Obstacles for Open Data

One of the mayor concerns around open data is privacy. It is probably the single most important issue that is keeping this movement from going forward. The federal government is prone to make excuses about protecting SIN numbers and citizen’s private information, but it’s simple enough to solve this: only share data that doesn’t directly implicate citizens. Nobody is saying to share health records, or address details – but health industry statistics or population census reports might be useful. On a more serious note, there is also concern about a breech in national security and how an accidental leak might lead to dangerous, unintended consequences. But this isn’t new, people that want to hack into the government’s mainframe will find a way to do it, if they haven’t done so already. The real issue here is that the government doesn’t want to give up control over the information they have gathered.

Open Data as a strategic asset

The problem is that many government decision makers don’t understand the full breadth and significance of the information they possess. Their next step, to be able move forward with Open Data, is to analyze how and by whom it can be used. Of course, there’s no way of knowing all the ways this information will be used, but it’s important to target prospective users of this information, so as to maximize the benefits that can be accrued from open sharing with the public. As David Eaves expressed in an interview with us, “[he’s] always seen open data as a way to not only empower citizens, but to drive culture change in public service.” In this sense, data can be used as a strategic asset that won’t only benefit the government, but also citizens, start-ups, and traditional businesses that can use it to evolve their organizations.

An example of this is Homezilla, a “home buying and neighborhood research assistant.” Homezilla is an online platform that gathers and puts together everything you would need to know when buying a home in one place: schools nearby, whether it’s a safe neighborhood, how far away the things that interest you are from your potential home. It reduces the amount of time a person spends researching, asking, and browsing around homes and uses open data to achieve this. Homezilla also uses open data to improve their Google street view accuracy for potential homes.

How to build a community for your platform

Another issue is participation. How do you build a volunteer community around an open source platform? How do you motivate people to participate and collaborate? Richard Weait, Open Street Map representative, says the most effective strategy they used is to make the collaboration fun. This is the same for Manor Labs, by making the online platform fun, people are more encouraged to volunteer and share. As Thomas mentioned in one of his blogposts the key motivators for participation are Love (for what you’re doing), Money and Glory. Both Manor Labs and Open Street Maps have found a way to build a contributing community on their sites.

Other platforms, such as Torontopedia.com, have not been so successful. Torontopedia is a non-governmental wiki for Toronto; it is meant to harness information from its citizen to create a comprehensive guide to everything you can find in Toronto. To do this, it needs people to participate, create pages, add/edit/update information. It is meant to be easier to use than Wikipedia because you don’t need to program or know how to use html. You do, however, need to sign up with your “Real Name” as your user name, create a page, and be “accountable” for the things you post. This, along with the fact that the site is unattractive and unintuitive, deters, rather than encourages, people to participate. It also dissuades people from commenting what they really think for fear of being immortalized negatively on the internet. Because of this, most of the pages that are on the site right now have been written by the creator of the site, HïMY SYeD; who ran for mayor last election period, and is planning to run again. The site does have some registered users that contribute from time to time, but it has yet to “take off” as a wiki platform.

For open data, or any kind of open source platform, it’s important to keep in mind that progress takes time, and even though this is the internet, and things happens at the speed of a click, people need to take some time to adapt to changing behaviours and learn to do things in a new way. We should also keep in mind that privacy will always be an issue, and the only way to move forward is to innovate pretending it’s not a pressing concern, come up with new ideas, and then tweak here and fix there to accommodate privacy. We have to push boundaries in order to create progress.

Editor’s note: Nitla is summer intern working at nGenera. She is currently enrolled fulltime at the University of Toronto majoring in Industrial Engineering.

Vertical integration was popular in the latter part of the 19^th century and the first half of the 20^th century as a means to assure consistent and predictable supply chains for large-scale enterprises. Andrew Carnegie coined the term in the late 1800s to describe the structure of his company, U.S. Steel, which owned virtually their entire supply and distribution chain — the inputs to production (ore and coal mines), the means of production (steel mills) and the means of product distribution (steamship and railroad lines) – ergo a completely vertically integrated company.

