Posts about networks

Network knowledge

January 16, 2012 by Jeff Jarvis
, , ,

I’m a bit late in blogging about and urging you to read David Weinberger’s new book, Too Big to Know. That’s because I couldn’t find my oft-underlined, much-dogeared galley, which I soaked in as soon as I got it.

David is an intellectual hero of mine. He is a coauthor of the seminal work of net culture, The Cluetrain Manifesto. His subsequent books, Small Pieces, Loosely Joined and Everything is Miscellaneous taught me to look at the world differently (yes, it’s partly his fault) and to understand the changing architecture of relationships, information, and now knowledge. He is generous with his thoughts. He challenges me (when I presented Public Parts at Harvard, where David moderated, he pushed me to consider what I was saying about the relationship of ethics and norms and he likely influenced me to consider that as a next project … his fault, again). He is open and curious. He does this with charm and unwarranted but sincere self-deprecation. All that comes across in his books.

Knowledge is an awfully big topic, the biggest. As he started this project, I heard David fret over that. But he succeeded in bringing new perspective even to this. The nut of it:

As knowledge becomes networked, the smartest person in the room isn’t the person standing at the front lecturing us, and isn’t the collective wisdom of those in the room. The smartest person in the room is the room itself: the network that joins the people and ideas in the room, and connects to those outside of it. It’s not that the network is becoming a conscious super-brain. Rather, knowledge is becoming inextricable from — literally unthinkable witout — the network that enables it. Our task is to learn how to build smart rooms — that is, how to build networks that make us smarter, especially since, when done badly, networks can make us distressingly stupider.

I interpreted that through one of my favorite (and, sorry, oft-repeated) memes these days: the Gutenberg parenthesis. Among other things, it argues that before Gutenberg, knowledge was about preserving the wisdom of the ancients. In the Gutenberg parenthesis, knowledge sprung from contemporary authors, experts, and institutions. After the parenthesis, as I see Weinberger’s thesis, knowledge becomes province of the network. It isn’t resident only in single facts or artifacts (that is, books) but is a much more complex prism that can be seen from many angles and changes its appearance across them. Knowledge becomes less static, more living. David says it better:

Knowledge now lives not just in the skulls of individuals. Our skulls and our institutions are simply not big enough to contain knowledge. Knowledge is now a property of the network, and the network embraces businesses, governments, media, museums, curated collections, and minds in communication.

Knowledge until now was about creating and controlling scarcity. Up to now, says David, “[w]e’ve managed the fire hose by reducing the flow. We’ve done this through an elaborate system of editorial filters that have prevented most of what’s written from being published . . . Knowledge has been about reducing what we need to know.” But now, of course, information is abundant and only growing — multiplying — as we invent more ways to create and discover and capture and analyze and question. That’s what freaks the old — pardon my choice of word — sphincters of information, the controllers and owners of it. This conflict erupted when Gutenberg invented the printed book and scholars feared we’d end up with too many of them. It emerges again now that Berners-Lee has invented the web.

David grapples with the history of our perception of facts, then wrestles with the idea that we “are losing knowledge’s body: a comprehensible, masterable collection of ideas and works that together reflect the truth about the world. . . . We’ll still have facts. We’ll still have experts. We’ll still have academic journals. We’ll have everything except knowledge as a body. That is, we’ll have everything except what we’ve thought of as knowledge.”

Knowledge, he says, “has been an accident of paper.” We convinced ourselves that a set and knowable worldview was possible because the media into which we put our information created that comforting expectation. Same goes for news: “All the news that’s fit to print” is the greatest conceit imaginable: that everything that matters happens to fit in what we can afford to produce. We know so much better now.

These are profoundly disruptive ideas about ideas. It helps that they come from someone who presents them via doubt rather than dogma. David is, like me, essentially an optimist, but he sees the choices we have and the dangers that present themselves if we chose the wrong paths.

At the end, he examines the characteristics of the net and its knowledge: abundance (“The new abundance makes the old abundance look like scarcity”); links (“Links are subverting not just knowledge as a system of stopping points but also the credentialing mechanism that supported that system”); no need to get permission (“Let anyone publish whatever they want … and the Knowledge Club loses its value”); publicness (somebody ought to write a book about that); and the unresolved nature of questions (“The old enlightenment ideal was far more plausible when what we saw of the nattering world came through filters that hid the vast, disagreeable bulk of disagreement”). “What we have in common,” he concludes, “is not knowledge about which we agree but a shared world about which we will always disagree.”

