Archive for category connect
The Value Proposition in Business Models
Posted by Tim in aggregate, business models, connect, filter on 28 August 2010
Anders Sundelin wrote a post earlier this week about the evolution of the business model concept. He does a great job of showing the various ways in which this idea has been operationalized – it’s still surprisingly fuzzy. For the state of the art thinking on business model innovation, a special issue of Long Range Planning has twenty articles on the topic (all free to download through September).
One element that is consistent across nearly all of the different ways of thinking about business models is that of the Value Proposition. A central part of building a successful business model is creating value for your customers. Innovation plays a role here in two ways: first, innovation is the process of executing new ideas to create value, so it is a central part of any new value proposition; second, we can innovate in the way that we create value, not just in the products, services or know-how that we offer.
In order to innovate the way we create value, it makes sense to look at how we create value from information. In general, we do this by aggregating, filtering and connecting. This works for big firms like Amazon, and smaller firms like O’Reilly Publishing.
I ran across two more examples of how this can work for smaller firms this week. The first comes from Seth Godin’s description of Gerald Roush and his Ferrari Market Newsletter. Here is the description of the newsletter:
The newsletter, it appears, was not just lucrative, it was a bargain. It chronicled the pricing, whereabouts and details of just about every Ferrari ever made. If you were a buyer or a seller, you subscribed. If you wanted to run an ad, you were required to include the car’s VIN, which added to Roush’s voluminous database.
The Roush effect involves extraordinary domain knowledge, a market small enough to understand and diligently earning the role of data middleman. The players in the market want there to be one clearinghouse, one authority who can connect the data, see the trends and publish the conventional wisdom.
Often when people talk about “aggregators”, they are referring to places like Amazon or Google, who try to catalog everything (or close to it). This is a great example of how you can effectively aggregate on a much smaller scale. The Ferrari Market Newsletter isn’t trying to aggregate everything, it’s just trying to aggregate all available information on Ferraris.
In this case, the aggregating is combined with filtering to create an comprehensive aggregation of information in a specific niche. The connections are made between people that are interested in Ferraris – most importantly, between those that want to sell one and those who wish to buy one.
Note that this is not algorithmic filtering, as we see on the comprehensive sites. It is judgment-based filtering. It often sounds as though algorithms are the only way to go these days, and as this case shows, that is not at all the case. There are still opportunities to build effective business models based on personal judgment.
Here’s another example, though it is more speculative. On Techdirt, Michael Masnick talks about the idea of building affinity-based music groups. Techdirt is a consistently interesting blog, and you should definitely check it out. Here is how he describes these groups:
… Topspin’s CEO, Ian Rogers, penned an open letter to Guy Hands, the head of (struggling) EMI, suggesting that rather than think of itself as a “record label” focused on promotion and distribution (two things that are easier and cheaper than ever before), it could instead focus on being the smart filter for music listeners today, struggling to find the music they love amidst so much musical abundance in the world. The suggestion was to take some of the key, iconic, bands under the EMI roof, and put them under affinity-based “mini-labels” with other less well known bands, that would appeal to people who liked the more well known band. It seemed like a great idea, which, of course, EMI has not done.
Here again, the value is created through filtering. And as with the Ferrari Market Newsletter, this model would then try to aggregate all of the bands that relate to each other in a specific way. This is a model that has worked very effectively for many years for Dischord Records – and like Masnick I think it has great potential.
Creating a novel value proposition is an essential part of generating an effective business model. There are great opportunities to do this in creative ways. If you focus on aggregating, filtering and connecting, you can build a good information-based value proposition.
LikeRelative Comfort
A Guest Post by Rick DeWitt
One of the ways people manage anxiety is to operate within their comfort zone. We each have our own internal sense of how much is too much, and how much is too little, and the comfort zone is in between.
We have comfort zones about many aspects of our lives, such as intimacy, athletics, and money. When we drop below our comfort zone, our survival instincts kick in, and we respond by doing something radical to get back. When we risk pushing the top of our comfort zone, we optimize our performance and grow. However, if we go too far, we will again do something radical to get back.
Comfort zones belong to individuals, and everyone is different. Where a pauper’s zone may range from $10K to $20K, a millionaire’s zone may be $1M to $2M. One person might think a walk around the block is good exercise, while another person doesn’t even break a sweat for the first mile. Roughly speaking, these comfort zones appear to vary exponentially from one person to the next.
