Posts Tagged ‘Silicon Valley’

Silicon Valley, not President Obama, has the Power to Save the World from Depression

March 21, 2009

 

Everybody agrees that the economic meltdown was caused by a crisis of trust.  Once disbelief entered the system, tight knit economic networks swiftly frayed into “every man for himself” loose threads.  The Emperor Economy has no clothes. 

So who can weave together a new economic fabric?  No, not Washinton D.C.  Silicon Valley.  And you.

During the United States Presidential Election, the Obama team successfully used the slogan “Change We Can Believe In.”  The media lasered in on the word “change” because that meant “not Republicans” but it’s my belief that average public hearts were most responding to the “believe in” aspect.  Human beings are intrinsically wired not to like change, but it’s an inherent need to believe in the people, ideas and institutions that surround us.

A growing number of American citizens are already becoming leery or downright fearful of President Obama’s sweeping list of changes.  While talking “bottom up solutions” during the campaign, he’s working to impose more and more top-down mandates.  That’s no surprise.  The Federal Government was designed to be the top of a power hierarchy.  Obama must work within that top-down system.

The problem is that no matter what the Obama administration desires, no matter what actions they take, trust — that one essential element that can turn around the economy – will not be injected back into the economy by government.  They simply don’t have the power or means to do it.  The bailouts and stimulus bill haven’t helped because they haven’t restored trust.  Many argue they’ve done just the opposite by highlighting abuse and excess and have made matters worse.

Recession lingers and depression threatens because of deep mistrust that is turning into despair.   Now that it’s lost, how can the public be expected to rebuild faith in people we don’t know, institutions we can’t reach, and extraordinarily complex systems we don’t fathom?  There is only one way.  Trust must come, as Obama rightfully stated in the campaign, from the bottom up.  It must start by believing in the people and the commerce around you.

My regular readers will be tired of hearing this from me again, but understanding this is so vital to economic recovery (and the avoidance of grave world conflict sparked by global depression) that I can’t say it enough.  For the two hundred thousand years that modern humans have lived on this Earth, social networks were economic networks.  Everybody depended on family, friends and trading partners for their livelihoods.  It was people they knew, they spoke with, they trusted, who kept them alive.

Today, especially online, social networking is mostly about conversation, education and entertainment, not about making a living.  For most of us, our ability to earn or lose money is dependent on things so far removed from us that we have very little control over it.  Mysterious things that happen in far-off places affect us more than the people and things we can touch.

This needs to change.  Luckily, everything is already in place to make that change.   We just need to tweak and build on what already exists.  We just need to turn online social networks into simultaneous economic networks, as they are naturally meant to become.  Social networking grows up, if you will.

I’ve written here and here about what Silicon Valley can do and how.  Basically, we need to create a true digitized economy based on heart to heart connection.  This means taking responsibility for letting friends, family and followers know which products and services are worth supporting and being compensated for that endorsement. 

This, in turn, means taking power away from corporations so that successful advertising distribution is dependent more on having goodwill than having deep pockets.  By holding companies accountable, having the power to affect their ability to find customers, gross atrocities will at least diminish if not end.

It also means creating a market for ALL digital goods.   Every creative person no matter what their skills and passions needs to have a seat at the table, not just musicians and application developers.

Journalism must also have a seat at the table.  Professional journalists who work for publications as well as compensated independent bloggers must be included.

The final thing that’s required is to allow people who produce non-digital goods and services to have access to the market.  If I have one pizza shop in Petaluma, I should have as much opportunity to reach potential customers in my area as Pizza Hut does.

By creating one-on-one bonds between buyers and sellers, we can rebuild trust, get buying and selling going strong again, and rebuild the economy.  Moreover, we can strengthen the social/economic fabric so that devastating economic unraveling never happens again.

But Silicon Valley must step up.  The tech world needs to stop wasting its time on having no business models, no outward look, and no clear and focused ambition.  It’s time for the Valley to cross over into the mainsteam instead of waiting for the mainstream to come to them.  It’s time to show some leadership.

The world needs Silicon Valley to create some change we can believe in.

How Silicon Valley can Re-grow the Economy from the Bottom Up

February 28, 2009

Details:

1)     Create an Open Ad Network, similar to Adsense but for any multimedia, for use on social networking sites like Twitter, Facebook and FriendFeed, as well as blog sites like WordPress.

2)     While anybody can upload an ad and say how much they are willing to pay for its run, only users will have the power to distribute the ads.  IOW, users get to pick and choose the products and services they wish to endorse for their own social graph and casual readers.

