Experience shows that the first wave of Internet-enabled change was tainted by irrational exuberance. A sober analysis of today's trends reveals that this new participation is both a blessing and a curse. Mass collaboration can empower a growing cohort of connected individuals and organizations to create extraordinary wealth and reach unprecedented heights in learning and scientific discovery... (but) the new participation will also cause great upheaval, dislocation, and danger for societies, corporations, and individuals that fail to keep up with the relentless change.
- Don Tapscott & Anthony Williams, Wikinomics, page 15.
When people talk about crowdsourcing, wikipedia is almost always the first example given. The challenge, of course, is that wikipedia is a not-for-profit site, and individuals and companies face a very real issue trying to carry the lessons over to for-profit exercises. While we’ve highlighted companies ranging from Innocentive to Cambrian House in the past, I thought I’d draw your attention to another company moving into this space - Kluster.com.
Erick Schonfield wrote an excellent article about Kluster on TechCrunch about 10 days ago, and the key point is this: Ben Kaufman (the CEO) believes that what’s missing are market-like incentives to motivate contributors and push the best ideas forward. In turn, it appears they’re evolving a fairly interesting incentive distribution framework to encourage participation.
Kulster has created their own currency called “watts”. Companies and individuals can post projects (and their accompanying awards) on the site, similar to an innocentive contest. Kluster members can then “invest” their watts in whatever ideas they think are best, and they can also contribute to them in a variety of ways (design, etc.). When a contest is won, everyone who backed the winner gets a payout based on a variety of criteria - how much they contributed to it, how many watts they risked on it, and how early they got behind it.
It’s quite a cool idea - not only does it allow for the distribution of rewards, the watt system provides a market-based incentive system that should push the best / most marketable ideas to the top, so crowdsourcing is being leveraged in a few different ways at once. It’s also quite Darwinian - at the end of the contests, the Watts invested in the losers are redistributed among the winners, who then have more to invest in the future.
There’s also talk about royalties and other things that I think would be great (but apparently were met with resistance), but to get the rest of the details I strongly encourage you to read Schonfeld’s article yourself. Better yet, check out Kluster.com for yourself (but make sure you have a FireFox browser, because IE doesn’t seem to work so well right now).
Breaking news from the Digital Music Forum East 2008 Conference. In Ars Technica’s coverage of the conference, they posted the highlights of Ted Cohen’s opening speech which contained the groundbreaking news: Music 1.0 is dead. To be fair, the former Senior Vice President of Digital Development and Distribution for EMI seems to have a pretty good idea about what’s going on.
What surprises me, is that it needs to be said at all. Is there anyone anywhere who doesn’t understand what kind of trouble the old music industry model is experiencing. There’s more print and and bandwith devoted to the topic of its slow death every day than Gutenberg could have imagined in his wildest dreams and yes, I can see the irony in writing that in a piece on the same topic.
Here’s just one example of the what I’m getting at. Last year 48% of U.S. teenagers did not buy a single cd - a ten per cent increase over 2006. One estimate puts the ratio of illegal to legal downloading at 20 to 1. Clearly, it’s time to re-think things.
Cohen suggests a solution. He says that instead of wallowing in their desperation, the industry needs to be to be “wildly creative” and look a new models of doing business. I have a wildly creative suggestion. Instead of trying to swim up stream, all the time, the music industry could try getting with the program. Do I have a concrete solution? No. But there are success stories that the industry can look to for starters.
The success of Radiohead’s pay-what-you-want album is just one example of the music industry trying to drag itself into the 21st century. The digital market is only going to grow as legal downloads occupy an increasingly important and sizable component of revenue. It’s time the music industry took these fringe ideas and ran with them instead of trying to prop up a failing business model.
In what Tim O’Reilly refers to as a kind of augmented reality, the first ever Passively Multiplayer Online Game has recently been launched in closed beta. Created by startup company Gamelayers and backed by $500,000 of funding, this new venture aims to turn ordinary web surfing into perpetual online play - as if surfing the net wasn’t addicting enough.