Although our subjective perception is exponential, our resources are objectively linear. Suppose the millionaire gave $10K to a pauper? The millionaire stays within his comfort zone, but he pauper would think his ship had come in. Suppose the pauper gave $10K to the millionaire? He would lose his life savings, and the millionaire would not be moved. Although the objective value of the gift was constant in both cases, the emotional value is vastly different. The emotional value comes from the direction in which the gift moved.
Compassion is giving a gift according to need. Although I used philanthropy as an example, we have comfort zones about myriad aspects of our life. Whatever you have, give some of it away. Teach. Give a hug. Host a fun run. You may find yourself pushing the upper boundary of your own comfort zone around joy.
Note from Tim: I’m happy to have this post from Rick. He is currently a Mad Scientist, following a career as a programmer for Microsoft (where he only worked on the the cool stuff), and early success as a schoolyard football player.
Grab Bag: Constraints, Change & Networks
Posted by Tim in connect, innovation on 2 August 2010
Three posts jumped out at me today, so I thought I’d share them with you and add some thoughts:
- First, John Borthwick wrote a fascinating and thoughtful review of the iPad. He says that the native applications that will make it a genuinely unique device haven’t emerged yet, but that when they do, they will be the ones that take advantage of gesture. I think he’s right. He also had this to say about some of his favourite apps to date:
In the early days I was fascinated by camera A and camera B application — it lets you use your iPhone camera on your iPad, over WIFI. It’s one of those wow app’s — you show it to people and you can see their eyes open as they think of the possibilities this opens up. I think the possibility set that it opens up relate to the device as an extension of other connected devices. There (are) a small handful of other applications I found that have done interesting things integrating iPads with other devices — ie: Scrabble, iBrainstorm and Airturn. Airturn is brilliant in it’s simplicity and well defined use – using a Bluetooth foot pedal to turn the iPad into a sheet music reader. Apple might well have not put a camera on v1 of the iPad for commercial reasons (ie upgrade path) but the business restriction has opened up an opportunity.
CameraA/B is a good example of how those design choices are driving innovation. One of the first pictures I did was a requisite recursive image.
This reinforces my idea that constraints drive innovation. Limitations focus our attention, and since we are idea-generating machines, they help us find ways to work around them creatively. If you are trying to innovate, embrace constraints.
- Seth Godin wrote an excellent post with 26 words from A to Z that he has either invented or redefined. It is actually a pretty good summary of the major themes in his work over the past decade or so, with a lot of links that reward further exploration. I was particularly struck by his word for Z:
Z is for Zoometry: Originally a term from zoology (pronounced zo-ology, in case you were curious), zoometry is the science of instigating and learning from change. This is the revolution of our time, the biggest one in history, and it’s not just about silly videos on Youtube. One by one, industry by industry, the world is being remade again and again, and the agents of change are the winners.
This both explains why innovation is critically important (there’s a pretty high chance that your industry is being remade too), and it outlines an essential skill in the modern economy – initiating and adapting to change.
If we’re innovators, we must build our zoometry skills.
- Finally, Mark Earls asks then answers the question What Are Social Networks For? His answer:
Social networks are not channels for advertisers or for the adverts/memes you, your clients or any of your so-called “influentials” create, social networks are for all of the people who participate in the network.
Social networks are not best understood as channels down which folk send things; social networks are webs from which members pull down learning (from each other).
Now how does that change what you’re trying to do?
I think he’s right about the nature of social networks, and I think that the question he asks at the end is critical. It’s a waste of time to build things designed to ‘go viral’, because it’s not something that we control.
Build things (and ideas) that people can use, and if you’re lucky, they’ll share them with their friends. That’s the way the network economy works.
Critical Mass
Posted by Tim in connect, innovation strategy on 29 July 2010
In a brilliant post this week, Charlie Stross asks what’s the minimum world population needed to maintain the current level of the technology available to us today. Not long ago I talked about how isolation from the mainland made Tasmanian technology go backwards for a significant period of time – this is exactly the issue that Stross is addressing as well.
Here are a couple of the points that he raises:
And as for your smartphone? The damned thing has a component count somewhere between ten major subsystems and frame components and a hundred billion (if you go down to the smallest scale and count the capacitors in its FLASH memory). The number of fab lines on the planet that can make memory chips of that density is limited, and they rely on rare elements mined only in exotic locations and in tiny abundance.