3)     Ads are very dynamic, mostly limited-time offers and invitations by companies previously approved (Users will input their “150” – the number of brands we are each loyal to on average, which serve 80% of our everyday needs) .  Once the goal of the advertiser is met (such as 10,000 coupons saved or printed), the ad is automatically replaced by another in the queue.

4)     Of course, there will be room to introduce new products and services, too, for those companies seeking brand awareness.  This will spawn limited offers to targeted influencers such as “Can we send you our new coffee maker to try at home?”

5)     As users’ friends, family and followers engage with the ads, the user makes money.

6)     Smaller businesses that can’t afford to pay cash can offer users discounts.  For example, $.25 per engagement towards meals at my local restaurant (so if 20 of your local friends check out the ad of the new restaurant you recommend, you get $5 off your next meal there).  Also, if a startup cannot afford to pay, the user can override the “place best paying ads first” function and distribute the ads for little to nothing, to give deserving companies a boost and help make sure they stick around.

7)     Earned money can be spent at participating LOCAL businesses via cell phone exchange, so that users are encouraged to spend the money locally, to shore up their own communities.  If spent this way, the money is not taxable for the user (but would be subject to tax for the businesses) and the business picks up the bank transaction fees.  So even if you earned $1,000 a month or more via this system, you wouldn’t get taxed on it and you wouldn’t increase the tax rate of your primary income. (Of course, the government will have to sign off on this, but given the state of our economy, if there were a groundswell of support for this, it shouldn’t be a problem.)

8 )     The alternative is to withdraw cash once a month, which will be reported to the IRS and bank transaction fees will be charged.

Advantages:

1)     Individuals will earn and spend extra money, stimulating the economy, especially their local communities.

2)     Since people will be recommending products and services they know and enjoy, then trust, confidence and demand will all increase.

3)     Advertisers will finally benefit from an online advertising method that actually works for demand creation (as opposed to Search’s demand fulfillment).

4)     Because companies themselves cannot distribute the ads, goodwill and not just money is required for any and all ad runs.  This will make businesses more accountable to customers and society at large.

5)     Crappy ads will not be distributed.  Demand for higher quality ads will increase and professional copywriters, photographers, videographers, and so on will be put back to work.

6)     Everybody has the same, level playing field so that small companies without huge advertising budgets can still access the marketplace and compete effectively with big companies.

7)     Being able to access the market will make entrepreneurism skyrocket, creating income, tax revenue and jobs.

As I’ve written before, we should create a for-profit consortium to make this a reality.  The sooner the better.

Friend Limit Frustration Exposes Tech World’s Weakness in Social Science

February 15, 2009

Debate about friend limits has once again erupted, this time started by Louis Gray on FriendFeed. 

This is yet another great example of the problems that have been caused because social networks are created by tech guys who know little to nothing about social science.

Out of all the different social networks that have been launched, not a single one is architected to the way human beings naturally function. 

Here’s a tip guys: divide online space the way we all divide our offline space, into Intimate, Private, Social and Public. 

This hell-bent desire to dump sales and promotional activity into SOCIAL space is exactly why none of the current social networks will make it to the IPO finish line.  Advertising and PR should be a part of PUBLIC space.  Obviously, Facebook et al don’t know the difference.

Of course, I’ve been saying this for over two years to Robert Scoble and other thought leaders in the tech world, even to the creators of Twitter and FriendFeed directly, but nobody has yet aligned social networks to the realites of social science.  Design anthropology isn’t something Silicon Valley has shown any willingness to even listen to, much less submit to, much less invest in.   So I won’t hold my breath that these frustrated arguments caused by anti-human-nature design will cease any time soon.

How can the Web truly be “open” when only young white male geeks get to decide what the Web is?

January 28, 2009

closed1

How many times have we heard from the tech world that ideas are worthless, that only the application of ideas has value?  This commonly held Silicon Valley belief – that ideas are insignificant compared to execution – is, pardon my language, Scoble slobber.  Yet, this mistaken belief drives the Web.  Moreover, it self-servingly puts all the power in very few, non-diverse hands. 

Wall Street: old white males. 

Silicon Valley: young white males. 

You can’t be offended by one and happy with the other.

Yes, application is vital.  More than vital.  But you can’t apply something that doesn’t first exist: the idea.  Poor ideas remain poor even when executed well.  The most stellar engineers can’t make a silk purse out of a sow’s ear.