Players earn ‘datapoints’ by simply surfing the web and can use these points to plant mines at various popular websites for other players to find. Less violent players can choose to leave gifts instead. Players can create quests for other players that involve following paths and finding missions along the way.
The potential to draw users to various websites through these quests creates plenty of opportunities for monetization, however, an article in Gigaom notes that the developers are currently not thinking of monetization options but instead focusing on finding new ways to turn surfing the web from “a mostly random activity into goal-directed fun.”
This development brings us one step closer to the idea of the internet browser being the ultimate social networking platform as PMOG might eventually provide IM, photo sharing, event planning and other typical social networking services.
The recently launched Flock Browser has attempted to be the leader in this space by providing an open source browser with enhanced social networking functionality.
While some may view PMOG as another inconsequential passing fad, Tim O’Reilly points out that this provides a glimpse into the future of the next level of “electronic augmentation of the world in which we live.” If the rapid adoption of Massively Multiplayer Online Games such as World of Warcraft, which as of January 22, 2008, has surpassed 10 million subscribers worldwide, has shown us anything, its that the potential for these types of games is massive.
It will be very interesting to see what new features PMOG adopts as the road ahead will provide plenty of opportunities as Gamelayers developers ponder: “How do you design a game where all of human data is the playfield?”
Look, we don’t really want to pick on Facebook. It’s sort of like tripping the prom queen. So don’t revisit posts like this, this, this, this, and this.
There was news today that the Canadian military has sent a memo advising soliders not to post anything related to their military activity…on the basis that tech-savvy members of Al-Qaeda and the Taliban can study them for clues about locations, movements, equipment, etc.
Much has been said, often in this space, about the Net Generation, and how their digital upbringing has instilled in them a different set of values and norms. That’s all well and good (ok, maybe not… see below), except, for the possibility that - perhaps - the “Net Gen” isn’t quite as “Net” as we often think. Or so go the findings of a just released study by Ipsos Reid. Entitled “Inter@ctive Teens: The Impact of the Internet on Canada’s Next Generation,” the report highlights some rather interesting findings that may in fact dispell the belief that N-Geners are “Internet-savvy, constantly-wired early adopter(s).”
The report notes that:
“12 to 17 year olds spend, on average, only 13 hours per week on the Internet (compared to a weekly average of 19 hours for online adults), and that number has not increased since Ipsos last measured online teen behaviour in 2004.”
As I have written before, social lending holds a lot of potential in its ability to tap into the natural ties between people. Recent estimates by Gartner support this view; the research group expects that by 2010, 10% of the worldwide market for retail lending and financial planning could be controlled by social network banking platforms. Banking executives beware; the two most popular products include lending and payments, both very profitable areas for traditional players. (Mortgage mess aside)
The leaders of social banking, which include Zopa, Prosper and Lending Club, have certainly been busy. Prosper has raised $40 million from investors, Zopa attracted $34 million while Lending Club secured another $10 million to grow beyond Facebook. Membership has also been growing: Prosper has almost 500 000 while Zopa is up to 150 000. One study predicts that Americans will turn to social lending to pay off mounting credit card debts with the amount borrowed for this growing to $159 billion by 2012.
Although social lending is not new, after all people got along without banks for thousands of years, the phenomenal growth of these new financial institutions is primarily driven by young people and high net worth individuals. The Net Generation, which is comfortable interacting in social networks, is mistrustful of large banks and attracted to the altruistic aspect of peer-to-peer lending. While social lending is still a nascent phenomenon, about $647 million worth of loans were made in 2007, it is one of the faster areas of growth in financial services. Traditional banks, just like telecommunications and record companies, will have to find a way to adapt and compete in this new Wikinomics environment.
