Ross Mayfield's Weblog

Chris Anderson on Abundance in IT

Chris Anderson gave perhaps the only bloggable talk at the Microsoft Global CIO Summit.  He gave a preview on his upcoming book before 200 Global 1000 CIOs.  This is posted with permission.

"It is not too much to expect that our children will enjoy electrical energy in their homes is too cheap to meter." -- Admiral Lewis L. Strauss, then Chairman of the US Atomic Energy Commission, 1954

Imagine if he was right.  What if we could desalinate water at a low cost.  When an underlying resource that touches everything becomes free, then the transformative effect is amazing.  Carver Mead in the 1970s was really the first one to understand the social and economic impact of Moore's Law.  He taught his students that "Waste is Good."  Waste transistors because they are becoming free.  Alan Kay considered the interface, the command line at the time.  IT's job used to be to protect the Mainframe as the resource, they judged what was worthy.  Their priorities mean not wasting cycles on silly stuff like I/O.  Kay said it was worth wasting transistors to make them easy to use, even fun, and available to a broader s  Innovation happens when you take technology and put it in unexpected places.  The democratization of technology is how innovation happens, not the technology itself.  The Graphic UI changed the world.

"Waste Storage."  We live in a world where we otherwise conserve storage, but on a MB basis it is asymptotically approaching free.  If something is going to be zero soon, get ahead of it.  Look at Webmail with Gmail and Yahoo.  They made money from their use faster than the cost of their use.  Free is a powerful word.  If you tell someone you never have to delete your email, it changes their behavior.  Remember "Your mailbox is full," what was that about? My new Cisco VoIP phone tells me my voicemail is full, corporate email too, why?  How can deleting emails be part of my job.  Somewhere someone got stuck in a scarcity mindset and now we are creating a productivity drain.

"Waste Bandwidth."  The old model was that the only way to get content to people was broadcast, and singlecast was costly.  YouTube looked at changing economics and revolutionized television by giving away storage, video and most importantly opening up to everybody.  Long Tail video, if you will indulge me.  Out of those niches can have surprise hits for the masses.

For the first time in history, complexity is free.  3D printers mean the fiddlyness of an object doesn't cost much any more.  3k gears costs the same as 1 gear, you can print a watch for the cost of printing a ball.  Zero machining cost means a new kind of object will be created.

Scarcity economy only fits mass market goods. Online, with the Abundance economy, you have infinite choices.  When we guess what people want, we often we get it wrong.  When we give them choice, we are measuring, not guessing.  Only so much shelf space at Blockbuster, infinite  shelf space at Netflix with whole categories that have suddenly proven to be popular.  A richening of the American culture that is more diverse.  Tap into the latent demand for diversity. 

What killed Tower Records wasn’t the decline of the CD or Napster, it was the iPod.  You might think of design or ease of use, I think it is abundance embodied.  Hitachi invented a better 5Gb micro drive, but not the use.  Engineers told Steve Jobs that we have this gift from technology, and realized that we want our entire music library in my pocket.  Given the opportunity to have infinite choice, people will take it.

Raymond as the embodiment of the broadcast model.  Reaching everyone simultaneously means you have to satisfy common needs, the lowest denominator.  But where are taste diverges is where we go deeper. Nobody loves Raymond, everybody likes Raymond, somebody loves LonleyGirl15.  She had an audience just as large as Raymond, reinvents our concept of what TV is.  She is a creature of abundance, he is in a world where you have to be mass to be broadcast.