The opposite is also true.  Good ideas are hard to keep down, no matter what.  Twitter wasn’t executed particularly well, to which the Fail Whale testifies, yet Twitter is flourishing because at its core was a good idea.

Good ideas are just as essential as good execution.  And as “execution” moves closer and closer to becoming a commodity thanks to the Open Source movement that has made “patent” and “proprietary” dirty words and developers interchangeable and expendable, someday soon, the only wealth creation advantage for any Internet product will be the idea itself. 

 Problem #1 – Silicon Valley’s inability to judge if an idea is truly good or not

How many times have we heard venture capitalists say that in order for them to consider your project, you need to get something launched and prove traction?  What is this demand if not an admission that they don’t have a clue if your idea is solid or not?  Yes, you can choose to believe that they are testing your execution abilities, but your programming skills could be confirmed by simply pointing to other projects you’ve already completed.  What they really want to know is whether or not people will desire what you develop. 

That’s what traction is, of course: confirmation of the idea. 

Silicon Valley’s “let’s throw ideas against the wall to see what sticks” approach is extremely wasteful of time, talent and money.  It also limits executed ideas to those of mostly young (limited life experience), mostly left-brained (limited creativity) mostly males (limited accommodation).

Solution

VC firms have technical expertise to judge the technology, but as everything becomes open source and non-patentable, this analysis is less critical.  The Social Web has taken over and social science can no longer be ignored.   VC firms should hire or contract with people who can judge ideas from a human adoption standpoint.   This means people with expertise in anthropology, sociology and trend forecasting.

Problem #2 – Silicon Valley’s sexism

 “Sexism” is a word I very seldom use and certainly do not brandish carelessly.  Neither do I mean it on an individual basis.  These days most men aren’t ignorant-based bigots against women.  But Silicon Valley and the Web itself are extremely “institutionally sexist” given the fact that the vast majority of VCs, technologists, and tech reporters/bloggers are male.  Even as women are now online in greater numbers than men, female ideas and wants and desires largely go unexecuted. 

Elevating anthropology and sociology to the same plane as technology as suggested above will naturally bring in more women, but more needs to be done. 

Solution

Investors should actively seek out ideas not just from women, but also from other groups that aren’t now being included in VC’s ponder piles, like older folks and racial minorities. 

“If you could build the world’s best Internet experience, what would it be like?”  Ask that question, sift through the business plans, verify that the result would be desirable to large numbers and THEN go get the technical talent that it takes to execute.

Why is that so hard to fathom? 

Ideas may be a dime a dozen but GOOD ideas can be worth millions.  Even billions.  Open up who can offer business plans, get diverse experts to help review them from a people-perspective as well as tech-perspective – so you can stop the absurdity of “build this first and then maybe we’ll give you the money to build this” – and you’re bound to find some great ideas that can be executed.  And I’ll bet most will include monetization plans, too!

Either that or we can just stay stuck in the poverty of Web 2.0 until Scoble runs out of slobber for yet another social network by yet another young white geek male.  SIGH

PS: Before anybody accuses me of geek bashing, I love geeks.  My late husband was a geek who worked for Intel.  How could we live without you guys?  I wouldn’t want to try.  But it takes all kinds to make the world go round, and it is the Worldwide Web, after all. 

The Internet should reflect everybody.  And until it does “open” is closed.  That’s all I’m saying.

Silicon Valley Fad or Trend? – #1 in a series: Personal Branding

January 4, 2009

incrediblesSince starting this blog a month ago, I’ve found myself writing several posts about the importance of understanding anthropology, not just technology, when developing Internet products and services.  In an effort to be clearer regarding what I mean by “anthropology,” I’ve decided to get more specific. 

This is the first in a series of articles analyzing whether something we see and experience online is a Silicon Valley fad or a cultural trend you can expect to endure and permeate into non-geek cultures.  If you’re building an Internet product or service that you want to survive and make mainstream, it is vital to know the difference.

Personal Branding: Fad or Trend?

Sarah Lacy, a Silicon Valley journalist, yesterday posted an article about how her concerted efforts to brand herself haven’t paid off in cash.  Like so many others, Lacy is working longer and harder than ever for no visible return.

What is it?

Personal branding means to package yourself into a commercial property that can be applied to various products (think cartoonist Hugh MacLeod promoting tailored suits and wine) or across a variety of platforms (think Scobleizer on Twitter, FriendFeed, Facebook, etc.)  Personal branding in the context of the Internet essentially comes down to Web celebrity in micro-niches, mostly geek related. 

Why is it?

