inventor's creative output to stream into the work flow of the company, without inadvertently creating a dam.

The challenge is to avoid the kind of soul-killing "project management" approach that most companies use to impose order on chaotic processes. Did Tolstoy take a "project management" approach to writing novels? I hardly think so. I want to create a structure in which creative thinkers can effectively communicate their ideas without imposing any kind of conformity on the ideas or the process of generating them. (Hint: Will the end product look a lot like a blog? It just might.)

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Freeecommerce

Last week I was at a Thai restaurant with some friends, and due to a kitchen mix-up, our waiter ended up with an order of deep-fried smelt on his hands with no paying takers, so.... That's right, free smelt!!!!

Want a free website of your very own? Go tell Thame at Erratic Wisdom (who coded and designed a snappy luxury goods blog for a friend who lost interest), why you deserve to be the new owner of this particularly free enterprise and he'll throw in the url, too. Nothing fishy about this deal....

On "Purpose as Strategy"

Umair Haque on an idealistic yet non-icky definition of purpose in the context of business goals:

...the benefits to yesterday's myopic version of competition are eroding fast. Profitability, competitive advantage, etc, are less and less durable.

In this kind of world, it begins to make sense to do what you think is cool - yesterday, this was more risky than otherwise; today, the risk in both equations is equalizing. And, of course, it's far more satisfying to do something that actually means something to you.

Most simply, perhaps the truth is that purposiveness is a strategy that dominates the economics of hypercompetition.

I have developed a distaste for overt discussions involving mushy terms like "social responsiblity," "following one's bliss," "purposiveness" etc., a revulsion that exists in a certain state of dynamic tension with my abiding interest in the actual accomplishment of these things.  Which is why I find Haque's hard, shiny language and sober reasoning refreshing--and props to him for daring to take back a five-dollar New Age word like "purpose."

In honor of the effort, here's another one: When most people use the word "integrity" they mean something noble and sentimental. To me, the other definition (as in "structural integrity") is entirely sufficient, as it accomplishes the same thing, but without dipping into the cloying smarminess of self-congratulation. I want to live in a world where integrity is structural, not sentimental.

Why aid still won't work

In this month's lead essay at Cato Unbound, 'Why Aid Doesn't Work,' William Easterly makes a rational case for directing international aid dollars toward programs where the results can be objectively measured by hard scientific methods. He's persuasive, but in the end, the scientific method is still just a patch, a facsimile for what's really missing: legality.

In the developed world, the distinction between government and non-government organizations is meaningful, but not in places where government is corrupt and ineffective. In a lawless state (ie, one where corruption dominates the channels through which people get things done, for good or for ill), both aid organizations and entrepreneurial warlords effectively operate by the same rules. One's moral orientation is not the point. If the basic sphere of operation is illegal (in the deepest sense of the word), then there is little chance that your efforts will result in enlightened, long-term improvement. Will Connors, a Chicago journalist and blogger working in Ethiopia has written compellingly about corruption in the aid community there.

Any aid-before-government aparatus is still going to break down--it will just do so further down the road. As Easterly suggests, you may demonstrably produce healthier, taller, better-educated children by buying them meat to eat twice a week, but if the best they can hope for is to grow up to be a corrupt low-level official, have you really accomplished anything lasting?

Better to see aid dollars spent as investment dollars--sunk into private businesses, rather than programs of any kind. It is possible. It is even possible that the weaker the local (corrupt) government, the greater the opportunity for leveraging capital investment. In Carol Pineau's documentary, Africa: Open For Business, the CEO of Daallo, a Somali airline, marvels that the only reason he's able to thrive is that there's no government at all in his country. No government means no corruption, he observes dryly.

cross posted on Samizdata.

Innovation Quotations

Here are some excellent reminders of exactly how disruptive innovation has always been, by definition (duh). From Tina Roth Eisenberg, whose design blog, SwissMiss, is one of the little things in life that make me happy when I'm not listening to smart people make frustrating, stupid statements about the future (fortunately for me, according to the research, it's the small things that make you happy anyway, not the big things):

"Heavier-than-air flying machines are impossible."
(Lord Kelvin, president, Royal Society, 1895)

........