…seemingly similar artefacts (cars, phones, airliners) have invisibly accreted complexity. The complexity makes them better (safer, more economical, more luxurious) than their predecessors, but vastly more difficult to engineer; stuff that used to be fixable by shade-tree mechanics and jobbing electricians has receded over the horizon. Back in the early 19th century, the complement of a sailing ship could expect to maintain the ship in every significant way using tools and expertise that they could carry aboard the ship. Today in the early 21st century, that’s not an option with airliners or probably even automobiles.
Thirdly, the complexity embodies in these new products means that their production is dependent on a complex web of lower-level specialities.
Then I found this current example of how we lose technology via Ralph Poole – the US has forgotten how to make Trident missiles. Here’s the story:
Plans to refurbish Trident nuclear weapons had to be put on hold because US scientists forgot how to manufacture a component of the warhead, a US congressional investigation has revealed.
The US National Nuclear Security Administration (NNSA) “lost knowledge” of how to make a mysterious but very hazardous material codenamed Fogbank. As a result, the warhead refurbishment programme was put back by at least a year, and racked up an extra $69 million.
For the first time, the report described the difficulties faced by the NNSA in trying to make Fogbank. A new production facility was needed at the Y-12 National Security Complex at Oak Ridge, Tennessee, because an old one had been demolished in the 1990s.
But vital information on how Fogbank was actually made had somehow been mislaid. “NNSA had lost knowledge of how to manufacture the material because it had kept few records of the process when the material was made in the 1980s, and almost all staff with expertise on production had retired or left the agency,” the report said.
The moral of the story is simple. Connections drive innovation. We need input from people with a diversity of viewpoints to help generate innovative new ideas. If our circle of connections grow too small, or if everyone in it starts thinking the same way, we’ll stop generating new ideas. And then we’ll forget things like how to make a fishing hook. Or a trident missile.
We need a critical mass of intellectual viewpoints if we want to innovate.
David Gauntlett – Making is Connecting
Here’s a great talk by David Gauntlett outlining some of the ideas from his upcoming book – it’s 9 minutes long and well worth the time:
It’s a bit of a jolt to run across something that resonates so strongly with some of the ideas that we’ve been developing here. Look at his three reasons that making is connecting:
Making is connecting because you have to connect things together (materials, ideas, or both) to make something new.
Making is connecting because acts of creativity usually involve, at some point, a social dimension and connect us with other people.
And making is connecting because through making things and sharing them in the world we increase our engagement and connection with our social and physical environments.
He’s talking about the importance of connecting in personal creativity, but compare that to what I’ve been saying about the importance of connecting in business models:
… 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 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.
I continue to believe that connecting ideas is the fundamental creative act in innovation. It’s great to find others like Gauntlett that are a lot further along than I am in thinking about these things. I’m definitely looking forward to the book!
The Art of the Innovator
Posted by Tim in book riffs, connect on 26 July 2010
Superconnect, the new book by Richard Koch and Greg Lockwood, includes this great quote from Denis Diderot in his Encyclopédie:
Everything is linked together… beings are connected with each other by a chain of which… some parts are continuous, though in the greater number of points continuity escapes us… the art of the philosopher consists in adding new links to the separated parts, in order to reduce the distance between them as much as possible.
I would say that this is also the art of the innovator – “to add new links to the separated parts, in order to reduce the distance as much as possible.”
This includes both of the connection steps – connecting ideas to each other (the source of novel new ideas), and then connecting ideas to people.
The thing that I particularly like about thinking about it in this way is that if you are innovating to reduce the distance between people, you are more likely to come up with things that are genuinely new, and more importantly, to come up with things that create genuine value.
Incremental improvements to existing things don’t do this. Instead, consider part of Umair Haque’s description of what makes Apple unique – their willingness to completely rethink existing categories:
Challenge products. Most companies make the same toothpaste, car, or shoe — just in a slightly different color or flavor. Not Apple. Every once in a while, it challenges the existing dominant design, the accepted ideal of what a product should be. That is, of course, the story of the iPad. Yes, tablets have been around for a while — but none with the features, attributes, and pricing of the iPad. Instead of contesting the same old stuff, Apple challenged everyone to rethink it.
That’s the art of the innovator. To create some artful innovation yourself, start thinking about how you can build those links.
