The importance of purpose in peer production

What is it about Nick Carr’s recent challenge to Yochai Benkler’s views on the peer production model that feels wrong? He says that peer production exists prior to a commercial market and that a commercial market will break down the peer production model.

“One thing that has become clear is that the success of social production collectives hinges on the intensive contributions of a very small subset of their members. Not only that, but it’s possible to identify who these people are and to measure their contributions with considerable precision. That means, as well, that these people are valuable in old-fashioned monetary terms – that they could charge for what they do. They have, in other words, a price, even if they’re not currently charging it. The question, then, is simple: Will the “amateurs” go pro? If they have a price, will they take it?”

Nick’s challenge is accurate, particularly when a peer production model doesn’t have a strong enough purpose to hold it together through adversity.

And Jason Calacanis has done what almost anyone in his shoes would also try by offering to pay Digg users for their “labor” on Netscape instead of on Digg. He wants to win.

“I’m absolutely convinced that the top 20 people on DIGG, Delicious, Flickr, MySpace, and Reddit are worth $1,000 a month and if we’re the first folks to pay them that is fine with me–we will take the risk and the arrows from the folks who think we’re corrupting the community process”

I guess it’s the assumption that people are motivated first and foremost by money that bothers me. No doubt I’ll do something for money if the benefit of doing it for love or because it’s right is less than the benefit of having the cash. I want to give my family all the advantages that I can.

But I think Nick misunderstands a value proposition inherent in the concept of communities.

There are a lot of people who put a lot of energy into building their church community when that time could be spent elsewhere making money. And I doubt most churches would suffer any significant memership losses if a nearby competing church offered to pay people to switch churches. They participate in the church community because the investment returns have personal and social value that have nothing to do with their material wealth.

People who moderate online communities like some of the more active Yahoo! groups invest themselves because of their interest in things like social influence or sometimes even for other selfish gains. The really successful groups have an undeniable and crystal clear purpose.

For example, the San Francisco Golden Gate Mother’s Group is a highly engaged community of women with new babies who help each other with the day-to-day challenges of urban motherhood. The community holds itself together by the shared desire to raise children well. That mission couldn’t be any simpler or more important to a first time mother. Even the least-engaged member understands that answering someone’s question now results in better answers for you when you need help in the future.

Paying people to participate wouldn’t make them better at what they do. I’d argue it might actually make them worse. If Netscape was a brand with a purpose that mattered to me, then Jason wouldn’t have to pay me or even the best bookmarkers to participate.

Nick also challenges the notion that peer production can operate without management overhead. I think he miscalculates the role of management in peer production. Yes, it may be required, but management is a service to the group, a service to the mission. Management in peer production could probably be outsourced.

I do think Benkler may actually underestimate the importance of a clear and cohesive mission for the group. Without a core purpose that the members of the group find important, a competing commercial market could very well break down the community.

But that then begs the question of how valuable the community was in the first place.

Screencasts mature…now with advertising!

I’m liking some of the innovations coming out of IDG’s InfoWorld these days (my old digs). I’m told the podcast advertising is working really well for them, but I’m particularly interested to see that they have begun screencasting in earnest…and it’s sponsored, to boot.

The InfoWorld home page now has the rotating feature box which yesterday included a link to a series of AJAX instructional screencasts. Among several related pieces, Peter Wayner produced a 7 minute instructional screencast on the Yahoo! user interface javascript libraries.

He begins by pointing out which libraries he likes and then proceeds to build a web page that utilizes the code. You can watch the screencaster type out his code and then demonstrate how it works.

Though raw in quality, the content was exactly right. The viewer is able to watch over the shoulder of someone who is at their computer working. It’s the online equivilent of Jacques Pepin…well, the finished product didn’t look all that tasty, but I learned something nonetheless.

Editor Steve Fox describes how screencasts answer the creative writing mantra ‘Show, don’t tell‘:

“After all, if you’re reading about how something works, you want to see it in action. That’s where the Web’s presentation capabilities open up stunning possibilities.“

Now, here’s the best part of the innovation…it has a video preroll…yes, an ad! A very brief video was baked into the beginning of the episode. Of course, I doubt Microsoft paid for this exposure being that it is so experimental, and they will be unable to measure success through traditional means, as there will be no clicks.

