unfinished work

Ecosystem Management - Is Control Good or Bad

Two posts in the same day illustrate the problems at either extreme of ecosystem management on the web.

Apple exerts too much control

Firefox too little

Is there an obvious middle ground that doesn’t create a big management burden? Is there a technical, or architectural solution that would lead to good behavior with out requiring a human referee?

I can’t say what the solution might be. I suspect it will combine clever architecture, good incentive structure, and some crowd sourced human oversight. But I sure hope there is a solution otherwise we are staring at a fundamental limitation of the web.

Where You Stand Depends On Where You Sit

Over the weekend, David Carr of the New York Times lost it. He published a piece in the Sunday New York Times in which he suggested a last ditch survival strategy for newspapers.

His suggestion:

1. Put up a pay wall
2. Shut out the search engines
3. Say no to cut rate digital ads
4. Merge weak papers in local markets

The emotion in the piece felt like an anguished cry from someone cares passionately about the civic role of the newspaper as well as its economic viability.

I am sympathetic. It takes informed citizens for a democracy to thrive. Newspapers used to be the dominant source of news. The whole point of laws agaisnt the consolidation of news outlets in local markets is based on the need to preserve multiple voices. Yes, it is important that information be broadly accessible. Yes, it is important that voters have access to multiple points of view. But no - that does not require that newspapers as we know them continue to exist.

The reality is that the newspaper industry, despite its long, important, even noble service to our democracy is no longer too big to fail. There are already enough news outlets to ensure access to information and to multiple points of view. There will be more in the future.

So I’d be ok if the newspaper industry adopted all of David suggestions and would be happy if the FCC waived all the media concentration rules to make it happen. It would, unfortunately, have the effect of accerating their irrelavance. That would be too bad because, there is still an important role for news gathering and analysis, and the best reporting would be lost to us during a period of transition before new models emerge.

David’s righteous indignation over the role of search engines in the newspapers demise is way over the top. His peice suggests that search engines have unfairly appropriated the content of newspapers and undermined their business models. He suggests that if they all band together and refuse to allow search engines to index their content, the problem would be solved. He says this as if it is completely obvious that the appropriation of their content by search engines is at the very least immoral and should be illegal. And that newspapers should have every right to collude to deny search engines access to this content.

To me, it’s not so clear. What if sources were to come to the same conclusion. What if everyone who supplies information to a reporter decided that newspapers were unfairly capitalizing on their information and insights. What if they decided collectively to withhold that information so that news papers could not continue to unfairly profit from thier information.

Looked at that way, it seems like the value in newspapers is less about the facts and more about the aggregation (and interpretation) of those facts. That search engines are now aggregating newspapers seems less like the heist of the century and more like the natural, inevitable, and ultimately positive creative destruction of capitalism.

I Hope Larry Lessig is Wrong

Steven Johnson moderated a conversation between Larry Lessig and Shepard Fairey last night at the New York Public Library. The topic was remix culture. The most interesting exchange was when Steven pointed out that remix art seemed poppy and ironic but inherently limited, and Larry replied by arguing that any art that has as big a social impact as Shepard Fairey’s Obama poster, or as the Daily Show, is not limited. Shepard piped in that throwing paint at a jet engine and seeing what lands on a canvas 30 yards away isn’t all that profound either. I think Steven and Larry may be right that broad and “shallow” may be every bit as profound as narrow and deep, and that Shepard may be right that, these days, narrow and deep is in pretty short supply anyway.

But the conversation that got me thinking was about Larry’s recent career change. He has been fighting the enclosure of the digital commons for 15 years. He told the audience that he is now focused on the corrupting influence of money in politics. He cited the example of a bill just re-introduced by Rep. Conyers of Detroit (HR 801) that would require that the results of research funded by the American taxpayer not be freely distributed. This bill is designed to protect the interests of (ironically) mostly foreign publishers. Larry went on to say that the sponsors of this bill recieved twice as much campaign funding from publishers than other congressmen.

Ok - I agree money corrupts and I can see how campaign finance reform could cleanse the debate in Washington, but I hope Larry is wrong about his career choice.

Larry left the fight for free culture at a moment that he described as the most “hopeful” ever to tilt at a new windmill. Is it possible that the old windmill, the acceleration of transparency and the furtherance of the democratizing qualities of the web are not just the key to a revitalized, engaging popular culture - they are also the key to managing the corrupting influence of money in Washington.

The fundamental problem is that the issues that are decided in Washington tend to have a diffuse impact on a large number of relatively unorganized consumers and a very direct impact on well organized commercial interests. For example, consumers are harmed by the lack of innovation in licensed spectrum but wireless carriers greatly benefit from the goverment granted monoply that protects them from competition. It is not hard to figure out why carriers are winning that fight. Consumers don’t even know what’s at stake. Carriers know not only exactly what’s at stake, but how key decisions are going to be made, by who, and what the re-election prospects (and campaign funding needs) are for the key decision makers.

I hope that the web will become the vehicle for education and engaging consumers about the key issues and that once they are engaged, it will provide a vehicle for making sure that their voices are heard. I believe that process will reduce the infuence of special interests, and increase the infuence of voters.

