“The control the Web took from the vertically integrated, top-down media world can, with a little rethinking of the nature and the use of the Internet, be taken back.”

The main way we’re seeing this happen is through pay walls and locked down services, mostly in the form of apps and specialty devices that emphasize convenience over control. Most users aren’t savvy enough to dig into the nuts and bolts of technology—geeky techno-details be damned, they want what they want, immediately. Unfortunately, the consequence of this apathy towards technology is a future where a select few companies will control a significant portion of the content we consume. Apple would be the key culprit here with sleek must-have devices that, although tremendously well-designed (full disclosure: I own an iPad myself), lock users into a convenient, ‘black box’ mentality of computing.  Powered by iTunes, the App Store, and iDevices Apple controls the flow of content (the new TV network), monetizes the media you consume (the new record company and music store), has final say over which apps you can use on your devices (a new software monopoly), and controls the end user experience via extremely inflexible devices (recall Ma Bell owned all the actual telephones at one point as well).

Mobility is also a big factor. With more people creating and accessing data via mobile devices (e.g. smart phones, Kindles, and iPod Touches), we see more niche uses of the net that don’t include browsing and the open distribution of content. As the Wired article notes:

“Within five years, Morgan Stanley projects, the number of users accessing the Net from mobile devices will surpass the number who access it from PCs. Because the screens are smaller, such mobile traffic tends to be driven by specialty software, mostly apps, designed for a single purpose. For the sake of the optimized experience on mobile devices, users forgo the general-purpose browser. They use the Net, but not the Web. Fast beats flexible.”

The emphasis on convenience over control has built other media empires as well, including services that use templated experiences to simplify the web (think web presences on Facebook or even Blogger, as opposed to sites created by individuals and designers). Author and web pioneer Jaron Lanier derides many such efforts as dehumanizing and anti-intellectual, and cautions us against lock-in to design principles that were conceived by those more interested in advertising and data aggregation than people and intellectual property. His recent book, “You Are Not a Gadget” serves a manifesto for those unhappy with the current direction of most web 2.0 initiatives. He notes,

“Lock-in removes design options based on what is easiest to program, what is politically feasible, what is fashionable, or what is created by chance.”

It’s nice to think that lock-in and disempowerment is happening to help consumers and create better experiences, but it is also happening because it’s profitable. The ‘ease of access’ versus ‘freedom’ argument is a false dichotomy; you can have both, it’s just more work and more costly. But, it can (and should) be done. However, for companies, it’s easier to cite reliability and security concerns and far more profitable to keep things locked down. Lock-in allows for monetization via proprietary formats, advertizing, and device replacement. In a poignant, yet fairly targeted jab at Google, Lanier goes on to say:

“If you want to know what’s really going on in a society or ideology, follow the money. If money is flowing to advertising instead of musicians, journalists, and artists, then a society is more concerned with manipulation than truth or beauty.”

Herein lies the problem. Apple is creating its own walled garden, but has effectively created a way to monetize content and distribute money to artists and application creators. Google on the other hand has taken a much more open approach, but monetizes content via advertizing, which is not distributed to content creators. In both cases, the individual consumer feels cheated.

I wrote about much of this before in a Wikinomics post about Jonathan Zitrain’s book “The Future of the Internet and How to Stop It.” The main issue: locked down appliances like the iPhone that could eliminate the PC, and with it the “test bed and distribution point of new, useful software from any corner of the globe,” and “the safety valve that keeps those information appliances honest.” The move towards appliances also dumbs-down the user experiences. When appliances break you don’t open them up yourself to fix them, you call the manufacturer. This is exactly how the Apple approach varies from the PC approach. The internet dystopia that Zittrain feared could be upon us, and most users (even tech savvy ones) don’t even perceive this as an issue. As one commenter to my Zittrain post mentioned:

“The death of the PC should not be an issue. It’s like caring about the death of the CD, who cares, something better has replaced it. There will probably always be PC’s for those who prefer optimal performance in certain hardware and want large visual displays. But the majority of the population makes a waste of all that good hardware just by only using a PC to go on Facebook or chat with friends. Let them have their mobile devices and gaming consoles.”

Ah, but PCs do matter and here’s why: Without PCs we lose control over how we experience media. Media that is streamed at us through apps and gamining consoles treats us as passive recipients in a similar way that TV or radio did; it hosts purely sanitized content, it is controlled by companies not individuals, and it’s infused with advertising. The reason we don’t notice (or don’t care) is that it is social and so gives us the perception of control and creation. But what we perceive as control is data entry into predefined fields and forms that limit our expression. We need PCs to truly create new content.

Social media has debased intellectual engagement and self representation by making it effort-free. The cognitive load required to type something on Facebook, comment on a blog post, or even post a video on YouTube is small because these sites are designed to mimic a stream of consciousness. Although little creative energy is expended to interact, time is still spent, and information is still created and consumed. Much of the content includes off-the-cuff remarks that would traditionally have dissolved the way idle chatter does; however, repurposed using social media they are often compared in the same light as actual article writing or high-quality productions. Most apps don’t encourage the thoughtful creation of content, whereas using a full blown desktop is all about creative freedom. In a fairly balanced response to the Wired piece, Shane Tilton from the Center for Society and Cyberstudies Journal says:

“Creation vs consumption: Most of the promoters of the death of the open web are looking at it from the viewpoint that we go online to get our information, check in with our friends and maybe post a picture or video. If this was the case, the closed web would have won years ago. However, we like the ability to do create works from time to time and love having a way to share it with a larger community. The app based system of uploading content is relatively simple, which is the good and the bad point about the system. You can share content as it is in the real world, however it is moderately hard to edit it and add a creative mark to the content. An open web system gives access to online editors and content creation tools. The close system, for the most part, lacks these qualities.”

The multi-billion dollar question is, are locked-down devices, apps, and internet pay walls the future? Or, will it be open devices powered by the likes of Android and Symbian, and supplied with open content via web search and peer-to-peer networks? As long as the web is free and open and accessible to all, companies like Google can index it and derive value from it. And, with the launch of Google Instant, it seems that Google is trying to move people away from integrated search bars back to the home page (where it can better monetize its ads). Whether it’s Google’s web or Apple’s apps, one thing is clear, the next phase of the internet will be monetized by a few key players and far less free than it used to be.

