broadstuff

I have been to two talks in the last 6 months where people claimed 1.0m and then 2.0m users of Second Life. Both times I blogged afterwards that I had never seen more than about 10,000 on when I was there, but being a trusting soul I took the PR guys at their word

Well, turns out I was not the only one scratching my head as to where all the avatars had gone.

Clay Shirky did a bit of analysis and wrote a very sharp piece about all this on Tuesday.

Turns out that Linden claims 2.0m *residents*, where a resident is defined as the avatar, not the user. However it is very unlikely that the ratio is 1:1.....many people have more than one avatar. Also, apparently Linden’s own numbers suggest that the Residents figure includes even failed attempts to use the service. They were adding their second million Residents between mid-October and December 14th, but they also reported just shy of 810 thousand logins for the same period.

In addition, this figure is gross of churn, and I have seen figures as high as 85% bandied about, that may also include inactive avatars though.

Thus at its worst, assuming say a ratio of 1.5 : 1 of avatars to users, 1.8m gross avatar logins and say a 66% churn, Second Life would be on something like 400,000 actual users in reality. An "industry standard" 33% churn puts them at about 800,000 users.

Pity they felt the need to do this really, it just makes it worse when it all comes out and I do think they are doing something very interestng.

(Addendum...great article comparing Virtual Reality's (broken) promises 10 years ago with Second Life today over at Valleywag. I played with VR. the economics and computer power are very different today, but it is a sobering lesson)

Now to do some digging to see if its so lonely at Habbo Hotel

Its nearly 2007 and time for some reflection, and an article in the McKinsey Quarterly on 10 long term megatrends caught my eye today. Its interesting to think about their impact on broadband media, and broadband media's impact on them.

The trends are (McKinsey notes in italics):

Trend 1. Centers of economic activity will shift profoundly, not just globally, but also regionally. As a consequence of economic liberalization, technological advances, capital market developments, and demographic shifts, the world has embarked on a massive realignment of economic activity.

So Asia as a % of GDP will go back to levels last seen in about 1700 AD - i.e. India and China will be great global economic powers again. The IT industry overall has seen huge offshoring over the last 5 years especially, but Broadband media changes the game, from a game of doing the same things with lower labour costs to doing things smarter with higher agility - and if manufacturing is anything to go by this can mean bringing things back closer to the customer. I think the more interesting note is the one about regional shifts - ie within the USA, within Europe, within the social networks in the world (eg the English speaking world). Here is where regional development policy, and policies of individual states will start to matter, as citizens can move both their economic activity and their bodies about far more easily in a networked world. For example, Ireland right now has some great deals for companies - both established and startups - so there is quite a drain starting from London.

Trend 2. Public-sector activities will balloon, making productivity gains essential. The unprecedented aging of populations across the developed world will call for new levels of efficiency and creativity from the public sector. Without clear productivity gains, the pension and health care burden will drive taxes to stifling proportions.

Clearly broadband media can help with automating some proceses today (ie higher efficiency), as well as allowing things to be done in new ways (ie effectiveness) - but these are fiddling with deckchairs - the big numbers are heathcare, looking after the aged, and (in Europe) unemployment benefits.

What I never understood with this trend was the "why won't countries just cut down the state sector spending?" angle - probably not voluntarily, but imho at some point the sums just won't stack up and pressure to reduce spending will be overwhelming. I just can't see the money earning workers in 10 - 15 years time being prepared to fork over 60% + of their income to support the ageing baby boomers and long term underemployed. Given that the people paying the bills will not be the voting majority, this will all get very "interesting" in most democracies. With respect to ageing populations, Isaac Asimov once wrote a story about how the planet moved to voluntary euthanasia to control this problem, except of course the "voluntary" bit became subject to increasing social pressures. I may be one of those people - sobering thought.


