Archive for category connect
The Economy is a Network
Posted by Tim in complex systems, connect, networks, time on 9 March 2010
The word “network” causes a lot of the same problems that “innovation” does – it is used in so many different ways that it is often hard to tell exactly what the user means, it’s in fashion to the point of sounding like hype, and as a consequence a lot of people are ready to stop using it altogether. So when I say that “the economy is a network” it can cause some confusion. Do I mean it is like a network? That is has network-like properties? That it’s something between a hierarchy and a market?
No. I mean that the economy is a network – and that the best way to analyse it as a network. In network analysis, a network consists of nodes (people, firms, countries and so on) and the connections between them (economic exchange, friendship, family relationships, disease vectors and so on). An economic network then is one where people are the nodes, and the economic relationships form the connections between them.
Thinking about economics in this way leads to some useful insights. I was reminded of this when I read Umair Haque’s latest post today – The Real Roots of Recovery. Here is how he sets up the problem that he’s trying to address:
What is an economy? Is it just rivers of money and stuff, flowing back and forth between consumer and producer, resting on a bed of information? That’s more or less the way we’ve conceptualized it. It’s why economists often say that banks and funds make up the “financial economy,” while industries that make stuff are the “real economy.”
When we conceptualize an economy that way, the implicit goal for both “producers” and “consumers” is merely accumulation of money and stuff. More, more, more. That’s what I call a “thin” economy. That kind of economy is thin in three ways: it’s brittle, easily broken; it’s fragile, crisis-prone; and it’s as shallow as Paris Hilton.
His suggestion is that to make a stronger economy, a “thick” economy, we need to focus on making real connections with others.
Yet even that’s just a beginning. The economy is “constructed” by us: built anew every second of every day by each of our billions of tiny decisions, emergently. The real change begins with each of us, and the choices we make.
This is a network story! The issue with networks is that ties are expensive to maintain. If we think about economic ties, the involve money, attention, time and care. My read of Haque’s argument is that we tend to only think of the ties in terms of exchange. In this view, we choose to buy a loaf of bread, we pay for it, and that’s that. That’s thin. A thick network tie will consider attention, time and trust as well.
What does this mean in practical terms? If we think of our economic relationships as network ties, then the idea that every transaction is a one-off makes no sense at all. Each time we need something, we have to figure out who is cheapest, where they are, and how to make that transaction. On the other hand, if we think of economic relationships as network ties, as something that persists – we value them differently. Now trust becomes more important, as does attention. We want ties that we don’t have to worry about because we know what we’re getting. We want a stable, persistent network. The way to get that is to build relationships with the people in our personal economy. We don’t have to recreate a whole new network each time we need something.
Viewing the economy this way also changes where we want to be in the economy. Take a look at this network diagram from Valdis Krebs:
The people that I’ve circled are those with high betweenness centrality (learn about that here). In an exchange economy, those are great positions to be in because you can take advantage of your position in between two big clusters. Any goods or information that has to pass between the two groups has to go through you, and this is profitable. However, this also leads to a brittle network. If you lose the people with high betweenness, the network breaks down as the groups become isolated.
If you take a network view of the economy, you become worried about the overall structure of the network. You build links between people so that there is redundancy in the network (network weaving!). This is the strategy that O’Reilly Media has used very successfully. In a network economy, we try to build up the structure of the network to increase resiliance.
Finally, thinking about the economy as a network helps with innovation. In an exchange economy, you just have to get your new ideas out there. If they are better, people will buy from you. Everyone that has ever tried to get a new idea to spread knows that it’s not this easy. We have to get people to disconnect from whatever ideas they’re currently using and adopt ours. If we think of the economy as a network, this process makes sense. Our innovative ideas (new products, newservices or new ways of doing things) have to build new connections. Often this means that we need people to break old connections. This is the central problem in idea diffusion.
The economy is a network. Think about it this way and suddenly we move beyond transactions. The nature of the economic ties between us becomes much more important. These ties involve money, time, attention and trust. If we pay attention to these four things as we build up our economic network, we’ll start building a thicker, more resilient economy.
Information Wants to Be Free?
We often hear that “information wants to be free” – but does it really? If it does, why did my research partners and I just pay $13,000 to get a copy of this database?
Now that’s admittedly 13,000 Australian dollars, and once you take exchange rates into account it comes out to — a whole lot, in any currency. Why is it worth that? And why did we get it? Alert readers will be able to guess that the answer to both questions is aggregate, filter and connect.
This is a concrete example of creating value from information in both cases. First off the database. It is a compilation of data about strategic innovation alliances going back over 30 years. The data has been aggregated from public sources. It has also been filtered – out of all of the available news about strategic alliances, the original researchers have filtered out all of the ones that are not innovation-related. They’ve then also aggregated data about the objectives of the alliances, start and end dates, industry, and several other things. And they’ve connected all of that data together into a database. By starting with widely available information, they have used aggregating, filtering and connecting to create a valuable resource for researchers.
The people that have put the database together have already done plenty of analyses of the data, and published many papers on their findings. So why would we pay for data that has already been pretty thoroughly worked over? Because we can aggregate, filter and connect too. In this case, we’re paying them for most of the aggregating and filtering, but we have some unique connecting capabilities that makes it worthwhile for us. I have some skills in longitudinal data analysis that are fairly rare – connecting these with the data will create new information. My primary collaborator has developed some unique economic theory, which we’ll connect with the outcomes of my network analyses. By connecting our unique skills and knowledge to a database that anyone can buy, we’ll create new value.
Our objective is to provide some practical insights that will help organisations manage innovation collaborations more effectively. Studies show that somewhere between 50-80% of all innovation alliances fail to meet their objectives. If we can figure out a way to improve these outcomes it would be quite valuable.
So the next time someone tells you that “information wants to be free”, remind them of the entire quote from Stewart Brand:
On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.
And then remember that the way to create the expensive information is to aggregate, filter and connect.
Why Your Great Idea Will Fail
There are a few reasons why your great idea will fail. The main one is that it will fail because it isn’t executed, or it isn’t execute well. We’ve talked about the problems with focusing just on ideas many times before. Last week I read an outstanding post by Matt Perez and realised why this is a problem. Here is one of the key parts from Matt’s post:
As I’ve been saying in several posts, I think it is obvious by now that more and more the future will be dominated by companies that can keep up a consistent stream of innovation. Given the system today, patents are a necessary evil for some industries, but woe to those who focus solely on protecting their one (and only) brilliant idea. Better to spend money and effort in creating and sustaining a culture (and processes and metrics) that makes innovation possible, even disruptive innovations.
As I read this, I realised that the issues with ideas and innovation are a stock and flow problem. When we focus just on compiling ideas, we are working on increasing our stock of ideas. Often, when we do this, we think that more ideas are better.
The problem is that better ideas are better, not more ideas. In order for this to make sense, we need to think about the flow of ideas. This is why I think that Matt’s point about the importance of having an innovation culture and process is so critical. We need to be able to translate ideas into action. That is why tools like the Innovation Value Chain are so effective. It’s not that the model is perfect, or the only tool to use. But it works because it gives us a feel for the way that we process ideas – we need to generate good ones, we need to select the most promising ones to try out, and we need to get our great ideas to spread. We miss a lot of these critical steps if we only focus on building our stock of ideas.
