Ross Mayfield's Weblog

Vigilant Tolerance

A lot of people would prefer that I blog about tech issues that I matter to them, or categorize for what they really need. Sorry, skip this post. It's a thing that matters when you go beyond the techno-utopian threads of the Valley, or go beyond being a tourist in the rest of the world.

The other night we were walking through the most public place in beautiful Old Town Tallinn, Estonia, and something reminded me how ugly this place can be. Some guy, presumably for his bachelor party, was dressed up as black man, face painted and wearing an afro wig. One of his friends was having him giving him a shoe shine.

I don't have pictures, for fear of smacking the ignorant son-of-a-bitch with my cell phone. Instead, I gave him the word. Many of the words were not nice, and the main one was racist. At risk, I freaked them out.

A friend of mine once told me that when she saw her first black man in Estonia, she thought he was made of chocolate. The problem is pure ignorance, not a superiority complex or more pure intolerance that you find in other countries.

Maybe my problem is that I come from the most vigilantly tolerant of cultures, that of the Bay Area (yes, America is actually made up of many regional and distinct cultures, you can't blame us all for Bush). It's not my problem, but I make it my own, because it really is. To be sure, this place is changing and it is more diverse than ever. In fact, it isn't even a racist culture, but it needs to change from where they are on the scale, damn quick. Ignorance is solvable.

Estonia has had a real issue with occupational Russian minority (30%, the rational-at-a-time source of legal barriers for inclusion), but it seems to easily forget that with the fall of the wall it sought inclusion from the rest of the world for more than security. Now their economic freedom is at risk, not just for the need of immigration reform, but cultural tolerance. Accession should be an uplifting process. The EU will see to that, as immigrants will come from all stripes. So be ready, little country, because you can.

UPDATE: Please read this thoughtful comment by Kalju Rüütli.  Taken together, this conversation provides a more complete picture of the issue.  Americans would also do well to consider his comments on our Administration.

Joining Plazes

I'm excited to join the board of advisors of Plazes, the leading location-aware social software company.

Visioonist

I'm in Parnu, the third largest city in Estonia, really a beach town on the southern coast. If you ever visit during the summer, definitely rent a car and drive here and to the islands. The real Estonia is outside Tallinn.

Just gave my talk to the Visions to Solutions IT conference. Mostly did the wiki thing, showed off a couple of tools to explain tagging, talked about open source and made an argument for more liberal immigration policies to fuel growth of the sector. As was expected, I couldn't tease out questions after the talk.

Estonia's leading blogger, Siim Teller, spoke in Estonian about blogspace and the opportunities for adoption.

Ulo Parts from the Nokia technology platforms division had some good insight into their innovation process with talk meant for the engineering mind. "All inventions are not innovations, all innovations do not include inventions. 90% evolution, 10% disruptive is a good rule of thumb." He dove deep into how multidisciplinary and complex it is to put together a handset, complete with formulae and block diagrams. Main mathematical task is to find well performing receivers with optimized performance. Their implementation platform needs to be flexible to enable multiple radios. They look to cooperate in R&D with openness, focus research on radical innovations (which should be the focus of small technology companies, so they look to partner with them) and need efficient implementation.

Spoke with several people who were using wikis inside their companies. There is a natural adoption of open source here because Linux was invented next door, technical skills and budgetary constraints.

Oracle Puts Siebel out of Business

I don't have a lot to say about the other big deal this week, but I love this story from Bruce Daley at the Siebel Observer:

...At one customer event a few years ago Tom Siebel showed up with cuts and bruises on his face.

"I ran into Larry Ellison at bar last night," he joked at the time.

Oracle's efforts to put Siebel Systems out of business were no laughing matter. There is a story, which like most good stories deserves to be true even if it isn't, that early in the Siebel's corporate history an effort was made to convince the Redwood Shores giant to buy the new company's solution. The contract made its way up the corporate ladder until it reached Larry Ellison's desk. Ellison then made an appointment to see Tom Siebel personally. When Siebel arrived Ellison took the contract and ripped it to pieces in front of him...

What should be in focus today is that Oracle has been trying for years to put Siebel Systems out of business and they finally succeeded.

Putting all these companies out of business to protect a dying revenue steam simply creates opportunities for new businesses.

Skype is the Nokia of Estonia

Jüri Kaljundi has a great post on what the Skype deal means to Estonia. 