Many people are busting out Yertle-the-Turtle tactics to virtually climb the social ladder by collecting “friends” and followers as some people might collect trading cards.  But much of this is nothing more than natural ego feeding and is not a conscious effort to establish a personal brand.

When it comes to deliberate personal branding efforts, I believe there are two main forces driving the aspiration.  One is the on-the-job desire to highlight your own external visibility, to grow it separately from that of your company, so that you may carry its value with you as you move from job to job to job.  Remember, nobody these days expects to work for the same company for very long, either by choice or by layoff. 

The media world is especially dynamic, thanks to disruption caused by the Internet.  If you have a job today, you can’t count on having it tomorrow, so it makes sense to leverage whatever visibility and credibility your employer offers and make it your own.   As an example, Robert Scoble formed a large hive of followers thanks to his job at Microsoft.  Since leaving the software giant, Scoble has maintained a herculean effort to breed this hive so that his value to other potential employers is much greater than it would be if he were a lone employee.  Like a queen bee, wherever Scoble moves, his hive moves with him, and a higher compensation point is assured, so long as visibility is what the new employer wants to hire.

The second propellant for personal branding is the Internet’s “culture of free.”   Most people with digitizable talents no longer have a secure and dependable means to profit directly from their work, since digitized copies can be swiped for nothing.  For example, markets for photographs, cartoons and freelance writing have collapsed.  But that’s a good thing, according to Silicon Valley’s free-culture evangelists.  Free, they’ve claimed for years, will make you richer than ever.   All you need to do is give your work away for nothing in order to build up followers and a personal brand, and then somehow (magically?), all that visibility will translate into dollars.  Sell t-shirts.  Sell book collections.  Become a paid speaker.  Just sit back as people throw money at you.  Ride the high tide of all that free love.  That’s the attractive theory.

Will it Last?

No.  Personal branding is a Silicon Valley fad; it’s not a cultural trend.

Yes, personal branding has indeed worked for a relatively small number of people in the short term, but it’s not sustainable for the long run.  Nor is it a practical strategy for the masses.  Here are some reasons why:

1) Personal branding is an extremely consuming effort.  Hugh MacLeod often writes in his blog about being exhausted by the demands of living an independent branded life without the security and relaxation of a steady income.  Robert Scoble claims to spend seven hours or more every day on FriendFeed alone, which is nine hours a week more than a full time job.  The vast majority of people are unwilling or unable to put in the time and dedication required to be a Web celebrity. 

2) Each one of us has two talents.  We have more or less ability to do a huge variety of tasks, but only two genuine talents.  Very few people have more than two and virtually nobody has less.  Unless one of those talents is salesmanship or you happen to fall into good luck (or a blend of both), you simply don’t have what it takes to turn the other talent (or mix of good-at’s) into popularity.

3) Celebrity itself is always ephemeral, no matter what you do.  As Sarah Lacy points out in the above article, you must constantly look over your shoulder to watch out for the next guy who wants to steal your thunder.  Count on that next person emerging to replace you, sooner or later.  People’s attention is a zero sum game.  If somebody new stays on the radar, then somebody else must disappear.  The most ardent fans are often the first to become disloyal since seeking the “new” and “fresh” and “exciting” is part of the psychological makeup of being a fan.

4) Being viewed as a brand is fraught with risk in this post-collapse economy when CEO-hating consumers distrust things that smack of corporate-ness.  Watch for people to increasingly disengage from folks who have a commercial agenda beyond the sharing of their own talents and genuine passions. (Scoble and MacLeod actually fair well here, since they both promote only what they’re honestly passionate about, or so it seems.)  Be mindful that what passed as confident self-expression pre-collapse may well be viewed as shameless self-promotion now.  More than ever, people want and need real value added to their own lives, not hype, and certainly not exploitation for somebody else’s profit.

5) Remember the lesson of The Incredibles: if everybody is “super,” then nobody is.  The idea that anybody and everybody can be a celebrity doesn’t logically work.  The frustration and dysfunction of trying to out-popular the next guy will ultimately collapse the desire – to the point that the culture turns against follower greed.  Soon, value and authority must be found in ways beyond how your stats look.

6) Brands must be positioned.  That’s the problem bloggers have.  Michael Arrington is the arrogant-ass tech blogger who specializes in arrogant-ass startup news.  But is that really what he wants to be doing forever?  Surely not.  Who wants to be doing anything forever?  But because of personal branding, Arrington is TechCrunch and TechCrunch is Arrington.  Consequently, it’s very difficult (some say impossible) for Arrington to sell TechCrunch.  And even if he could sell it, is he now too “typecast” to remake himself into a different brand?  Normal people live multiple dimensions and many different lives within one lifespan.  When you turn yourself into a brand, you’re short-changing other aspects of yourself in the present and threatening your future evolution. 