So the idea that things will settle down and opinions will coalesce around shared facts once we get through this maelstrom of change is a fantasy born of experience but blown apart by the network. So will the future sound like the Fox-News-and-comment-snark present? It needn’t if we adapt our norms to a new reality and if, as David says, we build our networks well. That means building them around new opportunities, for example: “The solution to the information overload problem is to create more information: metadata.” We don’t need more filters, more gatekeepers, more mediators. We need smarter, bigger brains digging through more and better information. Don’t recreate old models. Disrupt them.

David concludes: “We thought that knowledge was scarce, when in fact it was just our shelves that were small. Our new knowledge is not even a set of works. It is an infrastructure of connection.”

Chew on those wires for a while.

The collaboration economy

October 16, 2009 by Jeff Jarvis
, , ,

Two events of recent days underscore for me how old-media executives are not comprehending the collaboration economy: how it adds value, how it creates efficiency, how it operates under new currencies.

Add this to the other blind spots these old media powers have about the new economic reality: the imperatives of the link economy, the need and benefit of giving up control, the advantages of creating open platforms over closed systems, the value of networks, the post-scarcity economy and the art of exploiting abundance, the need to be searchable to be found, the deflation innovation brings, the value of free, the triumph of process over product…. This is what I wrote in my book about. Trying to get media to understand it is why I wrote it.

Behind each of these new laws of the new age is a set of consequences that result if you don’t at least try to understand them and continue to operate under the expired rules of the industrial economy. We online folk tend to operate under entirely new assumptions and think that our legacy colleagues see the same world we do. But they don’t. That hit me square between the eyes – once again – this week at a Paley Center debate over paid content between Steven Brill and NPR chief Vivian Schiller.

“I don’t know of any worthwhile content that’s free,” Brill said at the start of his remarks. He said it as a truism, as if we’d all assume the same. But I think most of you reading this would think that false. You may not value this very blog, but it’s free. The web is filled with free wonders. There’s plenty of wonderful content that’s free, more every day.

Later, Brill suggested we imagine going into the New York Public Library and instead of seeing many books, we see millions of pages, loose and flying about. What would we do? His stated assumption is that we would recognized the need for professional editors and journalists to make sense of it all. My response to his question was, “Go to Google.” Not for the first time, he sneered at me. But others around the table agreed that Google brings together our editing through our links and clicks; we will make order of that pile of pages, given the means to do so. Our assumption is that we value those actions and opinions, even if they are free – perhaps all the moreso because they are free.

That afternoon, I finally read AP CEO Tom Curley’s remarks in Hong Kong – before his duet with Rupert Murdoch at the Forbidden City – in which he equated control with value. That is the distilled essence of the old media model.

Listen to Curley: “The value of that content has been undervalued. It’s now at the lowest level, I think in history…. But the reality is that all of us know that our content is valuable…. We deserve to be paid, and now it becomes a matter of trying to figure out how to do that…. It’s time for us to get control of our content, and so we shall do that.”

Curley is saying that it’s up to him – not us, not the market – to set value. That is possible only if one controls distribution. That is why he wants control – or wants it back. He asserts value as a matter of entitlement, emotions, and ego over economics. But in this open economy, there is unlimited competition and value is created in many places, measured in many currencies.

Curley says that “we intend to participate in that stream, in that revenue stream.” But what about the content stream? He needs to participate in what Marissa Mayer calls the hyperpersonal news stream. He has to break out of the idea of sites and portals and go to where the people are. Yet Curley said he’d prevent his customers from redistributing his content through emails or “re-syndication” – from the stream, in short.

Here’s the nub of it: Curley says, as has been quoted often already, that “there is an oversupply, at least in the short term, of us.” That is true only if you see the world in the old, owned, controlled, closed, centralized, professionalized, scarcity economy – only if you think you can own news and access to it and thus its price. In the post-scarcity economy, he can’t bear new competitors; he call them the oversupply.

But in the collaborative economy, it’s another matter. All those “extra” people add new value and efficiency – if you see the opportunity in it and enable them to. They’re us. That’s how Google sees us, capturing our links and clicks to discover the value of those million – no, trillion – flying pages. That’s how Wikipedia and Craigslist created their value, dealing in trust and membership as a new currency. That’s how I want next-generation news organizations to look at us, as the people who will create news while the news orgs add value to it: vetting, correcting, organizing, training, promoting, selling. The news orgs and their journalists then become so much more efficient because they work collaboratively with the public. That’s how they become sustainable and profitable again. But this happens only if you trust and value the others and understand the economics of collaboration.