In arguing this point, it is easy to discount idea generation too much. As Harold Jarche points out, we need both stock and flow to make things work. But the most common mistake when firms try to become more innovative is to focus entirely on building their stock of ideas, which is why I think it’s important to emphasise the importance of building a process that facilitates idea flow.
Hugh MacLeod makes this point in a different way in his post today:
Products are idea amplifiers. The molecules and/or bytes are secondary.
This gets at the importance of the last part of the Innovation Value Chain – getting ideas to spread. And it also illustrates the importance of good quality ideas – if everything that we are trying to sell is based on ideas, then quality is clearly important. But at the same time, we have to execute them, and we have to get them so spread.
So your great idea will fail if it is only part of an idea stock. If it’s your one great idea, that you hang onto no matter what, the odds of succeeding are low. On the other hand, if your great idea goes into an idea flow process, then your chances are better. We need “consistent streams of innovation” to win – and for that, we need to concentrate on improving our idea flows, not just increasing our stocks.
(Photo from The Stock Solution Photo Agency under a Creative Commons license, and the cartoon is the latest from Hugh MacLeod’s daily newsletter, which you should subscribe to)
Establish Authority by Creating Value
Posted by Tim in aggregate, book riffs, connect, filter on 22 February 2010
One of the best ways to build connections within the economic network is to be an authority – and since revenue often follows connections, this is a useful strategy to consider. How do you become an authority? I’ve run across a couple of suggestions recently.
First up – this from the JournaMarketing Blog (I’m not trying to pick on the guy, his recent posts are much better, and worth checking out):
Services like Friendfeed make it easy to pull together information from a lot of different sources. So if you’re looking for a way to become an authority in your field, find the 5-10 top sources in that field, and pull their feeds into one location — on your own website. You’ll earn the goodwill of those other sources by linking to their content. And you’ll gradually become the 1-stop shop for anyone looking for information in your field.
Compare that process to the one outlined by Chris Brogan and Julien Smith in Trust Agents:
Say that you’re asked a question by e-mail about a specialty of yours… You could just respond by e-mail, but you don’t. Instead, you write about it on your blog. You point the person who made the original inquiry to what you wrote, so taht person gets what he or she wants; but now, anyone else can see it as well. People who arrive via Google by searching for similar information can visit and post comments weeks, even months, later. Your blog post, which used to offer answers to typical questions asked by a few people, has now become a resource…
Imagine that you do this 500 times. Over time, you’ve probably been asked 500 questions about your specialty; suppose you had answered all of them on your blog. These 500 posts now make up a pretty hefty set of resources, with a lot of insider information and tips, and you’re heping a fair number of people. As you do so, you’re starting to become known for your expertise.
So, our choice: establish your authority by creating value for people, or do it by appearing to create value. Which do you think will work better? Which person are you most likely to believe? Which takes the most work?
Aggregating by itself does not create value – this is a common fallacy doing the rounds these days. To create value, you have to aggregate, filter and connect information. In the Trust Agents example, you are not just aggregating the stuff that you know. You are filtering it so that it addresses specific problems that people have, and you are connecting up ideas to help solve those problems. And you are also connecting your solutions to people, actively through e-mail and telling people about your blog, and more passively through search engine visits.
The difference, of course, is that it takes a lot more effort to create 500 good quality blog posts. It will probably take more than a year, or even longer. And even then, you’re only “starting to become known” as an expert. But that’s what it takes to establish genuine authority. You have to put in the hours – there’s just no way around it. Of course, the payoffs (both emotional and financial) to being a genuine authority are generally higher as well.
These ideas apply whether you are building a personal brand, or whether you are creating an innovative business model. You need all three skills to creat value. You have to be able to aggregate, filter and connect to establish authority by creating value.
(Photo from flickr/Wessex Archaeology under a Creative Commons License)
You’re too Scared to Innovate
Posted by Tim in book riffs, connect, innovation on 18 February 2010
One of the best live shows that I saw during my university days was Beat Happening and Girl Trouble. All of us were a long way from home in Washington when I saw them in New Jersey. While Beat Happening was playing what I thought was a pretty mesmerising show, my friend Tom leaned over to me and said ‘we could do that.’ I looked at him for a long time, then said ‘but we don’t, do we?’
We didn’t then, and we don’t now. We don’t play like Beat Happening, we don’t do a lot of things that it seems like we could, if we just tried it. Calvin, Heather and Bret did not play complex music:
and yet, there haven’t been many bands like them. Why not?
Seth Godin says in his new book Linchpin that it’s because we’re afraid. His contention is that the way to be personally remarkable is to make art, and that it is within everyone’s capability to do this. Here’s his description of Fred Wilson and Jerry Colonna’s investment firm Flatiron Partners:
…for five years, they returned profits and created companies like few other funds in history. After the fact, it seems obvious that this was a special moment in time, and that taking advantage of it was smart. But there, right then, it wasn’t obvious, it wasn’t easy, and there certainly wasn’t a manual. Anyone could have done, but anyone didn’t. They did.
Godin’s explanation for why people don’t regularly create things that sets them apart, that makes them remarkable is fear. His idea is rooted in biology -
The lizard is a physical part of your brain, the pre-historic lump near the brain stem that is responsible for fear and rage and reproductive drive. Why did the chicken cross the road? Because her lizard brain told her to.
Want to know why so many companies can’t keep up with Apple? It’s because they compromise, have meetings, work to fit in, fear the critics and generally work to appease the lizard. Meetings are just one symptom of an organization run by the lizard brain. Late launches, middle of the road products and the rationalization that goes with them are others.
This reminds me of the most common reason give me for why they aren’t innovative: their boss won’t let them be innovative. Or their company won’t. Or both. Or their industry isn’t innovative. It’s all the same excuse – I can’t innovate because I’m scared.
Here’s the thing – if you really want to innovate, and there really isn’t any scope for you to do so in your current position, then you have to get a new job. Either that, or you have to figure out how much you can get away with, and try some things. Either way, you have to take action – now.
Godin says that way to get around the problem is discipline. You have to practice overriding the fear. The more times you do this, the more self-confidence you gain, and the easier it gets. But it never gets easy – you always have to fight the fear. I know that I sure do.
Here’s my prescription:
- Think about how much you can get away with – if you manage a budget, how much discretion to you have? If you don’t have a budget, what are the parts of your job that you control?
- Make a list of 10 things that you can do within the current scope of your work that will make things better for the people with whom you interact – customers, co-workers, bosses, whoever.
- Do those things.
- Figure out which ones worked, and those more.
- Figure out which ones didn’t work, learn why not, then forget about them.
- Focus on the ideas that went well – even if only one of them works, you just made your work a better place.
The point with this is to just get started with innovation. Try things that are cheap experiments. Learn from failures, amplify successes. Try a lot of ideas at once so that you don’t get too attached to them – if you only have one idea, the stakes are much higher, even for a cheap and quick experiment.