An HR executive at a major manufacturer confided to me: “Last weekend, I hacked my iPhone so I could use it on our network because it is not an authorized device at our company.” When I asked how he learned to hack his iPhone, he said he found an Internet chat group of like-minded iPhone owners and readily found the right settings for his particular network.

A Managing Director in Singapore for a US-based company told me that his PC is virtually useless in Asia “Recently I was in Hong Kong stranded in traffic,” he said, “and I watched another executive, probably a competitor, thumbing his way through phone calls, emails, and other business on a tiny keyboard and tiny screen. Meanwhile I sat in the back seat of my limo twiddling my thumbs looking at my un-tethered laptop, bemoaning the fact that our company does not support an Asian mobile solution.”

Are these isolated examples? No. Are they real? Yes. Are these your typical Gen Y or Net Generation employees? No, all are senior executives each with over 20 years of experience. Why would any company want to stifle the productivity of its high paid executives?

The anecdotes come from the fieldwork of a major study of employee computing released by nGenera Corporation earlier this week. A group of colleagues and I spent more than a year conducting the research, which was sponsored by a blue-ribbon syndicate of global corporations that are members of our nGenera Insight programs. We interviewed individuals at top vendors, global companies, and major government agencies to understand the best way to unleash employee creativity, support new forms of collaboration, and drive new levels of productivity.

Let me review just a few of the findings from the study. (You can download a summary of the report here.)

• Some companies get it, some don’t. Most employees come to work to be productive. Many want to be creative. And, increasingly, more and more want to collaborate. Collaboration in the workplace requires open data, open apps, and open minds. Does this mean a workplace free-for-all? No. In fact, companies that “get it” categorize their data, specify where open apps can be used, and put in place infrastructure that naturally implements policies and controls to guide “creative and open minds.” Those that don’t get it find themselves outmaneuvered when it comes to looking for new talent and forced to reinvent the wheel every time they need to partner. Competitors who get the need for collaboration will continually extend and improve their product and service features faster and at a lower cost.
• Collaboration requires a collaborative services infrastructure – nGenera calls it a Collaboration Server. Who has better information about your employees, your HR systems or Facebook and Linked-In? With over 300 million profiles on Facebook, it’s very likely that Facebook profile information might be useful to download into your internal systems. Would such information benefit your employees? Would profile information benefit your sales reps when they deal with customers or prospects? Yes and yes. Organizations need a “master hub” for collaboration. This “master hub” seamlessly interconnects proprietary systems, structured data and unstructured data, internal search with external search, open applications, and external platforms (e.g., Google, Facebook, LinkedIn, Plaxo, WebEx, Salesforce.com, etc.), so employees have what they need. As nGenera puts it, the Collaboration Server integrates leading consumer platforms, user management and security, policy and compliance management, and metadata repositories.
• Share data, information, and knowledge to create value, but categorize first. Companies need to segment data and knowledge into a minimum of three categories: 1) data that is open; 2) data that can be shared; and 3) data that is closed (locked up). Why? Employees need to know what data is in which category. Open data can be freely shared with a great deal of discretion and often this leads to new ideas and innovation. Shared data, the realm of joint ventures, product design, etc., must be controlled and selectively (usually under contracts and NDAs) shared. Data such as formulas, designs, customer data, etc., need to be looked up and sometimes taken completely off the grid for competitive and legal reasons. In our research, thought, we found that few companies have taken the time to make even these simple distinctions. It is no wonder data security and privacy are compromised.
• IT cannot do everything, nor should they. Yes, technology is a major source of innovation. And yes, it’s impossible to have any business discussion these days without having a technology discussion. But that does not mean that IT must do everything. Companies that completely lock down their IT tools, technologies, and infrastructure, by definition, must depend on IT professionals to do everything. Today, with computer literacy rates at all-time highs, employees can do much on their own, if given the right tools and the right policy frameworks. In fact once the creativity is unleashed, few companies can anticipate all the innovation that ensues. Locked-down companies deprive themselves of significant productivity and innovation in their workforce. Smart CIOs are revamping their infrastructure and policies to support self-service IT models and unleash enterprise-wide creativity on a massive and measurable scale.
• Some employees will manage their own computing just for the privilege to be more creative and self-reliant. One of our earliest findings in this research program was that every organization has a segment of employees that want to be self-sufficient. They will even buy their own technology and provide their own support if the organization will give them greater freedom over their technological choices. A number of companies now provide this option to employees, such as by providing a stipend for purchases. Employees buy what they can with the stipend (usually from an approved but diverse list), and then are welcome to make additional purchases on their own nickel to augment their “computing environment.” At BP, one of the largest global energy companies, such a program reduced support costs and increased employee morale. Of course, BP also put in place the policies that defined the rules of the road, instituted a computer “driver’s license,” had the participating employees sign appropriate use contracts, and engineered a thin client infrastructure to securely link self-reliant employees to sensitive internal systems. The moral of the story: Do whatever you can to harness this class of employees.

We uncovered several other key findings about how companies are supporting and nurturing employee freedom, creativity, and self-reliance in pursuit of a collaborative workplace. Some companies (see Dion Hinchcliffe on open business data and open business methods) are on their way to the new model of employee productivity and so are some leading government agencies (see data.gov and apps.gov). Every organization has a choice and the consequences of the wrong choice may be dramatic and immediate: Will they pursue new policies, technologies, and practices that unleash the creativity, innovation, and energy of their workforces, or will they continue to rely on command and control and in the process stymie the next generation of enterprise innovation and productivity gains?

Wikipedia goes to great lengths on it’s NPOV (Neutral Point of View) policy page to explain how and when an article can be considered “neutral:”

The neutral point of view is a means of dealing with conflicting verifiable perspectives on a topic as evidenced by reliable sources. The policy requires that where multiple or conflicting perspectives exist within a topic each should be presented fairly. None of the views should be given undue weight or asserted as being judged as “the truth”, in order that the various significant published viewpoints are made accessible to the reader, not just the most popular one.

This sounds great, but I’m concerned that the Wiki system as a whole might have considerable bias built-in. First, consider what Wikipedia is. It’s the “free encyclopedia that anyone can edit,” but not anyone does — instead, most prefer just to read (it’s the 7th most visited site online). Just as visiting the site is an opt-in process, so is editing it; the community that creates and polices content is very much self-selecting. This is where I think the problem arises.Something is only neutral within the context of its community. That is, an issue is neutral (in my mind at least) when it exists perfectly balanced between the centres of gravity of two or more conflicting views. Given that the population of people who edit Wikipedia is necessarily drawn from the people who read Wikipedia — but also have the inclination, be it technological or ideological, to edit the site — there is the concern that the editing community has a different makeup with regards to their opinions on issues than the reader community, and the world at large.