While I join everyone in congratulating Skype (Jeff has posted some good comments and links to other blogs on this) and all the great people there, there are many reasons why the Skype deal is also of great importance to Estonia and Estonians. It should be a big push to start new successful tech startups and for enterpreneurs to look more actively at international markets, something that has been very limited until now...

True, you can say Skype is not Estonian per se, having its holding company in Luxembourg (tax reasons?) and big part of management and marketing in London. Still over 80% of the employees are located in Tallinn, and all of the product management and software development as well as other technical functions are done here in Estonia. Pretty good for a country with only 1,35 million employees and a total headcount of less than 5-8 thousand IT people in the country (my very rough estimate). ...

Actually, Skype is even more of an Estonian company than most realize, as the majority of founder stock is, perhaps the best measure.  Jüri suggests rightly that Skype will be the reference model for Estonian companies in how they source the best international talent and expand abroad.

I'll add this, Skype could prove to be the Nokia of Estonia.  A few years from now, when deal earns itself out, Skype could diffuse a generation of tech entrepreneurs and investors.  In Nokia's case, many of them started companies that were later brought back into the fold, benefiting the company and the country.  A unique capability cluster is being developed here in VoIP, P2P, Security and Social Software that will give rise to new startups.

Again, the primary risk for this scenario is immigration reform and cultural tolerance.  The former is policy and the latter systemic.  Reflecting upon my own experience, it's not easy for the expats who do get in.  Expat networks provide a kind of support group, and seeing how I'm in the business of supporting groups, I wonder if Social Software could come to aid.  Would anyone see value in an expat wiki as a resource for informing and connecting?

Business as Usual at Skype Estonia

Had a nice visit to Skype Estonia.  Apparently they have been very good at keeping the secret about acquisition rumors, and I'll have to respect their privacy, but can share a little.

I thought everyone would be drunk by 4pm on the day of a big exit, as is more than typical back home.  But on an internal webcast they emphasized eight times that it was business as usual.  And it was.  Since I visited in November, they have almost tripled their team and were growing out of their secret location. 

While hanging out in the kitchen, I found a copy of the Manifesto for Agile Software Development. Nice.  Guess this is where I can slot in the wiki plug, Skype has always run on wikis inside (and another well known communication tool).   Maybe the first significant exit for a wiki-based company?

One of the guys I was hanging out with is the father of blogging in Estonia.  His offspring is still relatively small, about 1 thousand active blogs, but my sense is that may change soon, especially with Share Skype as a corporate communications case.  The work Lenn Pryor is doing with the Skype developer program is pretty significant, they have more to do, but this is one API-based developer program that is starting to make sense.  Joining eBay increases the scale of the platform and community that holds it responsible.  Quite different from the small startups that try to position themselves with proprietary APIs as a platform when they have no community.

Meg Whitman apparently mentioned in the conference call that Estonia was seen as a key pool of talent.  This is absolutely the case, but the labor market for the best people is really tight, which brought up my key issue of how open Estonia should be.

When I visited last year I had the sense that this is where the real hacker entrepreneurs were.  Committed for the love of the product, respect for the technology, interest to understand social patterns and a vision to be fulfilled.  This time there were new faces amongst the backdrop of a very big deal.  In a couple of hours they are all headed to celebrate, as they should, maybe I'll stop by.

The Simple Reason eBay bought Skype

In two hours, eBay is holding a conference call about buying Skype.  I'm visiting the Skype guys in Tallinn a couple of hours later.  Lot's of folks are scratching their heads.  I have no inside information, nor really want it, but can offer a simple explanation that the market seems to be missing -- that markets are conversations.

Pierre Omidyar once explained to me that one of the smartest things he did when starting eBay was to not constrain communication around his market -- by publishing email addresses.  He was suggesting to me that we open the Socialtext Customer Exchange, but the core insight is more valuable.  Back when I was running a B2B exchange, this was considered a contrarian move.  After all, it let buyers and sellers circumvent your transaction fees in some cases.  But letting go of control fosters liquidity.  Especially when you couldn't possibly structure communications to fit all transactions.  Today I would venture that most of the communication on eBay's transactions are out-of-band.  Other communities with emergent liquidity such as Craigslist succeed by enabling even further out-of-band communication.

Skype will provide eBay a communications platform for the other half of it's market -- the conversations.  eBay will enhance the liquidity of it's spot market, gains a business with great fundamentals, positioning for yellow pages business, further infrastructure for billing, payment and -- identity.