As you do this more, you’ll get better at it – you’ll build innovation skills. Linchpin is worth reading to find out how to start building these skills. If you get really, really good at thinking up and testing new ideas, then getting them to spread, your job will get more interesting, and you’ll have more opportunities. This means change, and that’s a big part of what causes the fear. But it’s also what provides the rewards.
And if you get exceptionally good at all of this, you might make it look so effortless that anyone that watches you work will think that they can do it too – just like Beat Happening.
Get Better Ideas, Not More
Posted by Tim in connect, innovation strategy, replication on 16 February 2010
Innovation is all about executing ideas so that they have economic or social value. John and I have both talked frequently about how many firms overemphasise generating ideas when they try to increase innovation. When they make this mistake, they end up with a lot of stockpiled ideas, but the amount that they have successfully executed hasn’t gone up because they have mistaken invention for innovation.
There are two issues with ideas that we need to manage – we need to get better ideas, and we need to get them to spread. At a personal level, these are the two parts of connecting – we connect ideas together to create novel, valuable new ideas, and then we connect these ideas to people to get them to spread. We also have to do both of these things as firms when we are managing innovation.
I ran across a great example of these issues today with the blog. A couple of days ago I wrote about how Venessa Miemis used the skills of aggregating, filtering and connecting to create a great blog post called ‘iPad: Overhyped Flop or a Case of Great Design Thinking?‘. The post was very good, and it ended up going fairly viral, with over 14,000 views in a week. Venessa’s assessment is that the bulk of this traffic was driven by this tweet from Tim O’Reilly:
That seems like a pretty reasonable assessment to me. Our conclusion was that connecting the idea to O’Reilly was what led to it being connected to many of the 14,000 people that arrived later. Coincidentally, I had the same thing happen to me yesterday with my post using the aggregate, filter and connect framework to analyse the success of O’Reilly Media. It also was tweeted by Tim O’Reilly:
You couldn’t really ask for a better controlled experiment, could you? So what happened with my post? Well, O’Reilly drove a bunch of traffic to my site – today has had the single highest number of visitors to the blog ever, and it’s still only 1 pm here in Australia. But the total number of visitors is about an order of magnitude less than the number Venessa had.
Why is this? I think it is because of the quality, or at least the spreadability of the ideas in the two posts. Seth Godin uses this diagram in his post today to show how the quality of an idea is worth more than the number of (faux) followers you are talking to:
He is arguing that if your idea is more likely to be passed along, than you can start by giving it to only 100 people (the purple and green lines), and it will quickly spread further than worse ideas seeded among 10,000 people (the red and yellow lines).
Why were Venessa’s ideas more likely to spread than mine? A few reasons:
- I think hers were better thought out. Her post on the iPad is thorough, it makes really good sense, and she articulates the key themes that she found very well. Mine was a lot rougher and this makes my post less likely to spread (though I’m still thrilled with how many people have read it!). The better idea spread much further through the same channel.
- Venessa’s topic has a broader appeal – which makes it more spreadable. There are a lot more people interested in whether or not the iPad will be any good than there are interested in business model innovation. Hard to figure, but true!
- The iPad is a better fit with Tim O’Reilly’s network. If we can generalise about over a million people, I think it’s reasonably safe to say that they are probably more interested in technology than in innovation ideas. So the overlap between the overall higher number of people interested in iPads and O’Reilly’s list of followers is high too.
I think this is a perfect example of the importance of connecting up ideas before we try to connect them to people. Godin’s conclusion is:
A slightly better idea defeats a much bigger but disconnected user base every time.
The lesson: spend your time coming up with better ideas, not with more (faux) followers.
This is an important innovation lesson as well. We don’t need more ideas, we need better ideas. In many ways this is a stock and flow problem – if we only focus on stocks of ideas, we’re less able to get them connected to people. We need to think about our idea flow. As the story of these two posts illustrates, the quality of an idea has a lot to do with how well it flows through our networks. It is yet another example of the greater importance of quality, not quantity.
As we’re managing innovation, we need to figure out ways to increase the quality and the flow of our ideas, not just the number of them.
Aggregate, Filter & Connect for Smaller Firms
Posted by Tim in aggregate, business models, connect, filter on 15 February 2010
We know the story by now: as it becomes less and less expensive to transfer digital content, the price firms can get for information-based products and services is being driven down. This has led to chaos in the music, news and publishing industries. So everyone in these industries is doomed, right? Wrong. I believe that successful business models in information-based industries can be built if you focus on three key skills: aggregating, filtering and connecting.
I’ve talked about how this is true for people, and also for large firms like Amazon. But what about medium-sized companies? Doesn’t all the money go to the big ‘aggregators’ like Amazon and Google? Not necessarily. A great example of a smaller firm that has been very successful in the information-based industry of publishing is O’Reilly Media. Today I’d like to talk a bit about why I think they are doing well. But first, let’s hear why Tim O’Reilly thinks they’re doing well:
Tim O’Reilly makes the argument for Open Publishing @ TOC 2009 from Open Publishing Lab @ RIT on Vimeo.
Right off the bat, he characterises the firm as ‘connectors’. O’Reilly works to spread ideas (connecting ideas to people), and then uses the connections that are made to generate money. It’s a pretty good business model, and one that I think will continue to work. Here are some more examples:
- First off, O’Reilly filters by specialising – they are not a general publisher. Here is Tim O’Reilly’s broad business goal:
Here’s mine: To become the information provider of choice to the people who are shaping the future of our planet, and to enable change by capturing and transmitting the knowledge of innovators and innovative communities.
To do this, they primarily focus on publishing books on the internet and open source technologies, programming, and systems administration are probably their core areas, but they also look at other digital topics like security, digital photography and information design. When building their business models the first thing that smaller firms need to do is to find something in which they can be the absolute best.
- Once they have filtered by specialising, O’Reilly aggregates in a couple of ways. One way is through the conferences that Tim O’Reilly mentions – they draw thousands of people that are interested in the O’Reilly core topics. It’s likely that most of the people that are interested in writing on these topics show up at these conferences. They also aggregate by building a community around their work. In addition to the conferences, they do this by hosting online user groups and forums, providing training, and giving away a lot of relevant content through blogs, white papers, and free downloadable copies of many of their books. All of these activities pull in the people that are most likely to contribute great new content themselves.
- When I talk about connecting at the personal level, there are two directions of connections. People connect up ideas, and this is how they create value. They then connect their ideas to people – this is how they get their ideas to spread. It is roughly the same for firms. First, they create value by connecting up their value network. In the case of O’Reilly, part of how they do this is by taking a highly activist role in the editing process. As John Scalzi humourously points out, publishers provide a number of services that are critically important to authors. Connecting authors to the right resources is a key part of building the value network at the back end – ultimately, it is the value network that creates economic value.
- The second part of connecting for firms is getting your ideas to spread. I think that this entails much more than marketing. It is built upon meeting the needs of your customers and business partners. Again, O’Reilly takes an approach that is different from most publishers. They have been much more willing to provide free downloads of books – sometimes this hurts sales, but sometimes it has driven sales. In both cases, it has helped to build the community. They also get their ideas to spread through the conferences. As this week’s TED conference has shown, when you have limited space available for a desirable event, you can charge people a lot to attend. One of the ways that people get their money’s worth from such events is to tell everyone they know about them – which spreads the ideas.
