Ross Mayfield's Weblog

That has such people in't!

"O wonder! 
How many goodly creatures there are here!
How beauteous mankind is! O brave new world
That has such people in't!"

-Miranda, Act V, Scene I. The Tempest, by William Shakespeare

Heterarchy, Structurelessness and Tools

I've suggested for a while that Google's greatest innovation may be in it's management practices.  Gary Hamel has a great piece in the WSJ on their novel management system designed to gaurd against risk factors for sustained growth:

• Evolutionary risk factor #1: A narrow or orthodox business definition that limits the scope of innovation. Google's response: An expansive sense of purpose.
• Evolutionary risk factor #2: A hierarchical organization that over-weights the views of those who have a stake in perpetuating the status quo. Google's response: An organization that is flat, transparent, and non-hierarchical.
• Evolutionary risk factor #3: A tendency to overinvest in "what is" at the expense of "what could be." Google's response: A company-wide rule that allows developers to devote 20% of their time to any project they choose.
• Evolutionary risk factor #4: Creeping mediocrity. Google's response: Keep the bozos out and reward people who make a difference.

A key practice is the use of heterarchical (as opposed to heirarchical) organization forms which favor innovation -- particularly augmented by social software.  Google is unique in that it is a large enterprise in hypergrowth that is new (an brave) enough to adopt new tools and practices.  The absence of legacy can be enough of an advantage to create a legacy.

Organization

Part of this is due to organizational forms such as heterarchy -- which are often confused with being fully democratic, meritocratic and sprinkled with granola.  Lee Bryant picks up on as thread about the "ability to enjoy the benefits of open markets and free socieities is also a function of our position in the power structures at play, whether we like it or not."

Anyway, the tyranny of structurelessness argues that apparently flat or non-hierarchical organisational (power) structures are not inherently democratic or inclusive; or, as Will puts it:

"In essence: stripping away formal and explicit rules from groups does not result in groups without power relations or hierachies. All it does is replace them with implicit, invisible and tacit forms of power relations - friendship networks, charisma, chat and all the other things which Californian Nietzscheans rather like."

Will also relates this to Richard Sennett's idea that ���Power is present in the superficial scenes of teamwork, but authority is absent���.

The Tyranny of Structurelessness was written in 1970, and since then there have been some cultural changes, but mostly technology advances that facilitate interaction.  But nonetheless, it is important to regonize that even in the flattest organization, an order emerges that is not as ideal as some theories would hold, but one that is more adaptive.

Practices

Google has created an enviroment that taps into financial and social incentives for production.  I'm only into the first chapter of the Wealth of Networks for a richer understanding of commons-based peer production.  Meanwhile, John Sviokla points a paper called Effort for Payment: A tale of two markets:

In this short piece they brilliantly show people operate with at least two core motivations – social and economic – and hence live in two different “markets” for all our actions. Social markets – when we are asked to do favors, or work for charity, or provide for love ones, are markets in which effort is independent of payment. If you give me a little gift or a large gift, my effort does not change. However, once you introduce a financial incentive in a social market, my effort (in their study) actually decreases, because I am now working for money – and my effort is linked to how much I get paid. If one continues to increase payment, one can get effort back to where it was when I was working for nothing! Put another way, a small payment is not only a bad incentive, it pollutes what otherwise was effort that did not have a price by turning a social market into a financial one.

So in developing practices to tap into social incentives, use incentives that truly are social.

Tools

Part of this is due to tools, as Jason Kolb provides emphasis:

What's really cool is that I think this opens up the possibility of Web 2.0 technology not only improving knowledge management and sharing processes, but it also has the ability to motivate people beyond their current levels of participation.

Andrew McAfee, who kicked off this whole Enterprise 2.0 thing, considers these tools ratchet technologies and there's no going back.  He picks up on this comment from Socialtext user Sean Park: I honestly can’t conceive of going back to working without the wiki. And for all intents and purposes, wide adoption only began 6-7 months ago!

But the Socialtext wikis that I use (full disclosure:  Socialtext lets me use their software for free.  I have no financial stake in the company) and my del.icio.us bookmarks and tags have become as indispensable to me as email, Google, and my Blackberry.  They ace both of the classic criteria for user acceptance of IT:

• Ease of Use:  To start editing a page on Socialtext, I double-click on the page.  This is so convenient that I’ve set up a one person wiki (which must be a taboo of some kind) with my to-do lists on it.  I can access it from anywhere, and add to it in seconds.  With the del.icio.us browser toolbar I can bookmark a new page with one click, and go to my collected bookmarks with another. 


• Usefulness:  I’ve set up wikis for all of the collaborative projects I’m working on, and email alerts and/or RSS tell me when any of my colleagues have advanced the work.  Del.icio.us frees me up from having to remember URLs or keep my bookmarks consistent across the computers I use, and its tagging feature lets me organize sites and pages the way I want to.  The social features of del.icio.us are, for me, icing on the cake.  I use them to learn about new sites and voices devoted to topics I’m interested in.

This post ended up being a collection of really damn interesting stuff.  But I guess should give it a conclusion.  Here we have tools that, with the right practices, provide a deeper level of participation which themselves enable different organizational forms.  Not all companies will apply these tools to flatten the organization, but there will be a trend towards transparent productivity that may never go away.