(photo from flickr/Matti Mattila under a Creative Commons license)
Managing Different Creative Styles
Posted by Tim in book riffs, connect, innovation strategy on 25 July 2010
Connecting ideas is the fundamental creative act of innovation. Trying to harness this creativity within ourselves and our organisations is the first step in managing innovation as a process. Of course, this is a step that resists systematisation – as Simon Bostock points out, innovation is a cloud not a clock. In that post he quotes Jonah Lehrer:
Karl Popper, the great philosopher of science, once divided the world into two categories: clocks and clouds. Clocks are neat, orderly systems that can be solved through reduction; clouds are an epistemic mess, “highly irregular, disorderly, and more or less unpredictable.” The mistake of modern science is to pretend that everything is a clock, which is why we get seduced again and again by the false promises of brain scanners and gene sequencers. We want to believe we will understand nature if we find the exact right tool to cut its joints. But that approach is doomed to failure. We live in a universe not of clocks but of clouds.
Malcolm Gladwell shows why this process might be hard to manage in his story called Late Bloomers (originally in the New Yorker, then in his book What the Dog Saw). One problem is that there are radically different styles of creativity.
Gladwell talks about several examples of people that came into their own creatively later in life. One comparison that he makes is between Picasso and Cézanne. Picasso was precocious – his genius was apparent from pretty much the first painting he showed in public in his early 20s. On the other hand, Cézanne took much longer to develop. The consensus now is that his early work was for the most part terrible (in part because he was not technically skilled when he began) – his string of masterpieces didn’t start until he was in his 50s. In addition to differences in when their artistic talent emerged, there were also substantial differences in the ways that they thought about creativity:
Prodigies like Picasso, Galenson argues, rarely engage in that kind of open-ended exploration. They tend to be “conceptual,” Galenson says, in the sense that they start with a clear idea of where they want to go, and then they execute it. “I can hardly understand the importance given to the word ‘research,’ ” Picasso once said in an interview with the artist Marius de Zayas. “In my opinion, to search means nothing in painting. To find is the thing.” He continued, “The several manners I have used in my art must not be considered as an evolution or as steps toward an unknown ideal of painting. . . . I have never made trials or experiments.”
But late bloomers, Galenson says, tend to work the other way around. Their approach is experimental. “Their goals are imprecise, so their procedure is tentative and incremental,” Galenson writes in “Old Masters and Young Geniuses,” and he goes on:
“The imprecision of their goals means that these artists rarely feel they have succeeded, and their careers are consequently often dominated by the pursuit of a single objective. These artists repeat themselves, painting the same subject many times, and gradually changing its treatment in an experimental process of trial and error. Each work leads to the next, and none is generally privileged over others, so experimental painters rarely make specific preparatory sketches or plans for a painting. They consider the production of a painting as a process of searching, in which they aim to discover the image in the course of making it; they typically believe that learning is a more important goal than making finished paintings. Experimental artists build their skills gradually over the course of their careers, improving their work slowly over long periods. These artists are perfectionists and are typically plagued by frustration at their inability to achieve their goal.”
Where Picasso wanted to find, not search, Cézanne said the opposite: “I seek in painting.”
I think that there are parallels in innovation. There are innovations that seem to spring straight out of the heads of their young creators, like the search algorithm upon which Larry Page and Sergei Brin founded Google in their mid-20s. That’s Picasso-style creativity.
And then there ideas that take a while to germinate, and many iterations, like the Dyson Vacuum. James Dyson took over five years and hundreds of prototypes to get his bagless system to work. This invention, launched while he was in his late-30s, represented a major leap forward in terms of technical sophistication and accomplishment relative to his earlier inventions. This is Cézanne-style creativity.
This has a couple of implications for innovation management:
- At a personal level, we need to know which approach works best for us – the intuitive, broad, big picture, jump-straight-to-the-answer Picasso-style method, or the deliberate, slow, iterative Cézanne style.
- As managers, we need to avoid using ideas like this to support stereotypical thinking. Picasso worked in the same way all the way through his career. His creative style was established early and persisted. So it is not an issue where young people are creative one way, and older people are creative in another.
- If we are working with groups of people that are not experienced thinking creatively, we might need to set up innovation systems organised more around seeking, iteration, and Cézanne-style creativity.
There are many challenges in trying to manage innovation as a process. Accounting for different styles of creative thinking is another factor that we must consider in doing this.