Vertical integration was one of the key inventions used by industrialists to manage the proliferation of transaction costs involved in the orchestration of a scale enterprise. Industrialists at the time did not have the Internet nor did they have well-developed global financial markets or global supply chains. As a consequence these early large producers had to create their own infrastructure and transaction cost deflators through vertical integration. Otherwise the coordination, collaboration, and transaction costs would have overwhelmed their enterprises. As the industrial economy developed, other industries followed suit with other vertically integrated firms in the petroleum, automotive, and newspaper / communications industries. However, as economies matured and suppliers and supply chains became more reliable, the model was largely abandoned in favor of a more distributed model with specialized firms serving segments of the supply chain and many vertically integrated companies divested.

All of that is history: today is different. While vertical integration may be on the rise, entrepreneurs and executives operate with many more tools in their strategic arsenal. Let’s look at two tools that help shed light on the new approach to “going vertical:” the Internet and collaborative business platforms.

1. The Internet. The Internet is now a euphemism for the reality of a highly-interconnected always-on business environment. More to the point, this highly connected world has radically reduced collaboration and transaction costs. When vertical integration is applied in this context, the purchase of an element of the value chain is not used to corner the market or reduce transaction costs, but rather but rather to solidify the company’s position relative to the business ecosystem. So for example, the acquisition of Sun by Oracle, enables Oracle to embed its software in a hardware platform, similar to the iPhone or to the Google Nexus One, that in turn provides more options to work with others and build growth through an interconnected ecosystem (for commentary on the pending handset war between Google and Apple, see Laura Carrillo’s post). With the hardware, Oracle has the potential to involve more partners and grow the business beyond the bounds of a software provider. Consider also that Oracle can also entice other developers to create add-ons (apps) for the Oracle tool. One other benefit: Oracle potentially opens new markets with smaller companies that desire industrial strength databases.
2. Collaborative Business Platforms. In a prior post, I noted an emerging “best practice combination” of a collaborative business platform + a business ecosystem. Google needed to remove itself from Apple’s Board and create their own handset and move into head-to-head competition with Apple, RIM and Nokia. Google has the world’s most powerful and extensible collaborative platform with 100′s of millions of users. But, without a handset (i.e. a mobile device) it cannot differentiate itself nor assure its place in the increasingly mobile marketplace. This inability to garner sustained loyalty of its customers was a key threat to Google’s ecosystem. Without a branded mobile device, Google is just another “app provider.” This vertical integration play allows Google to instantiate its brand in a physical mobile device. Why is this better than instantiating its brand in an iPhone or a Blackberry? Because, the device enables Google to offer a more extensive set of apps and offer functionality that is critically dependent on firmware integration. It also creates new options for Google, who has been largely dependent on the hardware manufactures for it innovation model. Now the Google innovation maven can drive innovation in hardware and firmware.

So the new form of “going vertical” is a merged strategy that will operate in concert with collaborative business platforms and robust business ecosystems. In the case of Oracle, Apple and Google, the addition of hardware assets to their respective business portfolios increases their competitive options, extends their brand, provide a closer connection with their customers, provides a new “sandbox” for innovation, and offers new ways for partners to contribute to their business ecosystems. In the new style of vertical integration, the goal is not to go it alone, but rather to set up the game, so that more partners can participate in the supply chain thereby enhancing Oracle’s, Apple’s and Google’s prognosis for growth.

Each category around the “wheel” represents a different type of conversation. By implication, each type of conversation serves a distinctive business purpose. Solis and JESS3 did the hard work. For each type of conversation they mapped the appropriate collections of social media tools. According to the “Prism”, Facebook and Linked-in serve different types of conversations. Facebook, MySpace and Friendster are Social Networks. Linked-In, Plaxo, Ning and others are Interest and Curated Networks. Most of us lump all of them into the same category.