Trend 3. The consumer landscape will change and expand significantly. Almost a billion new consumers will enter the global marketplace in the next decade as economic growth in emerging markets pushes them beyond the threshold level of $5,000 in annual household income—a point when people generally begin to spend on discretionary goods.

The people coming online in the next few years will still grow hugely - but they will be mainly Asian, not OECD. This will impact the language, culture and basic economics of the 'Net (see next point), especially as they will probably use lower cost devices (mobiles, PDA's etc) and lower bandwidth networks initially.

Trend 4. Technological connectivity will transform the way people live and interact. The technology revolution has been just that. Yet we are at the early, not mature, stage of this revolution. Individuals, public sectors, and businesses are learning how to make the best use of IT in designing processes and in developing and accessing knowledge.

This is the (r)evolution we set Broadsight up to work in. Blogging, the Web 2.0 movement and the rise of Web Video in 2006 are in my view early examples of these broadband driven shifts, but this is just the beginning. As Bill Gates once remarked, change is less than you expect in 2 years and greater than you expect in 10 (think back to how you worked / lived 10 years ago for example...or watch the film Wall Street)

Trend 5. The battlefield for talent will shift. Ongoing shifts in labor and talent will be far more profound than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of well-trained talent. The increasing integration of global labor markets, however, is opening up vast new talent sources.

The battle for talent is a big McKinsey theme, often alluding to the "star and project team" based wages in many entertainment based industries (I include TV sports here...) but to be honest so far in most sectors I see it as mainly translating into a whole cadre of OECD senior executives using it as a reason to bid their salaries up as the rest of their employees'wages stagnate - clearly nearly all talent is at the top of companies looking at the overall wage data (and the talented also seem to be of remarkably similar background - if you look at where wages have rocketed, nearly all global talent today would appear to be white skinned, have an MBA and work in senior roles, mostly in financial institutions).

I haven't yet really seen the equivalent of the City of London's "big bang" where the Old Boys' clubs were broken down and talent was rewarded with much less regard to background, but it does seem to be starting off in the media industry now with the shift to user generated content plays, taking advertising (and thus financial power) with it. The role broadband media will play will be that of connecting disenfranchised talent to end users, as it has in media. How it plays out in say financial services will be very interesting to watch..outsourcing of analysis is already happening, but I suspect that the interesting bit will be forcing the opening up of many closed shop functions to new people. (I have always been intrigued by the continued survival of fund management for example, when it is clear that simple trackers beat the bulk of the managed funds on net benefit year on year)

Trend 6. The role and behavior of big business will come under increasingly sharp scrutiny. As businesses expand their global reach, and as the economic demands on the environment intensify, the level of societal suspicion about big business is likely to increase. The tenets of current global business ideology—for example, shareholder value, free trade, intellectual-property rights, and profit repatriation—are not understood, let alone accepted, in many parts of the world.

The recent trend to see the Corporation as a psychotic individual under law would seem to be an early harbinger of this mood shift. So far increasing political pressures on OECD governments to crack down on corporate excess has usually resulted in the bad practices being exported to the developing countries.

So far, 'Net media has worked as a way to identify poor performance by corporates (eg via blogging, price comparison) but I expect the smarter corporates will start to harness it to help their own ends far more, and (hopefully) help their customers in the process. As to IPR, I think in this arena the corporates are on the wrong side of the current....trying to limit the flow and use of ideas in a knowledge economy is a public bad, and the 'Net so far has shown a remarkable capability of going around obstacles. Don't bet against the 'Net.

Trend 7. Demand for natural resources will grow, as will the strain on the environment. As economic growth accelerates—particularly in emerging markets—we are using natural resources at unprecedented rates. Oil demand is projected to grow by 50 percent in the next two decades, and without large new discoveries or radical innovations supply is unlikely to keep up.

