broadstuff

This year's Reboot theme was Free, a subject I have some views about. I couldn't make it, but have followed with some interest. Here are a few of the blogs covering the things I found interesting, plus some of my comments. I find many commentators critiquing these new ideas don't go far enough - this post, on the other hand, probably goes too far

New Thoughts in Social Media:

1. Jyri Engestrom on Nodal Points (blogged by David Weinberger). Jyri is imho one of the structured thinkers in the Social Media space (which is sadly far too full of neo-hippies, snake oil salesmen and general fluffbrains) and talks about how this all ACTUALLY WORKS. He has pushed his concept of social objects - ie reasons for connecting but expressed in codifiable form - forward to nodal points, which are connection nodes in the social matrix where information is stored and which can give peripheral context

“Imagine a physical world where we have as much peripheral information at our disposal as in WoW.”

Like Jyri, I've been fascinated for awhile about how we can leave context data at key point in data matrices and have it pop up where / when needed - so more thinking on this is welcome!

2. Don Stowe Boyd follows the whuffie factor to its endgame and argues that the cosy nostrums of warm fluffiness will be more like the cosa nostra of the Mafia. Its not all sunshine and flowers..... (more of this below)


FreeConomics

3. Jerry Michalski on Free (as found reported by Dieter Rappold in one of the few good overviews of the sessions I found)

On the second day Jerry Michalski also talked about different free business models based on the Article of Chris Anderson in the Wired Magazine:

1. Freemium (Flickr)
2. Advertising (Google)
3. Cross Subsidies (donate CDs, have packed concerts)
4. Zero Marginal Costs (digital goods)
5. Labor Exchange (digg, Amazon Reviews)
6. Voluntary Donations (A throusand friends)
7. Pay what you want (TerraBite)

- He showed us also that so much can be done for so little - Craig Newmark shook up 3 industries of billions and billions with craigslist: Yellow Pages, Classifieds, Directory Services! No wonder given the fact that 60% of the internal cost at Telecoms are histrocial costs for legacy systems and billing processes. If one could get rid of that! We got told in business schools that Scarcity = Value. But we increasingly see a growing abundancy mentality.

As Dieter notes, the risk is that:

Todays abundance of Music/Content/Software imposes an important question: Why pay before I know that it’s good? That means we have to be famous first - then get rich!

Which is a Zipfian economy model - ie a very small number of people get very rich (and the advantage goes to those already famous on Record Company money), but most get very little, even with tiny talent differentials.

Also, as you can also see, few of the above models are actually Free, they are Offset models, wherein someone else pays for the free lunch - and herein lies the mental sleight of mind in the FreeConomy. This sleight of mind leads to risky errors, such as:

4. Working for Free - An argument about the freedom of free work (Last seen in large numbers c 1970's), fine thesis except for the small flaw that unless you have a trust fund you either (i) moonlight from your daytime job, (ii) have to trust others to feed you or (iii) you go for the "starve in a garret" mode.


Impact of Low Transaction Costs on Organisation / Social Structure

5. J P Ragaswami (Confused of Calcutta) made the basic point about ease of arbitrage in a low transaction cost world - “for every artificial scarcity there will be piracy. It will be destroyed.”

6. Traci Fenton on Democratic Organisations - 10 democratic Design principles (again thanks to Dieter for the list):

1. Purpose + Vision
2. Transparency (open book management)
3. Dialogue + Listening
4. Fairness + Dignity
5. Accountability
6. Individual + Collective
7. Choice
8. Integrity
9. Decentralization
10. Reflection + Evaluation

7. Lee Bryant (Headshift) on freeing the Battery Human. Dieter's report:

And asked how we can codify freedoms and values to provide longevity to them. Ironically we are stuck in the concepts of Max Weber and Frederick W. Taylor. But the consumerisation of Enterprise IT is a big chance to change that. Given the fact that Taylorism is simply too costly in complex, global ever changing market. Social Networks combined with weak ties are a efficient corporate immune system - whistleblowing when things go wrong.

I must admit to being hopeful, but also fairly sceptical about this sort of thing in any large scale organisation, firstly for the reasons of organisational complexity explained well over here by Dare Obasanjo:

There is less politics at a startup. In any activity where humans have to come together collaboratively to achieve a goal, there will always be people with different agendas. The more people you add to the mix, the more agendas you have to contend with. Doing things by consensus is OK when you have to get consensus from two or three people who sit in the same hallway as you. It’s a totally different ball game when you need to gain it from lots of people from across a diverse company working on different projects in different regions of the world who have different perspectives on how to solve your problems.