As one moves around the wheel, other helpful distinctions become apparent. Forums, Reviews and Ratings (e.g. yelp, Epinions, Amazon), SMS/Voice, Lifestreams, Twitter Ecosystems, Micromedia (e.g. Twitter, Yammer), Blog Communities, Blog Platforms, Blogs/Conversations, Crowdsourced Content, etc serve different objectives and different types of conversations. Each conversation has a different collection of social media tools. One readily gets the idea. It immediately makes sense. Each of the twenty-four different types of conversation requires a different type of social media.

The taxonomy also marks a key milestone in the evolution of social media. A key indicator of the maturity of a discipline is the ability to create a meaningful typology. While the creators developed the Conversation Prism from a marketing perspective, the taxonomy applies to many other disciplines and contexts.

Here are some thoughts on how to use The Conversation Prism:

Marketing. Everyone is interested in getting more customer mindshare, establishing meaningful conversations and developing hot communities around products. But how? Distinguishing among the different types of conversations and tools helps to focus effort. Sean Moffitt, one of the key thought leaders in nGenera’s Marketing 2.0 program notes that Facebook, Twitter, YouTube and Flikr are key conversation forums, but one has to also match the conversation to the marketing objectives and the product or service. The Conversation Prism provides a way to rethink which types of conversation reach the best audience and achieve the right message and customer experience.

Enterprise Strategy. I’ve lost count of the many conversation with executives who simply dismiss social media as an irrelevant pastime or an “Extra-curricular” activity. Many think Facebook and MySpace are the sum total of social media when they are not. And often, social media is dismissed out of hand, to the detriment of an organization’s strategy, because everything is lumped together. The Conversation Prism cuts through the clutter and buzz and assigns the role and place of various types of social media. Use this taxonomy liberally for internal business strategy discussions, social media strategy, and most importantly, our soapbox – collaborative enterprise management.

Finance. Yes, finance. What does social media have to do with finance? Take a look at the wheel again. Armed with the taxonomy, the CFO or the controller for that matter can begin to think about where various tools might add value in conveying and explaining financial concepts, policies and performance. For example, quick relay of confidential financial information to small group would use a different set of social media than information disseminated to institutional investors, or retail investors. What type of conversation provides the best result for each constituency?

Information Technology. Increasingly, various groups expect the IT organization to recommend the right social media tool for the right problem. On what basis should these decisions be made? The Conversation Prism enables IT professional to understand the landscape and make recommendations based on desired business outcomes, not simply technical features. Bandwidth, storage, API’s, architectures, apps, widgets, gadgets and price vary by social media type. Some tools require internal infrastructure, other operate as SaaS in the Cloud.

Human Resources. Conversations and social media involve people. Duh. However, employees should understand appropriate use. Often, social media gets a bad name, or experiments fail, because the wrong tool is applied to the wrong circumstance. Ever consider using a text message for a performance review. Some have. Use “the wheel” to teach appropriate use.

The Conversation Prism provides a welcome tool as social media moves into its second stage of development. It surveys and maps the social media landscape. Perhaps other destinations will be added. However, in the mean time, The Conversation Prism, a simple framework, provides self-evident guidance to those who wish to profit from the social media revolution.

Stemming from other posts and discussions about this very issue, I put forth the following list of simple guiding principles that I think can provide a starting point for organizations entering this sphere of communication.

Although, there is no one single, policy structure that can fit all situations and organizations, the one thing I do take a strong stance on, is the need to keep the rule simple to understand and relatable, which is the reason I chose to use the rule of the road as my reference point.

Most Importantly, Don’t drink and Drive…well that’s just good advice

My point in putting up this list is to mainly drive discussion around the subject of, what constitutes ‘good’ social policy? Hopefully this provides a springboard from which to launch this much needed debate.