But show me an ad anywhere on the Internet that can capture my undivided attention better than this. And tell me how you could find a more targeted viewer than someone wanting to learn how to accomplish a specific task. It’s the best of both worlds – targeting and brand marketing.

What if this video clip was socializable (is that a word?) and caught fire around the web? InfoWorld should offer the embed script with each screencast so that someone can post it to their blog or their favorite video sharing site. And even better than that, the InfoWorld screencaster should actively post his screencasts to every video sharing site he can find and try to get some comment love from the people he’s connected to out there. Each screencast could live a contagious existence as people socialize it in different ways. InfoWorld already baked in the logo into the video stream, so any loss of control in the distribution is automatically mitigated by guaranteed brand exposure.

I’m sure critics will say that video on the Internet and video ads have been around for a long time, and podcasting already acts this way. I’d argue that this is actually really new.

Not only is the screencast format easier to produce than live action video and more compelling than podcasting, but the instructional nature of it gives the viewer and the screencaster a uniquely engaging relationship. As a result, the advertising in this environment can be much more relevant than your typical preroll video ad on news or entertainment content.

Of course, they can be fun to make, too. I’ll bet the editors are much more excited to narrate a screencast they can edit and produce on their own and distribute through the proven web page and RSS methods than they would be to sit in a mock studio with the marketing team telling them how to look good for the camera. It can’t be fun acting like you’re on TV fully aware that your webcast video audience will be a few hundred people at best after the clip gets posted behind an awkward lead capture wall.

Well done, guys. This is the kind of investment that could kick your online growth path well beyond the revenue tipping point.

Designing for the future

There’s a great presentation by William McDonough speaking at the Bioneers Conference back in 2000 about designing for the future available via Google Video (thanks Metafilter). He has a revolutionary perspective on how humanity needs to think about its current institutions and processes compared to the kind of future we’re currently designing for ourselves.

He talks about the design flaws in a society that doesn’t yet respect the rights of non human species or the future generations of life. The Endangered Species Act was passed only 30 years ago, the first acknowledgement that another species has a right to exist. He discusses the design flaws in the Industrial Revolution that led to man’s intent to constrain nature.

McDonough goes on to talk about waste and the idea of “throwing things away”. Such phrases and concepts will undoubtedly be challenged by our children who have to own the future waste problems today’s generations are creating for them. He asks how you would map the plutonian disposal locations buried deep below the earth’s surface today for generations thousands of years from now who will surely need to know where we put it.

Anyhow, this presentation really captured my imagination in several ways including the important question of what we are designing into our future world with today’s Internet innovations. What can we do today to at least mitigate if not correct the known errors in judgment made to date?

For example…

Social Decay
The tools of the Internet have enabled us to connect to other geographically diverse people in amazing ways at amazing speeds at low cost. In most cases, those connections are lighter and looser and less involved than the connections people create when spending time doing things together.

Are the lightweight connections on the Internet costing us time spent face-to-face? Are we isolating ourselves from the real world as we bury ourselves under the many media experiences surrounding us all the time? How can the Internet connect us more deeply and meaningfully to the people and the things that matter rather than distance us?

Information Classes
Knowledge is power. But the power of knowledge should never be used for subjugation.  Couldn’t we mitigate abuse of knowledge by giving everyone access to as much knowledge as they want to have?  Is Internet access a right on a global scale that should be protected for all? Should objective information such as independent journalism be not just a protected public service but a requirement for modern global society?

Energy Consumption


Photo: Fully Armed Vishnu

The power requirements needed to sustain all the web sites in the world are escalating. Are there other ways to power the Internet? Can computers and networks use less power and create less waste? Is it possible to have a entirely recyclable phone? More importantly, can they create power and reduce waste?

McDonough challenges traditional capitalism and government policy alike. He sees a triumverate forming where a “Bill of Responsibility” much like the “Bill of Rights” might reconstruct the incentives for making the world a better place. It’s not about creating efficiency but rather creating a design for growth.

The questions is, “What do you want to grow?”

Open source software as a customer capture tool

I just started messing around with a product called SugarCRM which is an open source sales contact management tool much like Salesforce.com.