Wikipedia attempts to address this by saying that in order for something to be cited as a reference, it needs to refer to a reliable source — one that has a reputation for fact checking and integrity. There are two problems with this:

1. “Reliable sources” have bias built in too. Al Jazeera is reliable to one subset of people, FOX News is reliable to another. Fans of either source would be offended to hear that the other is placed on the same level as their own.
2. The community gets to decide what sources are reliable (because who else is there to, Wikipedia is a community based effort).

The first problem doesn’t have any easy solutions; individual bloggers may be telling the truth with every word they write, but until they have a sufficient following and track record, there’s not really any reliable metric to decide if what they’re saying is admissible. Wikipedians could do research to bolster one-off claims found on blogs, but this practice would be awfully close to original research, something the site strives to avoid.

The second problem is simultaneously easy and hard to solve. The more people edit Wikipedia, the more accurate the alignment of “neutral” to the Wikipedians and “neutral” to everyone else becomes (unless of course people with a specific agenda flood into the site en-masse to try and shake things up). But this is counterbalanced with the issue of getting people involved. Not everyone wants to edit Wikipedia, and not everyone who wants to knows how.

Interestingly, I read this result as meaning that Wikipedia is consistent from first to last. In principle, the more people edit Wikipedia, the better it gets; similarly, the more people edit Wikipedia, the more its version of neutrality becomes one that reflects the world at large. It’s a fantastic resource, and if we want it to continue to improve, at some point, we’re all going to have to get involved.

(A special thank you to my friends Danielle, Eve, and Josh, with whom I had the conversation that resulted in this post. Also of note is that XKCD, did, in some measure, address this long before we did.)

Open standards and open source software already enjoy widespread support in Europe, particularly among governments who fear the influence of Microsoft and other proprietary software vendors. So this year’s conference will examine some of the issues that will define the Internet of the future. How will the next 5-10 years of technology innovation transform the Internet, for example, and are today’s regulations sufficient to ensure that the Internet remains open?

My role is to help make a broader case for openness in business and government, with my main point being that greater openness — socially, technologically, politically, and strategically — underpins any hope we have of solving some of the massive challenges that confront humanity. Here’s the description I’ve just finished drafting:

Open standards are fueling a period of unprecedented innovation on the Internet that is reshaping every institution in modern society. In business, smart firms realize that openness can accelerate innovation and unleash the knowledge, ingenuity and skills of a diverse global talent pool. In government, greater openness is generating radically more productive, equitable and transparent services and unlocking new possibilities to crowdsource solutions to global challenges. The Open Internet not only underpins these important transformations, it helps reveal a more general competitive and political imperative for the 21st century. Without greater openness in all institutions, the world will be ill-equipped to confront the complex challenges that face humanity.

I hope to see you at the event if you’re in or near Brussels on on April 24th.

Contests like these are worthwhile for a variety of reasons. One, if we left it up to public officials to make government more transparent I think we can all predict the outcome. Two, contests are a reasonably good way to incent broader involvement from the public. And three, third parties are not contrained by the bureaucratic encumberances and political considerations that stiffle innovation in the public administration. Thus they can build innovative new applications using public data sets faster and more freely than government.

That being said, we need to move beyond the “google map mash-up” paradigm and build applications that enable genuine interaction and engagement with government. And for that to happen, we need government agencies to genuinely engage in this process. I’m sure the folks at Sunlight Labs would agree!

Applications are due March 31st and winners will be announced on April 7th. The winner receives $15,000.

He outlined five objectives for the Forum.  I’ve summarized them below but I encourage everyone to read the full speech, which is a quick read.

First, we will support governments, and particularly the G20, in their efforts to address the systemic risks in the financial systems to stabilize and relaunch the economy. We have worked together with the respective governments to make sure that all relevant issues are integrated into our discussions and that we can create here – midway between the G20 Summits in Washington last November and in London next April – a true global multistakeholder partnership supporting bold but necessary actions and policy changes.

The second objective for our Meeting is to make sure that we look at our world in a holistic, systemic way. The financial and economic crisis is not the only issue that needs a global multistakeholder response.

The third objective of this Annual Meeting is to start a year-long process to help design the systems and institutions that the world needs to really cooperate and to confront global challenges in a much more proactive way.

The fourth objective of this Annual Meeting is to better shape the ethical value base for business, highlighting a clear differentiation between industrial and service companies that provide true value to society and those that make money through paper transactions and speculation. Profit is a major driver of business, but it is clear that it cannot be profit at all costs and that self-indulgence cannot replace reasonable competitive remuneration.

The fifth and final objective of this Annual Meeting is to reconstruct the global economy. Yes, we are in the midst of an enormous challenge but we are also at the threshold of many promising breakthrough technologies, as the strong presence of our Technology Pioneers demonstrates. Today, a great opportunity exists to generate a new wave of economic growth based on technologies, products and services directly meeting societal needs in eco-efficiency, in healthcare, in transportation, in people empowerment and many more.

As the Wall Street Journal notes:

Closer ties are crucial to both sides. P&G, the biggest advertising spender in the world, is waking up to the reality that the next generation of laundry-detergent, toilet-paper and skin-cream buyers now spends more time online than watching TV. Google craves a bigger slice of P&G’s $8.7 billion annual ad pie as its own revenue growth slows.

One can imagine many comical, yet extremely valuable exchanges like the one captured in the WSJ article:

As the two companies started working together, the gulf between them quickly became apparent. In April, when actress Salma Hayek unveiled an ambitious promotion for P&G’s Pampers brand, the Google team was stunned to learn that Pampers hadn’t invited any “motherhood” bloggers — women who run popular Web sites about child-rearing — to attend the press conference. “Where are the bloggers?” asked a Google staffer in disbelief, according one person present.

For their part, P&G employees gasped in surprise during a Tide brand meeting when a Google job-swapper apparently didn’t realize that Tide’s signature orange-colored packaging is a key part of the brand’s image.