Web 2.0 Nimcompoop

Nick Carr argues that Enterprise 2.0 deployments are made successful through adoption, which I concur.  But he takes the elitist view that it's not just if enough people adopt it, but if the talented people do.  There is some truth to this in theory, most of it is based on public perception of Wikipedia and blogspace, but what is missing is the actual details of what happens behind the firewall:

1. In three years of running Socialtext, we have not had a single report of inappropriate use of these tools by an employee.  Sure it can happen, but that does not discredit the data point, nor that you could infer from it that people are, on the whole, good.
2. Mass adoption does not simply happen because of grassroots interest.  But when it does, it explodes.  At DrKW, wiki traffic outpaced the intranet in just six months.
3. These are productivity tools.  They are simply more efficient than the way intranets and email works in the enterprise today.  Busy people like them.
4. There is a Power Law of Participation.  Not everyone has to be highly engaged, a very good thing.  And a core community can take hold to do the heavy lifting.
5. Do we really have to point out this is not KM?
6. Perhaps most interesting, inherent transparency rewards sharing, punishes hoarding and fosters trust.

Any adoption initative should seek out key contributors for what they can contribute.  But one man's expert is another one's nimcompoop.  At a certain point, the content generated stand on it's own.  It is either a valuable resource worth returning to, or people will not.  Arguing for quality or expertise makes sense in theory, but a little practice and understanding of wabi sabi provides greater understanding.

Power Law of Participation

Social software brings groups together to discover and create value.  The problem is, users only have so much time for social software.  The vast majority of users with not have a high level of engagement with a given group, and most tend to be free riders upon community value.  But patterns have emerged where low threshold participation amounts to collective intelligence and high engagement provides a different form of collaborative intelligence. To illustrate this, lets explore the Power Law of Participation:

Most of Chris Anderson's Long Tail examples have focused on models of consumption, not production, where intelligence is largely artificial.  Amazonian algorythms guide users down the long tail from Britney Spears to Nobodys, made available without the constraints of shelf space.  But the interesting question is will the tail wag? Can users discover their own power together to either discover something great, or even create it?

As we engage with the web, we leave behind breadcrumbs of attention.  Even when we Read, our patterns are picked up in referral logs (especially with expressly designed tools, like Measure Map), creating a feedback loop.  But reading alone isn't enough to fulfill our innate desire to remix our media, consumption is active for consumers turned users.

Digg is the archetype for low threshold participation.  Simply Favorite something you find of interest, a one click action.  You don't even have to log in to contribute value, you have Permission to Participate.  Del.icio.us taps both personal and social incentives for participation through the low threshold activity of tagging.  Remembering the URL is the hardest part, and you have to establish an identity in the system.  Commenting requires such identity for sake of spam these days and is an under-developed area.  Subscribing requires a commitement of sustained attention which greatly surpasses reading alone.  Sharing is the principal activity in these communities, but much of it occurs out of band (email still lives).  We Network not only to connect, but leverage the social network as a filter to fend off information overload.  Some of us Write, as in blog, and some of us even have conversations.  But these are all activities that can remain peripheral to community.  To Refactor, Collaborate, Moderate and Lead requires a different level of engagement -- which makes up the core of a community.

The byproduct of use is a Conucopia of the Commons -- the act of using the database adds value to it.  As users engage in low threshold participation (read, favorite, tag and link) we gain a form of collective intelligence.  But it is important to distinguish the value of collective intelligence and collaborative intelligence, as first pointed out by Mitch Kapor:

...Tons of interesting types of collaborative filtering, like Digg, is TiVo like, indicating individual preferences, with some algorythm logic.  Valid and interesting, but people are not connecting.  Different from a bunch of people focusing on creating something.  That is higher value than collaborative filtering, my thesis, if you can get people to work together.  Look at health information, broadly speaking, why are doctors not collaborating to build such a resource -- the lack of information, locked up in a database that Harvard publishes, kills people.  I can feel the opportunity... 

When users participate in high enagement activities, connecting with one another, a different kind of value is being created.  But my core point isn't just the difference between these forms of group intelligence -- but actually how the co-exist in the best communities.

In Wikipedia, 500 people, or 0.5% of users, account for 50% of the edits.  This core community is actively dedicated to maintaining an open periphery.  Part of what makes Flickr work isn't just excellence at low threshold engagement, but the ability to form groups.  Participation in communities plots along a power law with a solid core/periphery model -- provided social software supports both low threshold participation and high engagement. 

WoW 60

Last night my character on World of Warcraft (a Paladin called Kalevipoeg), reached level 60 -- the highest in the game.  So far, it's a "research" project gone awry, and something that explains why blogging dropped off over the last six months.  When you start the game you believe it ends at 60, but it turns out there is much more (large scale raids, epic gear).  The game, as designers intended, has become more interesting.  Coordinating 40 people to take down a big bad guy, when some are strangers and all with different skills and capabilities, is a very different experience.

But the most fascinating part of the game to me lately is what designers never intended.  In WoW, you have to cooperate to advance.  Most of the activity is in adhoc groups acheiving goals to receive loot, some of it very rare.  So when a rare drop happens, norms that transcend the loot rules encoded.  A manual dialog on who is a fit for the loot ensues, with ties broken by roll.  Large scale raids have a handful of drops to divy up, so whole systems are invented by groups.  With DKP points assigned by convention, a manual auction takes place that rewards participation over time.  Users that break these rules are labeled Ninjas and face banishment from the guild.

The gaming industry has realized the value of user generated features for some time now (AddOns, Level Editors, etc.), but I find fascinating the areas designers choose not to code.  For users, they are perhaps the most important, the Point of Reward, but they are left to their own devices.  A large scale raid loot distribution system is not supported by their Auction House platform, but instead is left to users to create their own market through conversations.