Tim O’Reilly wrote the book (well, the article) on Web 2.0 – and he uses the principles he has outlined to build his company. There isn’t anything new in any of the individual actions that O’Reilly Media undertakes – the thing that is unique is the way that they have combined things.
This is a great example of business model innovation. They are not delivering books, they are delivering ideas. Once you make that key switch, there are many new opportunities available. The O’Reilly Media business model is based on skills in aggregating, filtering and especially connecting. These are the three critical skills that you need to build successful information-based business models – whether you’re a person, a huge firm like Amazon, or a smaller firm like O’Reilly Media.
Creating Value from Information
How do we create value when we’re busy tweeting, blogging, reading and writing? I have been arguing that to create value from information, we need to have systems in place that allow us to aggregate, filter and connect information – and that this is true for people, and for business models. These are the things that go on all the time behind the scenes when people are creating blog posts, and I thought it would be interesting to see how this actually happens.
Shortly after the unveiling of the iPad, Venessa Miemis wrote a post called ‘iPad: Overhyped Flop or a Case of Great Design Thinking?‘ Venessa has a distinctive talent for writing about complex topics in an integrative and creative manner, so I thought it would be interesting to ask her about how she put this post together.
Tim: What resources did you use to collect & keep track of all of the discussions surrounding the iPad?
Venessa:Ever since I started blogging regularly, starting in November 2009, I’ve used Twitter as my main tool for collecting resources. It’s taken months to build a network, but it’s been well worth it. I’m very satisfied with the quality of tweets that pass through my stream. For the iPad post, it wasn’t too hard to find the articles – the Twittersphere was abuzz with speculation and opinions about the iPad in the week leading up to the keynote and in the days following it.
I saved most of the articles that came from a media outlet (Wired, New York Times, engadget, PopSci), and then paid attention to the articles by individual bloggers that were getting RT’d and referenced the most. I also used the #iPad hashtag to search what people on Twitter outside my immediate network were saying. I saved all of these links into delicious.
Comment: Twitter ended up acting as both an aggregation tool and a filter. The assumption behind Venessa’s strategy here is between the tweets from own network, which is large, and through searching that she would find most of the relevant commentary on the iPad. The filtering aspect is interesting – when we choose to follow someone on twitter, we are in part relying on them to choose the best things that they encounter to tweet about. So our network is doing a lot of the work in terms of filtering.
Tim: Did you use any tools to sort out the themes, or did you just work it out in your head?
Venessa: The themes emerged from the posts themselves. As I read through them, it seemed the implications of the iPad could be framed around three main areas: business, education, and leisure.
Comment: Here’s where I’m a lousy interviewer, because this is the key part of the process and I didn’t ask very good questions here (but see Venessa’s comment for more). But the value in the post is that it did not simply aggregate all the online discussion about the iPad. After collecting all the information that she could find, Venessa selected further by picking what appeared to be the key posts about the iPad.
Then, she connected up ideas by grouping them into themes. For me, this is the entire reason that the post works so well – it is the creative connecting. It’s also interesting that Venessa covers this in one line. It’s very typical that this step is hard to describe. We often talk about themes ‘emerging’ from our collected reading. As I’ve said before, connecting ideas is the fundamental creative act – and when you read the post, you can see how Venessa did this extensively in writing it.
After we connect up ideas, then we have to connect our ideas to people to get them to spread:
Tim: How did you promote the post?
Venessa: At 2:06pm on Feb 1st, I tweeted this:
At 5:03pm on Feb 1st, Tim O’Reilly tweeted:
That day, there were 3,672 visits to the site. The next day had 5,297. The next day had 1,690, and since then there have been between 700 – 1,000 visits daily. The post has received 21 trackbacks, and 121 comments (although I answer almost every comment, so you can subtract that by half). It was one of the top 20 posts on wordpress.com on February 3rd.
At the time of this writing, bit.ly shows the link has been clicked 7,785 times.
I also just found out that the post was mentioned on Leo Laporte’s “This Week in Tech” podcast on February 7th by Baratunde Thurston.
Tim: Can you track how the idea travelled?
Venessa: With over 1.4 million followers, it’s clear that Tim O’Reilly’s influence is far-reaching. Normally when I post a new article, I’ll get around 400-700 visits. Last week I had over 14,000.
I did get a big influx of new followers on Twitter (250+) within those first 48 hours, but I don’t know what percentage of that translated into new blog followers.This has been a really interesting experience, and more a display of the power of influence than anything else. I wouldn’t say the quality of that post was particularly higher than any others I’ve written. It was just super topical and given exposure by a highly influential person within the tech community. In order to get a post go that viral again, I may just have to be patient until Steve Jobs builds hype for whatever comes after the iPad.
Oh, and another thing to mention, which I thought was interesting – though I received 10 times the amount of traffic, I only got about twice as many comments…..so maybe 14,000 visits and only 50 comments. which to me says a lot about the amazing community that has grown around the blog. Though I may not get huge daily numbers with my traffic, a lot of people comment and engage and interact, and that’s what has made the blog so interesting. The posts are primers, but the conversations that follow is where a lot of insights and tips come in. So though I saw the power of influence via traffic, the quality of traffic I already had is unmatched.
Comment: There’s obviously a lot to say about connecting up ideas and people here. First, the traffic spike from Tim O’Reilly came as a result of the quality of idea connections in the post. There were hundreds (probably thousands) of posts about the iPad that week. Venessa’s did well because of the synthesis. That’s what led to the post getting into a traffic network with so many people in it.
I think this sheds some light on the question of the value of transient traffic. Venessa’s blog regularly gets a lot of very good, thoughtful comments as she mentions. This is because of the community that has built up around the blog (connecting ideas to people!). Because that community was already there, I think it made it easier for her to capture some value from the huge spike in traffic that she got. Double the number of comments is actually pretty good – it is sure more than you’d expect if transient traffic is ‘worthless’. Same with an increase of 250 people following on twitter. I suspect that regular RSS feed readers probably took a spike too. If you’re creating good intellectual value, it increases the connective value of transient traffic.
Finally, a lot of people talk about information aggregation as something that creates value in and of itself. Because it is a relatively easy thing to do, this why a lot of people dismiss Amazon and Google as ‘merely aggregators’. But the value doesn’t come from simply aggregating. The real value comes from aggregating information, filtering it effectively, and then creatively connecting ideas.
All three parts of the process must be done well in order to create value from information. I hope that this behind the scenes peek at the making of ‘iPad: Overhyped Flop or a Case of Great Design Thinking’ provides some insight into how the process works.
Think ‘Network Structure’ not ‘Networking’
Posted by Tim in connect, innovation strategy, networks on 13 February 2010
The biggest problem with the idea of ‘networking’ is that it is a bad idea. Why? Because as it is usually practiced, networking consists of going out and making a whole bunch of new connections, and then hoping that something good will come of them. It is much more productive to think about your position within the network as you create connections. Once we have creatively made connections between ideas (which is the core creative act in innovation), we have to get our new ideas to spread. We do this by connecting the ideas to people.