SugarCRMThey’ve done a really clever thing which is to build a revenue model around the added services rather than try to charge for the core software. You can download the same app that everyone else uses and install it yourself for free. But if you’re not up to the installation challenge, you can let them host it for you and get started in about 5 minutes for a $40/month usage fee. They charge more for additional services that larger groups may require.

I simultaneously started playing with the Salesforce.com free 30 day trial so that I could compare products. But I quickly realized that my learning curve for operationalizing any CRM system as part of my business was much more than 30 days. I also realized that I wanted the ability to do some major customizations which most likely need to happen at the code level. And I figured a Salesforce.com rep was going to call me and start selling to me which seemed like a fair price to pay but one I could actually do without. In fact, I got a call within 24 hours.

I wouldn’t have considered any of these issues as requirements except for the fact that they are available to me. I downloaded the SugarCRM software, installed it, configured it and uploaded a bunch of data in one afternoon. I now have a view into my customer pipeline that is going to simplify both strategic decisions as well as synthesize the variety of conversations happening across the business.

Now, I’m sure that Salesforce.com is more robust and that they have a lot of services and data integration methods I can’t get with SugarCRM. It must work better for larger organizations. I’m sure that Salesforce.com is more reliable, has fewer bugs, has more 3rd party developer tools, etc. At InfoWorld I learned that the cost of open source software becomes time and customization work which is sometimes more expensive than paying service fees (Aug. 2002, April 2006).

The San Francisco Chronicle noted this week that Salesforce.com is in a strong position with its model:

“A growing number of small businesses already realize that, despite recent problems, on-demand software makes more sense than setting up your own computer network.”

A sales manager at Salesforce.com informed me that he has never personally had to sell against SugarCRM in any of his calls. The market for it is probably pretty small.

However I just can’t help but I wonder if SugarCRM is in a position to do to Salesforce.com what Salesforce.com once did to Siebel, undercutting on price and extending efficiencies further out to the edge. The edge used to be self-serve style software as a service. SugarCRM went further and took the edge all the way out to the open source community.

A CRM app isn’t core to running my business. I can do what I need with spreadsheets. But if this tool makes my life easier or allows me to spread intelligence further or faster or if I’m able to make decisions I couldn’t otherwise visualize in my head, and I suspect it might, then I will definitely invest more heavily in it. At that point I may be calling on SugarCRM for additional services.

This software model also has the nice effect of helping me drive myself through the customer marketing funnel at my own pace. At the end of it, I won’t mind paying them for their services, and, in fact, I might be asking to pay for them. What sales person wouldn’t rather receive calls than make them?

Of course, the moment I need services that are worth paying for, I may need to switch to Salesforce.com. SugarCRM is banking on the possibility that I’ll reach user lock in before I get to that point. If I have to make that decision, then it means things are going well. And for that, SugarCRM will already have “loyalty” checked off in their column of my product comparison chart.

Online media revenues breathe life into print-centric thinking

Media executives are admitting publicly that the print publishing model doesn’t appear to have a happy ending to the heavy beating it keeps taking. Folio ran a story this week titled “The Revenue Tipping Point“. It refers to the point at which online revenue gains outpace the print revenue losses at a magazine publishing company.


Photo: therese flanagan

“While online revenue is still dwarfed by print revenue for most publishers, many are starting to see real revenue growth online exceed the real revenue loss in print on a quarterly basis. That’s a huge justification for publishers investing online; a final warning shot for publishers resisting (and yes, there are still plenty of them out there) online investment.”

The business magazine master himself, Pat McGovern, confirmed the trend:

“At the American Business Media Spring Meeting in May, IDG Communications chairman Pat McGovern, head of a company that has been criticized for not committing sooner to the Web, spoke of how the company is now making more money online than it is losing in print.”

Agencies and marketers have been telling publishers that they were shifting budgets away from print to online media for several years. Circulation has been flat or falling across the print world. Readerhsip time spent figures have all been pointing online.

Colin Crawford also of IDG added his thoughts (and warnings) on the trend:

“Every year our print ad market contracts in terms of total advertisers and total pages and revenue and our print circulations fall. There is nothing on the horizon that indicates any sort of reversal of this trend…Transformation involves a deep cultural shift in attitude to put online first and stop over protecting print.”

The signals are everywhere, crystalized for the shortsighted in big red figures on the balance sheets.