I wonder what other kinds of collaborative employee exchanges could prove beneficial? How about healthcare providers and pharmaceuticals? Large retailers and product design teams? Marketers and contact center employees? Anyone thinking about video game designers and corporate IT executives? University professors and social media companies?

It appears (sample of 2-3 random articles) that these banner ads are now atop most of the entries in wikipedia.

On one hand I think it was rather noble of Wikipedia to refrain from commercial advertising on its site (because as Lawrence Lessig mentioned at a recent event of ours: commercial income might cause us to question motivations of contributors).

Yet on the other hand, I find it ironic that wikipedia’s “supported by donations” model has lead to banner ads on every page anyway. I’m guessing I’ll be flamed for saying it – but I say why not go the whole way. If we have banner ads on the top of every page, I suggest opening them to the highest bidder.

Done right, perhaps there is a way ads could actually keep wikipedia pure. Instead of hundreds of companies trying to quietly and subtly weave their agendas into wikipedia entries on the sly – why not give this commercial activity a proper and transparent place on each page and call it what it is – marketing!

Given that the status quo is largely still in effect, we’re left looking for other indications that change is coming in The Middle Kingdom. In my original post, I argued that business could be such an agent for openness in China. I wrote:

Business is a powerful force and its influence can’t be denied but criticisms that companies (search engines, I’m looking in your direction) have been complicit in Chinese censorship efforts leave me somewhat skeptical. Business is a powerful force and its influence can’t be denied but criticisms that companies (search engines, I’m looking in your direction) have been complicit in Chinese censorship efforts leave me somewhat skeptical.

Well it looks like Google has finally decided to do something about it. On their official blog this week, Andrew McLaughlin, Director of Public Policy and Government Affairs, posted the following:

In a world where governments all too often censor what their citizens can see and do on the Internet, Google has from the start promoted global free expression and taken the lead in being transparent with our users. We’ve pressed governments around the world to stop limiting free speech and made it possible for dissidents, bloggers and others to have their voices heard.

Being that Google’s mantra is “Don’t Be Evil”, it’s nice to see them address an area where they’ve been suspect in the past and use their Internet dominance to shine a light on an issue they formerly whitewashed. The internet has the power to put unjust and restrictive practices under real scrutiny but it won’t happen on its own. To that end, in the post, Google announced their partnership in the Global Network Initiative. The GNI is a global cooperative effort of non-profit groups, companies and educational institutions with a mandate to, “protect and advance freedom of expression and privacy in the ICT sector.”

It’s a small step, but it’s one in the right direction. It makes me wonder: Is this a tipping point for freedom or will we continue to see business as usual?

It’s called FiveThirtyEight.com – the Five Thiry Eight stands for the number of electors in the Electoral College.

I’m a big believer in numbers and the use of statistical analyses and simulations to achieve the most objective view possible – and the writers of FiveThirtyEight Nate Silver and Sean Quinn do just that.

This blog is a perfect illustration of the benefits of Web 2.0. Now, citizens have access to data and for those who are intersted and capable in doing so, they can use the data to develop and objective assessment. They know exactly where the information is coming from, how it’s being used and the best part – they can share it with the world.

In the spirit of transparency and to prove that their blog provides a well-informed, trust-worthy view the authors offer full disclosure; providing their names, explaining their day jobs, even going as far as stating who they support. However, the key is that they also disclose, as clearly as possible, their methodology for the results on their page.

Here is the process overview on their FAQ page:

Process Overview

The basic process for computing our Presidential projections consists of six steps:

1. Polling Average: Aggregate polling data, and weight it according to our reliability scores.

2. Trend Adjustment: Adjust the polling data for current trends.

3. Regression: Analyze demographic data in each state by means of regression analysis.

4. Snapshot: Combine the polling data with the regression analysis to produce an electoral snapshot. This is our estimate of what would happen if the election were held today.

5. Projection: Translate the snapshot into a projection of what will happen in November, by allocating out undecided voters and applying a discount to current polling leads based on historical trends.

6. Simulation: Simulate our results 10,000 times based on the results of the projection to account for the uncertainty in our estimates. The end result is a robust probabilistic assessment of what will happen in each state as well as in the nation as a whole.

I encourage you all to go take a look and determine for yourselves how accurate these predictions are. I know this is a blog I’ll be visiting daily.

Ten days after mailing the physical copy of the report to Carleton, Moufid emailed the 32 students whose accounts had been completely compromised, and informed them that the school had been made aware of the attack on security, and had decided to ignore it. One of the students happened to be an intern at a CBC newsroom, and her supervisor found the story to be interesting — it grew from there. Carleton said that they only received the package the same day that Moufid emailed the 32 students, leaving them with no time to do anything at all.

Moufid’s attack came from recognizing a substantial logical flaw in Carleton’s user authentication system: that once someone has access to a compromised email account, they have direct access to just about everything else. After seeing this design flaw, Moufid worked backwards, using what he knew about the Carleton systems, to figure out his point of attack, which turned out to relate to the Campus ID cards.

Once word was out that Carleton was looking for the hacker, Moufid promptly turned himself in. Carleton did not elect to expell him, but instead made it a condition of his continued presence at school that he claim to have lied about alerting the school to the security issue, among several other punishments.

While my heart goes out to Mouffid, I think he could have handled the situation in a much more delicate manner, Universities are built on reputation, and don’t respond well to students taking direct, public attacks on their reputations.

Since I’m still a student, this story hits home for me. Not because I intend to break into my school’s security system, but because someone else may have already, and my school could be sweeping it under the carpet. As the two links to wikileaks above point out, once the information is out there, it’s out there, and there won’t be a broom large enough to clean up the mess so that no one finds out.

As for how a university expects to have a population comprised almost entirely of the leaders of tomorrow, and be able to repress information that that population has access to, I’m not sure — I don’t see it happening. By ignoring Moufid, and then trying to discredit him (assuming that Moufid had given them plenty of notice), Carleton has set a precedent that will deter future students from bringing forth security issues: it paints their options as either allowing the insecurities to remain (by being ignored when hilighted), or receiving harsh penalties for trying to bring those security flaws to light.

I don’t mean to be hard on Carleton, it just happens to be the school where this incident happened, but it could just have easily been anywhere else. Universities need to make sure that they’re properly prepared for, or at least open to the idea of, uncomfortable situations such as these when the powers that be aren’t the ones with all of the answers.