The web may also change the fundraising equation in Washington. If we assume that Chris Hughe’s My Obama web site is the new model for engaging activists and attracting campaign dollars, and that there is no reason that every politician at every level will not be using these techniques in the next election cycle, then the influence of special interests will be diminished.

So I hope Larry’s new focus on the corrupting influence of campaign finance reform is uneccessary, and I hope that once he gets into it, he will use his remarkable talents continue to accelerate the transparency of politics and the democratization of campaign finance that the web has enabled.

What's Like Happening to Like Culture?

My partner Albert complained a couple of days ago about the overuse of the word like. Like :-) Albert, I regret its over use. Like Albert, Mary and I also find ourselves constantly saying to our two ten year olds “its not like anything” - just say what you mean.

But I think there is something else going on here. I think kids today are so much more self aware than we were when we were growing up that they are uncomfortable speaking directly. By starting evrery sentence with “Like” they introduce an element of ironic distance to every utterance that signals how sophisticated they are.

I guess we will have grown through the ugly adolescence of our culture when the most sophisticated kids begin to see the usage as a crutch and drop its use to signal that they are even more sophisticated and self aware than their freinds who are still need to distance themselves from everything.

continuations:

A couple of days ago I was riding on a Metro North commuter train behind a group of teenagers who were loudly discussing something. I say something because I could not make out their topic as it was drowned out by the word “like” appearing three or more times in every sentence. Now I am generally not language obsessed and English is my second language, but the complete lack of expressiveness among the teenagers and their constant substitution of “like” for more complicated words or expressions was a bit horrifying……

To do my own little piece to stem the decline, I have now taken to correcting my kids whenever they use “like” as a meaningless filler or to avoid having to think of the correct word.

There Is A Reason For Free And It Ain't VCs

The most intersting thing about Hank Williams post on Friday of last week - Free Is Killing Us - Blame The VC, is the comment thread. Many people take Hank to task for what is a simplistic generalization that has little, if any, basis in fact. Dave McClure provides does a particularly efficient job of it

»in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it.

this is just patently false, and the statement that VCs are making it hard to compete with free is just specious, at best.

Dave goes on to pick apart Hank’s argument point by point.

What surprised me, however, is that no one picked up on what I think is the central reason we see so many free web services. Several people talked about the declining cost of building and hosting a service. Some mentioned that the marginal cost to a web service of another user is often close to zero. These arguments explain why it is possible to offer a service for free many times with no VC funding, but it does not explain why people do it.

The thing that no one talked about was the relationship between the user of a service and the provider of that service - how that has changed on the web and what it means for business models. The reason so many services on the web are offered for free is that the users of the service are not customers in the traditional sense, the are the co-creators of the service. The service provider creates the environment, the users provide the content. Craigslist is a great example of this. Without users to upload the ads and police abuse, Craigslist would be much more expensive to operate. Of course the users get the service for free (mostly), they created it. You could make the argument that Craig should be paying them - that is how the newspapers ran classifieds for years. This is true of many of the most visible free services. Who provides the content at Google or Facebook? Who edits Digg? These services are govenrnance systems that regulate user generated contrtibution. They have to be free.

This is also why so many web services have or will have media business models. I did not say advertising supported business models because most people think of that narrowly - banners on pages. I said media because that implies that we are talking about a threeway. It is not just suppliers and customers. It is suppliers, customers, and sponsors. Even that is too simplistic. Most of these businesses will be supported by a third party who either wants to reach an audience (advertising, sponsorship, etc.) but others will work because the service provider can take a byproduct of their offering and sell that. A search engine could, for instance, package anonymous aggregate attention data and sell it to market researchers, or to other service providers who could then use the data to improve their offering, perhaps by filtering or relevancy ranking some part of their service.

Hank’s complaint that small businesses on the web can no longer succeed at small scale reveals a dated conception of small business, and a limited view of the transformation we are living through. The relationship between suppliers and customers is changing. So is the relationship between scale and profitability. Craigslist is a small business (23 people) but they have scale (20mm uniques).

I am not defending VC’s here. I agree that there was a lot of money thrown at web business in the 90s in an effort to get big fast. But most of the VC’s I know have a much more nuanced view today. They recognize that their best portfolio companies are cultivating an ecosystem, one that they can nourish and influence but not one they can control. Offering some services for free is part of the bargain with the co-creators of their service.

artificial scarcity

I have always hated the idea of artificial scarcity. It seems like such a waste of society’s resources. So I was surprised to stumble across an example that I could not condem out of hand.

Mary showed me the work of a photographer that she thinks is really great. I agree the work is great but learned that he prints a limited number of each image to create a market for his work. He like most photographers or print makers produces a limited set of prints. The first five  are sold for $5000, the  next ten for $10,000 and the last few are sold for $50,000. 

Since he can produce an unlimited number of prints, my first reaction was what a waste, then I started wondering if there are examples where someone could justify limiting the amount of something even if there was zero marginal cost to produce that thing. 

I can not think of a moral reason for not doing this in the case of art 

Is there a business here?

Lots of folks I know set up standing queries to search for themselves on the web. It explains why Craig Newmark is so quick to comment on a post that talks about craigslist. 

what revenue

If you know the revenue model when you start it is not sufficiently disruptive to make a difference