Archive for January, 2009

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

January 28, 2009

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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.

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What FREE gets you

January 16, 2009

My son is a former Marine.  Yesterday, I went with him up to Portland’s VA Hospital.  It’s a big ugly place that reminds me of the communist buildings in Eastern Europe.  Even the toilet seats look like they’ve been there since the 60s.

While my son was in his appointment, I asked the fellow at the counter if the VA offers sleep studies, as I suspect my son has sleep apnea.  He told me, yes, they do offer it.  But it takes THREE YEARS to get an appointment.  My jaw dropped.  THREE YEARS?!  Yep.  He knows because he’s been waiting two years himself and was happy that he only has one year to go. 

The VA is like the free Internet.  We think that the Web is fabulous because that’s all we know, but it’s not half what it could be.

The thing people don’t understand is that free has an opposite end, and you can’t pick up one end of the stick without picking up the other.  Getting something for free means somebody else is supplying something for nothing.   What will that eventually do to quality and quantity?  What will that do to the money supply?  No shared revenue.  No research and development.  No innovation and job growth.

Where things are free, there is no bustling economy.   Incomes are low for the few jobs that exist.  Quality is relatively poor.  The engine of wealth creation is turned off.

Look, would you rather be able to earn $100 and have to pay for $50 worth of stuff, or get $25 worth of stuff for free and have no income?

Too many Internet users are choosing the latter.  They don’t understand that the Internet’s free culture has been a disaster when it comes to art, culture, and economic growth.

We have movie actors and television actors.  Why are there no Internet actors?  Because of Free.  Why is the Family Guy guy the only tv professional creating Web-only content?  Because of Free.  Why will even geeks have increasing difficulty making a living off the Internet?  Because of Free.

Thankfully, there are other hospitals – and sleep clinics – besides the VA.  There is no other Internet besides the free Internet.  That’s going to change.  And those people who keep an open mind will be the first to appreciate those changes and to profit by them.  It’s not going to be an easy transition for a lot of people, just like Eastern Europe hasn’t made an easy transition from communism to capitalism, but in the end, the vast majority of people will declare their lives better off because of it.

How will Twitter make money? Treat usernames like domains

January 15, 2009

 UPDATE: 3/20/2009  This from AdAge shows that there is GREAT value in my similar idea, whether or not people like it: “A proposed expansion of top-level domains means that by the end of the year there could be hundreds. Coca-Cola and Pepsi could request .soda or .softdrinks; Procter & Gamble and Unilever could sign up for .laundry or .soap. The initial cost estimated by the Internet Corporation for Assigned Names and Numbers is $185,000 for registration plus anywhere from $25,000 to $75,000 in annual fees. But if both Pepsi and Coca-Cola wanted .soda, there would be an auction, and the domain rights would go to the highest bidder. And that could get pricey quickly for brand owners. One outside consultant estimated that the total cost to business could reach $1.5 billion. And that’s to say nothing of domain squatters.”

 

Today, “How will Twitter make money?” is to the Internet what “Who shot JR?” was to television in 1980.

I never watched Dallas, so I can’t answer the latter question, but I’ll take a stab at the first one.

All Twitter needs to do is charge a yearly fee to register usernames, like domains — only make it so users have a shot at making money from it, so that everybody doesn’t rebel.

Every name should start out cheap, like $5 a year.  If somebody wants a name you have, then they can offer more than that.  If you sell, you get half the proceeds and Twitter collects the other half.  If you don’t want to sell it, then you get to keep it just until the year’s registration runs out.  At that point, you either have to sell it or you must pay Twitter 50% of the highest offer in order to register it again and keep it for the next year.

Of course, Twitter could make bidders escrow funds for large bids, to make sure the bidders are sincere and not just trying to run up prices against somebody. 

The fair market price would always prevail.  Of course, some names would be much more valuable than others.  So say you have the name iPhone.  If Apple wants it, then they pay you a few thousand dollars, and you get half and Twitter gets half.  It would be good PR for companies to pay a decent price.   What a name sells for could be posted, so everybody knows what “going rates” are.

If your username is your registered Trademark, then Twitter can arrange to make the name permanent to you for a fee. If the name is a generic name, like “hotdog,” then the registered user could change over time from Oscar Meyer to Yankees Stadium to Nathan’s Hotdogs.

This would make Twitter a ton of money and be fair to all users.  The early adopters get compensated, but they don’t get to squat on names that could be of more value to somebody else. 

Twitter and all social marketing networks have become marketing platforms just like Web pages became a marketing platform.  Why shouldn’t we pay for usernames just like domain names?  Makes sense to me.  Just think of how fast Twitter would grow from all the speculators rushing to grab brand names. 

It Makes Money to Take Money

January 13, 2009


I’ve been warning for years that the “free” Internet is a collective disaster.  If you want some explanation of that, watch my video.  (Sorry for the diction…I was being treated for cancer at the time and my tongue was fat and lazy.)

It amazes me how many perfectly well-meaning, intelligent people believe that society is better off when all news, information, entertainment and visual arts can be consumed without charge.  Yet, if you asked those same people if it would be good for society if grocery stores gave away all their food for free, at least most of them would understand that the answer is no.

Of course, “free” never really meant free; it means “let somebody else pay.”  Let the investors pay.  Let the advertisers pay.  Let the guy who wants a t-shirt pay.  And don’t forget the girl who is embarrassed by the donation pleas from starving artists who will pay.   The rest of us can happily ignore any responsibility to cough up without shame.  After all, free is righteous.  We’re not bums, we’re enlightened.  Or so the argument has gone for years.

But now, our economy is in the pits, VCs are closing their pockets, advertisers are falling away, and donations are less likely than ever.  So what will this mean for the Internet?

It means the free lunch is over.

A paradigm shift is coming.  Free will be replaced by direct payment models.  Look for the best websites to start charging admission and subscription fees.  Micropayments will finally be made workable.  User-generated content will no longer be happily provided to make other people rich.

Many people will kick and scream during the transition, but ultimately, everybody will be much better off.  The Internet will flourish both economically and culturally as more talents get compensated and creativity finally explodes to everyone’s delight and prosperity.

In a few years time, the Internet culture that is today dominated by defenders of free will be thriving beyond recognition thanks to those who understand during this recession that it makes money to take money – and especially to those who are brave enough to act accordingly.

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.