"I think there is a world market for maybe five computers."
(Thomas Watson, chairman of IBM, 1943)

........

"There is no reason for any individual to have a computer in their home."
(Ken Olsen, president, chairman and founder of Digital Equipment Corp., 1977)

More.

All the World's a Game (or at least it should be)

From Ross Mayfield:

An interesting article in Wired by John Seely Brown and Douglas Thomas Page explores the role of online gaming as job training and a recruiting qualifier:

...Unlike education acquired through textbooks, lectures, and classroom instruction, what takes place in massively multiplayer online games is what we call accidental learning. It's learning to be - a natural byproduct of adjusting to a new culture - as opposed to learning about. Where traditional learning is based on the execution of carefully graded challenges, accidental learning relies on failure. Virtual environments are safe platforms for trial and error. The chance of failure is high, but the cost is low and the lessons learned are immediate...

...In this way, the process of becoming an effective World of Warcraft guild master amounts to a total-immersion course in leadership. A guild is a collection of players who come together to share knowledge, resources, and manpower. To run a large one, a guild master must be adept at many skills: attracting, evaluating, and recruiting new members; creating apprenticeship programs; orchestrating group strategy; and adjudicating disputes. Guilds routinely splinter over petty squabbles and other basic failures of management; the master must resolve them without losing valuable members, who can easily quit and join a rival guild. Never mind the virtual surroundings; these conditions provide real-world training a manager can apply directly in the workplace...

Mayfield suggests he'll be looking at prospective hires' "extracurricular" activities, like World of Warcraft play, as well as their work achievements from now on.

I say, if we can learn to do business better by playing games, couldn't we also improve business itself by making business itself more like a game? As a manager, I'd love to have lots of Avatars. I'd also like to see Avatars in a company perform specific jobs, especially those jobs no "real" person likes to feel stuck--anyone in the company could become Vlad the Collector for the length of a phone call, or spend an hour playing Katrina the Customer Service Fairy with far less ego-involvement than they feel being dispatched to do these things now. Role-playing could make the "dirty jobs" of business more palatable (and keep egos in check for the big jobs, too).

I also like the way games quantify abstract acheivements and encourage non-monetary forms of exchange between players. Getting people within a company to collaborate has always been an issue. What if they had karma, health or power points in a game, some juju to trade?  You could look at this as encouraging "office politics," but if you've worked in an office, you know the vast amounts of energy that go into office politics no matter what you do. Why not harness and store that energy and put it to use?

Could we make work as engaging and dynamic and fun as a game? Of course we could. I'd like to someday build an entire company with a virtual office on a gaming platform, and hire from the ranks of online players. Kind of like Ender's Game, but with profits instead of destruction.

Free money

Should money be as free as speech? After all, it is also a form of communication.

In the past year, the internet has spawned a few companies aimed at helping individuals borrow and lend without bothering to involve a bank or credit agency. Zopa, based in the UK, aggregates individuals into groups for the purpose of making small loans, with a socially conscious slant. In the US, Prosper just launched a sleek, well-designed person-to-person lending site. Borrowers can also form groups on Prosper, for the sake of leveraging better interest rates. I also know of at least one nascent project, Bruce Boston's Quid St., which aims to aggregate individuals for the purpose of making capital investments (as opposed to loans).  I met Bruce recently, and he mentioned what an influence gaming had on his view of how to build an online marketplace. Which put me in mind of the Park Paradigm, a blog about digital markets whose authors think future finacial markets may evolve out of sports book and gambling sites. And not entirely unrelated note, Paypal made it possible just this week for people to send each other money anywhere, via cell phone.

Lots of internet companies entering a "hot" development space usually means that there is about to be a battle for dominance. But I do not think this another instance of a "crowded" field, like Ajax word processors or online file storage solutions, where everyone is trying to bring the killer app to market and knock the others out of the running. What we are witnessing here, I think, is the creation of a new and diverse international capital market.