This is a big area for a short thoughtpiece, suffice to say that broadband media will be pressed into service increasingly as a cost saving alternative. Wherever the economics of the 'Net start to beat the increasing costs due to resource shortages, expect to see it deployed. For example, the amount of extra resource we spend constructing and running transport infrastructures to be able to cope with order-of-magnitude-larger peak loads for a few hours a day is staggering, so the economics of telecommuting will increasingly tell. Ditto shopping via web rather than by car.

Trend 8. New global industry structures are emerging. In response to changing market regulation and the advent of new technologies, nontraditional business models are flourishing, often coexisting in the same market and sector space.

I think we have seen a lot of this in the tech space already with bootstrapping of small companies, and it will continue as the transaction costs of access to capital, technology and people goes down (rentacoder anyone?). I have seen arguments that the role of the Corporate moves from control to co-ordination - not sure I believe that, the Corporate structure is designed for control, and I suspect a different sort of entity is needed to manage Co-ordination - matrix structures just don't cut it . Broadband media, by facilitating communication makes it far easier to run virtually, globally and at lower net cost than traditional physical models, but it has drawbacks of its own which are only starting to be understood (comms difficulties from no informal interaction for example).

Trend 9. Management will go from art to science. Bigger, more complex companies demand new tools to run and manage them. Indeed, improved technology and statistical-control tools have given rise to new management approaches that make even mega-institutions viable.

This has been the dream from Frederick Winslow Taylor onwards, though I have seen not that much evidence of any great change to date compared to say 10 years ago as what the above would have me believe. I have no doubt that many senior managers believe this to be the case, but my experience is that a lot more calculation to the desired end result actually occurs. What I have seen though is:

- a lot more maths used to back up many politically based decisions (or delay unwanted ones).
- many of the revolutionary new companies in the last 3-4 years not being funded using anything like conventional analytical approaches.

Trend 10. Ubiquitous access to information is changing the economics of knowledge. Knowledge is increasingly available and, at the same time, increasingly specialized. The most obvious manifestation of this trend is the rise of search engines (such as Google), which make an almost infinite amount of information available instantaneously. Access to knowledge has become almost universal. Yet the transformation is much more profound than simply broad access. New models of knowledge production, access, distribution, and ownership are emerging. We are seeing the rise of open-source approaches to knowledge development as communities, not individuals, become responsible for innovations.

Well, this is where we come into the frame again.....overall the technology trends we see are around increasing adoption of video as the mainstream medium, and trends towards increased use of:

- user generated (or at least searched and assembled) content
- need for new types of search and metadata creation
- social networks increasingly employed, and incresaing use of unfied identity/profiles across services
- open source and webservices
- services across multiple devices (many PC's, mobiles etc)
- advertising moving to be an interactive service
- huge use of analytics in all systems

So, much to mull over...have a great New Year celebration.

Post Script

For those who think this is all too high level - Om Malik is running a "make your own predictions for 2007" session over here, along with some links to some others' predictions.

It seems that Microsoft, inspired by their PR agency Edelman, has given a bunch of A list bloggers Vista loaded Acer "Ferrari" laptops (though they are not even red), in the hope that the blogware produced will ignite a fire under our asses and we will all go purchase said OS.

Well, first things first - few with the faintest experience of a new OS will buy it early, it's just too important a thing to use before the bugs are ironed out. Wait for SP1 at least!

Secondly, and more important, it won't work because the blogosphere is a transparent social network .

This is basically an attempt to buy a tipping point, and thats all fine and good (obeys Ecclesiates Law after all) and its good Old Marketing and PR. The theory is that you find those social nodes, those hypernetworked individuals, and they spread the word and influence les autres. Worked well in the old media, work here, right?

Unfortunately, it violates 2 basic principles of human networks:

(i) the influencing effect of those social hypernetworkers only works if we are receptive and trust them. Now that I know these guys (any gals?) have access to a tailored laptop, preloaded etc, I know their wisdom is no longer that of the Crowd - I suspect it is going to be tainted (even if not the case), so I have already discounted them. And, since I don't know who has and has not had the gift, I will distrust them all on this subject!