Members of the net generation will scrutinize everything to make sure that it meets their standards, including especially the security systems that their universities provide. When you’ve got the architects of the security systems of tomorrow on hand, and they’re happy to find the holes in your current security system for you, it seems only prudent to seriously entertain their suggestions.

Valve, the company who developed Portal, has a long history of openness with their games. With their first game, Half-Life, Valve released a Software Development Kit (SDK) that allowed amateur game designers to build their own games on top of the existing engine. Counter-Strike, arguably the most popular FPS game ever, was the result of a fan-made project built on top of the Half-Life engine. Valve ended up hiring the team behind Counter-Strike, and eventually made a sequel.

Staying true to form, Valve released an SDK for Portal. So far as I knew, it was mostly used to make new levels with new challenges. Monday, it was announced that for the past eight months, a fan-made prequel, Portal Prelude, has been silently under development. It serves not only to add content to the existing game, but also greatly expand the scope of the story. In fact, Valve has even approached the team to offer their support and congratulations.

The team released a trailer for their project:

It’s tremendously professional.

Valve has done a fantastic job of building a loyal community around their games, and they’re very relaxed about amateur teams using their characters and settings to tell new stories, it’s very reminiscent of the Japanese manga culture. But instead of just providing their fans with material to adapt, Valve also gives them first-rate tool to work with. Based on the Portal: Prelude trailer, those tools look to be usable to great effect.

Valve, and other companies that open their games, are providing their consumers, and potential employees, with far more than a game, they’re selling a platform (and access to a loyal and enthusiastic community). It’s a fantastic example of openness and prosumption, and with benefits shared among everyone involved. This fan made extension of the story is fitting, given that the original development team was a bunch of students who caught the eye of Valve at a trade show, they were brought on board. Maybe the same thing will happen to this team…

Prelude is due out this month, here’s to hoping that my excitement isn’t misplaced!

The set up at Krems here in Austria is very professional with a great cast of speakers. After my keynote I did a panel with Secretary Andreas Schieder, the State Secretary for Civil Service and Administrative reform. We talked about government 2.0 and how wikinomics has implications for other institutions in society like education. Austria is doing some interesting things and he really gets it. In one example he did a comparison of the internal intranet and the public web site for his ministry and found that the information was pretty much identical. Conclusion — we need to be more open, but we default to opacity.

An addition:

Here at the Talk of the Future Conference in Krems Austria, I was delighted to meet Bret Swanson, a Senior Fellow and Director, at the Center for Global Innovation. He has some mind boggling data in the growth of bandwidth requirements for the internet. Consider this – a single Cisco Telepresence uses as much bandwidth as the entire internet of 1990.

Today openness and transparency are lauded as being not just good for your brand and public relations, but good for business too. (I think Don was just a few years to early with his book The Naked Corporation) The thing is that when companies jumped on the transparency bandwagon a few years ago, openness translated to sharing information on a website. The emergence of Web 2.0 tools changed the landscape overnight and stakeholders not only expect timely access to information, but a channel to engage and interact with the organization. What seemed like a simple task even three or four years ago has now transformed into a more complex exercise.

From the standpoint of the organization the bar has been raised in terms of the resources, policies and diligence they need to undergo in order to successfully engage stakeholders. Organizations aren’t used to committing the effort and resources to these initiatives, and even more troubling for many is the question “once we engage stakeholders, do we have to listen to them?” Organizations are used to functioning in a vacuum, formulate a strategy, develop offerings, communicate with customer, measure success, evaluate and repeat. Being open means that you have to do things like co-create offerings, collaboratively manage your brand and image, engage customers and listen and respond to feedback.

At first glance it seems as if the stakeholder is the only one benefiting from the changes as organizations fumble to get started. However, when an organization thinks about having more channels, detailed information, deep access and the potential for real relationships with stakeholders it sounds like the ideal situation they have always been trying to create.

So what’s the problem? For our clients it’s too much all at once and it’s very easy to get overwhelmed at the seemingly limitless possibilities and countless problems and pitfalls. In order for organizations to succeed the need to approach this new era of stakeholder engagement like they do a product or service rollout. Try a pilot, use a test market. I mean you would launch a new product simultaneously across the globe without running a pilot, so why would you try and engage and satisfy all of your stakeholders in one fell swoop? In this age of openness and transparency your stakeholders are not going to expect perfection or polish, they expect you to be honest and upfront. It’s not if you make a mistake, it’s when you make a mistake, how will you respond.

If I was writing this post a week ago, it probably would have been a feel good story about wikinomics, but the wheels have recently fallen off the proverbial bus. This is a development equally worthy of exploring in relation to the challenges that come with embracing wikinomics principles – and particularly those that emerge when you only embrace a few of them. Of greatest interest to me – if more stories keep popping up like this, it could be a dramatic blow to more open, collaborative innovation processes. That would be a shame.

TechCrunch picked up the story on August 22nd, when Ning suddenly removed all of the WL widgets, without warning to anyone, from their network. This decision which clearly angered the company, as well as the thousands of customers who had spent time and money with WL in order to optimize their offerings. Based on the emails that WL has published on the web, this is the gist of Ning’s complaint:

Over the past few months, WidgetLaboratory’s applications have caused multiple and significant technical degradations to the Ning Platform. In point of fact, your code has broken numerous times and has negatively affected a large number of Networks in addition to the Ning Platform.

This sounds fair enough – having a single company break the platform repeatedly would seem to be a problem. However, WL vehemently disagrees with this assessment. If you read through the emails they point the finger for whatever platform problems exist squarely at Ning (particularly highlighting when Ning implemented Dojo changes that broke many applications without bothering to inform any of their partner developers in advance). They also indicate the shutdown may be more about anti-competitive behavior (a.k.a. they’re making too much money and Ning wants it, and/or Ning is worried they’ll lose customers and revenue going forward). From their POV, this was a win-win-win relationship, and they don’t understand why Ning would do this unless there were ulterior motives.

What’s the truth? it’s hard to say without knowing EVERYTHING that’s gone on, but it’s even harder to say Ning has went about anything in the right way. If you work through the email train, there is an ongoing (if occasionally heated) dialog through to August 7th between Spencer Forman at WL and CEO Gina Bianchini of Ning, at which point she indicates the communication will be handed off to Jay for technical issues, Bob Goorah (general counsel) for the terms of service, and Jason Rosenthal for business conversations (who was starting on the 15th). The next email in the chain is this:

Dear Spencer,
I am writing to inform you that your network (widgetlaboratory.ning.com) and third party applications have been removed for violations of our Terms of Service. Please direct all correspondence regarding this matter to my attention. Thank you.
Bob Ghoorah
General Counsel
Ning, Inc.