In the enterprise, the corporation is about shared purpose and a logical and prudent allocation of resources.  The ROI Memo is scarcity thinking, in Abundance, its fail fast.  Of course we would like to succeed fast, but not possible to predict.  We don’t bother with ROI models, we ensure the experiments are cheap.  Great thing about innovating at the edge is you can minimize the cost of doing it.  Don’t make people jump through a lot of hoops, the cost of experimentation is free.  "Everything is forbidden unless it is permitted" vs. "Everything is permitted unless it is forbidden."  In the magazine I live in the former, on the web I live in the latter.  The social model is Paternalism in Scarcity -- "we know what's bet."  Egalitarianism, "you know what's best,"  In the old world we decide the heirarchy of the page, on the web we have Reditt where they tell us what they want.  The NYTimes front page and emailed page almost have no correlation.   For the first time in history we can measure demand and not guess.  The decision process is top down in Scarcity vs. bottoms-up.  Let the interns run riot.  They become a source if ideas an innovation at low cost, we identify talent beause we can empower the edge.  Command and control -- the soviet system is the corporate system.  Or with Abundance, we have Out of Control.  A scary proposition, for brand centric companies like mine.  I'm evangelizing that we experiment in our web properities, but it might take a generation to wrap our heads around two kinds of brands.

For the CIO perspective...from a MIT study of student needs:
• Mailing list management(google groups)
• Seeing whats coming up at events.mit.edu (upcoming)
• Access to the online library (university does this best)
• Command line acess to shared programs like mathematica and to general lunux account stuff (university does this well)
• File storage (university price is hard to beat)
• Printing

When they come to the corporation, they are disappointed.

With Conde Nast, Skype and Second Life are blocked, the iPhone problem, email retention policies and spam whitelists.  Probably happened for good reasons at the time.  Every one of these annoys employees and creates a bad environment.  We use Skype because it is easier and works.  The White Wire and the Black Wire.  A single DSL under white, internal bandwidth on the black.  The only time I use the black wire is to print.  If the IT department wants to packet sniff, all the more reason to use the white wire.  A bank is functionally prohibited from experimenting with social networking because they blocked every single one.  The old idea of IT determining what is appropriate prevents experimentation at the edges.  There are some things that are bad about this, a virus that comes in from the white wire, but that’s like going to starbucks.   I recommend trying the two wire.

Wrote a controversial blog post on who needs a CIO?  The answer is they are necessary, but only if they can adapt to consumer technology and behavior.

The terrifying conclusion to all this is that we may have to trust our employees.

The Q&A was off the record.

New VP of Professional Services

Cross-posted from Socialtext.com

Let me introduce you to Michael Idinopulos, the new Socialtext VP of Professional Services. I first met Michael at Wikimania in Boston two years ago, when we were on a panel with Andrew McAfee about Enterprise 2.0. I had previously encountered his writings, such as this piece on discovering expertise and we naturally hit it off.

Michael comes to Socialtext from McKinsey & Company, where he helped clients with Enterprise 2.0 as Global Director of Knowledge Technology. Amongst other projects, he helped create McKipedia, McKinsey's internal social search tool for finding information and expertise. Building upon the five years of mistakes we have learned from, I have no doubt that Michael's experience creating value with social software tools and practices across his own company and clients will prove invaluable for customers in the Socialtext network.

Michael succeeds Matthew Mahoney in this role. Matt's contributions to Socialtext were immeasurable and he found it was time for him to get back to that education startup concept he had before joining us. Although we will miss working with him, it's wonderful to see a friend follow his dream after helping us with ours.

I'll be sure to highlight the first event where there is an opportunity for you to meet Michael.

Future of Ads Matrix

In light of Google's launch of Ad Widgets, Kevin Kelly riffs on my 2004 Cost Per Influence, Sell Side Advertising and transitive advertising concepts, and then discovers this new corner.  Perhaps the future is automagically subliminal?

  Future of Ads Matrix 
  Originally uploaded by Ross Mayfield

JSB on Change and Games

Here is my rough impressionistic transcript of a talk by John Seely Brown on Change, Organizations and Gaming.  It is from Don Tapscott's New Paradigm conference on Enterprise 2.0.  I am bandwidth constrained, so pardon the lack of links and supporting materials.

Shift happens.  Video by a high school teacher in the middle of Colorado to make the argument to a school board that change has to happen.  JSB says this is a better video for corporate america.

