The Collaborative Reformation

Collaboration has become the buzz word of the times. It holds out the promise of making all work productive all of the time, an attractive carrot in times of economic crisis. While collaboration tools will improve the effectiveness of existing processes and businesses its true impact and most dramatic effect lies in how collaboration tools can bring about a reformation of business.

Improving the efficiency of existing process works up to a point and indeed most, if not all, collaboration tools are predicated on somehow improving the efficiency of existing processes. The real promise of collaboration tools is how they can help users reform the fundamental processes of businesses. I’m not simply talking about getting rid of layers of approval but the complete overhaul of how new work is brought in, how it is created, how it is charged and how it is produced.

The impact comes from allowing business and users to focus on the work that adds value and streamline and eliminate the non-value add work. Elimination may involve out-sourcing to another business where the particular process or work is their value-add. Think designing cover art for a new book. It is not a value add proposition for a publisher but is a value-add proposition for a designer.

The reformation extends beyond simply managing documents and information to completing the core tasks of the business whether it is a plumber, development agency or a manufacturer. Collaboration services need to be given access to the physical world that plays such an important part in many businesses whether it is tasking plumbers and ordering plumbing supplies for delivery or controlling a CNC machine.

In effect collaboration services need to evolve into a framework within which business operates; a framework which supports agile business processes, modules for specialist features (think CAM control) and management of information within the business. This is the path for development of collaboration services such as Huddle.

The ultimate goal is supporting the ideal of the networked business. A “Business” is a network of smaller businesses using a common collaboration platform with specialist modules from various providers. Business becomes a network of networks in which the collaboration service coordinates activities. It is this that is the root of the dramatic and sustainable change that collaboration services can bring to business.

Can Hubdub Survive?

I’ve been playing with Hubdub recently and all I can say is it has a looong way to go. In fact I think that unless some major changes are made Hubdub won’t survive 2009. Unfortunately, I think Hubdub faces some major, major hurdles, that will make the struggle to build a decent revenue stream (remember now cash is king...angel funding will only get them so far).

Hubdub for those that have not come across it is as predication market based around news. The idea is to combine news aggregation of some sort with predictive markets.

I’ve put down bets and created questions. My consequent experience has been less than heart warming. But to illustrate my concerns let’s look at the questions I created.

My first question was “Will Digg buy Hubdub in 2009?” Speculative yes, but Hubdub is a predictive market – questions are by nature speculative. Background to the question: Kevin Rose discussed Digg’s international expansion plans in his talk at FOWA London. This talk was widely reported in the media. Some other facts:

• Digg has just closed a funding round of $29m in September
• Hubdub has only raised angel funding and has 4 employees
• In this economic climate cash is king. Getting revenue positive is the holy grail
• Hubdub has not articulated a source of revenue that is sustaining

From these data points (which are all easily available with a quick search on the web) one concludes that Hubdub is a good target for acquisition. It has a decent (although it requires some work) prediction platform but other than that it has nothing special. Kevin Rose wants to expand internationally and the prediction market technology would work well with the Digg platform. It would certainly give Digg greater number of potential revenue streams. I will be the first to admit that this is speculative but it is based on facts. But all it took was one person to raise a question and the question was voided.

Second question was “How far will UK house prices fall by December 2008?” This question was voided as it didn’t have an option for housing prices fall being below 15%. Let’s look at the logic of this. As of September 2008 both Halifax and Nationwide have reported house price falls of 12.4%. There are three more months to go before the end of December and these things don’t turn around on a dime. Being below 15% is not an option as credit is still tight and the UK has entered recession. There is no sound possibility that house prices will not fall less 15%. Now let’s look at this from angle of question creator. I may not want to provide an option so why should I? Why do questions have to be modified to provide gamblers with an option they want?

The issues with the questions are merely symptoms of what I see as major flaws of the Hubdub system. They are:

1. The rules for creating questions are vague and easily open to interpretation.
2. The very act of creating questions is daunting and annoying
3. The site is rapidly becoming dominated by power users

Hubdub is seeing the play out of Clay Shirky’s maxim “A Group Is Its Own Worst Enemy”. Power users and early adopters will band together to void questions and in other ways hassle newbies merely because they don’t like the question (rather than it’s predictive quality) or because newbies are falling afoul of capricious unwritten rules. There is no penalty against power users for this type of behaviour. This is over and above the effort needed to create questions in the first place. It is extremely disconcerting to put the effort into questions only to have them void on relatively spurious grounds.

The single most worrying aspect about the flaws in Hubdub is everyone has been talking about the development of communities and their interaction for the last 11 years. Let’s recap – Usenet went through the same problem, Slashdot went through the same problem, Digg went through the same problem. See a pattern here?