So much for business and technical I guess – only the lawyer now, and there appears to be no interest in finding an amicable solution. WL, as noted, has posted the email correspondence on the web. Ning’s initial public response, in contrast, was this:

This morning we removed WidgetLaboratory, a third party application developer, from the Ning Platform for violating Ning’s Terms of Service. WidgetLaboratory provided independently developed applications that could be added to a social network on the Ning Platform by a Network Creator. While we try to be as transparent as possible, it’s our long standing policy not to comment on specific cases where we remove networks or third party developers from the Ning Platform so we will not be providing any additional details publicly.

You have to love that – we try to be as transparent as possible… but we’re not going to tell you anything. How transparent. Lawyer Bob continued to respond to several emails from Spencer, and helpfully reminded him of the terms of service:

Ning has the right (at its sole discretion) to delete or deactivate your account, block your email or IP address, or otherwise terminate your access to or use of the Ning Platform or any Network, or remove and discard any Code or Content within any Network, without notice and for any reason.

While legally this is very clear, one has to imagine that setting a precedent of unilaterally shutting down the most successful widget provider on the platform might not be good for encouraging other developers, or encouraging customers to pay for premium services that could/ will quickly be axed. If you read through the responses on various blog posts (including this one on the Ning developer platform), you see this come up repeatedly – and you notice that most seem to be on WL’s side.

Gina later posted a more thorough response which has some more positive responses – though it’s interesting to note many users seemed to be asking for Ning to offer them the applications that WL used to offer them, which is a very slippery slope indeed. It’s even more slippery when Gina notes that:

Our focus at this point is in assisting Network Creators in finding alternatives to features that they may have been using from WidgetLaboratory. If we could fill these holes today, we would. We will start this effort shortly.

There’s no way around it – this looks really bad. It’s bad to have a model where 3rd party players are encouraged to get involved, grow a business with valuable offerings they develop and prove, and then get shut down while the “parent” company and customers clamor over replacements for them. Not sure how that can be sugarcoated.

There’s also another wrinkle in this – if you check out the August 7th email, you’ll note that one of Ning’s other complaints is that WL sometimes asks for user names and passwords, which is also against the terms of service. WL points out that they do this as a service for paying customers, who WANT to provide it to them, so they can go in there and… diagnose and trouble shoot problems with their licensed and purchased products. That seems perfectly sensible, and again to everyone’s benefit – but apparently Ning does not agree. Even while complaining that WL code regularly breaks down and hurts the network. Curious.

So overall there are a lot of disconnects here, and as more information comes out it might clear up – but I doubt it. I think it’s fair to say at this point that if you want to learn how to deal with such “open” development platforms and partnerships, do pretty much the opposite of what Ning did. Even if they had to shut down WL, they could have went about it in a far better way. Secondly, saying that you try to be transparent, and then sharing nothing, is dumb. Finally, if it’s the innovation of 3rd party developers that is helping your company so much, you really have to think about what the long-term implications are when you unilaterally axe your top performer and then very shortly after that talk about replacing their offerings being your top priority.

He likens this to a post i9/11 future, one where our online rights and privacy will face unprecendented scrutiny by government. You can watch part of his talk at Fortune’s Brainstorm Tech conference in California where he made the comments below.

This message mirrors part of the thesis proposed by author and Harvard Law School Professor Jonathan Zittrain in his new book “The Future of the Internet and How to Stop It.” In it, Zittrain argues that we’re on the path to Internet lockdown thanks to a combination of proprietary devices and malicious intent. You can read my colleague Naumi’s review here.

There’s some great discussions and ranting taking place about this pretty much everywhere so I’ll pass on the summary of what’s being said and instead pose two questions: what constitutes an i-9/11 attack, and what would such an act allow that isn’t already being done today?

Thoughts?

Look for the special on bittorrent trackers sometime after August 10th.

My argument goes like this: as Will argued a few days ago, Wikipedia, by virtue of it’s nature, could be more fair and balanced than any news network. The John Edwards article he discussed was pulled back and forth by differing viewpoints until finally an equilibrium of compromise was agreed on. While the article may or may not paint a true-to-life picture of things, it paints a picture that, in general, people find truth in — that is to say, an article on wikipedia is a snapshot of our current concensus about the state of the world.

Because Wikipedia tracks every change made on every page, ever, future historians will be able to look at the evolutionary histories of various topics, as they are filtered by the public eye of whoever makes up the current public. Events of the past that were controversial at the time they occured will be reported as being less and less inflamatory as future generations update the collective account of history to be in line with their current view of things. While I don’t expect a wholesale change of content, even compounded shifts of adjectives in an article over time could greatly change the meaning of articles. But, this shift can be clearly and explicitly tracked: a degree of honesty-over-time is built into the process.

I just hope that the integrity of the servers remain, I can just imagine future schoolchildren debating whether or not lightsabres actually existed: “but if they didn’t exist, why is the article 10,000 words long?”

This week I will profile the Seattle based coffeehouse giant Starbucks. In case you missed my last report card on De Beers; you can find it here. You can now find all my previous entries, and posts relating to them on the new Regular Features tab on the top left side of the page. Like all my previous entries, I will be evaluating Starbucks on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: The original Starbucks was opened in Pike Place Market in Seattle, Washington, in 1971 by three partners. They sold coffee beans and high end coffee equipment, but didn’t sell any actual coffee. Entrepreneur Howard Schultz (current President and CEO) joined the company in 1983, and after trip to Milan, Italy, suggested that they sell coffee and espresso drinks in addition to beans. The original owners disagreed with this new direction, and sold the company to Schultz in 1987. By the time the company went public in 1992, it had grown to over 165 locations across North America. In 1996, Starbucks opened its first international location when it opened in Tokyo, and opened in London in 1998. Today, Starbucks has over 16,000 stores in 44 countries including over 11,000 in the U.S. alone. However, the company recently announced that it was closing down 600 underperforming company-owned stores in the U.S., effectively ending the era of prolific growth and expansion.