7) Branding yourself is potentially dangerous.  The goal of branding is to become as exposed as possible.  Do you really want to expose your whole self and consequently your loved ones, even your children, to the all the crazies in this world.  Do you really?  Most people don’t.

8 ) As the volume and quality of news, information and entertainment increase online to a more television-like level, and as average individuals become increasingly empowered to gather and share both, the concentrations of people who currently surround any one individual will disperse.  Average Joes and Janes will engage one-on-one with friends they mutually perceive as equally valuable.  While they will happily discuss pertinent content an A-list blogger may write, gathering at the feet of said blogger to be talked at, about all kinds of irrelevant matters, is going to go the way of the dodo tweet.  In other words, when more professionalism comes online and focus shifts to being about your work, not about you, personal branding becomes moot.  I predict this shift is going to happen before the end of next year.

9) Brand recognition doesn’t even equate to perceived value, much less real value.  In other words, having high recognition isn’t necessarily the same thing as having a good reputation and a valuable property.  It can be quite the contrary, in fact.  The most effective tool for building brand recognition online is controversy.  All web celebrities I can think of use it purposefully, some more than others.   “Shocking” language.  Cynicism and misanthropy.  Attacks on other Web celebrities.  The periodic drama between A-list friends.  It’s all about attracting and keeping attention.  Loren Feldman, who I happen to think is funny and talented though his subject matter doesn’t usually appeal to me, is the poster boy for growing his brand via controversy.  While it’s been effective for increasing viewership, it’s come back to bite him financially at least once.  Verizon dropped a distribution deal with Feldman because of his “TechNigga” videos from years ago.  If you put yourself out there as a brand, you’re going to attract enemies as well as friends, and you’re going to collect baggage, some of which could actually harm your career rather than help it.

Implications for Internet Products and Services

1) Blogging will not survive.  Blogs are a tool for personal branding, and we know how that will come out.  Create something to replace blogs.

2) As social networking matures, pointing to how many followers you have will seem immature at best, gauche at worst.  If you’re creating a new social network, don’t make the members’ number of followers public.  Leveling the playing field (as Ning does) will be much more effective than creating kings (as FriendFeed does).

3) Create a revenue model.  Design in it at the notebook stage.  Make it a part of your DNA, not something you clumsily strap on later.  Some of the Web’s best companies, like SmugMug, have refused to skip to Pied Piper economics and are doing well precisely because they didn’t believe the sham of Free and felt confident enough in their offering to charge for it. 

4) If you rely on advertising and are dependent on user-generated content, make your revenue model distributive.  Allow your members to own and control their social graph and compensate them for its use.  Pay your contributors for content that makes you money.  The days of making other people billionaires, like Mark Zuckerberg and the YouTube guys, without getting tangible compensation in return, are over.  Perhaps ironically, the next Google-like success story, the next IPO offering that leads to massive wealth for investors, is the company that understands that nobody wins the social networking space until we all do.

5) Understand the underlying trends that have led to the personal branding fad, and design products and services to solve those problems directly.  For example, create a way for photographers to get paid for their photos.  Or create a way for bloggers and journalists to carry their monetization models with them no matter what platform they’re on.

6) To expand #5 more generally: serve.  Serve your users – be they your readers, your social network members, or paying customers – as emotionally and as materially as you can.  This recession already feels like a depression to many people, and has for some time.  Find ways to save them money, create methods to make them money, allow them the means to find and commiserate with people in their same boat.  Create a way for fit-to-be-tied consumers to hold greedy corporations accountable!  The economy will get worse before it gets better.  Remember that we live in a post-collapse world and we’re never going back.  Even as the economy soars again, the culture won’t go back.  Our tolerance for commercialism, our debt tolerance, our trust capacity have all been forever altered.  All these things have implications when it comes to the successful design and development of Internet products and services.

I hope this article has provided at least some insight into the value of anthropology, and helps explain my assertion that the best technology will fail in the marketplace if it’s matched to poor anthropology.  Better yet, if you understand anthropology, you will find opportunity, and all of us need more of that.

 I will write other installments for this “Fad or Trend?” series in the coming weeks.  If you have any questions, topic suggestions, or wish to challenge me on anything, please leave a comment below.  Thanks.


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