When we analyse networks, the basic assumption that we make is that network structure is important. In practical terms, what this means is that the overall structure of the network is important to how well it functions, and our personal effectiveness within our networks depends upon our positions inside those networks as much as on the number of connections that we have.
Here’s an example. One line of network research has been built around Ronald Burt’s idea of structural holes – it is discussed nicely here by danah boyd. The idea is that in large networks, there are often major clusters within them that are not connected – the gap between the clusters is a structural hole. It can be very profitable to be the one that fills that hole by connecting the two clusters. And you can fill a structural hole even if you don’t have a lot of connections – here’s an example from one of my research papers:
In this network, the actor at node 5 has a lot of power, because all information from the two clusters must pass through her. Burt’s original argument was that from an economic perspective, filling a structural hole was one of the best things that you can do. He has gone on to show that filling structural holes leads to creativity – it’s the power of connecting ideas again!
However, from a network perspective, you can see how this structure isn’t so good. There is only one path for information and ideas to pass from one cluster to the other. If this were an organisation, this would be a horrible structure to have. Valdis Krebs and June Holley talk about how to address this problem through network weaving. The key idea here is that you should try to fill triangles. Valdis illustrates the idea by telling the story of how Ed Morrison connected up two people that he knew from the Oklahoma City Chamber of Commerce and Commerce Lexington, who were facing similar problems.
You can see here that the triangle starts with Ed filling a structural hole. But instead of acting as a broker, he acts as a builder – and connects Lynda and Cynthia to each other by introducing them and initiating a conversation about their common problems.
The key idea in network weaving is that filling in triangles leads to better-functioning networks. The trade-offs that you get for giving up your position in a structural hole are twofold: you gain stature and social capital by connecting people up, and the network becomes more capable of generating beneficial ideas that you can use yourself. June explains this really well in her talk ‘Networks in a Networked World’, whic you can find on this page.
There are a couple of key points here:
- In both of these examples, your position in the network is much more important than the number of connections you have. This leads to the basic mistake that most people make when they are ‘networking’ – the focus on quantity. You are much better off to have a network building strategy, which you can use to weave a better-functioning network.
- Bridging structural holes and filling in triangles can both be good business strategies – but they support different business models. Amazon’s strategy works not because they are simply an aggregator – they have very effectively positioned themselves in the structural hole between publishers and readers. Apple has done basically the same thing with iTunes. But filling in triangles also works – in many ways this is the key method for building gift economies that are driven by effective communities. This is the model used by Seth Godin, Hugh MacLeod and O’Reilly Media.
- If you’re managing networks within an organisation, you almost certainly want to eliminate structural holes, and use the network-weaving approach instead. In first place, unfilled structural holes are bad, so you want to get those bridged. But having only one person filling the holes can also be bad – you’ve substituted a bottleneck for a hole, which might not be much of an improvement. In most cases, you’ll want to build a more densely connected internal network, with many pathways over which ideas can flow.
To get our ideas to spread, we need to connect them with people. But doing this is not simply about volume – it’s not how many pageviews we get, or how many followers we have on twitter. Who we’re connecting to and where we sit within the network is much more important. So stop networking. Instead, start building a network.
We Have to Connect Ideas to Connect to People
Posted by Tim in book riffs, connect, innovation strategy on 11 February 2010
How do we create value in a world of mash-ups, remixes and nested hyperlinks? As I keep arguing, we do it through connecting – connecting ideas together, and connecting ideas to people. This is one of the core ideas that Jaron Lanier gets at in his frustrating but good new book You Are Not a Gadget. Lanier is a significant figure in the computing world who has accomplished a great deal. He was one of the pioneers in virtual reality, and coined that phrase. He was sharing a house with Richard Stallman when Stallman hatched the idea for GNU, which ended up leading to Linux, among other things. He’s been right in the middle of a lot the technological advances that we’ve seen over the past 30 years – so when he talks about digital issues, it’s worthwhile to pay attention to him.
You Are Not a Gadget builds on an argument that Lanier has been formulating for a while. The core ideas have been laid out in his essays One Half a Manifesto and Digital Maoism. The main theme is that Lanier takes issue with what he calls ‘cybernetic totalism’ – the key idea of which is:
That biology and physics will merge with computer science (becoming biotechnology and nanotechnology), resulting in life and the physical universe becoming mercurial; achieving the supposed nature of computer software. Furthermore, all of this will happen very soon! Since computers are improving so quickly, they will overwhelm all the other cybernetic processes, like people, and will fundamentally change the nature of what’s going on in the familiar neighborhood of Earth at some moment when a new “criticality” is achieved- maybe in about the year 2020. To be a human after that moment will be either impossible or something very different than we now can know.
To argue against this, he ends up arguing against a number of ideas that are currently popular, such as the discussion around the role of ‘free’ in business models, commons-based intellectual property initiatives, and the idea Moore’s Law will inevitably lead to a merging of computer science with, well, everything else.
Many parts of the book strike me as just wrong. He mangles the discussion of Stewart Brand’s ‘information wants to be expensive… but it also wants to be free’ dichotomy in a way that seems willfully obtuse – I have a hard time believing that he doesn’t have a better understanding of that argument. And when he talks about problems with musicians trying to make money with digitally-based business models – he contrasts the current state of affairs with a romanticised past that never existed. For example, he says that current model serves kids in a van that are willing to drive around to play gigs reasonably well, but that this isn’t a sustainable career. When has that ever been? Every band I’ve ever loved has done that, and they’ve been doing it since at least the mid-60s?
He then asks for examples of musicians that have succeeded with digitally-based promotion models. He discounts Jonathan Coulter because he has lowest-common denominator appeal (ummm, again like pretty much every single popular act for the past 40 years – that’s kind of the definition of ‘popular’) and then says he doesn’t know of any himself. Well, there are examples like Ani DiFranco and Kristin Hersh, and there also cumulative stats like the ones reported by the Times Online Lab, which show that in the UK, the share of music-generated revenue that goes to musicians rather than intermediaries has risen substantially over the past 5 years.
I think that some of these issues weaken his overall argument. But the book still has a couple of extremely strong points. The first is that Lanier has a number of concrete recommendations, which could be tried. I’m not sure they’ll work, but for example, his ideas about creating standardised formats and reporting rules for financial instruments strike me as well thought out, and something that we really do need to try.
And the core of his argument is exactly correct – we must have economic and creative systems that stimulate and reward the creation of new ideas. Open innovation only works when the organisations involved are creating their own ideas and contributing them to the mix. Mash-ups only work if there is something to mash-up in the first place. Lanier’s tagline is ‘You have to be somebody before you can share yourself’, and I think that this is exactly correct.
When I talked about Howard Rheingold’s filtering strategies the other day I discussed his idea that it is not enough simply to aggregate and filter information – you have to do something with it. You have to connect ideas up in a novel way – this is the fundamental creative act. You have to connect ideas together. This is hard. It takes time, it requires talent, and you have to work at it to develop your skills. You have to put the hours in, and develop grit to go with your intelligence.