On the other hand, all this might just be trying to turn a cloud into a clock…
(picture from flickr/Odalaigh under a Creative Commons license)
Get Out of the Echo Chamber to Improve Innovation
Posted by Tim in connect, filter, innovation on 16 July 2010
Ethan Zuckerman’s great talk from this week’s TED Global conference was just posted – it is well worth watching (the notes for the talk are here on Zuckerman’s blog):
This talk raises an important general point – if we want to be good global citizens, we need to be making more of an effort to discover what’s actually happening around the globe.
This relates to innovation though too. Connecting ideas to each other is the core creative act in innovation. And it is well-documented that we make more creative connections between ideas when we are exposed to a greater diversity of ideas. The problem is that most of us generally interact with people that are quite a bit like us. This greatly limits the diversity of viewpoints and ideas to which we are exposed. Consequently, this constrains our ability to innovate.
Here is how Zuckerman frames the issue:
We tend to use two types of filters to manage the internet – search, which is great at telling us what we want to know, and social, which promises to tell us things that we don’t know we want to know. There’s a lot of people trying to engineer serendipity by taking advantage of the fact that not only are you on the internet, your friends are also on the internet. And if your friends – or just someone with similar interests – finds something that’s interesting, it might be a serendipitous discovery for you as well.
There’s just one problem with this method. Human beings are herd animals. Like birds of a feather, we flock together. And so what you see on a site like Reddit or Digg – or what links you get from your friends on Facebook or Twitter – is what the flock is seeing. The flock might help you find something that’s unexpected and helpful, but it’s not likely to find you something from halfway around the world.
His solution to this problem is to find bridges – people that span multiple communities. These are people that can provide exposure to new ideas. John and I have talked about the importance of bridging in network terms – and Zuckerman provides clear examples of bridges, and the benefits of connecting to them.
He also talks about the importance of non-algorithmic filtering. I agree with him that we have lost sight of the value of this, and that we need to use different forms of filtering to create different forms of value. He talks about expert-based filtering as one specific method for finding bridges and increasing the diversity of ideas that you consider.
Exposing ourselves to a wider diversity of ideas is critical. It is especially important in our roles as citizens, but it is also crucial for improving innovation. We need to hear idea that don’t simply echo our own. The best way to make novel connections between ideas is to hear ideas that are radically different from those we’re used to thinking about.
We need to find bridges, or be a bridge, between diverse ideas. That’s one of the simplest ways to become more innovative.
The Negative Side of the Network Economy
Posted by Tim in connect, innovation strategy on 14 July 2010
The negative side of the networked nature of the economy is that it is not easy to get new ideas to spread through it, even if they are good ones. Part of the problem is that before you can people to connect with your great new idea (new product, new service, new way of doing things, new way of thinking), you have to get them to break connections first.
The latest illustration comes through the twitter feed of Valdis Krebs, a story on the invention of a syringe that greatly reduces the chance of infection in hospitals. This is hugely important, as infections are one of the leading causes of hospital-related health complications. The story tells of the invention of Thomas Shaw, a flanged needle which is apparently very effective at preventing infections.
I can’t judge the technical merits of the invention from the article, but for now let’s assume that the product from Shaw and his company Retractable Technologies is genuinely better than what is being sold by the Bechton Dickinson, the firm that dominates the syringe market. If this is true, then hospitals should be lining up to buy the new syringes, right?
So far, wrong.
One issue is the way that hospitals in the US buy things. Most of them purchase supplied through collective organisations, called Group Purchasing Organizations (or GPOs). Here’s a bit about how GPO purchasing works:
Then, in 1986 Congress passed a bill exempting GPOs from the anti-kickback provisions embedded in Medicare law. This meant that instead of collecting membership dues, GPOs could collect “fees”—in other industries they might be called kickbacks or bribes—from suppliers in the form of a share of sales revenue. (For example, in exchange for signing a contract with a given gauze maker, a GPO might get a percentage of whatever the company made selling gauze to members.) The idea was to help struggling hospitals by shifting the burden of funding GPOs’ operations to vendors. To prevent abuse, “fees” of more than 3 percent of sales were supposed to be reported to member hospitals and (upon request) the secretary of health and human services.