Just a quick heads up that John Hagel and John Seely Brown have a great little article in BusinessWeek, which talks about lessons Western executives can learn from Tata’s $2,500 Nano. All I’m going to give you from the article are the four subtitles, which should pique the interest of wikinomics readers:
1. Think outside the patent box
2. A modular design revolution
3. “Open Distribution” Innovation
4. Welcoming users back into the design loop
As always, John and John are well worth reading… are there any other lessons from the Nano that jump off the page?
An interesting little experiment was launched yesterday - the Encyclopedia of Life, which planners hope will one day host pages for all 1.8 million species (and however many more are discovered along the way) that are apparently roaming the earth today. At minimum the PR for the site must have been a hit, as the site got 11.5 million visitors in less than six hours, the site crashed many times, and as I type this in the wee hours of the morning I still can’t get access to it (www.eol.org).
But assuming that this is not an elaborate hoax, EOL is a massive undertaking that could be of great value to a wide variety of people - scientists, policy makers, students, teachers, etc. However, in terms of the wikinomics angle I’m particularly interested in watching one key thing - who ends up making the 1,799,975 detailed pages we know must still be done. It might be expert driven (likely accurate, quite slow), and it might be a mass collaboration (likely accuracy issues, quite fast), and it might fall pretty much anywhere in between. Read More »
Along with Don’s coverage of the Wii Pay to Play model, the gaming system has also been building steam on the web recently with the announcement and distribution of the Twilight Hack. This marks the first time that the tools to hack the Wii have been made readily available and this opens the door to a wide range of user-generated programs for the Wii, which can now run unsigned code. In non-geek language, this means that it is now possible to write your own programs for the Wii, using nothing more than a plain old Wii, a loophole found in the Legend of Zelda: Twilight Princess game and an SD memory card with an SD media reader.
Some of the early homemade programs allow gamers to use their Wii as an MP3 player and also to run the Linux OS. While I couldn’t hack a mainframe to save my life, I will be keeping a close eye on this development - first to see what kinds of great applications ensue, but also to watch for Nintendo’s official reaction.
During a recent game developers conference, Nintendo’s Takashi Aoyama announced a new Pay to Play program. Details were few and far between, but it appears that it will go like this - Nintendo will begin charging for certain parts of certain online games. In order to help limit customer confusion, such games will have a red “Pay to Play” sticker on the bottom. Payment will be done by Wii points. Everything else appears to be up in the air still (at least in terms of public disclosure).
This has led to a bit of a guessing game about what exactly Nintendo is up to, given that they have been vocal about maintaining the “free” price point for online game access in the past. Comment boards were made for guessing games, and if you scroll through ones like this there are a some interesting insights scattered throughout. Notably, it would appear that this is being set-up so 3rd party studios can sell games through the Nintendo Wii platform… which could evolve into a very interesting wikinomics business model indeed.
But I don’t want to speculate too much yet - just keep an eye on how Nintendo’s Wii platform, Microsoft’s XNA Game Studio 2.0, and others evolve and compete against each other as game makers, experience creators, platform providers, and a variety of other ways. It’s one of those industries that is on the bleeding edge of change, and there will likely be valuable lessons for people in all sorts of other industries.
If you started reading this post based on the title, you’ve already half proven the point I’m about to argue. Sensationalism combined with social media is killing the news. Sensational headlines have always captured eyeballs, even when the dominant media was newspapers. However, with online developments such as hyperlinks, RSS feeds, news aggregators, and online voting mechanisms like Digg, headlines are often all readers use when determining newsworthiness.
I’ve been doing some research lately on how political communication in evolving with Web 2.0. Going through my notes, I came across the following snippet from an interview with one of the co-founders of a leading political blog and social networking site:
“There is this whole debate about the destruction Digg is doing to how information is disseminated. You have all these people who are going through [the site] and reading sensationalized headlines that have to be fictionalized, by nature, to get promoted. These are accompanied by a very small summary that is usually not very well written, and again, slanted because most people, and I’m guilty as charged, are attracted to those types of stories. The people creating the headlines are just trying to drive traffic back to their sites.