Clay Shirky has been shouting from the roof tops about it for years. Hugh McLeod and Tara Hunt have all discussed it. At what point do people pay attention? Angel investing or not, for a service that is based on community and users, to not have the necessary tools needed to manage the community’s interaction with the platform is simply, well, scary. It speaks to a company that has a fundamental lack of understand of community base services.

Is it important? Very. Hubdub needs a diverse, large and vibrant community not only of speculators but also question creators. The way Hubdub is going to make money is from selling premium access to data and audience to businesses. However, companies will only pay if the Hubdub community is diverse and large as then the data and audience has value to them. As it is the current community is doing very well at driving new members away. Hardly a good method of growth.

Hubdub can possibly turn this around. The first step is to build the tools and features necessary to manage the community interaction. This will piss off the power users and early adopters as it blunts their power. That is the price to pay for improving the experience and engagement for a broader and more diverse people. Actions must have consequence. When actions have no consequence poor behaviour soon dominates. Slashdot found this out the hard way as has Digg.

The other part of the engagement issue is question creation. Relying on people to read FAQs about question creation is very, well, RTFM. Most people don’t RTFM and nor should they. If there are rules about question creation they need to be clear and objective with no room for abuse to void questions that someone doesn’t like. Of course, if the rules are clear and objective the system should not allow questions to be created in the first place that don’t meet those rules. People should not have to RTFM.

In fact, I wonder why voiding is necessary at all – isn’t the very act of betting on a question a vote on the question's quality? Why not just use the activity on the questions as a way to surface or subsume questions? Activity is a much better method than voiding or voting. Using activity blunts the prejudices and power of any single person or group of people.

The interleaving idea through the emails from Hubdub and site of not being a speculative market still stumps me. It’s a predictive market they are, by definition, speculative. It’s like being a fish and trying not to drink the water. Hubdub is a speculative market – if the problem is with questions that don’t have any news or are a long time in the future have a special section for these types of questions. Don’t ban them.

I did hope that Hubdub would be good. But I am sorely disappointed and I now doubt the company’s survival. I certainly would not invest any money in the company without some major changes to the platform.

Chaos, Finance and Non-linear Behaviour

With all the noise around cause and remedies for the financial woes we are currently experience something has been niggling at the back of my mind. It was only after watching the BBC documentary "High Anxieties: The Mathematics of Chaos" on Chaos math and reading some posts on nodes that it twigged.

The idea that the financial system is fundamentally chaotic (in mathematical terms) has been around for a while so that isn’t new. A system being chaotic is not a problem in itself, it just is. The problem lies in the transition from linear to non-linear response in chaotic system. Here we had a situation that seemed to be out of portion to reasonable rules of thumb for the system response. The size of the sub-prime looses shouldn’t have been enough to trigger the meltdown.

Unless of course the system was optimised and being highly driven. The past 20 to 30 years has seen the financial system optimised for making money. Without getting into the whys, wherefores and who did it, the optimisation process pushed the financial system to the edge of instability. Optimisation moves a system closer and closer to instability, which is how you get “optimised performance.” This works fine when a system is steady-state without unexpected shocks. The downside is it takes very little amount of non-steady state change to force the system into instability.

In chaotic system instability creates non-linear response that is unpredictable. That is what we are facing. A relatively small shock has sent the system into non-linear response. The system was pushed to the edge of non-linearity by two forces: growth in connections between nodes and the hard driving of the system.
The interconnection of nodes grew exponentially via the creation of various 2nd and higher order derivatives. The intent was to “spread risk”. Instead it amplified the risk across the system which would in turn amplify driving forces. The second part was the cheap credit. This acted to effectively increase the energy sloshing around the system, driving it hard.

To stop future financial crises, we need to de-optimise the system. We need to make the system robust. Regulatory changes such as tying capital ratio to the incentive system of executives, whether a good idea or not, will do little in an optimised chaotic system as even a small shock can have massive consequences. Instead we need regulations that look at limiting interconnectedness of the various nodes in the system and work to dampen movement of a shock through the system.

Put another way, we want to shift the system into an area that has the broadest linear response to shocks as possible. Some possible ideas are banning all 2nd and higher order derivatives or counter cyclical capital ratios. There will be great resistance to making the financial system fundamentally robust as it will limit the money making ability of financial institutions.

Apple's "New Technology" not so new

Image via CrunchBaseIt was interesting to watch the video of the Apple Notebook Presentation. The new notebooks are indeed items of engineering and design beauty.

But...