.....if you do the maths, you find that the number of transactions you need to get anything done in a peer only, dis-organised structure is huge and grows geometrically as you add people - and thus soon becomes unsustainable (the downside of Metcalfe's Law). This is the reason hierarchies come into being, Taylorist get on the job etc - to reduce the messaging and complexity. National "democracies" are in fact very hierarchical by definition, and if you go through Traci's 10 points you'll find that most of them are precisely what we criticize those in power for not doing!

Secondly, the thing less talked about in Social Media is that it operates under power law maths - the Zipfian economy I refer to above - ie, without checks and balances a few rich get richer faster, and the rest are worker drones. This is just another way of saying "Feudal". There is a long tail, but it doesn't necessarily wag the Big Dogs. Thus, seductive though this all sounds in the "sunshine and flowers" way its usually painted, it just does not actually work this way without very careful design. (Don't get me wrong, its possible - see Ricardo Semler's work here for example - but its non trivial to do and its not a "Social Media" thing per se - so caveat emptor!)

Exacerbating that, the laws under which public companies operate force a level of Corporate Evil (yes, even Google) that probably needs to be tackled before peace, love, brotherhood etc breaks out - if not, its more likely just a California Cult scam to make you feel good while being reduced to digital sharecropping.


Other Stuff

Nicole Simon has a whole lot of video interviews over here. There is also Twittering ad nauseam on reboot10 etc etc. It is interesting that as these tools increase in use, the content creators are doing far less long style blogging (at least it was far harder to find it about Reboot10 ).

Now my problem with this is that I just don't have time to listen to N linear video interviews and try to make sense of a plethora of loosely connected twts (Stowe Boyd usefully edits those of his talk on his blog page) - I think the issue with these tools is that they shift the attention time from the creator to the reader, and that is hugely inefficient. Not only that, but I can't do that copy/paste thing to create my own content as easily - so its far less user-friendly for me as a potential amplifier / echo chamber.

Hopefully more people will blog this week so more of the sessions can be linked in here (add any you know of in the comments too!).

All that being said, its great that things like Reboot happen, and I hope to be able to add my (irreverent) contributions next year

Michael Arrington rails against Twitter and praises Friendfeed over here, arguing that there has been a less infuriated response to the switchoff of the replies feature:

So why aren’t people screaming about the feature being gone? Because this time, they’re just heading

over to Friendfeed to have those very same conversations. Friendfeed for most users was just a place to bookmarks all their activities on other social networks. Now, more and more, it’s a place that people start conversations. The early adopters got that a while ago. Now, the not so early adopters are using it as a Twitter replacement, too.

He's wrong of course - the reason there is no sturm und drang is because its another opportunity to enjoy viewing the iconic Fail Whale:



Its on T shirts, posters, coffee cups - without a Fail Whale, Friendfeed cannot succeed

The thing about Twitter is it also has a huge user base, go elsewhere like Friendfeed and you have far fewer people to talk to. The A-List Broadcasters clearly want this to happen methinks (listen to ME, not each other) but thats not by and large what most people want - or are doing. As a number of commentators noted on the TechCrunch article in fact, using a simple service to increase Twitter persistence, such as Summize, is a far better option.

(Also, I don't understand why people think that a system with the same properties plus bigger messages will scale any differently? Twitter at least has $15m now to build out the new systems)

There is an interesting discussion going on on Slashdot - Chris Anderson's long tail being pulled by an HBR article potentially debunking his Long Tail thesis, (update - its made the WSJ now - this one hurts) though Chris's view is that one person's head is another's tail:

The best example of this is in what she describes as a growing "concentration" of sales around a relatively small number of blockbuster titles. In the Rhapsody data, she finds, the top 10% of titles (out of more than a million in that data sample) accounted for 78% of all plays, and the top 1% account for 32% of all plays. That sounds pretty concentrated around the head, until you reflect, as she notes, that "one percent of a million is still 10,000--[...]equal to the entire music inventory of a typical Wal-Mart store."

Actually, the Long Tail has been around for as long as inventory has been stored, the basic maths was done in the last century in the early days of statistics (Pareto ring a bell?). The obvious points made are that:

The whole premise of the Long Tail idea is that it's NOT a hassle for internet companies like Amazon and Apple to keep the low-volume stuff in inventory. That's what gives them an advantage over brick and mortar. If Amazon only sells 5 copies of the The "Long Tail: Why the Future of Business is Selling Less of More" a year, it only needs to keep 5 in inventory. If a chain store wants to sell the book it has to keep hundreds in inventory to ensure they have at least one in each store.

