Posts from April 12, 2005

Speaking of scale

Speaking of scale

: The American Society of Newspaper Editors just reported that the number of newspaper journalists in America fell from 56,393 to 54,134 over the last four years.

In the last year, the number of bloggers roughly doubled to more than 8 million. OK, so say that only half of them are active. That’s 4 million. Then say that only — pick a number — 10 percent of them even write about anything involving news. That would be 400,000.

If the news business can harnass the efforts of some of that number — helping to support them with training, content, promotion, revenue — imagine how news could grow.

Yes, Iraq is working

Yes, Iraq is working

: Today Andrew Sullivan eats a few crow feathers on Iraq:

It behooves me to write that I’m chastened – and extremely heartened – by the progress we’re making in Iraq. The elections were obviously the key – and they should have been scheduled at least a year before they were. But it’s equally true that the constancy of our amazing troops, and the magic of democracy, are turning this long hard slog into a long hard slog with an end in sight. The criticisms of the past endure. But the fundamental objective seems to be within sight. The right decision – to remove Saddam – is no longer being stymied by wrong decisions. I feared the worst. I was wrong.

Good for Sullivan. I still say it was the right thing to do. I still say it’s working. I also still say we could have done things better — hell, one always can — and so I’m not sure I’m ready to echo Sullivan there. But it is nice seeing people who had complaints — Sullivan or Maher – come forward honorably to say it’s working. Because right now, it is starting to work. Let’s hope it continues to improve.

yum.my

yum.my

: Del.icio.us gets funding from a great bunch, led by Union Square Ventures (Fred Wilson, Brad Burnham). [via Joi]

Scale doesn’t scale

Scale doesn’t scale

: Scale doesn’t scale anymore.

The old days of big players in the economy collecting consumers, audience, distribution, manufacturing efficiency, buying power, or capital in the grip of centralized control are waning. That used to be the way to find efficiency and size. That used to be the way to scale.

But they are being foiled by our new distributed world. And they are being replaced by a more efficient means of finding size and efficiency.

Aggregation is the new scale.

Read the post below about the decentralized, distributed future of job classifieds. Now consider how this same model of decentralization — of control at the fringes — can, should, and will hit other industries:

: News: As a producer, why depend on the 300 (expensive, snarky, recalcitrant) reporters you pay for when you could have 3,000 aggregated reporters to get more news less expensively than ever before.

As a consumer, why depend on one or two sources of news a day when you can aggregate the best of 200?

: Media: As a distributor, when you can no longer use your stranglehold on channels to guarantee you an audience, you will have to aggregate audiences to reach scale.

As a creator, you’re going to have to establish your own direct relationship with your audience: You have to do your own aggregating.

As a member of the audience, why adjust your schedule and taste to the distributor when you can aggregate your own entertainment from anywhere, anytime?

: Advertising: They simply won’t have the easy and inefficient option to buy network soon; they will have to aggregate niches of consumers to create a new and more efficient scale — with far better targeting, better advertising, better service, better sales.

: Retail: Why settle for the same crap that’s in every mall everywhere in the world (even on once-hip lower Broadway) when you can aggregate the unique stuff of an eBay?

And, for that matter, why bother with all those bricks when you can aggregate a more efficient customer base online? (See: Amazon.)

: Customer service: Smart technology companies have been taking advantage of the greatest gift of the distributed but connected world by turning customers into customer service representatives: I get a helluva lot better service on TreoCentral than I get from Sprint and Sprint saves the cost, real and psychic, of me sitting on hold and then yelling. It’s free money.

: Consumer products: Customized Barbies are about aggregating a customer base of one. I’ll be that car consumers will revolt against having premium packages shoved down their throats. Imagine how this could work even with Coke, which has to fight and pay for shelf space for all its many products trying to attract ever more tastes. If the let me go online and order what I want — caffeine-free C2 cola in bottles — I’d order a few cases and Coke would have a loyal customer and save shelving and even marketing costs… and also learn what consumers would want if they could control product design. Aggregate me, baby.

: Telecommunications: Dead. Next.

: Insurance: In New Jersey, folks fed up with expensive insurance created their own not-for-profit insurance companies for cars and now malpractice: They aggregated the underserved. Oh, how I would kill for that with my health insurance.

: Financial services: Will the wisdom of the crowds beat the wisdom of the brokers and analysts? Surely, yes.

: Education: How much better to be able to aggregate teaching, to select my teachers instead of having to throw my lot with one bunch or another.

: Labor: If you don’t need your employees to be in one place, on one old assembly line, how much more efficient it is to employ them wherever they are, whether that’s at home in the ‘burbs or at home in Bagalore. You aggregate the work instead of the workers.

: Politics: One-size-fits-all messages won’t work anymore as voters are able to find (or lobby for or create) a politician’s stand on any issue or any piece of legislation imaginable. Winning office will be like forming cabinets in Israel. Either the special interests that win might just be the special interests of the voters…. or politicians will be too scared to ever take a stand and only the pretty will win.

Pity every industry that has to adjust to the decentralized future. Money will be destroyed (on one side, but saved on the other) and the upheaval will make the business restructuring of the ’80s look like a garden party. But pity more the industries that are bound to atoms — airlines, home-building, shipping, and health care, say — that will have a hard time finding the efficiencies of aggregation, the new scale.

: See Fred Wilson:

You cannot collect all the pieces of a marketplace in a centralized way and control all of it. The technology won’t allow that to happen. You can’t “get to scale” that way.

You must be open to others owning pieces of the equation. You must let the users get the value of scale however the choose to create that scale. You must facilitate the creation of virtual scale.

The future of classifieds

The future of classifieds

: Blogging VC Fred Wilson posted a job listing on his site the other day and I left a comment saying this is the future of classifieds… and of headhunting: A member of a community posts a job not in some marketplace — whether that’s a paper or Monster or even Craigs List — but on his own site, speaking to his own network.

It gets better. Fred then sent me to a link on a search from Indeed.com, the specialized jobs aggregator and search engine that scrapes many job sites: Fred’s job listing was there. Now, in fact, Fred tipped them off to his listing and so they added it. But it’s not hard at all to see that they could have scraped blogs or other sites and found that listing — especially if the listing had some tag or tags that made it easy and reliable to identify.

I’ve been saying for a few years now that this is the future of job classifieds. Monster and Craig are merely waystations — disruptive and cheap new marketplaces competing with big, old marketplaces — on the way to a distributed future when there are no marketplaces, when buyer and seller (employer and employee) list their information anywhere on the internet and they are put together by aggregators and search engines.

And the aggregators aren’t all computers. See also Rafat Ali’s great listing of digital jobs at PaidContent.org. It’s not only a collection of jobs, it’s also a great source of industry intelligence I read and quote often to see what companies are up to.

So what used to be advertising is now just data… and community… and content.

This is the new distributed world. I don’t know how anybody makes money in it but I do see how many people save money. As has been cited too often now, Craig destroyed — did not transfer but destroyed — an estimated $65 million in classified revenue in San Francisco alone. But Craig still charges for listing jobs. Indeed doesn’t; it merely finds them.

Aggregation is cheap. Aggregation is efficient.

If I were a headhunter, I’d start looking for a new career. And I wouldn’t make it real estate.