What struck me as very wrong was the claim around the new chassis for the notebooks. The claim on it being invented or new is simply and horribly wrong. The unibody is simply a variation of the monocoque technique that has been around in manufacturing for a long time. Aircraft have used the technique since the 1930's.

It might be new to computers but Apple's claim is high suspicious. My real question is - what took so long? Why are advanced (and not so advanced) manufacturing and design techniques only now coming to computers?

I suspect because manufacturing has always been a tertiary or lower concern. Now is the time for computer companies to grab a few manufacturing and mechanical engineers and lock them room and tell them pioneer new designs for chassis that take advantage of the latest manufacturing techniques, equipment and design.

One other thing. The emphasis on new chassis indicates that computer manufacturers have a lot of room to reduce costs and material usage in computers. It is going to interesting to see how companies take advantage of the possibilities offered by advanced manufacturing.

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Google Chrome's benefit for Mozilla Firefox

Image via WikipediaMozilla release Firefox 3.1 beta 1 today. Reading through the release notes and the blog posts about the new beta it is clear that Google Chrome's biggest effect on Mozilla Firefox was to encourage the Firefox developers to setup innovation and development a notch.

Mozilla had been costing for a while. IE ceased to be challenger. Google Chrome has taken over that role (at least for now). If Google Chrome never gets more than 1% of the market, I would still call it a success by giving the FireFox developers the necessary kick in the pants.

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The Crisis Makes the Leader

Brad Feld wrote an excellent post about leadership for entrepreneurs. Fred Wilson re-posted a quote to his blog. Core is that time is now for leadership.

Until now leadership has been easy. It always is in good times. The current crisis will test the leadership skills of entrepreneurs. To paraphrase – the crisis makes the leader. This test is not going to be easy and I am sure it is going to find a lot of entrepreneurs found wanting. I hope that VCs and angel investors will step up to crease to back stop the entrepreneurs.

On the upside it will forge some great leaders that will be of huge benefit to the industry and society once we get out the other side. Something we sorely lack today.

For now it is the time to for entrepreneurs to step out in front their people, swallow their fear and charge forward. Now is the time to lead from the front.

Spiral to Disaster and Financial Engineering

There is a lot of blame going around for the cause of the current financial crisis. It is a laundry list and often seems to reflect the prejudices of the pundits rather than a rational consideration of what happened.

The striking thing about this mess for me is how closely the crisis resembles a spiral to disaster. Spiral to disaster arose (from memory) out of the fire on the Piper Alpha oil rig in the North Sea. The inquiry into the incident found that while a condensate leak initiated the fire, it was actually the failure or lack of various fail safes that ended in the loss of so much life.

While the financial crisis was kicked off by the sub-prime problem in the US, the reason it has gotten so bad is the lack or failure of the fail safes. There has been nothing to stop the spiral downwards into an ever increasing financial disaster.

The aftermath of the Pipe Alpha fire was 100 recommendations to improve safety on oil rigs, which then went on to being accepted industry wide. We can only hope that the aftermath of the financial disaster will be result in sensible measures that act as fail safes to avoid systemic failure and stop the spiral to disaster.

Widgets, Communities and the Edge

The web is making it easier and easier for groups and communities to form. Groups foster social cohesion by having members demonstrate affiliation and by the use of objects to create community identity. Think Star Trek fans wearing Star Trek uniforms at conventions or fans of Metallica wearing Metallica branded tee-shirts.

Unfortunately web based methods of indicating affiliation don’t really translate to the real world. This is important as groups are increasingly rooted in the real world, indeed traditional line between cyberspace and the real world is becoming increasingly blurry.

Personalisation services offer the ability to create physical objects that indicate affiliation and community identity. These services are centralised and therein lays the problem. By being centralised they impose a coordination cost on the groups.

Widgets offer services like MOO.com and Ninjazoo the opportunity to offer personalised and communitised products directly into the community without getting in the way. Widgets provide a means of removing the coordination cost on groups by meshing the service within the normal activities and sites of the group.

It is taking the mountain to Muhammad rather taking Muhammad to the mountain.

It is the distribution of core functionality where the true value of widgets lies. Not with the distribution of content but allowing web services to adjust to an Edge Economy.

Tags: MOO.com, Ninjazoo, Edge Economy, Web Services, Web 3.0

Data Half-life: Time Dependent Relevancy

Data Half-Life is not an indication of the importance of a particular piece of information. It is actually a measure of how long a piece of information is relevant. Relevance is not a substitute for importance. It is dependent on context and the information itself. So a low data half-life means that the piece of information will quickly lose its relevancy. A high data half-life means the relevancy will drop slowly.