Technology is doubling (every 18 months for computing, 12 months for communication, 12 months for storage).  But becoming invisible.  Problem isn’t building skyscrapers, it is a new infrastructure of electricity that powered elevators.  Every infrastructure has an interesting property to it, an S-curve.  Autos haven’t changed much in 70 years.  Today we have the first infrastructure that doesn’t seem to be leveling out, at least 20-40 years left in the growth in infrastructure.  Imagine if transportation advances were so exponential? 

Do we really understand exponentials?  In 1626 Peter Minuit bought Manhattan for $24 of trinkets.  Who got the better deal, Peter or the Indians?  If you invested in 7.5% interest it would be worth a hell of a lot more than all of Manhattan today.    Approximation 101: almost flat for the first 23 years then an almost 45 degree take off followed by a vertical line.

With Enterprise 2.0, the kind of changes around us will be dramatic and there is virtually no way we can structure the organization in time. There is an exponential change for infrastructure, people can change less fast, but organizational and institutional change can fundamentally not occur fast enough.

Wants to cast this as a culture of participation.  Where these kids are constantly building, tinkering, remixing and sharing.  But only when someone picks up what they have done and acknowledges it or remixes that these kids feel they are rewarded.  A lot of people in this room were tinkerers, but the tinkering stayed with us.  They are creating meaning and identity by what they produce and others can build on – a remix, open source culture.

Studying Anime with Mimi Ito, a new way to read.  Remixes of Anime is creative tinkering and the play of imagination – but it is also creative reading like in fandom – fans filling in the backstory in highly imaginative ways.  Creating meaning by integrating their imagination with that of the author in remix.

Shows the Matrix Reloaded trailer, and then a remix of it  The Narutrix Re-ninja’d to tell a story that makes sense in the Naruto world made by an 18 year old kid.

From mass media to participatory media, with a feedback loop between producing and consuming.  Amateur used to have a pajorative meaning in this county, comes from latin, amator, meaning to love.  He tells his MBA students to go and post something to Youtube as a way to carry a message.

Web 2.0 – “an emerging network centric platform to support distributed, collaborate and cumulative creation by its users”

Spirit of Web 2.0 – “to enable many people to participate in making small contributions that become culturally significant”

Google map mashup from citizens on the ground during Katrina.  Each contribution took only one minute.  Was not planned, a key part.

Who is Sick?  Anyone in SF can share where they are and how they are feeling, plots it on a map.  Voluntary contribution that would be impossible because of privacy of data. (/me wonders what happens when people can contribute when they think their friends are sick)

Game plan, introduces a new critical disposition: no learning, no fun.  I want to be measured and if I ain’t learning this isn’t fun.
* Pattern recognition and sense making
* Continuous decision making
* Conquering immense complexity
* Immeadiate feedback
* Constant change – constant challenges
* Joy from mastery of skills
* Bottom line oriented – scores matter! (bragging rights)

Economist, August 4, 2005 on gaming

Takes us on a quest in World of Warcraft.  Shows a slide on the exponential growth of WoW compared to other MMOGs.  Lineage in Korea also has significant growth. 

To see the value of games don’t just look at the core of the game, but pay close attention to the ‘social life’ on the edge of the game.  The edge is often referred to as the knowledge economy.  I got into this by taking the position “games are a waste of time” and one of the Mage developers said, “you are kind of smart, but you don’t understand my world.”  Did a reverse mentorship.  Also helped that this was outside his PARC non-compete clause.

Skills of a Guild Master – are actually the fundamentals of leadership
* Creates a vision and a set of values that attracts…
* Finds, evaluates and then recruits players that have a set of diverse skills and with fit with your norms
* Creates a platform for apprenticeship – newbies
* Orchestrates group strategy and governance
* Creates, sells and adheres to the governance principles for the guild and adjudicates disputes.