I still have issues with WoW's disconnection with real life, failure to augment it, let alone provide incentives to live it better.  I believe it provides good simulation-based training, have made connections there as happens with all social software, but it still comes at a cost great enough that I am unsure of it's return.

Ah, hell, it beats TV.

Wikitravel and World66 Acquired by Internet Brands

This is pretty interesting, two independent wiki communities for travel, Wikitravel and World66, have been acquired by Internet Brands (best known for Cars Direct).  They both reach 2 milion visitors a month and 10,000 editorial contributions per week.  Internet Brands focuses on large ticket purchases, and with the level of engagement a wiki community has, it makes sense.  Wikitravel is CC licensed, so the community has some say, and it will be interesting to see their reaction.  Terms of the deal are not disclosed, but if you find them you could add them to this wiki page.

Buy Side Publishing, An Open Model

Allow me to further simplify the Buy Side Publishing model. The most efficient part of the content business isn't in how or what they produce, nor how they distributed it, but how they make money.  Today the embraced commoditization is in advertising, with standardized metrics such as CPM.  But this makes money through directed attention, not directly from content.  To that, with the balance between freedom and profit motive required in a modern business model, you simply:

1. Apply CPM, and other standardized metrics developed for advertising, to content
2. Build upon the Creative Commons framework to ensure reuse without DRM under such commercial terms

This fills in the grey area between Commercial and Non-Commercial, or rather, let's you define Commercial use along with terms.  Maybe this is an over simplification, but picture this content universe...

1. But picture this post with a discoverable watermark that bakes in these two terms, with a CPM of $10 communicated to the clearinghouse each time the invisible .gif is impressed.  Say you read it and like it, fair reader and writer, and decide to republish it on your site. 
2. Someone else grabs it from my blogs and remixes it into a commercially minded remix.
3. Now picture someone finds it on your site, and thinks it would be a perfect complement to a Sell Side Advertising ad that is starting to take hold as a meme. 
4. Suddenly, as a publisher, I make money from all three transactions without the one-off transaction costs that plauge old notions of syndication.

I happen to think this is a model that not only unlocks value, but discovers it.

Jeff Jarvis comments:

But Ross, you assume that anyone would pay for content when they can link to it. Not sure that's a valid assumption. What am I missing?

Commercially viable remix use cases.

For example, search and aggregation are limited to fair use cases today.  Google scrapes and indexes an entire page, but only presents a link and summary on their own site.  What business models could they come up with going beyond fair use?  Or take more traditional media and their reliance on newswires as fodder.  What if they could efficiently syndicate diverse content sourced online into print?  Or from the initial publisher perspective, is there content you want to offer openly for non-commercial reuse, but also not restrict commercial use so long as you get paid?

Social networking becomes work

More on Socialtext in the Financial Times:

The laid-back atmosphere of the Googleplex might seem light years away from the dark-suited City of London. But Dresdner Kleinwort Wasserstein, the investment bank, is also a believer in the brave new world of wikis and blogs.

“We recognised early on that these tools would allow us to collaborate more effectively than existing technologies,” says JP Rangaswami, chief information officer at DrKW.

More than 450 DrKW employees have internal blogs and the bank has built an internal wiki with more than 2,000 pages which is used by a quarter of its workforce. After just six months, the traffic on the wiki exceeds that on the entire DrKW intranet.

Mr Rangaswami says one of the most popular uses for the wiki is to create meeting agendas – a task fraught with political pitfalls: “Using wikis is much more participative and non-threatening, as people can see what other people have suggested,” he says.

The wiki is also used with video clips to substitute traditional manuals in training new recruits.

DrKW uses Really Simple Syndication (RSS) technology to inform employees when the contents of wikis or blogs are changed...

Mr Rangaswami recognises the problem but says DrKW has not suffered from blogger banality: “Is blogging a good use of company time? They are going to have these conversations anyway – in the lift, for example – and if the topic is boring, people lose interest. It is self-policing.”

Emphasis mine, good sense JP's.

Google Calendar

I'm just blogging about this because:

1. I really like it
2. It's about damn time
3. Everyone else will

'Nuff said.

Enterprise 2.0

Harvard Professor Andrew McAfee:

I have an article in the spring 2006 issue of Sloan Management Review (SMR) on what I call Enterprise 2.0 --  the emerging use of Web 2.0 technologies like blogs and wikis (both perfect examples of network IT) within the Intranet.  The article describes why I think this is an important and welcome development, the contents of the Enterprise 2.0 ‘toolkit,’ and the experiences to date of an early adopter.  It also offers some guidelines to business leaders interested in building an Enterprise 2.0 inftrastructure within their companies.

One question not addressed in the article is: Why is Enterprise 2.0 is an appealing reality now?...

He continues, in his blog:

As described in the SMR article, these tools include powerful search, tags (the basis for the folksonomies at del.icio.us and flickr), and automatic RSS signals whenever new content appears.  As I type these words I don’t know the best site to serve as the link behind the abbreviation ‘RSS’ in the previous sentence.  To find this site, I’m going to type ‘RSS’ into Google and see what pops up (sure enough, the Wikipedia entry for ‘RSS’ was pretty high in Google’s results).  I also don’t know the URL of the page I’m using right now to type this blog entry.  I do know that it’s on my del.icio.us page, tagged as ‘APMblog,’ so I can find it whenever I want.  And I don’t know what work my three collaborators on a research project are doing right now; I just know that when any of them has some results to share or a new draft of the paper they’ll post it on the project’s wiki (which is powered by Socialtext) and I’ll immediately get an RSS notification about it.