Consider the story that Clay Shirky related in his keynote at Web 2.0 Expo in New York. In this story someone changed their relationship status from engaged to single. This information is highly relevant to some people and not very relevant to most others. Given that data half-life reflects the broader relevance of the information to a person’s network, it has a low data half-life. It is generally not relevant to most of the people in the network.

Now they many want to know or feel the need to know, that does not mean it is relevant to them. It is easy to mistake the desired to know or the need to know as relevant. Desire to know has no bearing of the information’s data half-life.

By having a low data half-life the relationship status will only travel only so far through the person’s network, thereby avoiding the result in Clay Shirky’s story. Data Half-life is represents how time dependent the information is. The more time dependent some data is, the lower the half-life and the less time dependent the higher the half-life.

Tags: Filters

Privacy Filters and Facebook

In my previous post I used privacy in Facebook as an example of how data filters could work. One point I glossed over was how currently Facebook, indeed all social sites, fail with social distance. Unfortunately, social distance is a necessary for privacy filters to work satisfactorily.

Facebook has one major flaw, once a person is a friend in Facebook they are treated the same as all other contacts whether the connection comes from bumping into the person at a pub or someone you grew up with. It collapses the privacy or social distance between two people. The social distance can be considered how strong the connection between two people is. Social distance provides a measure of both strong and weak ties as articulated by Mark Granovetter.

Without some measure of social distance or strength of connections, any privacy filter is going to fail. The social graph fails to represent the real world connections between people properly.

Facebook attempts to use groupings of friends to approximate social distance but this is cumbersome to use. The manual nature of setting up and categorising everyone into groups is a major barrier to use. People are lazy.

What is needed is an automated method for calculating social distance. Social distance is calculated (and this is how Mark Granovetter categorised connections) by the frequency of communications. Measuring frequency of communications is difficult for Facebook. While Facebook can measure wall posts, internal emails, poking etc., so much more of our communication occurs outside of Facebook, outside of the wall; whether through email, IMs, phone calls, SMS, twitter parties attended etc.; that the frequency of communication within the wall is not a reasonable approximation for the wider frequency of communication.

The key measure of social distance – communication – is hard to quantify as it is dispersed through many different channels. Trying to capture the frequency of communication via porting the data in is one method of dealing with the issue. The other, probably more realistic, method is to start off with some rules and use what can be easily quantified to refine the measure of connection strength overtime.

The rules would look at what is known generically about social connections. Some of rules are:

1. Married is a strong connection
2. The same surname is a strong connection
3. If strong connections to friends with which you have strong connections then you probably have a strong connection

Some of these rules will dictate a very strong connection (first rule) while others will dictate varying strengths dependent on factors such as prior connections with other friends (third rule). All connections start as very weak and are refined first by application of the rules and then overtime by measures of frequency of communication.

Privacy filters all start with knowing the distance between two end points whether physical in case of centuries before or by social distance in the case of today. Until Facebook and any other social-based site has a measure of social distance privacy filters are going to be mediocre at best and more often prone to failure.

Tags: Privacy, Facebook, Filters

Failure of Filters

The title from this post is taken from the keynote that Clay Shirky delivered at the NY Web2.0 Expo in September 2008. The premise of the keynote is that the “information overload” we are facing is not a problem but a fact (one that has been around since Gutenberg and his movable type press) and what we are seeing now is the collapse of the traditional filters that mediated the information overload.

The existing filters for information were founded in the difficulty of moving information over distance. The various communications technologies of the 20th Century have steadily eroded the tyranny of distance. The web completed the destruction of distance filters by removing all concept of spatial distance for information.
Our sense of privacy is again bounded up in the hassle in moving information over distance. This physical distance is the basis for the whole concept of privacy. The closer we are to other people the less privacy we expect. We found that to be a reasonable rule of thumb as those closest to us (community, family, friends) are likely to spatially close to us. We only now need privacy safeguards because the rule of thumb no longer applies – spatial distance is meaningless for information now.

Information overload and privacy issues are a rooted in us expecting that filters based on spatial distance to continue working in a world where information has no spatial component. Any filters built with this expectation don’t work. Instead we have to create a new framework for filters that don’t rely on spatial distance.

By borrowing ideas from science we can create a framework that doesn’t rely on spatial distance. The framework is based on data half-life, data permeability and data potential. Data half-life is the measure of how long the bit of data takes to lose half of its relevancy/ importance. Data permeability is a measure of how hard it is for data to move over a period of time – think fluid moving through a filter. Data potential is the initial potential for the data to move – think potential energy in Newtonian dynamics.