A lot of people mis-characterize the Long Tail as "making money by selling obscure stuff." That's only half of the definition. The other half is building a business where it does not cost you anything to keep lots and lots of obscure things in inventory, or alternatively, having access to millions and millions of customers, so if you sell to 1% of your market, it still adds up to something. Long tail does not work unless all of those 1% niches add up to 80% of the total market or unless you sell to 1% of a billion people. The internet helps businesses do both of these things.

There is one real concern I have of Long Tail theory, which is that another impact of low transaction cost networks is you get positive return dynamics, ie the rich get richer - faster - and I've not seen a convincing argument as to why this dynamic doesn't occur as the endgame in any Long Tail initial condition system.

This discussion however was my favourite:

(Person One) But then try to explain porn websites. There is a lot of tail to be hit there.

(Person Two) And lots of head too...

I love Slashdot discussions, there is a rigour and sharpness, as well as irreverence, that I think is missing in social aggregators such as Friendfeed. I'm not sure why......

One of the interesting things about the emergence of the Social Media scene is that it has driven a lot of Londoners of quite wide backgrounds to physically meet up at the Tuttle Club, and one of the outcomes of that has been a flowering of collaborations in all sorts of interesting projects - musicians working with marketeers, film makers with PR people - and in our case we have been working with others on a project on the Female Web - it is our hypothesis that there is an arbitrage as there are many women as customers, but far fewer people developing services that give women the UI / UE they prefer.

And one of the really good things about this collaboration is that other people can write some of the posts on the blog So, here is a thought piece by Janet Parkinson of Talking Voices that sets the scene:

It's common knowledge that women make up only about 20% of the technology industry - the reasons usually given amounting to 'women just aren't interested' or words to that effect. But with comScore reporting that online women now outnumber online men in the US, I decided to dig a little deeper to check out other possible reasons for this discrepancy and came across the following:

At the Blackberry Women & Technology Awards last month (according to Ian Williams of vnunet ) Charmaine Eggberry, the creator of the Awards commented on the fact that although nearly 90 percent of girls aged 11 to 16 believe that using technology is 'cool', with just over a third chatting about the latest technology on a daily basis, "there is still a lack of understanding about the phenominal opportunities that a career in, or associated with, technology has to offer".

She went on to say that over two thirds of girls aged 11 to 16 believe that there is a gap between the playground and the careers centre because the UK lacks smart female role models in the technology industry, and that over half think that there should be fewer celebrity role models and more inspirational business role models.

This is spot on. Role models for all teenagers form an intrinsic part of growing up and of making life choices. So what role models are currently being presented to teenage girls? Teenage magazines seem to continue to feed the predictable celebrity hype, latest fashion 'must haves' and 'how to grab a guy' columns, while in the media generally both offline and online let's just say it's difficult to find many female role models worth aspiring to....

Teenage girls are moving from hard copy magazines to the internet and are happy to take control of what they do there and what they read - the bright young women of today are not necessarily ready to be dumbed down continuously. If what Charmaine Eggbury says is true then perhaps the magazines should take the plunge, remove Britney or Jade from the front covers once in a while and replace them with a few successful women from technology. And girls, make sure to tell everyone what you 'really really want' - you've heard it often enough 'Because you're worth it'.

This is a theme that has also been driven up by people such as Sarah Blow & team who have been driving Girl Geek Dinners, trying to help women build up a supply side network and hopefully provide some alternatives to the Britney model (and dispel the notion that women can't be technical).

From the BBC:

The net's regulator, Icann, voted unanimously to relax the strict rules on so-called "top-level" domain names, such as .com or .uk.

The decision means that companies could turn brands into web addresses, while individuals could use their names.

A second proposal, to introduce domain names written in Asian, Arabic or other scripts, was also approved.

The market for namesitting will be somewhat negatively impacted we suspect, and as for Web 2.0 - its a bummr, but its ovr - no more silly spellings anymore, no Flickr, Dopplr etc, unless done for "ironic" post - post modern reasons

Downside is that early days it won't be cheap, no doubt names like IBM etc will be auctioned off at high prices:

However, the cost of setting up a domain - at least initially - will be an expensive business.