Curley talks, at last, about wanting to link to journalism at its source, which is important, since the AP has long cut the link to original journalism by rewriting it, by turning it into a commodity. But Curley talks about his news registry doing this among his closed circuit of members and big old companies – not the unlimited number of witnesses and citizens who will create news now. He talks about creating “our own self-referring network” (after talking nonsense about Google referring to itself nine times out of ten when Google links out to news far more than the AP ever does). He still sees a closed, controlled world where he sets the value. He, like Brill, does not respect the links and clicks and creation of people outside their walls, paid or otherwise because he can’t control it and he thinks that control is what still gives him value; the truth in the new economy is exactly the opposite: You gain value by giving up control. They do not see the value in collaboration and collaboration as a key to the creation of value and the recognition of efficiency of the new news economy.

30 days of WWGD? – Networks

February 1, 2009 by Jeff Jarvis
, ,

Today’s snippet reprises Tom Evslin’s great lesson about the economics of networks:

* * *

In 2005, I joined a roundtable held by the venture-capital firm Union Square Ventures in New York to talk about peer production and the creation of open networks and platforms. Counterintuitive lessons swirled around the room as entrepreneurs, investors, and academics analyzed the success of companies built this way. Across the table sat Tom Evslin, the unsung hero of the web who made the internet explode when, as head of AT&T Worldnet, he set pricing for unlimited internet access at a flat $19.95 per month, turning off the ticking clock on internet usage, lowering the cost for users, and addicting us all to the web.

Evslin gave a confounding lesson on networks. Explosive web companies—Skype, eBay, craigslist, Facebook, Amazon, YouTube, Twitter, Flickr, and Google itself—don’t charge users as much as the market will bear. They charge as little as they can bear. That is how they maximize growth and value for everyone in the network. Evslin used an ad network to illustrate the value of building scale in this manner. An ad network that extracts the minimum commission it can afford out of ad sales for member sites will grow larger because more sites will join this network than its greedier competitors. Ad networks need a critical mass of audience before they can sell to top-tier advertisers, which pay higher rates. So charging less commission to grow larger can yield more ad sales at better prices.

It gets even more head-scratching: Evslin argued that if the company that runs the network is too profitable, it will attract competitors that will undercut it and steal market share. “If you’re doing well but running at or close to breakeven,” he explained later on his blog at TomEvslin?.com, “you’ve made it impossible for anybody to undercut you without running at a deficit.” To sum up Evslin’s law of networks: Extract the minimum value from the network so it will grow to maximum size and value—enabling its members to charge more—while keeping costs and margins low to block competitors.

That’s not how many old networks operate. Cable companies wrap their wires around us to squeeze maximum fees out. Ditto for phone companies, newspapers, and retailers. Charging what the market would bear made perfect sense for them. But now they face competition from next-generation networks. Skype—which at the end of 2007 had 276 million accounts in 28 languages—exploded as a free service before it added paid features that drastically undercut old phone companies. Its founders pulled value out of the business when eBay bought it. eBay itself had created a new retail marketplace by extracting little from each sale. Once eBay thought it was alone at the top, though, it started raising fees—but that allowed online retail competitors Amazon and Etsy to steal away merchants.

Evslin’s poster child for network growth is craigslist. It foregoes revenue for most listings in most markets—charging just for job listings and for real estate ads in a few cities—and that made it the marketplace for most listings. “If Craig now attempted to maximize revenue by charging for a substantially higher percentage of ads, a door would be cracked open for competition,” Evslin said. “There is no chance at current rates for a competitor to steal Craig’s listings (and readers) by charging less.” This is the economy in which Google operates. It had no revenue model for its first few years until it happened into advertising. “Bank users, not money,” was Google vice president Marissa Mayer’s advice on building new products and networks. She said in a 2006 talk at Stanford that Google doesn’t worry about business models as it rolls out products. “We worry a lot about whether or not we have users.” That is because on the web, “money follows consumers.”

At the New York roundtable, an entrepreneur quoted legendary Israeli investor Yossi Vardi, who said that when he launched the pioneering instant-messaging service ICQ (later bought by AOL), he cared only about growing. “Revenue was a distraction,” he decreed. This doctrine of growth over revenue was mangled in the web 1.0 bubble, when new companies spent too much of investors’ money on marketing so they’d look big, only to collapse when money ran out and users vanished. Today’s web 2.0 method for growth is to forgo paying for marketing and instead create something so great that users distribute it—it goes viral. Once it’s big, then it can find the revenue. That money may not come directly from users in the form of fees or subscriptions but may come from advertising, ticket sales, merchandise sales, or from the value that is created from what the network learns—data than can be sold. I discuss such side doors for revenue later in the book.