(/me realizes what’s different is putting people together in scenarios of constraints and abundance)

Steven Gillett, CIO Corbis, as a guild master, see the Wired Magazine article from 2006.  At Yahoo, he got an assignment for a big project and didn’t ask for resources, he thought that doing the job was finding the resources, a natural thing in WoW.  Corbis to most of us is a conservative company, and being the CIO reporting to Bill Gates is not an easy job.  Took the job, and in the first meeting he had to present to Bill and was over-prepared by others.  JSB said to take a risk and explain that you are a gamer.  Bill lept up and dashed up to the whiteboard, and said, my god, I’ve heared about gamers and I’ve never met one!  Rest of the meeting was spent drawing architecture on the whiteboard.  Two weeks ago they launched Corbis in Second Life, btw, and he just did it on his own and it transformed both internal and external perception.

An organizational perspective on guilds – where agility and fluidity reign supreme.  What you do changes the game.  Guilds are themselves extremely flexible, hyper-responsive modern organizations, which change and shift dramatically in response to player and game-driven needs.  They provide a model not only for management, but for understanding how players continually position themselves in terms of the needs and goals of the greater organization.  Describes tanking and healing in WoW raids.  Tanks are often the most respected people in guilds.

What gamers want at work and how they expect to be treated.
* Be given clear top level direction/problem – then permitted to explore and discovery how to proceed
* Want metrics for measuring success – and recognized when they are met or exceeded
* Balanced decision making
* Believe without learning there is no fun
* Capable of intense concentration
* Interface with peers, build bridges

WoW is way to complicated to play without complex analysis tools and dashboards.  Guilds also do after action reviews.  Shows some mod Uis.

JSB concludes with a list of dispositions that gamers has, and says, "it is not the skills, but the dispositions of people that matter in a changing world."

eXit Yahoo Zimbra (XYZ)

Yahoo acquired open source email (complete with Ajax pixie dust) company Zimbra for $350 in cash.  My most sincere congratulations Scott and Satish, as well as Brad Garlinghouse on the other side of the table.    Good move. 

This isn't just about competing with Google's Gmail.  It builds upon Yahoo's native email development plus acquisitions such as Oddpost and Stata Labs to build a credible web-native alternative to Outlook and Exchange.  At Socialtext we are moving to Zimbra for at least shared calendaring.  It will be interesting to see Google's offline moves as it will now need to play catch up.

But this isn't just about email and calendaring.  This is another significant commercial open source acquisition.  This also raises a time honored question when it comes to Yahoo, and how it relates to the enterprise.  Both Satish and Brad's posts highlight their partner network (mostly ISPs).  Selling and servicing enterprises is not the competency of Yahoo, but as Google has VARs for Appliances so to does this XYZ combination.  If this is a direction for Yahoo, their number of acronyms will exponentially expand.

Social Networking Spam & Privacy

If you are like the many people getting Quechup invitation spam, consider how it relates to the serious privacy problems with Social Networking.  Quechup automatically imports your Gmail contacts and spams them when you register for their YASNS.  If Bob signs up for it, he is opting into the graph, but he doesn't opt in to spamming Sally.  Sally is included in the graph, whether she opts in to register or not.  Over time, even if Sally resists, she is modeled as a node in the graph. 

At first, this doesn't seem to matter.  But if Bob adds relationship details like they are dating, and then her husband John opts into the graph and adds the detail they are married, you get the idea.  But it is far worse, when the value of the network isn't the relationships, but simply the contact information.  This is the case with enterprise social networking, particularly for sales.  Many don't realize that Jigsaw actually pays people for submitting business cards of people they have met.  Yes, there are financial incentives for people to register you into graphs without your knowledge.  I'm seriously considering copywriting my contact information (Stowe Boyd suggested via twitter when I was exploring other ways of suing evil social networks).

The fundamental privacy problem is that social networks grow virally by adding you to a graph without asking you to opt in.  Once you are in the graph, it may be hard for you to know you are in, let alone opt out (Spoke, you may recall, did this purposely).  You are modeled without your control over social context, and identity and relationship data can be layered on top of you as a node.  Not all data may be available to users, but more will to developers and all will to the social network service providers.  Providers come in all stripes and you not only have to concern yourself with their ethical business practices, but the basic of security.  Opening the graph to third party developers based on open standards is a laudable effort to solve one social graph problem.  But the privacy concern of governance and oversight over those third party developers who have access to more data than users is uncharted.