The interaction of these three parameters determines how far and how quickly information can travel within an environment where spatial distance has no meaning. An analogy will help illustrate how the parameters behave together to filter information.

Let’s say we have some information – death of the chief of a village. The village has good roads and the news is to be sent by horse. This information will go far as it important (chief of a village), it is easy for the information to move on the road and the horse is quick. If, however, the death is not the chief then the news won’t travel as far it is not as important. It is the interaction between the data half-life (how important the person is), the data permeability (how easy it is to move the information) and data potential (how fast the information can move) which determines how far the information will travel.

Changing the parameters creates a varied set of filters that determines how far and how fast information will defuse. Each connection has a level of data permeability with information coming in assigned a data half-life and a data potential. The information only passes the filter when the data half-life and data potential are enough to overcome the data permeability.

To illustrate consider changing your relationship status in Facebook. If someone changes their status from relationship to single they don’t necessarily want the information to spread quickly through their “facebook friends” as their friends will include work colleagues and friends of friends only met once. Instead each of their connections should have different data permeability and depending on information (data half-life and data potential) it will show up in some of the connections news feeds right away, some in days, some in weeks and others never at all.

There is no single way to create and calculate data half-life, data potential and data permeability. Various developers will come up with their own methods. Some of which will work and others that won’t. Hopefully further down the track we will see a standardisation on calculating the parameters based on accepted criteria for each type of information – personal, communications, knowledge etc.

Tags: Filters, Information Overload, Privacy, Clay Shirky

Technology and moral responsibility

"Now I am become Death, Destroyer of Worlds"
-J. Robert Oppenheimer (from Bhagavad Gita Krishna)

A recent conversation with a friend has got me thinking about the oft used phrase "technology is amoral". Usually used to justify why research or a technology should be pursued when there are foreseeable abuses of the research/technology.

I've used the phrase myself without really thinking what it means. Until now.

The phrase isn't a justification but rather a cop out. A cop out for the researcher or technologist involved from thinking the ramifications of the research or technology and ultimately taking responsibility for possible misuses of the technology or research.

Every researcher and technologist must consider the moral ramifications of what they are doing. It is not straight-jacket of right or wrong. But rather a thought experiment to understand the ramifications of the research or technology being pursued. The aim is to answer questions of what are the moral ramifications of the research or technology? What could happen if things went wrong? What could happen if it was used immorally? Do the benefits out weight the risks?

Being unable to answer those questions about research or technology being pursued is a gross act of negligence. To often justified by the phrase "technology is amoral".

The phrase should really be "technology is amoral, but technologists aren't". As scientists and technologists we must take moral responsibility to how our research and technology is used.

tags: Technology, Morality

Can Silicon Valley Save the World?

(ed. this post is inspired by a recent trip to Namibia)

Can Silicon Valley save the world?

No.

Silicon Valley has become divorced from the realities of a vast majority of people's lives. There is simply no sense of what is important to people's lives. Silicon Valley has become about technology for technology's sake. And technologies value is only realised when it is applied to solve a real problem. Speeding up how quickly you can print solar cells by 2% is not a problem. How to make it easy for rural farmers in Namibia use solar power is. Human/donkey powered harvesting machine that does not require power other than that of human/donkey sweat is a real solution to increasing the productivity of small african farms.

Umair Haque and Robert Scoble have both pointed to the malaise within Silicon Valley. Umair even set out a challenge to Silicon Valley to solve the real problems. I have serious doubts whether Silicon Valley can answer the challenge. Being unable to answer the "call to arms" will have serious effect on the influence of Silicon Valley. The money is in solving real problems and real pain. Another twitter is not going to make money.

My pessimism comes from the ivory tower aspect to Silicon Valley, the disconnectedness. If you are blind to real problems and real plain how are you going to solve them? How are you going to develop the technology that solves the problems? To often engineers and VCs get dazzeled by the technology and not how the technology solves the problem. Quickly the technology is pushed forwarded with little consideration to how the development of the technology will actually solve the problem it was designed to solve. Soon the technology no longer solves the problem but has become the end in itself.

Technology only has value when it solves a problem. It might be a materpiece of engineering but unless it solves a problem it is worthless.

It is possible to reverse this illness. The cure is simple. Travel. By travel I don't mean going to conferences in far off places. By travel I mean get out and see the countries your are visiting. Get off the beaten track and mix with the locals. Go backpacking. Traveling is one of the few ways where you bump up against the problems, where you can have the opportunity to see people's pains first hand. Documentaries are a poor shadow of real travel.