But we already have an international capital market, you say. Well, yes and no. When it comes to lending and investing and otherwise redistributing capital, we make do with a rudimentary, feudal system that has never really caught up with our momentum toward the free flow of other types of currency--cash, ideas, information, energy, goods and services, even political will. We have developed extremely liberal mechanisms for exchanging these forms of dynamic and stored energy, but capital remains over-managed, its governance, distribution and oversight resting in the hands of a select few.

The invention of a truly open and free capital market will be as significant a development as the invention of the printing press, affecting the free flow of wealth and opportunity much the way that invention affected the free flow of intellectual capital. 500 years after Gutenberg, it's hard to imagine a world without cheap, plentiful and ungovernable words. One hundred years from today, it will be just as hard to remember a world where capital flowed through banks and currencies were government-issued.

Capital, and as a consequence personal wealth, will exist in a much more fluid and dynamic state than it now does, and all our discussions about wealth, wages and income will take place in an entirely new financial language. We may not end up solving poverty, so much as rendering it obsolete, all because of the technology-driven privatization of capital that is just now beginning.

Cross-posted on Samizdata.net.

A priest, a rabbi and a software engineer walked into a bar and...

Jeff Trexler calls isolatr "Web 3.0." I just call it funny:

The non-obvious utility of patents

subtitle: beat the horse slowly (as in I've said all this before, I know, I know)...But I just posted this on Samizdata.net, and Qumana is making it easy for me to spam my own blog with cross-posts, so here goes:

Tags: patents, IP, intellectual property

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Different people have described the Metabolite patent, currently under review by the US Supreme Court, as being about protecting a fact, but if you could patent the fact of homocysteine's correlation to B12 levels, then we'd all owe Metabolite licensing fees just for existing in a state of B12 homeostasis. To play devil's advocate, I read the patent as applying to the observation of the relationship. As such, it is a bit as if Galileo had filed on his observation that the earth orbited the sun. At the time, his view certainly met the USPTO's criteria of originality, utility and non-obviousness.

There is a dangerously bumpkinesque notion afoot, which holds that patents obstruct progress. This is (pardon the pun), patently false. Why is it that the most vociferous critics of the patent system, the citizens of the web--people who can understand that markets are conversations--can't seem to grasp that patents are conversations, too? Patents protect the free flow of ideas within our business, academic and entrepreneurial cultures.

Before we blitely trash the Patent Office, let us be clear on the actual ethos of patent protection. The point of patents is not to protect the patent-holders; it is to allow the rest of us to read the patents, adding to our collective knowledge base. The protection provided is a carrot. Nothing more….

By offering a proprietary position on a piece of work, for a fixed period of time, we gain permanent open access to the idea and the process that led to it. The granting of patent rights is a collective cultural and financial investment we all make--and if you're a libertarian, this is the kind of tax you want to pay. For the applicant, the filing of a patent is a form of open intellectual engagement with the world of ideas, a bit like the exercise of free speech. You can also call it opportunism if you like, but it's a functional question at root, not a moral one. Like them or not, patents and the culture of open exchange surround them foster more innovation than they retard.

Look at Gallileo: had he been able to hand a patent application over to some proto-Jeffersonian (the US's first VP took patents home in his briefcase every night), rather than having to lobby a bunch of recalcitrant "experts" in skirts and surplices, he might have enjoyed some freedom from worry and gone on to further acts of creativity. If not by profiting from his work, at least by virtue of the systemic protection afforded by the very existence of a patent office.

We tend to blindly assume that all great men and women we admire maxed out their creative potential--they achieved greatness, didn't they?--but if you look at their histories, you find that usually they limped to greatness under extremely unfavorable conditions. The culture of the patent has gone further toward ameliorating this culture-retarding situation than any other institution in the history of mankind. And it can go further.

There are plenty of valid arguments out there for why our patent system is broken, like this one comparing the USPTO to Bastiat's Fallacy of the Broken Window. And there are also plenty of ways to fix it. But I'm concerned about the baby in the bathwater. Why should these protections not apply to the inventors of non-corporeal stuff, as well as thinkers whose contribution is to connect non-obvious dots?