Apple understands that business platforms fundamentally change the rules of competition and accelerate cumulative business performance. Competitive business platforms drive and nurture the latest business innovations – mass collaboration, social networking, community formation, ecosystems, global cooperation, prosumerism, community branding, transparency, options portfolios and real time analytics to mention a few. And they also do the same for “old-fashioned” ones as well – things like business process management, customer intimacy, and supply chain management. We’ve studied business platforms extensively at nGenera Insight and Apple is not alone. But Apple has taken the approach and out-executed almost everyone else on the planet.

While many see Apple as enslaved to secrecy, unresponsive to external input, and obsessed with product control, the company has put many of those behaviors behind them. In fact, Apple is writing the book on 21^st Century style collaborative business models and continuous business strategy.Nokia and RIM became Apple students in the last 12 months – both have adopted a business platform approach. Ironically, RIM had the makings of a business platform long before Apple, but did not really exploit it. AT&T is being schooled again about business platforms as it copes with Apple’s latest generation iPhone 3Gs release (it seems that AT&T’s network can’t keep up with new iPhone features such as tethering and MMS messaging). Verizon is playing catch-up because it only recently saw the light – but rumors suggest it may have a deal with Apple on the “iTablet.” Meanwhile, it appears that Motorola still doesn’t get it.

But Motorola’s not alone. Almost 10 years after Apple’s launch of the iPod, iTunes and the iTunes Store, most corporations either stand in awe of Apple’s accomplishments, or see Apple’s approach as completely irrelevant to their businesses. They’re mistaken. These developments signal a new formula for business success that extends beyond the glitzy world of Hollywood or the high tech software and telecommunications industries. More importantly, leading firms in other industries have used the recession to put plans in place.

Let’s take a look at what the iPod, iTunes, the iPhone and the App Store really mean for business. A bit of history first. Apple Inc. launched iTunes, the now famous digital music application, on January 9, 2001 for the Macintosh computer. A little over 9 months later Apple launched the 1^st Generation iPod on October 23, 2001. About 2 years later Apple launched the iTunes Store on April 28, 2003. The iPhone was released 4 years later on June 29, 2007 after the runaway success of the iPod-iTunes-iTunes Store combo that revolutionized the retail music industry. The iPhone App Store was launched on July 8, 2008 with 500 applications, 125 of which were free. Today the iTunes Store is a digital media store encompassing all forms of digital media including music, games, software applications, podcasts, and a growing collection of video assets.

In the process, Apple sold in excess of 200 Million iPod units and over 40 Million iPhones. Apple sold more than 1 Million of the new 3Gs iPhones in the first weekend of its introduction in July. The iTunes store has sold 8 billion songs since inception, and is the undisputed leader in digital music sales. Moreover, Apple revealed in April of 2009 that the App Store introduced in July of 2008 had already hit the 1 Billion mark in downloaded applications. By late July of 2009, Apple reported that its extended community of iPhone developers, which split revenue with Apple on a 70/30 basis had produced over 65,000 applications that were approved by Apple and available for download on the App Store. At the end of 2001, Apple’s annual revenues were approximately $5.3 Billion USD. At the end of 2008, annual revenues had grown to approximately $32.4 Billion.

Here’s what Apple has learned and what I believe all companies should heed – the undeniable superiority of the 21^st Century business model:

1. Products must become business platforms that grow through collaboration. The iPhone, the iTouch, and iPod are not music players and multimedia phone – ergo products – so much as they are business platforms. A business platform is the totality of the physical product (e.g. iPhone), the embedded software inside the product (iPhone OS), the collaborative platform (iTunes+App Store), the economic community (the iPhone ecosystem which includes AT&T and other wireless providers, Google, Yahoo, the iPhone developers, related iPhone social networks and communities, and the iPhone global industrial complex (core manufacturers – e.g. Intel, accessory providers etc.).
2. Business platforms create superb externalities and a powerful ecosystem. Business platforms create a sort of lingua franca for all of the participants. In other words the business platform contains a common understanding for business transactions, business rules, business communication, technical specifications, interface standards and requirements. As a consequence transaction costs are minimized for all parties and efficiency results. For example, embedded in the iPhone OS, the iPhone SDK (systems development kit), the App Store and the iTunes store are the complete “rules of the road” for operating in the iPhone ecosystem. The result is a cumulative transparency that enables tens of thousands of participants to collaborate asynchronously and independently. In so doing they create economic value, a continuous wellspring of innovation and mutually extend the overall value of the economic community. They also rapidly extend the capabilities of Apple’s core product way beyond what Apple could ever do so on its own.
3. Business platforms create a learning platform that spawns communities of interest and communities of practice. A multitude of social networks and communities surrounding Apple’s iPhone business platform. Numerous Apple-sponsored and independent communities trade ideas, IP and practices daily and cajole and attempt to predict Apple’s next move.
4. Business platforms generate untold business analytics for the platform’s owner and participants. Because all elements of the business platform are networked, the platform generates a prodigious amount of valuable information about the product, the ecosystem, the participants, and the customers in realtime. Apple knows the score for each element of the platform and uses the information to fix, improve, extend and enhance the product and ultimately delight the customer.
5. Business platforms generate a superior portfolio of strategic options. The generation and management of options remains at the core of business strategy. Business growth depends upon the portfolio of business options available to the executive team. Traditional business models depend upon internal knowledge and internal innovation processes to generate new product ideas, new ventures and appropriate acquisition strategies for growth. Such traditional processes are anemic when compared to an enterprise armed with a 21^st Century collaborative business platform. Who has more options for the future, Apple or Motorola? Who has a richer options portfolio on potential products and services? Who has better information by which to value those options? For an investor looking to make an investment, which company has greater future value? The company with a business platform or a company with a 20^th Century, product-focused, internally driven innovation engine. I know my pick.

In subsequent blogs I will examine what we’ve learned about managing business platforms and dealing with negative and positional externalities, what traditional firms must do to change and embrace the rise of business platforms, the power of business platforms in Collaborative Enterprise Management, and the role that business platforms play in continuous business strategy.

To Apple I say: mega kudos, keep up the good work – it’s good for the economy and good for business. Thanks for letting the cat out of the bag.

If what you’ve heard about Twitter is characterized by headlines like, “Ashton Kutcher challenges CNN to Twitter popularity contest,” I can understand why you’re either tired of hearing about Twitter or simply don’t understand what all the fuss is about.

This article from Ad Age is completely refreshing and intringuing. It reminds us that Twitter is useful for more than simply learning about what Paris Hilton has been doing while on vacation. From reading the article, I am reminded that few people, let alone companies, have been able to see Twitter for its full business potential.

The article describes how Organic Inc. (a leading digital communications agency) has harnessed Twitter as a powerful business tool. At Organic Inc., social networks like Twitter are a critical peice of the company’s recruitment strategy. Around 75% of their online recruitment relies on social networks. More importantly, they are already seeing positive results after about 9 months of increased social network recruitment.

Given that mainstream media has pelted its subscribers with stories that don’t do justice to Twitter’s potential to be more than just a (insert generic, insulting characterization of Twitter here), stories like Ad Age’s look into Organic Inc.’s use of Twitter deserve more of our attention.

For anyone not familiar with the idea, it is, simply put, “pay-what-you-want” dining. (Radiohead recently applied the concept [not for food, of course], allowing fans to decide what to pay for their new album). At the end of the meal the customer decides how much it was worth, and pays accordingly.

Menus at Zesty’s Deli in Guelph, Ontario list a question mark beside items instead of a dollar figure. Tony Salamone, owner of Zesty’s says, “I have great faith in the people of Guelph.” The participatory pricing approach could clearly go a long way in keeping businesses honest, but the benefits aren’t one-way. For sure, customers win when they are empowered by the policy. At the same time, honest, and good quality businesses will win too - having customers reflect appreciation in the prices they choose to pay.