Now, we have a very loose definition of privacy, particularly in the US.  And the odds of a constitutional amendment are slim.  But this is a new and increasingly popular risk to your right to privacy that unfortunately is not popular in understanding.

UPDATE: Someone pointed me to this Rapleaf public profile which I never opted into.  Rapleaf has a decent privacy policy, but it is unclear if by emailing them to opt-out I become a user.  And if I register to manage my public profile I certainly become a user "We use this information to process registrations, contact our users, and to provide our services."  Auren Hoffman is behind Rapleaf, is very conscious of these issues and will probably clarify.  But there is an interesting facet about public profiles people don't opt into.  Great for SEO marketing and extortion signups.

UPDATE: Facebook opens to public profile search.  Guess I'll change my profile picture from the one of me partying like a rock star.  Also, copyrighting my contact info is a no go, perhaps I'll trademark it and me.

UPDATE: danah says:

I'm also befuddled by the slippery slope of Facebook. Today, they announced public search listings on Facebook. I'm utterly fascinated by how people talk about Facebook as being more private, more secure than MySpace. By default, people's FB profiles are only available to their network. Join a City network and your profile is far more open than you realize. Accept the default search listings and you're findable on Google. The default is far beyond friends-only and locking a FB profile down to friends-only takes dozens of clicks in numerous different locations. Plus, you never can really tell because if you join a new network, everything is by-default open to that network (including your IM and phone number). To make matters weirder, if you install an App, you give the creator access to all of your profile data (no one reads those checkboxes anyhow). Most people never touch the defaults, meaning that they are far more exposed on Facebook than they realize. zrven a college network is not that secure. MySpace on the other hand is rather simple: public or friends-only. Friends-only is far more secure than the defaults on Facebook. And public is well-understood to mean anyone could access it (and often this is the goal). But I know all too well that privacy has nothing to do with reality - it's all about perception. And Facebook *feels* more secure than MySpace, even if it's not. Still, I can't wait to see how a generation of college students feel about their FB profile appearing at the top of Google searches. That outta make them feel good about socializing there. Not.

It seems odd to me that Facebook is doing all sorts of things to go against what gave them such strength: group support for people who wanted to gather around a particular activity, tightly controlled privacy defaults, and simple/clean profiles (which have been made utterly gaudy by Apps). I think I'm missing the logic here. ::scratching forehead::

UPDATE: Auren Hoffman, in comments:

Ross -- thanks for the shout-out on Rapleaf. Anyone can opt-out of Rapleaf (and you do not become a user). We do have a bunch of people that opt-out every day. We also have many people that choose to only display some of their information (like just hiding their age or gender). There are many public profiles about people on the Internet (ZoomInfo, Spock, Wink, Rapleaf, and others) … at Rapleaf, our goal is give people the opportunity to manage their privacy and numerous online profiles and control what people see about them. Of course, we're a start-up (and thus not perfect) … so we really welcome your suggestions on how to improve.

Catalytics

One of the most rewarding things about working with people on adopting wikis is they are often change agents within large organizations.  It is a daunting task within many corporate cultures.  In most cases, it isn't about the tools and technology.  Those are just enablers for a special kind of employee that works against the Innovator's Dilemma, or simply wants to move things forward.  While they may feel alone within their organization, their peers in other organizations often serve as the best source of practices and encouragement.

At the Office 2.0 Unconference, I'd like to host a session on Catalytics, or how to be an agent of change within a large organization.  I hope you can attend and contribute what you have found to work, and not.  A draft presentation follows:

Happy Labor Day!