Hutch Carpenter wrote a terrific post today about the importance of ideas. He used the example of what goes on within firms, saying:
When I post an idea, I create the basis for finding others. That because when I post an idea, I’m making…
A call for your interest
Think about that. The act of publishing an idea is a broadcast across the organization. It’s a tentative query to see who else feels the same way. Or if not the same way, who has an interest that overlaps mine.
This is unique to ideas. Ideas are potential. They are a change from the status quo. There are others who share at least some aspect of your idea. In large, distributed organizations, where are these people?!!
Carpenter also quotes Brian Solis who says that “Ideas connect us more than relationships.”
I think that these ideas are critical as we build our networks. We don’t just blog and tweet and link-in just for the sake of making connections. At least, we shouldn’t. We should do these things to share our ideas. We should build our network around our ideas.
But to do that, we have to have some first. The value in Lanier’s book is in pointing this out. Before we can connect to people, we have to connect up ideas. That’s how we enrich those with whom we connect.
The Universe, Dark Matter and New Venture Success
Posted by John in connect, evolving economic entities, innovation on 10 February 2010
You have probably heard of the dark matter puzzle in astronomy. I don’t remember that much from the astronomy unit that I took as part of my science degree but dark matter is one of those big questions that just gets undergrad students thinking. Put simply, the universe is really heavy (!) but if we make a best estimate of all the matter that is around in stars, planets and other stuff then we still fall short of accounting for all of the mass by more than 50%. This is not a simple measuring error (it’s very hard to hide half of the universe behind a corner somewhere) and it means that current explanations of the structure of the universe are incomplete.
I’ve just written a conceptual paper with a colleague here at UQ Business School and some friends from the Kelley School of business at Indiana U, which starts with a similar ‘dark matter’ puzzle. Entrepreneurship has become a major area in business schools and the most fundamental question in entrepreneurship research is why do some ventures succeed and some fail? Now, different people have tackled this problem in different ways. Psychologists have tried to describe an entrepreneurial personality that has a greater appetite for risk. There are even twin studies, which show that if your twin is an entrepreneur then you are also more likely to be an entrepreneur. While these studies can identify the characteristics of entrepreneurs, linking psychological traits to new venture success has not provided convincing results.
With complex problems like this, what we usually try to do is build models with a whole range of different factors that might explain success. In addition to psychological factors, we can also add to the model the type of industry, previous new venture experience, team experience, venture capital involvement, just to name a few variables. While research can show that these many of these factors can be correlated with new venture success, even the most comprehensive models can only explain about 20% of success. Just like the dark matter problem in astronomy, using our conventional thinking on new ventures means that 80% of success can’t be explained by established theory.
But maybe we have been looking at the success of new ventures in the wrong way. What if we start thinking about it as a process of building connections and growing a network. Usually when Tim and I talk about networks, we mean contacts between people. Another way of thinking about a business is as a network of all sorts of things including machines, documents, reporting systems, finance, supply and distribution chains and, of course, people as well. An entrepreneur has to build this network AND hold it in place. In other words, the main task of an entrepreneur is as a filterer and connector. Filtering matters because it is about screening opportunities to change and build the network, but the connecting and holding it together is the real work of the entrepreneur. Holding the connections in place is often the biggest test of the new venture. Pulling different technologies together, making them do something different and keeping partners in agreement on the business plan are all examples of where ventures fail because the connections fall apart.
So, how does this help us with the unexplained 80% of new venture success? I think the answer to this lies in thinking about a chess game. A chess board only has 64 squares and 32 pieces but beyond the first handful of moves, virtually every chess game evolves differently. The process of continually forming and adjusting connections means that every new venture has a different pathway and a lot of the opportunities and success depends on being in the right place at the right time. In other words, chance plays a significant role in the success of new ventures. We are never going to be able to build a model of new venture success that explains everything.
Having said that, the real task ahead of us is to research new ventures as dynamic systems that evolve over time. It won’t give us simple answers, but it might give us a better understanding of the wide variety of challenges that these businesses face and from there we may be able to derive some general principles of failure and success.
How to Filter Better
I was at the mall yesterday eating lunch, and I took a moment to listen to the conversations going on around me. They were, without exception, utterly banal. Consequently, I concluded that conversation is a useless tool, and the widespread use of it is nothing more than a symptom of the widespread decline of intellectual discourse, manners, and civilisation as a whole.
Stupid, right? That’s a riff on Clay Shirky’s response to people that complain about the quality of discourse within social networks.
The latest version of that complaint comes from Tom Davenport on the HBR Blog, who asks for us to tweet about something important:
Almost 50 years ago, FCC Commissioner Newton Minow suggested that the then-new medium of television was becoming a “vast wasteland.” One could argue that the same fate is befalling social media.
So here we are again: a promising new medium being used largely for vapid chattering about celebrities. Couldn’t these technologies be used for good?
Here’s an analogy: bird calls. When Nancy and I started birding one of the things that we learned was bird calls. When we’re actively birding, we’re pretty alert to everything, because we want to know where the birds are. However, when we’re working at home, we pay less attention to the calls. And since we’ve got a yard that is pretty attractive to birds, there are a lot of calls.
The vast majority of bird calls don’t contain too much information. The most common form of call is what ornithologists refer to as ‘chip calls’, which are short, brief calls that birds use to let other birds know where they are. It can help them find food (lots of chips in one area), it can keep them from straying from the flock (most of the chips moving further away), and it simply be a Horton-Hears-a-Who type ‘hear I am’ call or an ‘everything’s fine’ call. When we’re working at home, we don’t pay any attention to these calls at all.
However, the birds also have a few calls that contain a whole lot of information. We’re particularly interested in the calls that say ‘predator’. That usually means there’s something pretty interesting in the yard, like a Goshawk, or this Carpet Python:
We only got to see that snake because we heard the bird calls, followed them, and found the snake.
So we’re filtering the bird calls in our heads all the time, waiting to find the interesting bits. We need to do the same thing with conversations (well, maybe not the conversations at the mall food courts…), and social networks like twitter. Most of the words used in these media are like birds’ chips. We need to find the words that contain data. How can we do this?
Howard Rheingold is in the middle of putting together of series of tutorials about Mindful Infotention that explain a few different methods that work.
These are fantastic videos that are well worth your time. In the one above, Rheingold makes several important points. He demonstrates the use of several different tools for aggregating and filtering information on a topic that is of interest to you. He has step-by-step instructions that make it pretty easy to track down specific information from streams that are on average not very useful.
Rheingold also talks about two different forms of filtering – algorithmic and personal. He correctly recommends using a combination of the two. Algorithmic filtering includes tools like PostRank, which uses a formula to determine which posts are most relevant to your search. Personal filtering takes place on sites like delicious and diigo, where you can find the pages that the highest number of people have bookmarked, or the pages that specific people have saved. There’s also using your network to help filter.