Being Open: Starbucks ranked 7^th on the Fortune 100 list of Best Companies to Work For 2008. Although friends of mine may tell you differently, Starbucks treats its employees very well. They offer health, dental, eye-care benefits to all employees who work an average of 20 hours per week over a three month period in addition to a 30% discount on drinks and merchandise. While Starbucks treats its employees well, it has been the target of much public controversy. While Starbucks claims that all their beans are purchased through fair trade, groups such as organicconsumers.org say that only 6% of Starbucks coffee is certified free trade. While they say the amount Starbucks ultimately pays for its beans is fairly comparable to free trade prices, Starbucks does its transactions through middlemen rather than with the farmers directly. Starbucks claims to sell “rare, exotic, cherished” beans from a remote plantation in Ethiopia that Starbucks advertising says is grown in ways good for the environment – and for local people too. However, this eco and poverty friendly sales pitch falls flat when the farmers are paid $1 a day and the plantation is located in a threatened mountain rainforest. Instead of committing to an accountable and respected third-party certifying system, Starbucks has created in internal “corporate responsibility” model that is expensive for coffee farmers, non-transparent and strictly voluntary.

Grade: B-

Peering: My colleague David Cameron wrote about My Starbucks Idea on the blog a few months ago. The idea is quite similar to Dell’s Ideastorm, most recently blogged about by Justin Papermaster here. The basic idea is that Starbucks customers submit ideas, and then discuss and vote on them. Starbucks then tries to implement the best ideas, and you can now follow their implementation progress on Twitter. This is a great idea that both generates great feedback and does a great job at engaging customers.

Grade A

Sharing: Starbucks does its best to try and control its intellectual property. Starbucks owns most of its stores, and only franchises or enters into joint ventures in certain circumstances. From the Starbucks website, “A qualified high volume/high traffic retail or foodservice operation can own and operate a Starbucks licensed store.” However, Starbucks will only license its name and operations in places like airports, college campuses, or hospitals where they would otherwise have no access. While it violates some Wikinomics principles, it is hard to criticize Starbucks for going this path. Even without franchising, and sharing its intellectual property, Starbucks has completely saturated the U.S. market. However, Starbucks is smartly entering foreign markets through joint ventures, partnerships, and licensing agreements.

Grade: B+

Acting Globally: Starbucks is profitably expanding internationally. With increasing news about store closures in the United States, Starbucks’ international expansion is more important than ever. So far, it has been very successful in penetrating markets traditionally opposed to American coffee, or coffee in general. While Starbucks is having a hard time convincing the older generations in France to abandon cafes, younger generations are joining American tourists in embracing frappuccinos and caramel flavored coffee. Starbucks is also expanding aggressively in tea-drinking nation of China. Starbucks is trying to overcome this by empowering China’s emerging middle class to show off their new lifestyle, and purchasing Western luxuries like Starbucks coffee. While Starbucks’ international expansion has gone well thus far, it still faces public protest for what it represents in a similar way to McDonald’s. Starbucks has been boycotted by antiwar protesters in Lebanon and criticized by New Zealand advocates seeking higher coffee prices for farmers. Faced with the possibility of terrorist attacks, they pulled out of Israel. However, these are minor bumps that are expected with international success.

Grade: A-

Overall Verdict: Despite its recent ailings due to a suffering American economy, Starbucks is an international success story. In the 20+ years since being sold to Howard Schultz, the company has had unprecedented growth. It is harnessing the power of Wikinomics through its use of peering with My Starbucks Idea, and is taking steps to becoming a bigger advocate of free trade and organic coffee.

Overall Grade: A-

I am not a coffee drinker or a frequent Starbucks customer, but I applaud what they have done as a company. I was wondering what fans of Starbucks had to say. Have you submitted anything on My Starbucks Idea? Do you think they should be more of a leader in the free trade movement? Do you drink Starbucks coffee when you go on vacation in Europe?

Any and all comments are welcome!

Regular readers of the blog may notice something different about today’s Dilbert mashup: such as the lack of a visible comic, or “mashup” if you will. The reason for this ties back to some fellow named “Rob”, who clearly has no sense of humour and spoiled the fun for the rest of us made an interesting comment on the July 18th mashup. In short, he found the Dilbert mashup to be a distraction not worthy of his attention, and indicated he would likely unsubscribe from the wikinomics blog, even though he really likes the rest of it, if my Dilberts continued messing up his techo-babble /noise. I’m also fairly sure he didn’t want my autograph.

So… we had a quick little review of the whole Dilbert mashup thing, in order to see whether this “Rob” fellow might be onto something. Thinking back, the initial idea behind the mash ups was that the new Dilbert site was an excellent example of the power of wikinomics in action, and what better way to promote such innovations than to participate in them ourselves? And since we have our own blog, wouldn’t it be cool if we could tie each mash up back to the principles of wikinomics in some way, and share these humerous anecdotes with our readers?

Well I sure thought it would be cool – and I think I’ve managed to make a direct connection a few times (such as July 7th, June 27th, June 25th, June 24th, June 20th, June 16th, a real doozy on June 13th, June 11th, June 9th, June 6th, June 5th, a humdinger on May 30th, May 27th, May 26th, May 22nd, May 20th, May 17th, May 16th, an “I almost wet my pants” on May 13th, May 10th, and May 8th/9th. For example).

However, scattered in between these are a few where the connection to wikinomics ranges from “less obvious” to “non-existent”, particularly when unspeakable violence involving coffee cups is prominently involved in the initial storyline. These posts may very well lead certain readers to question why exactly they are on the wikinomics site / in their reader – fair enough. However, without them we lose the regular publishing cycle to draw in the readers who, unlike “Rob”, actually like to see them daily, even in the cases where the wikinomics connections are weak. Such as my Mom and I.

So what to do when faced with such a dilemma? Simply embrace some of the principles of wikinomics, such as openness and collaboration, and launch Denis’ Dilbert Mash Ups on the blogger.com platform. Whenever I do a Dilbert mash up it will be published there, and on certain occasions, if the wikinomics connection is strong enough, we may also point to them here. That should make everyone happy, non?

This week I will profile the South African based diamond company De Beers. I case you missed my last report card on Blizzard Entertainment; you can find it here. I would like to thank Will Runyon for suggesting this week’s topic and directing me to this excellent Wall Street Journal article. Like my previous entries, I will be evaluating De Beers on the Wikinomics principles of being open, peering, sharing, and acting globally.