It is fair to ask what are real problems. Here's a (very) short list:

• How do you increase the productivity of small farms without chemicals or expensive fuel? (hint: human powered mechanics)
• How do you make it easy to install solar power? (hint: corragated iron)
• How do you keep mobile phones charged cheaply when there is no mains and no solar chargers? (hint: hand crank radio)

Solving these problems would make a huge difference. Solving problems like this is independent of where the problem lies. These are problems (even if masked) across the world.

tags: Umair Haque, Robert Scoble, Silicon Valley

Pulling out of recession

Most of the developed economies are facing a slow down if not a recession. Mark Cuban has described his method for pulling an economy out of recession. I broadly agree with his idea but I think that with an addition it address the biggest issues facing startups.

Startups (and small business as well) face two major hurdles or barriers to entry. The first is regulatory and the second is capital. Mark Cuban's plan address the regulatory barrier to entry and some of the capital issues (not paying taxes improves a companies cashflow). But it only goes so far. Not paying taxes is moot point if you don't have any revenue to support yourself.

To address the capital barrier, governments should implement a HELP-style business loan scheme. In this case the government would provide an initial loan that covers a single person's wage for a year. The loan could be renewed for a 1 year extension. The idea is that the load allows a small company to meet salary for initial employees during the launch phase when little to no revenue is available and other sources of funding are not useful.

The loan is then paid back through the tax system. The scheme would have several limits such as being limited to the average yearly wage and a company would only be allowed to ever have 5 employees use the scheme. Individuals would also need to be limited in the number of these loans that could be taken out within a time period (say once in a 5 year period).

The scheme is designed to allow people to take the plunge and spend that all important first year to get of the ground. It is very similar in intent to Ycombinator fund.

With Mark Cuban's plan addressing the regulatory burden faced by startups and small business the loan scheme addressing the initial capital requirements, people will find it easier to start a business and get it through that all important first year.

Economy, Mark Cuban, Finance, Policy

Intersection of the web and tangible objects (manufacturing-as-a-service)

MIT's Technology Review have an interesting article examining the rise of web services that allow users to design and make objects via the web. These services have the potential to disrupt traditional manufacturing. While at an early stage its useful to consider what disruption these services could lead to.

This disruption potential comes from two different causes. The first is the rise of micro-businesses around manufactured products (I am excluding already existing craft companies which simply use the web to sell their products). One example company would allow users to find and order fittings such as taps and facets that are no longer being made by the original manufacturer. The company creates and ships the taps and facets on demand to the user. Think printing-on-demand but for products.

Manufacturing based web services open the long tail of manufactured products. Suddenly, manufactured products never really stop being made just like books now never really go out of print with print-on-demand services from Amazon et al.

The other cause of the disruption is the way these web services change the economics of manufacturing and how this ties into increasing conciousness of energy/carbon cost of manufactured products. Why buy simple products like plates, pots, pans etc. that are made in China and shipped half-way around the world when you can purchase the same products at roughly the same price that is shipped from someone down the road?

Carbon concerns will change the economics of manufacturing by making smaller factories closer to large markets more economical than large centeralised factories. Web services based around manufacturing will further erode the economics of large scale factories by removing the need for companies to purchase or rent expensive manufacturing machines. These companies are the first of manufacturing-as-a-service.

Manufacturing-as-a-service removes the equipment and capital barrier to entry for new product companies. These companies can focus on product design and building the community around the product and leave the operation of the manufacturing hardware to manufacturing-as-a-service guys.

There will be a range of responses to manufacturing-as-a-service. Some manufacturers and factories will ignore it only to be over taken by the tide. Others will embrace it and will aim to become the Amazon Web Services of manufacturing-as-a-service. What the response will be is largely going to be determined by the DNA of the company.

Manufacturing-as-a-Service, Web Applications, Trends

The iPhone 2.0 is NOT a mobile phone

One of the big concerns I have with the analysis of the mobile phone (for example Om's round up here) is the implicit assumption the iPhone 2.0 is a mobile phone.

It is not.

The iPhone 2.0 is a mobile computing platform. Why do you think the keynote spent so much time looking at the Apps?

Its the mobile computing platform is the game changer. As a straight phone (even smartphone) the iPhone has great usability but is only so-so in terms of extra features (as many a blogger will tell ad nauseum). But as a mobile computing platform nothing compares.

More importantly, Apple is repeating the iTunes/iPod strategy of building a seamless end-to-end system. In this case it is a seamless end-to-end mobile computing platform. One that includes development, hardware and distribution of the applications.

Apple is pursuing an edge strategy that re-defines the general idea of mobile towards the definition used by Tim O'Reilly in his recent Web 2.0 keynote in San Francisco, 2008. It drives innovation to the edge and upturns the existing industry.

iPhone 2.0 is NOT a mobile phone. It is a mobile computing platform.