"We expect that the fee will be in the low six figure dollar amounts," said Dr Twomey.

Need to pay to be a playr......

The Facebook / UConnect case is over, but as the NYT notes, an interesting aside emerged:

ConnectU was apparently upset that Facebook’s valuation is not, as media reports have widely suggested, $15 billion, the valuation at which Microsoft invested in the company last year. The judge’s ruling says that subsequent to the $15 billion valuation, “Facebook’s board of directors determined a value of the company’s shares which was different than the valuation disclosed in the press release” announcing the Microsoft investment. That diluted the settlement amount, apparently enough to give ConnectU second thoughts. The decision does not reveal Facebook’s current valuation.

And lets be clear here - the sort of difference that would entice people to go to law again is seldom immaterial. Now a few days ago TechCrunch valued Facebook at $2.4bn based on the Bebo deal (we calculated a similar price a few months ago) to $13.5bn using the Linked In deal - but Linked In is based on people with money, and I somehow doubt the uConnect people would have gone to all that trouble for a 10% valuation difference (unless the payout was sizeable of course....).

No, I'd bet there is quite a spread on the Facebook Buy / Sell prices.....I can see the arbitrargeurs running their rulers over this with renewed interest now

Be very, very interesting to see what Facebook's management actually thinks its worth. This being the internet, wonder how much time it'll take to get out - would you go long or short

Update...3 days later, this post appears on TC implying a $3-4bn valuation.

Last night there was a debate on the BBC's role in fostering UK New Media startups, initially proposed by Techcrunch UK's Mike Butcher (here is his liveblog of the event). On the panel were:

Tom Loosemore, Ofcom and former ‘head of Web 2.0_ at the BBC
Jon Gisby, Channel 4’s first dedicated new media director
Azeem Azahar, startups angel investor, ex-BBC, original proposer of the BBC Public License
Tony Ageh, BBC New Media controller of internet
James Cridland, Head of Future Media & Technology for BBC Audio & Music Interactive
Jem Stone, Portfolio Executive, BBC new media
Chair: Steve Bowbrick, entrepreneur, Blogger on BBC policy

Mike has done a good job of summarising the speakers' talks and (will no doubt do as good a job later with) the Q&A session, so there is no point in going through that all - I thought I'd comment on some themes that came up recurrently.

Firstly, on the startup side - do your frigging homework! There is stunning naivete in some areas, and this is frankly unacceptable for a new media business that wants to succeed and work with any large companies - these areas came out last night:

Very Few people seem to understand the Rights Issue

Its actually very simple in one way - the BBC doesn't own a lot of the content rights, as that would be prohibitively expensive. Instead, the original content producers have the bulk of those rights. Its very complex in another way, as that means for any piece of media there are a horde of rightsholders to sort out - and over 50-odd years of content making thats a huge task

Materiality is not irrelevant

Based on some of the questions last night, I have to wonder about the financial acumen of some startups. This was really brought home to me with one questioner claiming that since all the TV audiences would soon go away, the BBC was dramatically underspending on its online world. The truth of course is the opposite - New Media is still a fairly small, albeit rapidly growing part of the overall media pie.

The BBC is not a charity

There were complaints that there was "no-one to talk to" at the BBC about various requirements. Sorry guys and gals, but in the world of business that's a general truth, not just the BBC. By and large the person selling the stuff has to find and seduce the buyer, not the other way round. The role of the BBC is not to dole out cash to people in startups just because they pay TV licence fees.

Do you guys "get" how big the BBC operation is? Wise up!

There was whingeing about some BBC technology being old, some being inflexible etc. We consult to media companies and Telcos and ISPs large and small, and in our view the BBC is no worse than any other player who has been going for 10 years at that scale. Of course there is legacy technology - but what startups have to realise is you (i) can't just pull a production system out because its a bit past its sell by date, and (ii) even if you do, it doesn't have to be your cherished new technology they use - in a large scale 5x9 environment there is a benefit in "tried and tested", and the "hot tech" du jour will be just another layer of sediment in the infrastructure in 2 years time anyway.

If I hear the "The BBC is ruining Commercial Startups by being Free" once more I'll thcream and thcream

Someone's got to be the 800lb Gorilla, this is a fairly benign one (look at the 25% - 50% spend on UK companies mandated in the BBC operations rules). Google and Microsoft don't do that. Google and Microsoft also effectively do their New Media work as a giveaway and make money elsewhere. Also, how many of the UK's New Media mavens got their leg up at the BBC, and have continued to use their networks to get BBC money?