Company Background: De Beers has been the most dominant player in the diamond industry for the last 120 years. In the 1930’s Chairman of the De Beers Group Sir Earnest Oppenheimer came up with the idea of single channel marketing. He defined it as:

“a producers’ co-operative including the major outside, or non-De Beers producers in accordance with the belief that only by limiting the quantity of diamonds put on the market, in accordance with the demand, and by selling through one channel, can the stability of the diamond trade be maintained.”

This basically made the diamond industry a cartel in which De Beers controlled 60 – 80% of the world’s supply. They carefully controlled the supply, and effectively controlled the diamond’s rarity. In 1947, De Beers targeting the emotional value of diamonds by launching the campaign “A Diamond is Forever” which Advertising Age magazine named the best advertising slogan of the 20^th century. This changed the industry forever as it effectively prevented a secondary market as a diamond was meant to be untouched by any other woman.

Today, De Beers is a company in transition. When CEO Gareth Penny took over in 2006, the company was in the process of completely changing its business model from controlling industry supply to a more demand driven model. Today, it only controls around 40% of diamonds traded worldwide. In addition, movies like Blood Diamond triggered waves of negative publicity about the conflict diamond trade in the 1990’s.

Being Open: Traditionally, De Beers has been very closed in their dealings. Throughout their history, they have tried their best to control industry supply, and keep competition down. In 1994, along with GE, they were charged with price fixing on industrial diamonds. In 2006, De Beers settled numerous class action lawsuits alleging that they were keeping the price of diamonds artificially high and violating anti-trust laws. They agreed to pay out almost $300 million to anyone who bought diamonds from a jewelry store from 1994 – 2006. However, ever since Gareth Penny became CEO and the complete change in business strategy, the company has become more open and transparent. Now, 100% of their diamonds are sold through the Kimberly Process which ensures that diamonds are conflict free. For the second consecutive year, they released a massive “Report to Society”. The Report covers De Beers approach, economics, ethics, employees, communities, environment, and a range of case studies, initiatives and related web sites. However, it was reviewed by Ethical Corporation magazine as “transparent but not entirely reader friendly. You can find the 2007 report here.

Grade: C+

Peering: A peer production model is not generally used in the mining industry. Exploration and extraction data is usually kept very private. However, De Beers should take a page out of the Goldcorp play book. In 2000, Goldcorp was struggling and unable to get the production they wanted out of one of their mining sites. That same year, they launched the Goldcorp challenge where they released over 50 years of geological data (everything they had) to the world offering $575,000 in total prize money to those who found deposits. The challenge was a resounding success, and led to the discovery of an additional 8 million ounces of gold. Since De Beers hasn’t found a new site in over 10 years, they may need to look for more innovative solutions to find more diamonds. Granted, there are significant differences between Red Lake Ontario where Goldcorp’s mine was and Botswana or Namibia. Although not nearly on the same scale, De Beers did co-sponsor Geological Odyssey 2001, a platinum challenge, with Goldcorp and offered a $4000 diamond as a prize.

Grade: D

Sharing: As mentioned above, De Beers is not really sharing much of its intellectual property, but it is doing a good job sharing with Africa, and the communities it operates in. De Beers has a 50-50 partnership with both the government of Namibia and Botswana. The government of Botswana owns 15% of the company and the diamond industry contributes over 33% of the country’s GDP. This allows the country to provide free education to everyone up to the age of 13. While De Beers has been criticized in the past for not hiring enough black employees in South Africa, it has undergone a recent black-empowerment deal so that now 26% of the South African country is in the hands of a black investment vehicle. De Beers is constantly looking for investments into emerging local businesses, and with its partners, invests close to $4.6 billion into African economies. De Beers seems to be shifting its marketing campaign to include African wellbeing. In the WSJ interview, CEO Gareth Penny said:

“We want people to know that with any diamond they buy, that product is not only deeply meaningful to them but, in terms of the contribution that it is making, to Africa”

This shows that their profit sharing with Africa may lead to positive publicity, and ultimately allow them to charge a larger premium.

Grade: B –

Acting Globally: De Beers does most of its mining in Africa, but also owns a few sites in Canada as well. They have failed to capitalize on newer sources of diamonds like Russia, India, Brazil and Australia. Demand is outgrowing supply at an increasing rate, so new sources will need to be found in order to keep up with this rising demand. Emerging market powers like India and China have driven up the demand for diamonds globally. This will lead to rising prices, which may strain its established North American market as it struggles economically. Currently, the U.S. represents 50% of its market share, and countries tied to the dollar represent almost 2/3s of their market. If the U.S. dollar continues to decline, De Beers may be forced to sell diamonds in a different currency to a more international market. It will need to search in alternative markets to find the highest bidders for its diamonds. According to the WSJ, they have no plans to change their American-focused strategy. De Beers should try to replicate its past success in Japan. There was no tradition for romance, courtship, seduction and prenuptial love in Japan; and no tradition that required the gift of a diamond engagement ring. If De Beers was able to penetrate Japanese society, they should be able to shift away from the American market as easily.

Grade: C

Overall Verdict: De Beers is still doing very well financially. Their masterful control of the diamond market over the last 120 years has led to a very strong position. They are starting to make strides in becoming a next generation enterprise. By continuing to apply Wikinomics principles, they should be able to remain #1 in the industry. With the current market conditions, a new diamond discovery would prove extremely profitable for the company. Its current methods aren’t working, so it will need to tear down its walls, and continue to open up to the world’s knowledge.

Overall Grade: C

Knowing how masterfully De Beers has created demand for diamonds, will you still spend/expect two months salary for a diamond engagement ring? Did De Beers do such a good job creating demand for its product that it doesn’t need Wikinomics? Is De Beers still exploiting Africa?

Thanks again to Will Runyon for suggesting this topic. If you have your own idea for a Wikinomics Report Card, message me on facebook, or e-mail me at bletalik@ngenera.com

Check out the original, and all the other mash ups, at www.dilbert.com.

Sadly, I don’t think I can compete with the sweater for the dead squirrel today – check out the original, and all the other mash ups, at www.dilbert.com.

Please note that the wikinomics blog team in no way supports violence towards those who suggest open source projects. As always, you can check out the original (and all the other mash ups) at www.dilbert.com.

Now I’m REALLY starting to think things being thrown at other people is a dominant theme – see here, here, and here. Or if you prefer, you can check out the original – and all the other mash ups – at www.dilbert.com.