Tags: iPhone, mobile phone, mobile computing

The Social Network has little Value in a World of Flow

Fred Wilson recently wrote a post about how the flow of data is important versus the data itself. Primarily in response to the ongoing bushfire in the blogsphere about Facebook and Google Friend Connect and the larger context of data portability.

The conceptual point of flow versus data is important one to highlight.

It is very easy to confuse the two. To an extent this is an artifact of our language which emphasises objects (nouns) over flow (verbs). But it is also influenced by trying to use an existing frame-of-reference to discuss a new frame-of-reference that is only just beginning to come into focus. This is always going to make everything more difficult.

The web is moving into uncharted territory. Up to now we have been dealing with the conversion of existing real-world into an online equivalent. Now the web has reached the point that it is moving beyond the confines of being a real-world analogy. This is creating vast new opportunities, few of which are known to us now. Data portability discussion exits within this new framework.

To make headway understanding this new framework, we need to converse using language that properly describes this new framework. The language of flow will help us frame problems and hold conversations that enable solutions and new opportunities.

In Wither Social Networks, Arise Communities I pointed out that social networks are glorified contact books. A better way to look at social networks is that the merely describe a connection between two people. They are the pipes, wave-guides, tubes along which guide the flow. What happens at the end points is not part of the social network.

In addition to the guides, we have process points. The process points are where points along a flow something happens to the flow. Whether its received (such as email), or processed (such as Wesabe). A process point is not necessarily where the flow stops, merely where it undergoes some sort of processing.

Facebook's aim is to become the primary process point. They know (or suspect) that merely having a description of a flow network is not enough. They have to be a processing point, but here is their dilemma: Facebook was never designed with being a processing point in mind, merely a description of a flow network. So their strategy is to try and control of the description of flow networks by restricting access while they shift to being a processing point, Facebook Connect being an example.

Bear in mind that the flow network description has little intrinsic value. It is the flows along the network where the value lies. In this Robert Scoble is wrong. It is not the flow network where the value lies but flow along the guides that is important.

So is Facebook right or is Google right? How about neither? Facebook's move is entirely about trying provide themselves with time to become a processing point and less of a pure flow network. Google's aim is to get access to the flow network in order to get access to the processing points. Google looses out if it doesn't know about the processing points. Neither are taking the positions they are merely out of moral indignation. I do find Google's behaviour less obnoxious than Facebook as Google's move is about access where as Facebook's is about control. Not really surprising given Facebook's past behaviour and in the words Umair, evilness.

Ultimately, it is a meaningless argument. The web is shifting so fast that both companies actions will soon be lost in the momentum in the move to flow. The flow based web even looks like it will overtake the Data Portability movement. Rendering the broader discussion irrelevant as well.

Tags: Social Networks, Facebook, Data Portability, Google, Web Next, Web 2.0, Fred Wilson, Robert Scoble, Umair Haque, Web Services

Wither Social Networks, Arise Communities

A community is an assemblage of people around a common interest. What Hugh MacLeod calls a social object. Social Networks, like Facebook, are glorified contact books. And as Facebook is finding out, people get stroppy when you get between them and their contact books.

A community, on the other hand, behaves differently. The members of a community are there because of the shared interest or bond, the social object. Consider the rise of communities around particular diseases as highlighted in this week’s NewScientist (vol 198, issue 2656). These communities are generating a wealth of data about these diseases that would otherwise be expensive or impossible to obtain. Communities tend to generate data around the particular shared interest beyond simply demographics that you get in a Social Network.

The data is hugely important. As Tim O’Reilly is fond of saying, “data inside” is the new “Intel Inside” (between time point 2.15 to 3:20 in the presentation). The value of web companies is entirely determined by the data they can aggregate and turn into new knowledge. Communities generate large amounts of data by harnessing the network effect. As each member adds more data around the shared interest this creates a positive feedback loop encouraging more people to add more data and so on in a virtuous cycle. A good example of this principle in action is the company Wesabe (also discussed by Tim O’Reilly in his keynote at 2008 Web2.0 Expo).

Social Networks don’t have this positive feedback loop that generates great swathes of data. While they do have network effects this is merely increasing the size social network by members rather than adding large amounts of data. We are even seeing indications now of limits to how far network effects work in maintaining growth of membership. The amount of data in social networks is relatively limited and most of this information is limited to who knows who and simple demographic data.

Social advertising is the “next big thing” in advertising. However, achieving this on a social network has not been easy. An outcome that is not surprising. The effectiveness of advertising comes down to two things: attention and intent. Attention being what is the person doing at the moment. Intent being why are they doing what they are doing at this time. The more closely you can determine the attention and intent of the user the better the advertising can be made to be of interest to the user.