These examples are not meant to show that my professional life is perfectly organized (that assertion would be worse than false; it would be fraudulent) or that we’ve addressed all the challenges associated with the growth of the Web.  They’re meant instead to illustrate how technologists have done a brilliant job at three tasks: building platforms to let lots of users express themselves, letting the structure of these platforms emerge over time instead of imposing it up front, and helping users deal with the resulting flood of content.

As the SMR article discusses, the important question for business leaders is how to import these three trends from the Internet to the Intranet --  how to harness Web 2.0 to create Enterprise 2.0.

Andrew also dug deep to develop a Harvard Business School Case Study: Wikis at Dresdner Kleinwort Wasserstein.

Nick Carr, always one for orderly skepticism, comments on the SMR article:

McAfee sounds a note of caution along these lines. He notes the possibility that "busy knowledge workers won't use the new technologies, despite training and prodding," and points to the fact that "most people who use the Internet today aren't bloggers, wikipedians or taggers. They don't help produce the platform - they just use it." There's the rub. Managers, professionals and other employees don't have much spare time, and the ones who have the most valuable business knowledge have the least spare time of all. (They're the ones already inundated with emails, instant messages, phone calls, and meeting requests.) Will they turn into avid bloggers and taggers and wiki-writers? It's not impossible, but it's a long way from a sure bet.

This is true, adoption is the rub.  But one hedge we have is, to McAfee's point, how these tools help cope with overload.  I'd wager, in fact I have, that email volume will only increase, some devices only exacerbate the problem, and unlike KM -- more productive and simpler models have an upper hand.

Would like to a FT article from today's Digital Business section to help prove this, but they got my company name wrong and a couple other errors (okay, I will).

Dion Hinchcliffe focuses on the technical aspects of this trend: Ajax, SaaS and SoA.  But what is really different is the focus on users ahead of buyers and architecture.  Remember, it's made of people.

Euan Semple on the rub:

This may be true of the experts of today but not the experts of tomorrow. I don't wish to sound complacent but I always end my presentations with the view that organisations don't have any choice but to get involved in this stuff as the teenagers of today are the workers of tomorrow and they won't accept anything less. If you don't help them they may not work for you at all or if they do they will start talking about your business out there on the web - they can't help themselves!

Help Wanted

We're hiring a Senior Internet Applications Developer.

BSEC: Tim O'Relly

Impressionistic transcript of Tim O'Reilly's talk at Buying and Selling eContent:

Similar to open source, Web 2.0 is about collaboration.  Companies that are information businesses, software as a service, the internet as a platform and are harnessing collective intelligence.  Yahoo as the ultimate content aggregator. Google's PageRank studies links, not just documents. eBay has 800k people making their living online. Amazon has more than ten million user reviews. 

Only a small percentage of users will go to the trouble of adding value to your applciation, therefore set inclusive defaults for aggregating user data as a side-effect of their use of the application.  Cornucopia of the Commons -- people building a database as a byproduct of using it, where the default is to share.  Flickr drives people crazy who work with formal taxonomies, but look at what you can do with it, the user innovation.  Shows Alexa comparison of Shutterfly vs. Flickr and Wired.com vs. digg.  Postgenomic.com.

Asynmmetric competition: competing with people with no business model or a different business model.  Encarta was a $100M business that destroyed one 10x larger and now comes in Wikipedia and Google.  Is Harry Potter a book, or an imaginative entertainment.  World of Warcraft is competition. Craigslist has 19 employees and is disrupting those with thousands.  The PVRblog makes more money on ads at $4-5 per click than I could pay him to publish a book.

The perpetual beta, when devices and programs are connected to the internet, applications are no longer software artifacts, they are ongoing services, therefore do not package up new releases into moolithic releaseas, but instead add them on a regular basis as part of the normal user experience. engage your userrs as real-time testers, and instrument the service so that you know how people are using it.

The PC is no longer the only access device for internet applciations, and applications that are limited to a single devcice are less valuable than those that are connected.  We have a lot to learn from iTunes, a three tier app from handheld to cloud to pc as control station. (personally, I think iTunes could learn a little from the Cornucopia).

Data is the next "Intel inside" where applications are increasingly data-driven.  Therefore, owning a unique, hard to recreate, data set gives you leverage.  Navteq as the data inside for Mapping, Digital Globe for satellite data, Gracenote for music applications, NSI for the registry monopoly (a lock point for value, despite Esther's efforts with ICANN).  1 Billion songs in a proprietary file format.

A platform beats an application.  Two types: one ring to rule them all or small pieces loosely joined. I'd like to see the latter survive for Web 2.0.  Housingmaps.com as an example that leverages data in mashup, shows the value of other platforms. 

The CD Burn-o-matic made Napster possible, huge difference with the eBook market.  The InternetBookmobile solves this problem.  Shows Safari, if books are used for reference, searching a library of books is what people need.  As you are reading, there is a See Also of related content.  SafariU lets you roll your own textbook.  RoughCuts, a wiki-based front end for collaborative authoring with subscription access to see it being developed.  AuthorsCut, EditorsCut maybe even ReadersCut to come.