But, as with many well-intended laws, the shift had some ground-shaking unintended consequences. Most importantly, it turned the incentives for GPOs upside down. Instead of being tied to the dues paid by members, GPOs’ revenues were now tied to the profits of the suppliers they were supposed to be pressing for lower prices. This created an incentive to cater to the sellers rather than to the buyers—to big companies like Becton Dickinson rather than to member hospitals. Before long, large suppliers began using “fees”—sometimes very generous ones—along with tiered pricing to secure deals that locked GPO members into buying their products. In many cases, hospitals were obliged to buy virtually all of their bandages or scalpels or heart monitors from one company. GPOs also began offering package deals that bundled products together. To get the best price on stethoscopes, a hospital might have to agree to buy everything from pacemakers to cotton balls from the GPO’s preferred vendors. Hospitals went along because they got price breaks, usually in the form of rebates if they met buying quotas.
Think about this in terms of connections. There are very large, complex, difficult to break ties between the GPOs and the large suppliers. The article on Shaw and Retractable Technologies cites several other examples of people and firms that have come up with great medical innovations which have essentially been killed by this arrangement.
Getting your new idea to diffuse through the economic network is often the hardest part of innovation – and also the thing at which inventors are least skilled.
Unfortunately, I’m not sure I have any really good solutions to this problem. One clear lesson from this is that when we are trying to be innovative, we must be aware of the importance of diffusion. Innovation is a process, it’s not just coming up with great ideas. Getting the ideas to spread is an essential step. And as the Retractable Technologies case shows, the deck is often stacked against you in this regard.
The second lesson is that we must understand the networked nature of the economy. When we’re getting our ideas to spread, we are trying to form connections between them and other people. We can do this by meeting their needs, and helping them realise their goals. However, before we can show that we can do that, we usually have to get them to break a connection. This can be incredibly difficult, and the playing field here is not level. Those that already have connections already have a huge advantage.
This is all part of what can make innovation so frustrating – it’s never just about the quality of the ideas. On the other hand, it’s also part of what makes it so exhilarating when it works.
Different Forms of Filtering Create Different Forms of Value
Posted by Tim in aggregate, business models, connect, filter on 8 July 2010
Ethan Zuckerman wrote a very interesting post today called What if Search Drove Newspapers? He talks about several different initiatives designed to gauge readers’ interest in different news stories, particularly those that are currently under-reported, and then devising methods for reporting stories on these topics. He asserts (correctly, I think) that this is basically search-driven content development. In particular, this is a strategy that will work well with Google.
Zuckerman concludes by making an interesting point (but you should go read the full post):
I’d propose another way in which search-driven content creation might be evil – it’s a step towards news outlet as search engine and away from news outlet as source of serendipity.
The front page of a newspaper is a statement not just about what’s happened in the world in the previous 24 hours, but what the editor believes is important for you to know about. There’s always more that happens in the world that can fit on a paper page – or even a much larger web page – and the editorial decisions made shape a vision of what you need to know as a reader and what you can safely ignore. Smart editors use this ability to engineer serendipity, pushing readers towards topics they might not have known they were interested in, featuring more obscure content that’s got good storytelling and a high likelihood of capturing a (previously uninterested) reader’s interest. (I wrote about this idea at more length in a post called The Architecture of Serendipity.)
The way to create value in digital business models is by creating value through aggregating, filtering and connecting ideas. The thing that I think is interesting about Zuckerman’s piece is that it basically looks at Google-style filtering as the only method for driving search. This method is algorithmic filtering – This is what people often end up talking about when they discuss news aggregators and other search-driven journalism.
However, there are at least five forms of filtering, and using each of them can create value differently. I think that we need to explore these other forms of filtering in trying to create online value – in the news industry as well as in other contexts.
The editor deciding what is important is expert filtering. This still is used in several contexts, such as at politico.com (discussed previously here). The expert network could be a very interesting approach to filtering new as well.
The main point here is that there is definitely still opportunity to take advantage of judgment in filtering and connecting news stories. Mechanical filtering methods (the algorithm-based approaches) appear to be dominating right now, in large part because of Google’s current gigantic footprint on the internet.
This does not mean that this is the only way to go, though. In order to create value with one of the different forms of filtering, you have to think through very carefully how you are going to do each of the aggregate, filter and connect steps. I’ve been arguing for a long time that the money in digital business models comes from filtering well, and that the firms that realise this are the ones that will do well. A business model with mechanical aggregating, and judgment-based filtering and connecting should still work. It might not be all things to all people, but then, very few successful business models are.