(ii) worse still, we don't by and large like "cheating" behaviour in a social network - its been shown in fact in a number of psychological studies that we will actually deny ourselves a benefit to ensure someone else does not get an advantage perceived as unfair. This "cheating by gifting" was not transparent in old media, so had a lesser effect, but it is in the blogosphere. Now, there is an alternative argument that making something exclusive increases its cachet, but I suggest that limited access to a mass production OS for geeky types is not that thing.

In my opinion it also flies in the face of the Web2.0 ethos, which is open access, and a beta testing approach to get crowd wisdom going. To an extent I think the initial secrecy by some (many?) of the recipients, and the defensive reactions when they were held to account shows that they kinda know this too (see here and here for example). What, after all, is the difference between this and the lyin', cheatin' and otherwise Bad Old Media that some of these same people have so disparaged?

I am also surprised at Edelman (if it is their idea as reported), after the Walmart gaffe (where they were pretending to be mom and pop bloggers for that very large corporate). I think its clear these guys don't really "get" the impact of transparency in a social network, despite Steve Rubel's view that social media is old hat. Once is unfortunate.....

Even then, you would have thought that LeWeb3 would have taught those who designed this the lesson - again - don't try and influence lots of people in a heavy handed way in an open system. Bad news is we all get to see whats going in the blogosphere. Worse news is grumpy people tell a lot more people than happy ones.

As to a personal reaction - call it being contrarian, call it envy, call it what you will, but I will always try to buy from a competitor of a company that does this sort of thing. I just don't like working with companies that are happy to work this way. I like to think companies I buy from treat all their customers equally, naive though that is, and I believe if many people thought that way and acted on it, more companies would.

And when thinking of the A list blaggers in future, my thoughts will turn to Animal Farm....Someone will publish the Sin List of those who blogged and never disclosed, it will come back to haunt them....

Update...this is too much...now Microsoft wants the laptops back! Talk about oil on troubled waters.

What I don't get is this is all so darned obvious....the level of ignorance about how social media works, even (especially?) by the so called pros is clearly still very high!

Postscript - good analysis of what was done wrong is given here, and of the ethics involved here. I read quite a bit about this all after posting, and I don't think its envy per se as some people assert - I think the distaste is the same that we have for politicians, financial pundits etc whose influence is "bought" - and it goes back to the way humans operate in social networks.

I also wondered whether this was in fact an attempt to create a Wildean Effect (it is better to be talked about....), but my instinct is that negative publicity for something like an OS purchase would be very counterproductive.

Post Postscript - been having a conversation with Hugh MacLeod on this over at his blog (Hugh blogs/flogs a particular South African wine*, but he is totally upfront about it which imho is a crucial difference). Anyway, he asked who I would no longer trust. Interesting question, I think there is a heirarchy of social network trust here:

1. Highest Trust = person writing without the laptop gift.
2. Next = one who disclosed at point of reception
3. Then = one who was forced to disclose (aka outed) early and was contrite
4. Last = one who was "outed" and/or sees nothing ethically wrong with it.

* Note - All South African wine is of course God's nectar, not just the one Hugh flogs. My favourites are Uitkyk, Kanonkop and Klein Constantia, and no I've never been given a free bottle by any of them

Signing off till next week, the only bubbles we want to see are at the bottom of glasses...........

Merry Christmas, Happy Holiday Season and a Prosperous New Year

There is a fascinating piece in this week's Economist about how power in software development is shifting from business based apps to consumer based apps, and how businesses are now adopting consumer apps in and around the business IT function.

For those old enough to remember, the last time this happened at such a structural level was the invasion of the PC into corporate worlds in the late 1980s imho.

This is going to be a Big Disruption I think....Salesforce.com is just the start.

Carpe Diem......Sam Sethi and Mike Butcher have now set up on their own now, at Vecosys (that was Sam's Sethis old website, I don't know if they will keep that as the brand)

No news of any TechCrunch plans to re-launch in UK as of yet.