Decoupling Decision Rights and Decentralization

Andrew McAfee has an interesting post that challenges the trend of decentralization in organizations.  Noting Tom Malone's work on how decreased communication costs enable more decentralized decision rights, he makes a distinction between information and knowledge.  You can now provide information to any potential decision maker at a low cost, but the best tacit knowledge for a given decision may reside in someone the core of an organization instead of the assumed edge.

Let’s say that a mortgage company realized that a few of its loan officers were just better at assessing credit risk than all the others. For whatever reasons (intelligence, experience, intuition, etc. ), they just had superior specific knowledge. In that situation, it would make good sense not to decentralize, but instead to centralize that decision right within the company, taking it away from the other loan officers. All the general knowledge (income statements, credit histories, etc.) would be sent to these few people, who would apply their specific knowledge to it and made decisions. In this example low information costs are still important; they allow all the general knowledge to be zipped to the few good officers. But the effect of low information costs isn’t decentralization and greater empowerment. Instead, it’s centralization of an important decision right and reduced autonomy for most loan officers.

Thought experiments like this one indicate to me that the net result of disappearing information costs won’t necessarily be decentralization. It will instead be the decoupling of information flows and decision rights. Organization designers will be able to allocate decision rights without worrying about how costly it will be to get required information to deciders. Leaders will be able to ask "Who should make this decision?" without adding "Keeping in mind that it’s going to be slow, difficult, and expensive to get them the general knowledge they’ll need."

Will this work always, or even usually, lead to more decentralized organizations? I find myself less confident than Malone that this will be the case. I agree with him that we’re at a very interesting point in the history of technology and the economics of information, but I’d label it a great decoupling (of information flow and decision rights) rather than a broad decentralization (as decision rights lateralize along with information flows).

Information has no value until it informs a decision that results in an outcome.  This is part of why it wants to be free and increasingly is.  The decider certainly plays a role in this equation.  But something concerns me about this Carr-esque classification of decision making capabilities based on tacit knowlege (what is it about theories from Harvard on expertise ;-P).  And I don't think it is enough to buck the trend of decentralization.

Decreasing communication costs and ubiquitous information begets transparency.  While the future impact of IT provides both the directions of strong crypto and transparent society, with uncharted privacy implications and policy -- I believe transparency is a greater force.  Especially when it comes to revealing bad decisions.

Lets take Andrew's mortgage company example.  First, celebrate that the organization can change structure from the decoupling of information and decision rights.  Then, note it can shift back.  If a group gains centralized decision making capabilities because of their, augmented by "general" information, it is in a good position to execute the decision making process. 

But my read of Malone's book is it is not just about decreasing communications costs that enable decentralization, but how decentralized organizations can scale.  I believe Andrew is suggesting that information systems that automate information processing enables this group to scale its capabilities.  At first glance, this is similar to how trading desks work.  But approving a mortgage for an individual is very different from institutional trading.  Markets are social and the actors in institutional trading actually rely on relationships, and by doing so improve their tacit knowledge and handle exceptions better.  By taking the social interaction out of the hands of the mortgage officer who is closer to the actual customer and in a position to assess different kinds of risks beyond the FICO score.  And perhaps worse in the long term, it dehumanizes the organization's capability to develop a relationship with the customer.

Perhaps I am being too prescriptive with the business model, and maybe sidestepped the issue by hypothesizing there is a different kind of tacit knowledge at the periphery of the organization.   But the point is some kinds of tacit knowledge and decision making capability, those best at detecting and handling exceptions to business processes, may not be scalable through automation and centralization.

What I really like about Andrew's idea is the ability to reassign decision rights because they are decoupled from information.  Good thing too, because corporations don't have deciding who is best to decide down to a science.  Given the potential transparency in an organization, we may get better at more broadly handling exceptions and learning from decisions made.  We may actually discover who influences makes decisions. But my long term belief in decentralized organization recognizes that it is the environment the organization exists within, not that inside the organization, that creates the greatest amount of exceptions.  And the organizations that put decision rights closer to exceptions are more likely to adapt and survive.

Perhaps a better structure is to encourage decoupling of decision rights