[…] The problem is that the people reading the news [on Digg] feel that by scanning these headlines they’ve been informed. You could scan the New York Times and Wall Street Journal and get a sense of the news, whereas now if you scan Digg-type sites, you’re getting a very slanted sense of the news. You form an opinion about an issue without really reading about what happened. I think that’s what’s scary about these things. Of course, the counter argument is that in order to be portable you have to be precise and you have to be digestible. It’s the whole snack media notion that everybody’s taking, but there’s got to be a little substance behind this or it’s going to work against us.”
In the past Don Tapscott and Nicholas Carr have debated on numerous occasions the topic “Does IT Matter”. At the FASTforward 08 conference Andrew McAfee made an interesting comment on how Web 2.0 tools and technologies mean IT will become a more powerful point of differentiation. Those of us at New Paradigm have always held the opinion that IT is a key component of competitive advantage.
The theme of FASTforward 08 was ‘the user revolution’ and it is the user/employee that is at the center of successful Web 2.0 solutions. The theory is that because employees are now informationalizing your IT systems being a fast follower is more difficult. The reason for this is two fold. First, implementation is no longer a matter of rolling out the tools, but rather convincing employees to adopt a collaborative mindset and way of working. Second, in the past the success of an ERP or CRM rollout revolved around a small team of experts and consultants which could to a certain extent be replicated by another organization. With collaborative tools success hinges on the entire organization contributing and developing the tools.
Look at some of the mainstays in the Web 2.0 suit of technologies - wikis, blogs, social networks, tags, RSS, predictive markets. The collaborative, social, user generated nature of these tools makes it almost impossible to duplicate the value from one organization to another. Sure, technically speaking it’s simple to install and configure Web 2.0 tools, but when you are talking about information technology, getting the information into those tools is an art form. This means that organizations that can leverage Web 2.0 technologies will gain competitive advantage based on the skill in which they use those technologies.
Although there are many things China can learn from its North American counterpart in this new world economy, there’s at least one thing North Americans can learn from the Chinese.
China has developed a reputation for bootleg products (CD’s, DVDs, software etc.). So here’s a crazy thought, instead of refusing to change and opting to take measures such as suing their customers, or coming up with crazy DRM policies…. the Chinese music industry is – adapting. Albeit, not by choice, Chinese record companies have given up trying to fight piracy like their European and American counterparts and instead, are looking at different business models.
Following up on Danny’s post about the strength of China’s internet firewall, and its ability to withstand the curiosity and ingenuity of its citizens, Pakistan is now the latest country to ban access to YouTube. The decision taken by the Pakistan Telecommunications Authority has directed all ISPs to block access to YouTube “for containing blasphemous web content/movies.” In particular, the PTA makes mention of the controversial cartoons that sparked debate, and more unfortunately, riots across the world. So I’m guessing they’re doing it to protect their citizens, right?
This popular Pakistani blog disagrees, noting that it may have more to do with trying to shield the world from the voting irregularities that several individuals had captured on film and subsequently posted on YouTube. Blocking access to the site, and thus distribution of what may or may not actually have happened during the elections, is thus a nice modern spin on the creation of a Potemkin Village…. things are fine because we say they are.
In a post by Don earlier this month, he wondered if China would ever bring down its firewall. In the post, he speculates that the coming Olympic Games would only make the crackdown worse. Well it looks like he may have been right and wrong according to this piece in the National Post yesterday.
The article says China will open up very limited parts of the “Great Firewall” in order to give visiting foreigners unrestricted access to the internet for the duration of the games. They’re able to do this because the Chinese Internet censorship system is precise enough that it can filter (or not) searches from specific IP addresses as well parts or all of any webpage - the Chinese are hoping to medal in this discipline in 2008.
One of our collaborators, Sean Moffitt, pointed me to this very thoughtful (and funny) video on the changing relationship between advertisers and customers. It clearly shows the growing disconnect between traditional media advertisers and a new generation of consumers impervious to the old sales methods. The ironic thing is that the clip was made by Microsoft, a company that spends $11.5 billion on sales and marketing, with over $1 billion in U.S. ad spending alone. Although, admittedly the company is moving the bulk of its ad dollars to the digital sphere and hopes to significantly transform its marketing mix by 2010. With clips such as ‘Bring Back the Love’ the company clearly shows that they understand where to invest.