UPDATE: it's a deal at $2.6 billion in cash and stock with a potential 1.5b earnout.  Skype earned $7m in revenue last year.

UPDATE: Read John Hagel's analysis and thoughts on high multiple management.

Beyond Borders in Estonia

I have to say that every time I visit Estonia during good weather, there are tempting thoughts of moving back here.  So far we have had a not-so-quiet weekend with friends and family.  Funny how the longer you know someone, the less they seem to change.

On my flight I met an entrepreneur who has lived here the past three years and is doing an executive MBA program in London on the weekends.  After being a CTO at a corporate IM startup and looking to start his own company (highly specialized psych research ASP), he picked Estonia for both the business friendly climate, easy visa, cost and lifestyle.

The economy here is booming, with double-diget growth over the past quarter alone.  Prices are about 30% less than the US, driven by wage growth following the EU accession.  There is a big gap between rich and poor and it's hard to discern the middle-class.  Since accession, many Estonians work abroad in the EU and tourism has exploded in both directions.

An Estonian friend who did quite well as a real estate entrepreneur over the past ten years told me he would love to invest in the US, but the Bush administration has made it too difficult to get a visa.  Instead he is starting developments in France. 

It should be noted that Estonian immigration policy isn't any better.  I have an Indian friend who wants to live here and could have a significant impact on the high tech industry, but he can't get a visa.  The biggest problem facing Estonian entreprepeurs is sourcing good human capital.  The fact is, this economy is near a peak (reminds me of 1996) and has structural weaknesses that are not being fully addressed.

Me, I'm just glad my passport is being accepted after going through the laundry.

Our Social World

Random notes from Our Social World in Cambridge, UK.

Ben Hammersley kicked off by stressing the important part isn't the technology, but the social interaction. When tracing the roots of blogging back the enlightenment, he notes that it introduced concepts of science, technology and good manners. Manners were invented by blogging, as the pamphlets were written and read in coffee houses by the same people wearing the same clothes -- if you wrote something rude someone could stab you in the head. He didn't clarify if this risk was present in blogging today.

Today's software has even more of an opportunity to be revolutionary. He explored some of the key attributes such as access to 2.5 billion people instantly, interconnectedness compared to documents and how it is free both as in freedom and beer.

Simon Phipps says that because connectivity has gotten into the soul of society, consumerism has shifted to participation. The second and third order opportunities have arisen in just ten years (compared to a 90 year cycle of philosophy). Blogs at Sun started with a crazy idea, Jonathan Schwartz said why don't you get on with it (now he blogs, if his post is concise it's likely it's been vetted) and otherwise adoption bubbled up without a formal launch. LiveJournal for lab book group blogging and Roller inside the company, Roller for external. Marketing and PR should not be in the hands of marketing and PR. Consumers are having a conversation, if you participate in it you have a chance of making a profit, connected capitalism that is going to change the world.

Tom Coates refused to define Social Software, but talked through all of our favorite examples. He is adopting the wiki way for group editable audio on a project right now in the BBC (30 people can together provide real-world diagnoses of cancer cells with 70% accuracy, btw). I added him to Wikipedia.

Jonnie Moore led us through some chaos games. When understanding Social Software, we are all dealing with our fundamental fear of the the unknown. If everything were completely structured it would all be terribly dull. Started this blog about a supermarket chain to see what would happen and now it has engaged employees defending their company. He shared this great link of Nicolae Ceausescu's last speech.

Lee Bryant talked about tags. Bottom-up emergent sense-making sounds like an interesting sexual position, but it's not. Negotiating shared meaning through tags is protection against hegemonic discourse. Talks about Enterprise Social Software that leverages wikis, weblogs and social bookmarking to create a social layer and bring collaboration back to users. Headshift launched Patient Opinion today, a simply wonderful project which enables medical patient stories.

Loic Le Meur was the first to mention the Long Tail at the event, explaining how a woman started blogging about cooking at the end of the tail and is now part of the fat head and has become a pro. Shows some MT integration with Podcasting. Turns out Loic is also one of the top 10 podcasters on iTunes in France. From now on we will call him Bloic (French law states that if he finds this offensive I would have to remove this comment or be liable). Talked through the Loreal botched French blog and 6A pricing cases of making a mistake, listening to comments and adapting. The European Blogosphere section of his wiki continues to be updated every other day, the International Herald Tribune referenced it as "source: best guess of bloggers."