But until only recently the investment and tradition behind print publishing and the print brands have made it very difficult for executives to tell their own staff not to mention the press that print magazine models are failing.

Why is it ok to open the kimono now? Because there’s now a story to match the strategic direction. As online revenue builds, investment will shift away from print at a reasonable pace. “We won’t have to close shop afterall,” Mr. Publisher says. “We’ll make up the losses with online revenues. Everyone just calm down and get back to what you were doing before.”

It’s a step in the right direction, but I find this story a little bit dangerous. This strategy implies that the print model has enough life left in it to make the transition only a matter of shifting money from one pocket to the other. I think many publishers will interpret this strategy as a way to hold onto their jobs while they wait for the combined print and online revenues to match pre dotcom bust earnings. It’s then that they plan to release a big sigh and head back to the golf course.

But the competition for online ad budgets is heating up, too. Unfortunately for the old school print sales guys out there, the online ad model doesn’t look the same as the print model. Banners are not the same as print pages, and, it turns out, there are several other effective and often more profitable methods for marketing online than standard banners. Many of them don’t require the overhead of a sales team. And many of them are based on totally new content production models, in case the editorial staff bought the rhetoric, too.

I guess what I’m suggesting is that spending time thinking about this tipping point is merely the first step in admitting you have a problem. But the race is on, and no doubt a bunch of publishers are going to get crushed both in print and online if they don’t actually really make the investment to turn their online businesses into valuable media vehicles.

Thoughts about working at Yahoo! after one year

UPDATE (10/17/2007) — Things have changed a lot since this was originally written in July 2006. A few have found this post through a search and made the mistake of thinking it’s relevant still, but this snapshot in time looks like historical record to me more and more every day. Many of the problems have been addressed or even resolved, and I really couldn’t be more optimistic about the future of Yahoo! now.

Next week is my one year anniversary at Yahoo!, so I thought I’d do a couple of retrospective lists. Looking back on the year, overall, I have enjoyed going to work, learned a ton, met some incredibly bright people and expanded a lot of my thinking about media. It really is a pleasure to work here, and I feel lucky to be part of the team. But, as with any company, there are things I wish were different, too.


Photo: Dawn Endico

Favorite things about Yahoo!:

  1. Open minds. In most cases, people are open to “not invented here” technology and products. In all cases, people are very open to new ideas. This culture makes it possible for everyone to feel comfortable speaking up in every meeting or blogging both internally and externally.
  2. Smartness. I’ve never been in a meeting where I felt an individual couldn’t contribute intelligently. You witness bursts of phenomenal brainpower both individually and collectively all the time.
  3. Never complacent. The constant stream of advances rolling out across almost all Yahoo! products is the public evidence that nobody inside the company is ever asleep at the wheel. They could be driving into a tree, in some cases, but they’re not asleep.
  4. Passion. Well, maybe not everyone is passionate about their specific job, but people are very motivated and feel like they are doing or contributing to something that matters.
  5. Diversification. Mature companies are able to spread both risk and opportunity across multiple channels. Yahoo! knows this well. That can create distractions, but Yahoo! never takes its eye off the ball, either. The user comes first. Always.
  6. Globalness. My experience at IDG gave me a taste for the benefits of globalizing a vision and then sharing knowledge and experience across cultures. I love seeing that same ethos here. People are always thinking about how ideas apply in different countries.
  7. Great work environment. The espresso bar; the gym; the great speakers who come talk to us; cubes up and down the hierarchy. Nothing will top the little building my team had across the street from the headquarters of The Industry Standard in San Francisco which was somewhat of a madhouse, but Yahoo! does a very good job of making life at work a nice place to be.