However, the BBC needs to sort out its act in some key areas too:

A simple process for understanding rights options

A point well made by TIOTI's Paul Cleghorn was that he wanted a clear view of the rights T&Cs because potential funders wanted to understand and quantify the risks, and without that it's very hard to get funding. Another person noted he had the rights cleared from 5 other public broadcasters in the time it had taken to not get to a conclusion with the BBC.

I would also argue that the BBC pays too much attention to rights holders compared to other commercial entities. In a way this is due to its public service legacy and funding - if anything goes wrong there are questions in the house, wails in the newspapers etc. Nonetheless it coul probably be more robust with "small cap" rights holders to content


Get the data you do have out as easily as possible
Background data, Metadata, BT owned content, R&D research - all these things can be used to create value added services, make it easy to access them

Define a strategy for rights going forward that does not perpetuate the historic mess

There are two pieces to this:

(i) A simpler way of handling the horde of non material rights so that they cannot hold up content re-use and are cheap to settle

(ii) It may not be possible for TV rights, but for digital rights ensure that usage rules going forward are more flexible. This is non trivial, as rights law in general is not really fit for digital purpose (The argument that otherwise everybody will just pirate the stuff anyway is always an interesting one

Make it easier to find out who does what

It is a large organisation, but many similar sized commercial companies are better these days at their customer / supplier etc facing processes.

Very good discussion, handled in a good spirit, kudos to all involved. Will add links/ comments as others post up their blogs.

The really interesting bit though was the starting of the debate about "what should the BBC be in Digital Media going forward" and I want to a address that in a later post after a spot of reflection.

Sharp observation from HipMojo re the investment by Amazon in Twitter:

Anyway, I think this is the first step towards Amazon.com buying Twitter… it just makes more sense to use something like Twitter in a commercial capacity than a communications capacity, which is odd because Twitter now bills itself as a “communications utility”. Whatever floats their boat…

Today, the vanity crowd uses Twitter in the way that they do, in 5 years - if Twitter is around - it will be used as a commercial platform. Mark my words.

Marked.

I also think it will incorporate elements of Seesmic, Dopplr and a number of other web 2.0 plays because it will have the end customer relationships, and its easier to just add functionality.

But, Twitter can only be bought by someone who brings useful synergies, and ideally makes money in some offset way, as Twitter itself has no direct revenue model yet - Amazon's infrastructure goes some way towards that, especially if the money paid to Twitter comes back as rental for their infrastructure

But what they really need is a network, or else it will be more akin to eBay buying Skype. This isn't a commerce play in my opinion, it is a comms one - Twitter is the embryo UC system Telcos have been trying to build for decades, and you don't really need your own comms network to flog retail goods online.

Ask eBay.......

...and Yahoo and Microsoft are the only ones still unhitched. They were dancing together earlier, but Yahoo went off and had a little shimmy with Google, but all Google was offering was a casual relationship - no commitment.

So here they are, getting it on again.......

There are a few other geezers hanging around, but none seems to have made a move yet, apart from some huffing and puffing.

Closing time at the digital Disco is approaching though....

One wonders in fact whether the clear out of a lot of the management was done in preparation of making the company more attractive - they would not be the first company to clear the decks like this, in eager anticipation.

Update...according to The Blodget, Microsoft also only wants Yahoo for her Search.

Planet Mobile's strategic response to Google's Android initiative - from ReadWriteWeb:

Nokia isn't finished with its acquisition spree just yet. Tonight the Finnish company announced a plan to acquire the 52 per cent of Symbian it doesn't already own and make the platform open source.

They had to - ever since Google announced Android, and Apple entered with iPhone, the clock was ticking on closed operating systems in the Tower of Babel that is Mobile OS. The economics of the industry requires a small number of coherent OS to develop applications on if it is to be viable vs the miniaturising PC's.

Plus of course, Google and Apple are not point players, they run ened to end Ecosystems, which double trumps a massively fractured point solution which is what the Planet Mobile OS game now is. RWW nails it here:

But at the same time, this could also be driven by Nokia wanting to have more control over both the hardware and software side of its business, similar to how Apple has created its own operating system for the iPhone.

Google, Nokia, Apple's hats are in the ring now. I wonder what Microsoft will do in this game, given that they are also swooping down from above with the new generation of small PC's. Prediction is risky, especially about the future, but an Open Source OS would not be an impossible dream, especially if it interworked closely with one's PC.