In the content business, we have to learn to let go.  A lot of what we have done successfully is to open our content, and get benefits from that.  The Long Tail of Safari use has spikes near the end, where people have found new uses en mass.  This shifts the demand curve.  Books that produce 6% of sales produce 23% of Safari usage.  In the top 10k computer books, 27% of views from books delivering 2% of unit sales, 47% of views from books delivering 9% of unit sales.  Search really does drive discovery.  This is why the Google Library project matters.  The number of books commercially exploited by publishers is 4% of those in print, 20% are public domain and 75% are orphaned works.

Make (described by Steven Levy as Martha Stewart for geeks).  90k paid circulation in 12 months, newstand sell-through of 60% (30% is industry average).  How did we get noticed?  We leveraged the consumer internet.  Find a parade, get in front of it.  Buzz Marketing demands a movement; a story.  Communities make better stories than magazines.  We celebrate characters, not products.  Follow the conversations, blogged like no tomorrow (3k posts in the first month), let readers submit ideas, Flickr phots, Google Video.  Digital distirbution is key to ubiquity, a free offering.  Diversified media: site, blog podcast, video, rss, IM  bot, SecondLife, in-person events, Maker Faire and local Meetups.

"I'm an inventor.  I became interested in long term trends because an invention has to make sense in the world in which it is finished, not the world in which it is started." -- Ray Kurzweil

Buy Side Publishing

What are the alternatives to DRM with a viable business model for content producers in an increasingly decentralized market?  A new media landscape is unfolding, where revenue leakage does not stem from theft, but competition from participatory models and co-opetition from aggregation models.

Participatory models can be exemplified by Craigslist, blogs and Wikipedia.  Users directly generate the content.   Craigslist serves as a datapoint of disruption ($10M in revenue while disrupting $60M ). Blogspace is generating it's own media as conversation  Wikipedia is a constructive community that collaborates to create content.  Production on Craigslist is driven by both market and social signals, blogs and Wikipedia largely by social signals.  The first monetizes a subset of potential posting fees, the latter is all about ME, as in Monetize Elsewhere or repetitional benefits.  All benefit from superior production economies, if not arbitrage conditions between social incentives and markets or firms.

Aggregation models can be exemplified by Edgeio, simplyhired and Google.  Edgeio leverages contributions at the edge of the network into aggregated listings that are complete and complicit.  SimplyHired is a vertical search engine for jobs that scours the web for summaries and links.  Google search provides fair use summaries in result.  All monetize attention wrought through aggregation, largely through advertising market-targeted to the externalities of attention.  All realize production and search economies.

While the long bet may be that Wikipedia eats Google between these models, the game at play is between traditional media and participatory and aggregated media.  The winners will balance freedom and profit-motive with social contracts that beget trust.

Quite frankly, traditional media cannot compete against participatory models.

Simon Waldman thinks out loud:

Fact one: aggregation is a fact of online publishing life - now, and even more so in the future.

Fact two: even if it’s just headlines and links back to content owners sites - if an aggregator is making money from this, they are effectively making money from our content.

Fact three: there is currently no structure for content owners and aggregators to have a useful conversation about rights/ licensing etc, beyond the mutual assertion of ‘you need us more than we need you’.

Fact four: ultimately, individual aggregators dealing with individual rights holders/ content creators is unworkable for both parties.

His solution is a centralized rights agency, the solution that worked for record labels and radio stations.  Unfortunately, that solution was invented in an analog era, and applying it in a digital era will lead to digital rights management.

Information wants to be free is an expression first recorded as pronounced by Stewart Brand at the first Hackers' Conference in 1984, in the following context:

"On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other."

In 1990, Richard Stallman put a normative spin on Brand's slogan:

"I believe that all generally useful information should be free. By 'free' I am not referring to price, but rather to the freedom to copy the information and to adapt it to one's own uses."

Creative Commons offers a baseline option, a set of standardized contracts for licensing content that range from all rights reserved to public domain.  CC offers a new business model, by baking in attribution.  Some businesses recognize that reserving all right still results in reuse and remix, and even in some cases of fair use, credit and increasingly valued attention does not come their way.  These externalities are largely positive, and when attribution is leveraged, the attention can derive profit.

Alternative to DRM

Others have argued effectively that DRM destroys value.

I came up with the model for sell side advertising out of a desire to better incentives for quality advertising content.  An open ad is created, the ad has commercial terms baked in but has unrestricted use, publishers choose which ads to place, even copying the ad off of other publisher properties, and are duly compensated.  I believe the same model can apply to content.

The core construct that is needed is standardized commercial contract that is watermarked to only restrict use for compensation.

Watermarked content with these terms can be administered by a rights clearinghouse that has two duties:

• register and track watermarks and distribute royalties
• protect the core license that enables paid reuse

In this otherwise decentralized model, a publisher could locate content on another publisher's property, look up the terms, acquire and republish with the only restriction being payment.

Immutable requirements

This can only work with three immutable terms:

* A presumption of innocence for users and publishers
* The content includes an identifier, such as a watermark
* The content may not technically restrict reuse

The Central Tenant

Web 2.0 and even Enterprise 2.0 rests upon a central tenant.  Nothing ado with the alphabet soup from Ajax to RSS.  It is simply, sharing control creates value.  This common pattern can be found across social software and it's practices of use.  Unfortunately, as Steven Weber first pointed out, while we have buy vs. build frameworks for the valuation of property, we do not have a framework for informing the decision to open.