Things Yahoo! needs to change:

  1. Control. There are way too many people “owning” things and not enough people contributing their expertise in the places where it’s needed most. The Product Managers’ scripted 1 year roadmaps become the magic wand of power used to reinforce the status quo.
  2. Innovation constipation. Few people are willing to take a loss on one product or strategy on the chance that another one might yield a brighter future. The result is a wait-and-see approach. That’s a shame given the incredible potential here.
  3. Isolation. The campus keeps us all from interacting with the rest of the world. External face-to-face meetings only happen amongst people whose jobs are dependent on interacting with external companies. It has an impact on the types of products the company creates…often oblivious to what’s happening on the Internet outside of yahoo.com.
  4. Product duplication. The company’s decentralized approach breeds an environment where different people are solving the same problem in different ways. This is expensive, but it does have the benefit of forcing people to stay on their toes (see #3 above).
  5. Analysis paralysis. There are way too many people involved in very small decisions. You get the benefit of uncovering all the potential pitfalls in any given problem, but people spend way too much time looking for problems and not nearly enough time creating solutions.
  6. Where are all the women at? I’m in a presentation with about 150 people right now, yet I see no more than 30 women in the audience. At a company with so much invested in the social aspects of the Internet, it suprises me that the more socially sophisticated sex doesn’t have better representation.

Video for education (or Really Simple Video)

I had some fun putting together a screencast recently to showcase an internal Yahoo! technology that my team is working on. I downloaded Camtasia, wrote a short script and then produced what turned out to be somewhat high quality video production with surprisingly little effort.

All you have to do is turn on the Camtasia recorder and then click around on your screen while you talk. It records everything and then outputs a prefab web page with the embedded flash video. The time I spent building it probably broke down like this:

5% – downloading software and setting up a quiet space in a conference room.
5% – learning Camtasia.
30% – preparing. I mean writing the script and practicing.
50% – recording. admittedly, I ran through the script over and over again to get a few stutters and ums and uhs out of the monologue.
5% – output and posting the page
5% – telling people about it

I think it took less than 3 hours in total, but I got lost in the process a bit, so it could have been much quicker. The most interesting thing to note about the process here is how little time was spent dealing with production issues and how much time was spent on content.

Camtasia is actually advanced enough for you to do more sophisticated editing if you wish. But it served my need just perfectly. I wanted to show people what was happening on my screen, and I wanted to post that as a video on a web page. They perfectly isolated all the functionality I needed to do that with as little user interface overhead as possible.

Jon Udell has been pushing this concept as a really important educational device for a while now and has demonstrated some interesting ways to apply it. It’s not just the ease with which a person can do high quality productions that he finds powerful. It’s the inherent sharability of the output. When people start to see that sharing video can be about more than entertainment and exhibitionism, then they may turn to screencasts to share what they know with the world. The format is particularly well suited for demonstrations and how-to types of educational video.

It’s just so simple, there’s no reason not to try it.

What makes a good leader of a participatory community

I’m very interested in what leadership lessons we can learn from the people who drive the successful peer production models on the Internet. What is it about Craig Newmark, Jimmy Wales, Rob Malda, Stewart Butterfield and the other pioneers of participatory media that make the brands that they’ve created so powerful?


Photo: heather

Yochai Benkler breaks down the incentives for participation in peer production models in a very sensible and fascinating paper called Coases’ Penguin and discusses the economics of collaboration in his PopTech talk now available on ITConversations. But there’s a missing thread in his analysis that I think is crucially important.

The creators of the platforms on which peer production unfolds must have some common characteristics that enable these reputation models to reflect back on the people who invest in the platform instead of the company, brand or leader of that vehicle.

No doubt the participants are what make the products sing. But there’s something in common about the way these shepherds have approached their products and their customers that create an environment of trust, utility, gratification, expression, community, etc.

I don’t think any of them one day woke up and said I want to build a massive community of people posting content. Rather they probably stumbled onto ideas that started in one direction and ended up a little different than what they intended. I wonder what it is about the way they approach problems and lead teams that made them capable of identifying where the sweet spot would be for their idea.

I suspect that all of them share a handful of key qualities that make them unusual leaders including things like…

  • Total dedication, focus and passion for the service the community is providing to itself
  • A laissez faire attitude toward conflict but quick to identify resolutions
  • Motivated by a desire to do something important, not by money. They want to be part of something bigger than themselves.
  • A very creative mind that thrives on solving problems though not necessarily skilled in traditional artistic disciplines
  • Collaborative leadership styles, the extreme opposite of authoritarian, mandate-driven leadership

I don’t think they are attention seekers. I don’t think they are self righteous. They probably were mischief makers as kids and grew up to be anti-authoritarian. I’m guessing they were heavy video game users at one point if not still and love to compete.

I’m sure all of them also understand the decentralized and collaborative mentality, not as a translation from another model but rather baked into the way they think about what they are building.