With the increasing use of mobile comes increasingly innovative applications. As we have seen in the past, community driven applications offer the most potential and Trapster is no exception. Trapster is a mobile application that works across a wide range of mobile platforms that alerts users as they approach a speed trap. The service depends on its users either pressing a button or calling a toll free number whenever they encounter a speed trap. Trapster can be used with any kind of phone, but is optimized for phones that support GPS or WiFi (using skyhook wireless technology). Not only is trapster free to use, it saves you money by avoiding hefty speeding charges and increased insurance premiums.
Brendan and I spent the past couple of days in Orlando at Fast Forward ‘08, self-described as “the Industry’s Largest Business and Technology Conference Dedicated to Search-Driven Innovation.” At the heart of this event was a focus on the user-revolution, and how search technology would play a role in facilitating it.
Here’s a quick hit-list of some of the highlights (unfortunately, I didn’t take any pictures of the surreal experience of witnessing an Oscar-like awards ceremony for search companies):
John Hagel on his two big revelations of 2007/2008:
A) China and India are at the leading edge of management practices, focused on a collaborative mindset (networks rather than individual companies) which allows for enormous scalability, flexibility and an ability to mine specific skill sets.
B) The N-Gen’s fascination with profiles and themselves isn’t about vanity or narcissism but rather an astute attempt at getting attention in a world of ubiquitous information.
Juha Tiihonen, CEO & Cofounder of Starcut, noted that by 2010 there will 3 billion mobile phones in use across the globe, that’s 4 times the number of PC’s whichwill be in use, and 3 times more than the number of television sets.
Sue Feldman, Research Vice President at IDC, shared some great research on the impact of China and Chinese companies in the search marketplace. Today, Baidu attracts more queries than Google, Yahoo!, Microsoft and ad networks. She expects that advantage to more than triple by 2015.
Mark McCarthy, Project Manager at ReliefWeb, shared some great stats and stories about the collaborative processes that have seen over 2,900 NGO’s contribute data and information to the site, which then combines into some powerful tools for humanitarian efforts.
And finally…. Tom Reamy, Chief Knowledge Architect at KAPS, had my quote-of-the-conference with: “In this supposed Web 2.0 environment all we ever hear about is “revolution.” Everything’s a revolution. Well, whatever happened to evolutions in technology? What’s so 2.0 about all this stuff - what about 1.2 and 1.4! Only Evangelical christians talk about evolution while High-tech evangelists are all about revolution!”
Oh, and some guy called Don Tapscott spoke as well. I think you know what he’s all about.
The New York Times wrote a good article about how Wikileaks, a web site that allows users to anonymously post leaked documents has been shut down.
From the article:
[The site]… invites people to post leaked materials with the goal of discouraging “unethical behavior” by corporations and governments. It has posted documents said to show the rules of engagement for American troops in Iraq, a military manual for the operation of the detention center at Guantánamo Bay, Cuba, and other evidence of what it has called corporate waste and wrongdoing.
This brillliant legal mind didn’t consider that the magic of the Intrawebs, could somehow keep it going in Europe.
Great discussion on the legal blog at the Wall St. Journal (great site, btw, I referenced it in an earlier post) about the ethics involved. Free speech is a concept valued highly by free society. But should anonymous free speech be held as sacrosanct? Surely, if someone is giving the right to say whatever he or she wants, they should endure the responsibility of the consequences.
The Dumbest Generation? Have your say. I must first acknowledge my personal bias on this topic...
As a member of the Net Generation research team at nGenera (and a member of said generation myself), I am a firm believer in the tremendous accomplishments and potential of the Net Generation (those born between 1977 and 1997). So, I must say that when I [...]
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