Postscript...Mike Arrington has written an astoundingly detailed post of the goings on here but no news of plans for the UK

With the fallout from LeWeb3 comes the view that blogging conferences are dead. See here and here for eg.


Bah Humbug........storm in a teacup.

Big picture - blogging is just another little tributary in the great onward flow of the broadband internet, at some point it rejoins the mainstream again. Blogging is a stage in the Conversation....it took over from listservers and bulletin boards as a way of showing time independant conversations, but there no doubt will be another phase in the future, and probably using bigger bandwidth better.

The real point of conferences is to meet great people and have great conversations. Don't care whether its blogging or social media or whatever - its all part of the bigger value chain of the broadband web.

And also.....what is there to say about blogging, really? A blog is just a simplified website profile with a few whizzy bits to allow time linked text to be pasted up easily plus some interactivity, RSS at the end of the day just punts content to Yet Another Media Reading Thingy, and frankly the tools to aggregate RSS are still pretty primitive compared to many email systems.

Next step is just to integrate the good bits of blogs into the overall web experienxce

Blogging has made a few reputations, and allowed a small subgroup of 'net people to feel unique for a while, but by and large its just an iteration in the bigger scheme of things, ie getting interactive information to the community. Is all this hooha more the traditional squawk of the early adopters as the mass market moves in?

In this respect I think Loic Le Meur was spot on...its LeWeb, not Les Blogs that really matters.

So...what comes after blogs then?

Interesting post about kids being used by VC's to test social media plays over there at Naked Conversations (picking up from a New York Times article)

Apparently VC's have recently discovered that kids will quickly show you (i) what works and (ii) how it will be used. Well goodness me, how extraordinary!! How long ago was Got Game published? - we've known kids drive many new adoptions at least since Web 1.0 (or are all those lessons part of a Dark Age best left forgotten and mouldering)

(harrumph....been testing stuff on my kids and watching them interact for 3 years now - in fact they found YouTube in the early days of this year).

But this is still interesting for 2 reasons:

Reason 1 - The reported reason - a bellweather, or canary (as in coal mining) as the article puts it.

By the way, here's what watching my kids' activities implies now:

- MySpace is old hat, they are onto the next one (Bebo in our case)
- Habbo - too simple / boring - went back to Sword and Sorcery games fairly soon (I have boys) - its not that they don't like social games - they play Sims with gusto - just Habbo doesn't do it for them. (Like lego men according to one)
- YouTube - loved Smosh brothers, but the buzz of YouTube has faded now - they are off doing other stuff.
- Pandora beats Last.fm hands down

Now, my swallows do not a summer make, but it is interesting none the less.....Krispy Kreme doughnuts are much, much stickier than social media sites.

But, what interested me more was the quoted VC person, a Ms Heidi Roizen, apparently based her decisions (as far as I can discern from article anyway) on the basis of a few days usage obervation. . I can see this is maybe more relevant for products (once the punter's bought it you've taken the money), but I'd be far more scared with services. For example, if you had invested in YouTube based on my kids' early takeup you would have paid a fortune...over a 4 month period you would be much more sanguine I think.

Reason 2 - Why are VC's doing this?

Apart from realising what most everyone else has known for ages I mean.....

No, what interests me is that a lot (most?) of the sage advice from VC's that I read on websites or even on various VC blogs says that they want traction and lots of customers before funding, in which case why bother doing this? Surely this would all be worked through if that were the case?

Methinks more are actually starting to fund earlier stage businesses, despite protesting so much?.

Now that is interesting.

PS...were there any kids at LeWeb3 to comment on use of French politicians

So, after posting on LeWeb3 / Le Web 3 (gives different search results btw) today, I thought I would see if there was any other analysis on the subject now that the kerfuffle has gone down - i actually think it was a very interesting object lesson.

Out of interest I started playing with the "Authority" thingy.