I don’t know any of these guys personally, so this is perhaps wasteful conjecture. But I’m very curious about how the mainstream media business is going to approach the idea of participatory and social media given the cultural chasm and even conflicting styles of the leaders in the two categories. So far, it seems, people like Rupert Murdoch (and Terry Semel) have been smart enough to let these companies run and let these leaders lead.

It won’t be long before mainstream media companies start rolling out their own concepts for participatory media models, and I suspect those ideas will often fall flat…and it won’t be because the idea is bad but rather a lack of the key qualities required to shepherd a community.

Measuring success through innovation

Product roadmaps can often become innovation roadblocks. If the roadmap gets translated into a timeline, then the team is forced into an the awkward position of having expectations against which they can only fail.


Photo: Baron von Flickrhoffen

The time required to meet most project deadlines is usually underestimated. There are ways to fight that like padding estimates and shifting resources, but deadlines are meant to be missed. And there are always new challenges and opportunities that popup midstream that you’ll never be able to predict.

As a result, the team gets rewarded for cutting out work and reducing the scope of a project in order to meet the goal. Hold on. That doesn’t make any sense. People get rewarded for delivering less?

In a discussion about Yahoo!’s tendency to focus on time-driven roadmaps with some colleagues yesterday, one person suggested that Product Managers should be rewarded for the number and quality of the features that make it into production. The roadmap then becomes more like a strategy or possibly just an approach to driving toward a vision.

I really like the idea that innovation is the goal rather than beating the clock. I can imagine the lively discussions happening up and down the management hierarchy, too. How much more interesting would it be watching a weekly report that showed all the cool stuff in development rather than a big timetable of all the projects that are running late?

No doubt it would be a lot more fun to congratulate your staff for the bright ideas that they’ve come up with and delivered rather than for the all-nighter they pulled to push out the same old s*#!t.

The fashion of business

Umair Haque equates the poor investment Americans make in their personal fashion with the cultural emphasis on productivity. He argues that people who are “stylish” are perceived as frivolous and unproductive in America. In a comment on Umair’s post Russell Davies flags the style conscious eyes and ears of the English and Japanese:

“In an essay somewhere William Gibson talks about how the British and the Japanese are so naturally expert in branding because they’re brought up to instantly spot the status inference in the tiniest marginal signal – accent, appearance, language. This must apply to style too.”


Photo: pinkbelt

True, though a bit short-sighted. I think Americans are also more forgiving of misplaced style signals or even completely ambivalent to the overbranded constructs that English and Japanese cultures use to reinforce conformity.

On the other hand, I would never argue Americans favor substance over style. Umair is right. We’re often lacking both. But America is also more ready and willing to accept a new idea or to support radical innovation than any place more stylish.

This is particularly true in business.

Look at California where the Internet business, in particular, continues to boom on the shoulders of new business models. Business itself is a type of fashion where the catwalk is loaded with hot startups and cool prototypes. For example, every online media company has been browsing through all the social networking sites and working on plans to at least accessorize their online offerings with social media in some way now that social media is the model du jour.

The tech business fashion model gets built into product strategy, too. Upon returning to Apple in 1996, Steve Jobs’ first step toward turning around the once-hot now-not desktop computer company was to reinvent the Apple style with the iMac. His bet on fashion was a winner which gave him the confidence to reinvent the MP3 player as a new fashion accessory.

It wasn’t until the flickr acquisition did I think Yahoo! was much more than a fashion follower. I’m still not sure I fully understand how fashion fits into the Yahoo! culture, but it’s clear that style is a priority in the search business.

While talking with some colleagues once about how Jeff Weiner would view a really new approach to the search user experience the response from one of the more senior people at the company was, “Jeff has a great sense of style.”

I remember my first day here nearly a year ago. I expected to see black denim and long back action and was instead surprised to see that most everyone looked rather polished if not trendy. Even one of my Nebraska born and raised colleagues shops at H&M.

Again, a shirt or two from Hennes does not make one a fashionable dresser, but style can be about more than what you wear. It’s also a vantange point from where you choose to make decisions or an awareness that enables you to spot important trends. Americans may not be dressed as smartly as Europeans, but their business sense is acutely tuned to fashion in the markets in a way that is still unmatched around the world.