When you open property for others to innovate upon, I believe the following should be valued:

• you grant real options that create, in turn, real options for innovation
• you reduce search and distribution costs for qualified buyers
• you gain commons-based peer production based on social signals

The costs of opening are relatively nominal, but the risks are not:

• you grant arbitrage opportunities to the market
• you open yourself to scenarios of inappropriate use according to some moral values, but letting go of control can reduce liability

What's wrong with this model

I'm sure I'll learn more after posting this, but my fear is even with baking in requirements, it could trend towards DRM as well.

Disclosures, even for implicit cause: Socialtext is the first wiki company.  I'm on the board of advisors of dabble, which is at the heart of remix models.

Manage Knowledgement (MK)

Manage Knowledgement is a way of describing KM that's backwards but works.  With KM, users were supposed to fill out forms as a side activity to extract their tacit knowledge.  Then some form of artificial intelligence would extract value.  Turns out, users resisted and the algorythms didn't match reality.  With MK, through blogs and wikis, the principle activity is sharing, driven by social incentives.  Contribution is simple and unstructured, isn't a side activty and there is permission to participate.  Intelligence is provided by participants, both through the act of sharing and simply leaving behind breadcrumbs of attention.

Buying and Selling eContent 2006

I'm at BSEC in Phoenix for the second year in a row.  A conference where content as property is a comfortable notion, but where attendees are embracing disruption. Esther Dyson gave a keynote this morning that I missed because the hotel room clock was set two hours behind (spring forward, not back!).  Right now there are some industry incumbents doing blogging 101.  Content distributor NewsTex is licensing blog comment and distributing as "commentary" to customers such as Financial Services BigCos and through LexisNexis.  Rafat Ali is here, waiting to make his move.  It's easy to write off some of the incumbents for not knowing what they are talking about, but we have a lot to learn from them.

Rumor has it that Marc Canter set up an unconference across the street, but has extended the idea beyond having no panelists to having no attendees.

GM Does Open Source Ads

A long time ago we had some theories about where advertising was going.  Jeff Jarvis had a notion of open source ads.  Well, it's all happening.

GM launched Chevy Apprentice:

Contestants are given a variety of images to work with and are given the ability to splice together the visual elements over which they can display their own advertising copy. A contest of this sort doesn't come without risks. As we expected, people who are opposed to SUVs for a variety of reasons quickly discovered that they were also welcome to participate.

Early on we made the decision that if we were to hold this contest, in which we invite anyone to create an ad, in an open forum, that we would be summarily destroyed in the blogosphere if we censored the ads based on their viewpoint. So, we adopted a position of openness and transparency, and decided that we would welcome the debate. (As an aside, we have been truly disappointed by the number of submissions we had to filter out because of their vulgar content.) I won't bore you with the details, but the overwhelming majority of the 22,000 submissions thus far have been earnest attempts at creating positive advertisements.

Was the risk worth it?  Yes.  The worst case scenario is people remixed the brand in the way they already related to it.  A set of already known truths, and if they weren't known, the brand manager wasn't doing their job.  Besides, such remix happens with or without the participation of the vendor.  At least this way they are part of the conversation.

Charlene Li:

While some people point to this campaign as an example of the failure of viral marketing and social computing, I think it points to a great success. Our definition of social computing is when technology results in power shifting from institutions (like Chevy) to communities (like customers). By losing that control over the brand experience, Chevy actually brought more people into it -- witness the debate over the campaign itself. The environmental and SUV fuel economy debate has always existed outside of the Chevy experience, but by bringing it into chevyapprentice.com, Chevy has harnessed it into a promotional benefit.

The point of this remix isn't the outcome, although I'll wager there will be some great creative, but how the process fulfills the ultimate advertising metric -- engagement.  The constructive intelligence phase of the experiment, next is collective intelligence. 

DCamp

Socialtext is opening it's doors to host DCamp, the first ad-hoc event focused on design & user experience, May 12th & 13th.  The folks at BayCHI are initiating this one, here's Rashmi Sinha's announcement:

D is for designers and D is for developers. We hope that this event will attract both designers, developers and anyone else who cares about the user experience. We hope that we will address issues of mutual concern together under the same roof and help build connections between the various communities that care about User Experience.

Go to the wiki, you know what to do.

Software 2006 Wrap-up

I had the accidental honor of being the last speaker at Software 2006.  So as I often do, I veered off of my showcase company presentation to point out how Socialtext is a conclusion of a theme. 

Not only was Ray Lane and other first day speakers decidedly grokking enterprise social software, but the last panel of the second day had Toby Redshaw, the CIO of Motorola, revealing wikis and blogs as perhaps his most successful project.  I wish someone took notes on the stats he threw out, but he viewed it as a bottom up initiative he sheilded from management until it was too late to pull the plug.  They did it in house using open source, had incredible adoption rates (he noted the HCI has two metrics: adoption and turning novices into experts), called it a KM initative and it filled the gap between silos.

It was impressive that MR selected showcase companies that were exemplary of the themes on the main stage.

• BDMetrics -- CRM for tradeshows and events (helping people spend money to get people to spend money)
• blinkx -- Created a new form of contextual browsing and their new video search
• ClairMail -- Mobile applications platform, doing deployments as large as 20M users
• Jotspot -- Focused on SMBs with a strategy of rolling out applications through search direct marketing
• Socialtext -- launched Miki!

Vint Cerf on Innovation Journalism, Blogs and Mobile Devices

David Nordfors provided an introduction to Innovation Journalism.  I liked his simple definition of the business of journalism: attracting attention that you can sell.