The owners of Barrie, Ontario restaurant Oscar’s echo Salamone’s message, “We are so confident in our kitchen and the food that we put out. And we are confident in our front of the house staff, our service is some of the best in the city.” Their message emphasizes the fact that business owners who apply participatory pricing aren’t operating charities – they believe that they will be more successful when they turn the price-setting power over to the consumer.

The first pay-what-you-want restaurant was the international, UK-based chain, Little Bay. According to reports, Little Bay is actually enjoying increased revenue since giving customers the power to decide what meals are worth.

More power to the consumer and an imperative to operate honestly for businesses, with increased revenue for those offering the best food and experience - participatory pricing is win-win.

I’d be interested to learn of experiences others have had with participatory pricing and in which industries you think it’ll have the greatest impact.

Because of this when I speak about prosumerism, I like to start by looking at some questions around a very special Dilbert cartoon. Dilbert cartoons, as most people know, poke fun at society and particularly workplace culture, usually highlighting some absurdity that people can relate to. But in this case what I’m saying is that, for perhaps the first time in history, we can argue that companies need to start acting more like Dilbert cartoons, rather than less.

The reason I can say this (and long time wikinomics readers certainly already know this) is because last year, Scott Adams made a major change to the Dilbert.com site – they turned it into a Dilbert Mash up platform. Every day when Scott publishes his new cartoon, an alternate version goes up. In this alternate version,  the images are present in each of the three boxes, but the text in only the first two. Anyone could then login and add their own punchline to the cartoon (it’s since evolved to include Group mash ups and other things I’ll talk about later).To tie it back to the opening lingo, the site is now a prosumer platform.

I was participating in this quite a bit last year, so effectively Scott Adams and I were co-creating cartoons, such as this one:

Please, hold the applause… and the laughter is becoming overwhelming .

Back to the story. So this looks like a cute, fun little example – what could the possible business implications be? Well, let’s start by looking at the perspective of Scott Adams and United Media – why would he/they do this? And would you do the same thing in their place? Would your company – and how would the decision get made?

Read the rest of this post here.

• Collaboration will help us do more with less. The idea is that collaboration can lead to greater efficiencies and reduce the amount of internal resources required for projects. Collaboration leads to better information which helps make better decisions in terms of how to allocate resources. Collaboration also takes advantage of prosumers and social networks where individuals can help co-innovate with companies at a lower cost than using exclusively internal resources. There’s an assumption underlying this scenario that there’s some surplus capacity in the economy because a) companies are cutting back on projects, but not necessarily eliminating all of the corresponding staff, and b) those employees that are cut will be available for contract work and targeted initiatives. In fact, this may even be a good time to stock up on promising young talent. The pro-collaboration folks suggest that collaboration can lead to new growth opportunities that will help companies differentiate themselves in difficult times. Extra cycle times may also be directed at innovation and R&D; “there’s a lot things you can do during rainy days” and building a pipeline of products and services may be one of them.

• There’s no time for collaboration; doing more with less means we’ve got to hunker down. With an economic downturn companies will not be willing to appoint resources to collaborative projects. Since the return on investment of collaborative initiatives is not always apparent, employees will also not be willing to allocate their time on activities that are not measured in performance reviews or not seen as directly contributing to the bottom line. From an employee perspective, it may make sense to hoard knowledge in tough times and be less collaborative in order to make yourself indispensable (i.e. prevent being eliminated). The “hunkering down” managers believe that collaboration is risky and can lead to wasted resources on dead-end projects. Moreover, they frown upon self-organizing behavior; suggesting that it will result in unfocused initiatives. It’s time to run a tight ship and that means scrutinizing all discretionary pursuits, focusing on internal resources, cutting salary expenses where possible, and getting remaining salaried employees to shoulder the extra weight.

Two opinions; two very different strategies. What do you think?