Rheingold makes an absolutely critical point at the end of the video – it’s not enough to simply aggregate information, and filter it so that you have only the most relevant information. You also have to do something with it! The information is no good unless you connect it up:
The important part, as I stressed at the beginning, is in your head. It really doesn’t do any good to multiply the amount of information flowing in, and even filtering that information so that only the best gets to you, if you don’t have a mental cognitive and social strategy for how you’re going to deploy your attention.
There is a wealth of great information being shared on a constant basis within social media and elsewhere. None of it does us any good at all if we can’t find the bits that are useful to us in solving the problems on which we’re interested in working. But if we filter well, we’ll discover that we actually are tweeting about things that are important.
(I’ll also just note that Howard is currently getting treated for cancer – the prognosis sounds encouraging, and I hope that he pulls through it in good shape.)
Personal Aggregate, Filter & Connect Strategies
A while back my PhD student Sam and I were talking, and he asked me about my RSS feed. His question was something along the lines of ‘what blogs would I have to read if I wanted to be able to make the connections that you do on your blog?’ As we talked, I realised that it didn’t matter if I gave anyone else my exact RSS feed, they wouldn’t be able to replicate my blog – and the reason for this is aggregate, filter and connect.
When I first thought about aggregate, filter and connect as a framework, it was in an attempt to explain why Amazon’s business model worked better than that of other online bookstores. The first time I talked about it in public, it was to explain how open education might work. I’ve been working on making it in to a general model of how we create something unique when we’re primarily dealing with information.
As such, it can be used to explain business models, like Amazon’s, or blogs, like mine. The more I’ve talked about the model, the more other people are picking it up, which is great. Some of these recent discusssions have gotten me thinking about how aggregate, filter and connect works at a personal level. This was really Sam’s question. I’ve talked about how Charles Darwin basically used an aggregate, filter and connect strategy, Phil Long talks about it as part of personal knowledge management, Harold Jarche has discussed it as both a general model for business and for personal knowledge management (an idea that Jack Vinson picked up, and connected to the concept of enhanced serendipity from Ross Dawson), and Glenn Wiebe used the framework to discuss both Joseph Priestly’s inventions and teaching. So we’re starting to get a bit of discussion Today I’d like to illustrate the concept by discussing how I use it.
Aggregate, filter and connect is a non-linear process, with lots of feedback loops. However, it is unavoidable to talk about it in steps. While I do that, keep in mind that it is all going on at once. Here is how I use the framework to execute ideas in my main area of interest – innovation and networks:
Aggregate: I do a lot of data scanning. The RSS feed that Sam and I were discussing includes 182 blogs. I also follow 306 people on twitter, most of whom usually tweet about things relating to my areas of interest. In addition to that, I finish a book about once every 3 days, and I’ve been doing that for a looooooong time. I also talk to a lot of people, despite being an introvert (see Sacha Chua’s great presentation The Shy Connector to see how that works) – last year had over 80 meetings with people that are practicing innovation management, plus contact with my students, who are nearly all out in the workforce as well. Then there’s the stuff I’ve learned in all the jobs I’ve had. Collectively, this adds up to a fair bit of data.
Filter: This is my weakest area – I don’t outsource nearly enough complexity. I need to get better at taking notes on things I read, in searchable media, so that I don’t do all the filtering in my head. At the moment, I don’t even filter my twitter stream. Ken Gillgren argues that we should be taking in as much data as we can possibly handle, to improve our ability to see patterns and make novel connections. So I’ll say that’s what I’m doing. In addition to my head, I’m also using Evernote, my own tweets, diigo, and my blog as filtering tools. And I’ve used fairly primitive methods like writing reading notes, though that generally hasn’t worked too well for me – I actually find blogging more effective.
Connect: Harold Jarche has been doing some fantastic thinking about this topic recently, and he made this diagram to illustrate the process:
I think this is a nice diagram, which pulls together a lot of the recent discussion on the topic. The one thing that I would like to add to it is this idea: connection works in two related but distinct ways. The first is that we connect ideas to each other. This is the innovative act – as Schumpter said, “(Economic) development in our sense is then defined by the carrying out of new combinations”. This is where I put a lot of effort when I’m coming up with blog posts, with research papers, and even with ideas for consulting jobs. Making novel connections is a skill that I work hard to build.
The second way that connection works is that we connect ideas to people. This is the outbound side of Connection. I use several strategies. When I re-tweet something, I try to make a comment that links the tweet to a broader concept (sometimes a challenge with 140 characters!). I write about the idea connections that I make in my blog – as people read it, they start connecting with the ideas. I give as many public talks as I can – from last September until now I have given more than twice as many public talks as I had in the previous three years combined. In Canberra last week I had a talk with Geoff Garrett, who said “Innovations travel on two legs.” There’s something to be said for that idea – and I have a lot of discussions about my ideas face-to-face – it’s one of the most effective methods of outbound connection.
So that’s a brief summary of how I have been trying to use the Aggregate, Filter and Connect framework over the past few months. In using it, I have learned a few things that might be useful for others too:
- It really helps to think about the three tools explicitly. As I said, I’ve always been reasonably good at making novel connections. But my ability to get my ideas to spread has increased dramatically once I started thinking in this way. Particularly with regard to outbound connections. My use of twitter, and the increase in my public speaking were both ideas that I initiated to increase my connections.
- When people feel overwhelmed by information, it usually means that they aren’t filtering effectively. Like I said, this is my weakest area. But there are some really smart people working on this. In addition to the posts I’ve linked to, check out the rest of Harold Jarche’s blog for some ideas. Venessa Miemis and Ken Gillgren have done some really good thinking in this area too. This is one of the areas in which most of us probably need to improve.
- The other area that we probably need to address is this: we need to get better at connecting ideas. This is where we create value – by making novel connections. And it’s not enough to just make the connections in our head – we have to frame them in a way that others can act upon. That means creating tangible content – a blog, tweets that connect ideas, podcasting, something. My primary recommendation here is to practice making novel connections, and then express them in a way that enables your idea to spread. One good way to do this is to expand the range of areas from which you collect information, and as you read and hear things from outside your area, consciously think about how they connect back to things that you know well. This is the strength of weak ties between ideas.
- Finally, your personal knowledge management scheme isn’t complete until you are doing all three things well. Aggregating is great, but only an initial step. If you don’t filter well, you won’t be able to make sense of the information that you collect. At the same time, even if you aggregate and filter well, you only create real value when you make novel connections between ideas. Information is the fundamental building block of idea connections. Once you make these novel idea connections, you then need outbound people connections to get your ideas to spread. The three skills reinforce each other.
So there’s the answer to Sam – you can replicate my blog by copying my incoming information streams, using the same filtering tools that I do, and then making the same connections between ideas that I do. In other words, you can’t. Aggregate, Filter and Connect is one method you can use to generate unique intellectual value.
NOTE: I’d like to thank everyone I mention in this post, and many others as well for contributing ideas that I’ve been able to use as building blocks in this argument – It’s great that we’ve been able to Connect! George Siemens and Jon Husband have also written things on these topics that have influenced my thinking.
Another NOTE: Venessa has pointed out in the comments that Howard Rheingold has written one of the definitive articles on filtering: Crap Detection 101.
Third NOTE: Follow-up post: Filtering With Your Network
Final NOTE: Here is a practical example of how the process works.