Lunch on the pitch had some good conversation about entrepreneurship in Europe, Skype/eBay rumors and the changes in the lives of the usual suspects.

Euan Semple talks about the enemy within and the BBC's enterprise use of wikis, weblogs, discussion boards and directories. Kept it very flat, very open and it grew fast: 8,000 discussion board users on a daily basis. Better that water cooler conversations occur openly, even though criticism can be difficult (even for himself when he chose a particular wiki vendor). Blogs picked up when an executive started participating, something far more popular than internal corporate communications. Wiki has 1,000 users with 100 wiki spaces with faster growth than any of the tools. Started with private wiki spaces, increasing use of more public spaces. When BBC staff couldn't participate in a public photography competition people complained on their blog, then Euan suggested using a wiki and they had their own internal contest. Otherwise wikis are being use for more formal communication and projects. These tools are helping democratize the organization, great contributions are recognized. Managers are better off engaging with these tools early, not trying to own them, but be there and participate from the start.

Suw Charman talks about dark blogs, the ones you can't see. There is a big race to be second in implementing new technology. Successful projects have a good reason for existing, identified business need (internal communications, personal KM, etc.). Sometimes a blog isn't the best tool (she said, "as Ross will tell you"). Blogs without a purpose have a tendency to fail. Sometimes an editorial process is introduced within the enterprise (e.g. The Guardian's personal KM use evolved into reporting, but has editorial oversight). Imposing software that does not fit into every day routines tends to fail. Integration with other systems (e.g. LDAP, email) is very important. Because the tool is simple, instead of providing training in a 3,000 page manual, provide them support. Adoption is not the big hurdle people think it is if you have a process to apply it to and invest some time in introducing it to users who can become evangelists. Suw draws a great distinction between visible (e.g. in a meeting) and invisible (working alone) work, supporting invisible work is important for social software as it is part of the norm. We are at a stage where we get what blogging is, but it's hard to measure success. If people use it, are enthusiastic, are bending it for their needs -- run with it.

Julian Bond provides a counterpoint on blog adoption. Pointing out that most internal communications is powerpoint + chocolate biscuits or CC + BCC. In other words, office politics as usual. The geek imperative of giving as much info as possible in excruciating detail vs. hoarding information for advantage. The software may be free, but they don't have the people in house to set it up. For a service provider, 25 meetings and manpower later a blog project for the FTSE100 costs 100,000 pounds. And the customer kicks back and says, "but you said the software is free."

Simon Grice says that identity is at the heart of Social Software. Makes the case for Personal Digital Identity (PDI). Quotes Kim Cameron (Microsofty): A system that does not put users in firm control of their own identity will ... be rejected by enough users that it cannot become universal. An issue 1,000 years old. Solving the identity problem helps solve interaction issues such as spam. Mobile devices are the first true pervasive identity authentication device, provides authentication, messaging and billing; converging global number standard and portability and they all carry a personal data store. He demos how you can leverage mobile identity and location awareness -- and how truly disturbing it is (made me think about LocationTheft, but also how intertwined Open Rights and Personal Identity are). In conversation, Simon Phipps suggest that we copyright our personal data.

One thread of conversation during Wiki Wednesday and Our Social World was about the difference between being an entrepreneur in London and the Silicon Valley. Just a thought during the break: access to capital is not just supply and regulatory and market structure, but an environment where investors are exposed to new ideas socially so they understand risks and opportunities.

Max Niederhofer talks about the youth of blogging and says blogging is like a MMOG, but unlike games they don't have a point to them. It's not solved, it's played. When games are played, rules emerge. Tom Coates didn't buy the weblogs as games thing because the regular world interplays with it, saying that "only in Europe would we justify that it's okay to talk in public."

Mmm...apparently this company is giving free wine to UK bloggers, so Hugh brought a case.

Colin Donald was one of the guys who stopped by Wiki Wednesday. I had to step out for the beginning of his talk. Traditional media is hampered here by legal responsibilities, beyond the broadcast model, they have to spend a ton of money moderating discussion boards.

My turn for a closing talk...

Technorati Tags: oursocialworld

Wiki Wednesday London

After flying there today, with a kid on my lap and quite sleep-deprived, I can say that Wiki Wednesday was a blast in London. Huge thanks to DrKW for hosting us. Great to see old friends and meet new ones.

I thought I might be able to stay up for the rest of it, but too many time zones to live through. It's all streaming in.