Social Networks do not offer great data to determine attention and intent. Just because you are a 46 year-old climate researcher, does that determine why you are looking for a holiday? An advertiser could assume you are looking for a holiday for yourself but there is no evidence for this. Nor can a social network really say whether you are looking for holiday in the first place. There is little data to indicate attention and intent. Communities on the other hand do offer good data for determining attention and intent. Consider the climate researcher. He joins a community around travel and holidays and asks the question of the community “what is a good holiday as a birthday present for my 16 year old daughter?” Now we know attention (searching for a holiday) and intent (as a present for his 16 year old daughter). Having this data allows the advertiser to very accurately target with information about holidays suitable for a 16-year old girl.

People like being part of a community. We are tribal at heart. A social network is a mathematical abstraction that merely indicates a connection. The tribe will always win over the maths. Communities will win over social networks.

Tags: Tim O'Reilly, Social Networks, Hugh Macleod, Social Object, Community, Data Inside, Attention and Intent, Facebook, Wesabe

The Best Regulation is Information

With the recent upheavals in the world financial markets there has already been calls to regulate. Arguably these calls are not wrong. The question, rather than should we regulate, is how and what do we regulate?

The financial crisis is one of market failure due to the lack of accurate and timely information about risk. The regulation needs to focus on correcting the issue of the markets providing accurate and timely information about risk.

The regulation needs to ensure that everyone involved in the market has knowledge of the real risk that various instruments and securities have. This will require the regulation of the ratings agencies as they failed to properly provide information on the risk involved in various securities. Or the rating of securities is handled by an independent body charged only with ensuring the risk of a security is accurately measured and information provided to the market.

The second bit of information is where the risk is. Here the accounting rules need to be change to ensure that risk cannot be shifted off-balance sheet so the risk "disappears". Essentially, if there is control and/or liability those risks need to show up on the balance sheet.

Mobilty, Facebook, Twitter and Social Cohesion

The Economist has an interesting article about mobility and its effect on society. In particular one anecdote of a plumber and a sociologist had a strong resonance.

"Richard Ling, a sociologist at Telenor, the largest Norwegian telephone company, and author of “New Tech, New Ties: How Mobile Communication Is Reshaping Social Cohesion”, was standing on his porch in Oslo one day, saying farewell to a few guests, when a plumber walked around the corner, talking on his mobile phone to what appeared to be his wife. Mr Ling, who had a leak in the kitchen, was expecting him. But the plumber took Mr Ling and his guests aback by walking right past them and into the house, where he took off his shoes and headed for the kitchen, chattering into his handset all the while."

The article goes on to talk about weak and strong social interactions. In this case the plumbers weak social interaction with the sociologist was overcome by the stronger interaction between the plumber and his wife. Or it could easily be the girl at the checkout counter chatting away to someone on their mobile phone while barely paying attention to the task of paying for their shopping. The anecdotes are there and very strong.

Now that strong social interactions are rarely limited by distance, they are easily overwhelming weak social interactions. But is this a problem? I think so. The weak social interactions are often with random people in every day life - bus drivers, commuters, shop assistants, doctors, police, people on the street, customers in a cafe - rather than with people we've selected as being a part of our "tribe". They are unlikely to be similar to us and this variety of social interaction helps us be less insular. In reading the article I was strongly reminded of one of my favourite quotes from Terry Pratchett.

"Individuals aren’t naturally paid-up members of the human race, except biologically. They need to be bounced around by the Brownian motion of society, which is a mechanism by which human beings constantly remind one another that they are... well....human beings."

The dominance of the stronger ties reduces the "Brownian" motion needed to make us human. This loss is what is disturbing about the "mobility" society. We are rapidly shutting out random acts of chance, of serendipity. Nor is it simply mobile phones. Social Networks such as Facebook also produce the same effect. Anything that promotes strong social interactions at the expense of weak ones are culpable.

Services such as Twitter and FriendFeed go towards promoting weak social interactions as a tweeter will not always "know" or have a previous strong social interaction with a follower. I do wonder, however, whether these virtual weak social interactions will again come to dominate over the face-to-face weak social interactions of every day lives.

Banning mobile phones, Facebook and Twitter is not an answer. These services and devices serve a strong purpose of facilitating communication and strengthening social ties. What we need to be aware of is the here and now. To recognise that at certain points the here and now of weak social interactions out weights strong social interactions.

Tags: Social Interactions, Mobile, The Economist, Facebook, Twitter, FriendFeed