Vint Cerf from Google begins with his motto: "Power corrupts and Powerpoint corrupts absolutely."

There are a billion users on the internet, and while that seems like a big number we have five more to go.  We need to take into account how technology is changing the economics of journalism.  On radio and TV your run out of time, with print you run out of space, on the internet you run out of neither.  What you do run out of is the attention span of the users, a finite resource.  In China the statistics are dramatically different, there are more Chinese 300M online than there are US Citizens, they spend more time, 10 hours a week on average for Americans, in China it's 15 hours.  This illustrates how people who have been starved for information act when they have access, and despite the laws in place. 

Early browsers had one interesting feature, View Source, which made all of us students of HTML, and later XML, people learned by copying what other people had done.  Some people in the Intellectual Property community have issues with this.  This has now lead to a substantial amount of people blogging their thoughts.  They are rapidly evolving from text to audio and video.  iPod has become a great tool for listing to audio logs.  As bandwidth gets cheaper, we see iPods turning into vPods and audio blogging turning to video blogging.  Our attention can be drawn to these things with tools like RSS.  The problem is there is a lot of information to choose from.

A interviewer once challenged him with the issue of too much information.  Did we complain about Gutenberg?  We learned how to deal with large quantities of information.  We don't read every book, listen to every radio program, watch every television show.  We get advice about what we should watch.  Sometimes we turn to trusted editors to get advice, sometimes our friends, sometimes we even think about it ourselves.  We will use all those tools.

The blogging world is online and machinable (read, indexed, searched by programs) which allows feedback you wouldn't otherwise be able to get.  The feedback loop on eBay for transactions could be similarly used for information on blogs.  In print media, the bylines have email addresses, where you could potentially interact with the writer.

Telcos talk about realtime streaming video aspirations, but there is a shift to downloading instead of doing something in real time.  The change in people's views on how to deal with these different media -- an important shift, a file transfer is quite forgiving, nobody is watching except a computer.  You can download at a low data rate in the background. Tivo is an example of this, PVRs, iPods.  The ability to work faster or slower than real-time, instead of being confined to real-time is a dramatic change for the distribution of these mediums. In Stockholm you can buy 100Gbps for 100 Europes, download a 1hr movie in 16 seconds.

Technological change changes business models.  Publisher is trying to get people's attention to sell to advertisers as the basic business model.  In the online world, advertising is the core of the business, odd when the service side is helping people find information, but you can make that attention sellable to advertisers, with clear distinction between commercial and searched for content.  You can go beyond reading an ad to doing a transaction on the spot.  The notion of classified advertising in yellow pages becomes a lot more alive.  Moreover, because the net is global you can aggregate a market that otherwise would not exist, such as with eBay.  But you also need local information, and online ads that are localized are highly valuable. Geographically indexing information is a powerful business model.

The power of mastheads like Boston Globe and NY Times is that the more trusted you are the more you stand out, authority and trust is important in this chaotic environment.  People who'se blogs are widely read will have value, but high quality editing is important. 

A Blackberry this morning was my sole access to the internet.  When I needed to make a call to a Representative Baucher in Washington, I looked up the number and clicked on it.  They are far more powerful than we realize and don't understand how dependent other parts of the world are on mobile devices.  Understanding that the journalistic experience needs to be delivered through the mobile device is important (Got to slip Vint a Miki).

The mobile is one example, a small display, but incredibly useful.  In an internet enabled world, there is no reason that a projector could not be online and downloading images, maybe using the Blackberry as a control device. Surrounded by networked equipment that is reachable anywhere, devices harnessed on a temporary basis to do something for you and then released.  I am predicting that during this decade, we will see more systems interacting with other systems like this and in journalism it will become part of our toolkit for sharing and feedback.

Miki

We launched Miki today -- the Mobile Wiki.

McKinsey on Tacit Interactions

Vanessa Colella from McKinsey & Company expands upon the two studies released today and their new notion of Tacit Interaction.

• Old formula was: customer need X offering innovation X sales and delivery models = success
• New formula: automating tacit interactions X web 2.0 for the enteprise X software as a service = success

Tacit interactions require judgement or expertise, not entirely rules based.  Using IT to support tacit interations was more difficult before.  More difficult to automate because users are trying to do something different every time.  In the next phase of software they think it is possible.

Four categories of opportunity:

1. Timely access to information and context: Increases access to data and information at the right time in the right context for decision makers
2. Improved decision making: Supports decision making through tools that allow a better use of data and the presentation of relevant information
3. Enchanced communication: Enhances and expands the reach of communications and increases the richness of the message
4. Better collaboration: Enables and improves collaboration by facilitating transfer, sharing and simultaneous process of information

General apps and back office applications are moving to SaaS, Infrastructure and Tools are not.

On Tacit Interaction, this has been a constant thread of this blog and something John Seely Brown and John Hagel have been expanding upon for some time using different language (social fabric as 5% of IT spending, focus on exceptions. etc.).