Now, Broadstuff is a new blog and has 21 links, so I up the filter and yup, we have a little authority. Up it again to "some authority" and we disappear.....

But,wait a minute - there are still other blogs with less links than us still being quoted. Authority is supposedly a function of linkages. What gives?

So, putting on my mathematicians hat I start thinking about the algorithms - clearly its not based solely on number of links

1. Time story was posted - nope, these other posts occur before and after my post.

2. Freshness of Links...nope...one, a 13 linker (67% of my "authority"), with a last link 6 days ago compared to my last one of 1 day ago is up there and I am in the null box

3. When blog was started...ok, got me there, I'm newer.....but equating authority with age is a very risky approach I would think.

4. Weighting the blog authority according to the authority of those linking to it....well, at this point I am too lazy to track back through all the relevant links to see whose net authority is higher.

I read back through the announcements on technorati "authority", and I saw nothing about this way of doing things. But it does seem the most likely explanation.

But what I did see was a few of the A listers fulminating on how terrible this filter was when it all started, as it reinforces the the A list - some of their best friends are Z listers (to quote one post). And an A lister complained yesterday that an aggregator blogsite (with his post on) was quoted when he wasn't.

Hmmm, thinks I - what algorithm would I write to keep my authority filter going and shut up the potentially damaging complaints from A listers whose Z list buddies were being discriminated against.......

Right!

You would increase the weight of a blog's links according to the authority of what was linking to them! Quietly of course, because all the other Z listers would raise quite a gerfuffle if it was made clear. All animals are equal dont y'know.

And maybe a little tweak to favour blogs that have been around longer...all these new blogbarians at the gate!

And I would claim, if found out, that it was an attempt to remove splogsites that is still in test

Now, I am sure there is a more innocent explanation, though Patrick's Razor states that the most cynical explanation is usually correct.

Anyway, I love a good conspiracy theory, even if I have to do it myself

I didn't go to Le Web 3 (fortunately it seems), but I've been catching up on my blog reading this evening (sad, I know - but its better than TV) and one can hardly miss the hullabaloo....but I'm not so much interested in what happened, but why it happened at all.

Seems to me that something novel occurred here....Old Time Politics hit the newest New Media, and - for once in these days of spin - the vox populi got out, in two ways.

(i) The context got commented on (and has it ever - just hit technorati for LeWeb3)

(ii) In (far fewer) posts, the content was commented on.

My takeaway - three things happen if blogging starts to occur in an audience - essentialy the Politico is speaking to a far larger (and less manageable) set of channels, so:

(i) "Spin" is going to be far harder from now on when politicians are operating live.

(ii) "Broadscasting", "Soundbiting etc " as a speaker is going to be harder - bloggers will expect to engage and be engaged

(iii) The net has a long memory....the stuff will be out there, searchable by all, not in a newspaper / TV station's closed database

There has been a recent parallel - the Walmart / Edelman thing - lesson I took from that is that in the blogosphere, because the comms is more many to many, spin gets found out far faster.

I suspect that the initial reaction of Politicians will be to go for more managed / controllable events, but that some ambitious / savvy ones will then master the new medium and start to make headway, which will force the rest to comunicate.

Could it be that the ability to read the conversation, and enter if it you felt inclined, will make people feel that they were again somehow engaged in the decision making, that they had a voice? This is a small step but it seems to me a useful step, towards greater inclusion.

My real hope is that it will rejuvenate the democratic process...for too many years the "didn't bother to vote" constituency has been far too large (imho) to comfortably call many OECD countries' governments "democratically elected".

No doubt any embryo system will be gamed, and played to death by sophisticated PR agencies...but if enough channels exist, the truth - or at least a less spun news - will out.

If you think of one or two of the crazier decisions taken in recent years, it is interesting to imagine how it would have turned out if a nation was chattering about them, onlien, and everyone could see what others were really thinking.

This way there would be much less chance of fooling all of the people, all of the time.