Network economics may be confounding, but networks themselves are simple. They are just connections. You already operate in many networks. Go find the biggest whiteboard you can and draw your networks from various perspectives: First draw your company with all its relationships: customers, suppliers, marketers, regulators, competitors. Now draw a network from your customers’ perspective and see where you fit in. Next draw your personal network inside and outside your company and industry. Draw your own company not as a boxy organizational chart but as a network with its many connections. In each, note where value is exchanged and captured (when you sell, you get revenue; when you talk with customers, you gain knowledge; when you meet counterparts, you make connections). Now examine how these networks can grow, how you can make more connections in each, how each connection can be more valuable for everyone. No longer see yourself as a box with one line up and a few lines down. Instead, put yourself in a cloud of connections that lights up each time a link is made, so the entire cloud keeps getting bigger, denser, and brighter—and more valuable. Then your world starts to look like Google’s.

How to build a network

August 15, 2008 by Jeff Jarvis
, ,

I was talking with a media exec who started a blog ad network — bless him — but who I thought was taking too high a share of the revenue: at least half. That’s a natural reflex, perfectly understandable: Get what you can. Other networks do that. But the problem for me is that by taking too much, he excluded me from the network — I’m sticking with BlogAds, which takes only 20 percent — and the problem for him, then, is that this slows the growth of his network and a smaller network is a less valuable network. He understands this will because he’s a smart media guy. He wants a large network.

I was actually just trying to channel the network wisdom of Yochai Benkler, author of The Wealth of Networks, and Tom Evslin, who had talked about how to grow networks at a Union Square roundtable about collaborative production more than a year ago. I wasn’t sure I was getting it right, so I went to Evslin’s blog and asked him for a reprise, which he has just provided, brilliantly. I’ll summarize:

The first counterintuitive lesson: Companies that build large networks on the web don’t charge users what the market would bear; they charge as little as they could bear. That is how they maximize growth and value for everyone in the network on top of the platforms they provide.

In his blog post, Evslin takes this a step farther, pointing out that if you run a network that depends on scale, such as an ad network, then the more pages you have to sell, the bigger and better advertisers you can attract and the more you can charge. So if you take a smaller commission for each ad in the network, more sites will join it with more pages, which can now be sold at a higher value.

It gets even more head-scratching: Evslin argues that if you are too profitable, then you will attract competitors who will undercut you and steal market share. “If you’re doing well but running at or close to breakeven,” he explained, “you’ve made it impossible for anybody to undercut you without running at a deficit, which is hard to get funding for.”

So, to sum up: Take the minimum value out of the network to make it grow to maximum size to enable its members to charge more for their value while keeping costs and margins low to block competitors.

That’s not how old networks operate. Cable companies wrap their wires around you and squeeze maximum fees out of you. Ditto phone companies, newspapers, and retailers. But they all face competition from next-generation networks.

craigslist is the Evslin poster child. It foregoes revenue for most listings in most markets—charging just for job ads and for real estate in a few markets—and that turned it into the critical-mass marketplace for most listings. “If Craig now attempted to maximize revenue by charging for a substantially higher percentage of ads, a door would be cracked open for competition,” Evslin writes. “There is no chance at current rates for a competitor to steal Craig’s listings (and readers) by charging less.”

I’m writing about the network model in the book and this will also be a key topic of discussion in our event at CUNY on new business models for news; that’s why I’m talking about it.

Rise of the network, fall of the portal

May 19, 2008 by Jeff Jarvis
, , ,

Mark today in the history of media. In today’s NY Times, we hear an ad guy praising networks over portals (and by portal, we don’t just mean Yahoo, we mean any closed media property, including TV networks and newspaper sites). Networks used to have cooties; they were supposed to be nothing but aftermarkets for unsold inventory — or so the big media properties wanted us and media planners to believe. But networks are quickly becoming more targeted, more efficient, and more economical. From the Times:

Some of the ad dollars that in the past had been spent at portals are being spread around instead. Ad networks, which fan out ads to thousands of sites, are adding targeting and are signing up reputable sites, making them more attractive for advertisers.

“There was a time when we would go out and buy inventory on the portals,” said Quentin George, global head of digital media and strategic innovation at Universal McCann, which plans media for clients like L’Oreal and Sony. “Portals make it easier for us to buy and place media on behalf of our clients. But as time continues and as analytics capabilities increase, you find that your media dollars can work better elsewhere across a range of different sites.”

Michael Hayes, senior vice president and managing director for Initiative Interactive, which handles digital spending for clients like Home Depot and Bayer, said that advertisers might be turning away from broad buys and looking for more targeted campaigns on smaller sites.

“This is hurting the portals,” he said. “There are more options.”

This is why I say that the Glam model — whether that includes Glam itself or not only time will tell — is a key business model for the future of media. Welcome to the post-scarcity post-media economy.