Ray Lane on the Inter-personal Enterprise

Ray Lane gave a great opening keynote that I'm sure will be covered elsewhere.  The first half of it he has said before, but then it got really damn interesting. What was new is a call to Re-think the software industry, encouraging greater risk taking in changing their business model.  Overcome challenges for access, evaluation cycles, integration, installability, value creation, business model ($) and renewal.  Leverage opportunities such as white space, low effort improvement, free now (and pay later) and individual value. "The enterprise software industry made one big mistate in the late 90s, we focused on the buyer instead of the user."  He thinks there are three characteristics of a software company going forward:

1. Low Resistance: clear value to users, immeadiate value and short decision-cycle
2. TCO (viral): Low cost barrier for adoption, encourages viral spread
3. Instability (viral): Easy to install and use, increased installation increases personal value, viral effect

His examples of virality (e.g. iPods) were actually word of mouth, but the point is web-enabled capabilities that we experience as consumers will be drawn into the enterprise.  He gets explicit with "Web 2.0" as easier and friendlier.  Project ahead in five years and it will be so easy and so secure that enterprises will gobble it up.  We built enterprise software before for transactions, today it is about collaboration (I swear Ray must read my blog).  He used a wiki and ideas were flowing, "you get on at midnight and share ideas!"

Speaks of Bill Joy's Six Webs, where different modalities, plus relationship, personal and location will drive Enterprise 2.0  He describes the mobile device as social, soon to get 50Gs and leveraging the social network as a filter. Wiki, blog and podcast -- the world is becoming about user generated content.  It used to be information blasted at us, but guess what, all the information is here and you can interrogate the web, understand your social network.  Why is MySpace that huge?  People want to be a part of their social network, get their information that way and be valued for what they contribute.  We will get new web-driven capabilities such as personal activity recording, physical world alive, electronic room designs and contextual awareness. 

Names this thing the Inter-personal enterprise -- people collaborating with a better personal experience so people adopt consumer web facing web applications that become interesting enough for the enterprise.  Individuals get personal access to information.  Fluid interaction more organic, more wiki-ed, more modular.  Individual value, integrated communication (every app in this category individuals should brag about).  Pull model: user, not buyer.  Quality and relevancy increase as contributed back to the enteprise. 

Wikipedia is great because people correct it, it requires a social network to correct its accuracy.  A forecast for the quarter starts with a salesman in Germany and works up the chain 6 steps, how many times do you think it was massaged on the way, but if I could look at the data myself, or better yet have experts who is used to seeing optimists and pestimists and submit their contributions, 50 people guessing as experts, the term tacit-interaction -- what could be better?

The seven laws:

1. Serves individual need
2. Viral/organic adoption
3. Contextual personalized information
4. No data entry or training required
5. Delivers instantaneous value
6. Delivers instant value
7. Utilizes community, social relationships
8. Minimum IT footprint

Making top down committee-based decisions is a thing of the past.  It's already started: WebEs, Skype, IM, RIM, Google Desktop, SFDC and Visible Path.  With Visible Path he describes a model where anyone can download, get started in two minutes as a network as one, then has incentives to get others to participate.

Good thing Ray got out of Oracle and into VC, the future he sees could only be seen with such a social network.  He always gets it, it's just that now he's got it.

UPDATE: Also covered by Dan Farber

Software 2006

I'm at MR Rangaswami's big event, Software 2006, where Socialtext is selected as a showcase company.  His intro began with a suggestion for what the buzz in enterprise software could be this year.

• Software 2004: Offshoring opportunities
• Software 2005: Vendor consolidation
• Software 2006: Ecosystem health

The focus this year is maturing as an industry and understanding constituents and how we can work together.  It's open for debate if the software industry has matured, Web 2.0 is consumer-driven (catch me in the hallway if you really want to know) or if Ecosystem is just a buzzword.  He thinks that the software industry is going through a quet revolutin.,   Software's Share of the IT Budget will grow from 30% to 35% in 2008 according to a CIO survey released today (pdf), VC interest growing and opportunities abbound for SaaS, SoA and Open Source.

The web 2.0 enterprise potential

Revenue will flow when and automaker pays for podcast about new car features, consumer goods company delivers an RSS feed for new product info and tech giant blog to the world about R&D. If you are doing wikis or blogs, how do you get that information out to the world? Tacit person-to-person interractionis 41% share of worker activity, but only 24% of software spending.  Lots of good things for customers as well as helping them get to the consumer.

McKinsey Report

SandHill.com and McKinsey released an industry report in pdf.  Let me unpack it for you and show you the good stuff:

Technology Discontinuity: Web 2.0 for the Enterprise. As in previous innovation cycles, whenever multiple point capabilities converge – such as wireless, pervasive broadband, and online collaboration – many new applications become possible. In these cases, consumers tend to adopt the new services and products before the enterprise, but in the end the enterprise market is usually far larger and more profitable. We believe that much of the hype around “Web 2.0” for consumers – with its rapid innovation in content (e.g., blogs, wikis, user editing and tagging), tools like search, and services like content hosting – heralds a much larger opportunity to put these innovations to work in the enterprise...

In particular, we believe the opportunity will exist to complement and enable “tacit interactions” – the most rapidly growing component of business labor cost. Person-to-person tacit interactions involve judgment or insight applied to complex communications or problem solving, and often occurs in, say, management, sales, customer service. , Tacit interactions differ from transformational interactions (changing a physical good into something else) and transactional interactions (following set rules in a repeatable fashion). They now represent 41 percent of all U.S. worker activity (measured by number of jobs) and are growing the most rapidly. However, only 24 percent of software investments today support them, indicating a significant potential opportunity for vendors with the right solutions. The software capabilities required will be different from those which led to significant productivity gains over the last decade through transaction automation and scaling Key opportunities for innovating in tacit interactions include software tools to increase access to data and information, support decisions, improve communications, and support multi-party workflows and collaboration – all likely parts of Web 2.0 for the enterprise.