What Would Google Do? by Jeff Jarvis
Posted by Tim in aggregate, book riffs, connect, filter, innovation strategy on 25 January 2010
The question of how to best adapt to the changes brought about by the internet is of key importance to all organisations that are in information-based industries. According to Jeff Jarvis in What Would Google Do?, the answer is fairly simple: do what Google would. Here is a video in which he outlines the argument in the book (this is from the same session of BRITE ‘09 as Umair Haque’s talk that I discussed yesterday):
Jeff Jarvis at BRITE ‘09 conference from Center Global Brand Leadership on Vimeo.
Jarvis, author of the blog buzzmachine.com, takes an interesting approach in this book. He infers a number of rules for acting more like Google, but he does this without having direct contact with the firm. Because he’s a very entertaining writer, this first half of the book is worth reading. However, in some ways it rehashes ground covered well by Chris Brogan and Julien Smith in Trust Agents (reviewed here), or David Weinberger in Small Pieces, Loosely Joined (reviewed here). The main ideas are that to succeed, you should join network and be a platform (both facilitated by the internet’s linking structure), give control to your customers instead of trying to retain it yourself, and build a business model based on serving niches. There are actually ten rules in the book, but those are the ones that I found most useful. Jarvis reduces these rules down to five in his tips for creating a Googlier you.
For me, it is the second half of the book that recommends it. In this section Jarvis tries to build new business models based on his Google rules in nine different industry categories, including media, retail, manufacturing and public institutions. Each section has two to three examples, and this part of the book is just fantastic. The thing that I like about it is that Jarvis really puts his ideas to the test here – tackling a number of industries that would not obviously lend themselves to following Google rules like car manufacturing, power generation, and restaurants. It is a fascinating intellectual exercise, and I think that a lot of his ideas would be worth trying out. I recommend the book based on this section.
I’ve been thinking about the ideas in What Would Google Do? while talking with an old friend from university who is currently working with a media company in the US. They are grappling with how to best deal with the challenges of online content. One of the things that they are considering is building their own branded media reader, an idea that Jarvis would almost certainly be against (I know that I am!). Valeria Maltoni wrote an interesting post on the topic of mobile news this morning. She included this graphic, which certainly makes the argument for the necessity of some kind of mobile application for media firms:
Maltoni also checks iTunes, and counts more than 3200 iPhone news apps currently available. This definitely means that my friend’s firm must be mobile-enabled – but why build their own e-reader? Why compete directly against Apple and the iPhone (and the upcoming iTablet), and Amazon and the Kindle, and, well, nearly everyone else that is already in this space? Their argument is that having their own branded e-reader will give them control. They can push out their own content to people, and reinforce the brand in that way.
There are all kinds of problems with this argument. First off, why do people need another mobile device that is tethered to one publisher’s content? Are they suggesting that people should carry their e-reader for their content, and a Kindle for books, and a smart phone for everything else? I’ve got too many gadget as it is – there’s no way I need another one. So I’m not convinced that the demand is there for another e-reader. I haven’t seen any of the financials, but I suspect that there is no way to make it pay without fairly massive volume, and I’m skeptical about achieving that too.
Maltoni’s recommendations start with creating great content, and the rest revolve around being more interactive with people – something that is probably easier to achieve with mobile apps than it is with mobile devices.
The e-reader idea also violates at least two of Jarvis’ Google rules. The first is do what you do best and link to the rest. This is very similar to Maltoni’s creat great content idea – that is what the media firm is good at, and that is what they should do. Do they have a competence in manufacturing electronic devices? Well, no. The second Google rule that this goes against is that you have to hand over control to gain peoples’ trust. The idea behind the e-reader is to enhance control, not give it up. Jarvis argues that this is exactly the wrong strategy to be following these days.
The one way to make the e-reader scheme work is to follow another of the Google rules – be a platform. The only way I can it working would be if it were structured to enable people to do a wide variety of things on it. This means having some kind of alliance that will enable book downloading, and an open software architecture so that enthusiasts can build apps for it. It means building in interactivity so that people can rate content, access the other content that they want, and mash it all together. It means directly taking on the iTablet, Kindle and smarphones. If you do all that, the scheme could work.
But I don’t think they want to do all that. So I don’t think the e-reader is the way to go. To find the best way forward, it might be useful for them to ask What Would Google Do?
Changing the Game for News
Posted by Tim in aggregate, business models, connect, evolving economic entities, filter, innovation strategy on 23 January 2010
A lot of people have been talking recently about a Harris Poll that shows that 77% of people in the US say that they won’t pay for online news. Specifically, this is the question they were asked:
How much, if anything, would you be willing to pay per month to read a daily newspaper’s online content?
And 77% chose the answer “Nothing.” These poll results are absolutely useless – primarily because the question ignores innovation. Here are some things that these results do not say:
- They do not say that information wants to be free.
- They do not say that daily newspaper content has zero value, or value approaching zero.
- They do not say that newspaper readers (or people interested in news in general) are a bunch of freeloaders.
The only thing this polls tells us is that whoever set up the poll is incompetent, and probably shouldn’t be listened to on any further matters of importance. This is fundamentally the wrong question to ask.
If you had asked people in 1980 “How much, if anything, would you be willing to pay per month to watch a television channel’s online content?”, the answer would be “Nothing.” And yet, cable television did reasonably well.
If you had asked people in 1987 “How much, if anything, would you be willing to pay per month to have another phone in addition to the one that you already have? And also, it will have a different number.”, the answer would be “Nothing.” And yet, mobile phones did reasonably well.
Of course people say they’ll pay nothing for news online! What idiot would say that they would? They get it for free already, from a number of good sources. We’ve never really paid for news. Cable TV and mobile phones worked because they offered something fundamentally different from what people already had. Cable didn’t take off until people heard about 24 hour sports on ESPN, and 24 hour news on CNN, and 24 hour music on MTV. Prior to this, you had sports on the weekend, and news at 6 pm and 11 pm, and music, well, never. Cable changed the value proposition.
Mobile phones changed the value proposition too – they allowed you to use the phone anywhere. And eventually, they allowed you to send short text messages. Even still, for me at least, this had negative value until smart phones came along and gave me a portable computer with gps.
And the big problem is that you can’t ask customers what they would want with these things in advance, because we don’t know. You can just experiment. With phones, the telcos always thought that the market was for businesspeople. Initially it was. Once they introduced texting, all of sudden there was a huge market for teens, which drove further innovation.
News has to experiment now, and they need to specifically think about how they create value with Aggregating, Filtering and Connecting. I’ve talked before about many different possible approaches to this. We can develop new funding models, like Jeff Jarvis has. We can develop new value creation models, like Dan Gillmore advocates. We can consciously develop an aggregate, filter and connect model, like politico.com’s or Dan Conover’s.
The main point is that this situation requires business model innovation. To figure out how to do that successfully, we have to ask new questions. We need a news version of cable television. Or a news version of mobile phones. The entire model has to look different. Polls that ask if you’d pay for current content online are not just worthless, they’re harmful, because they prevent us from asking the questions that can lead us to genuine innovation.
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