Posts about newarchitecture

Defining the new economy

I’m collecting links to thinking that tries to identify the essence of the new economy. In a stream-of-consciousness flow about just this, Brian Frank argues that we’re moving from an industrial to a venture-capital economy where supposed scientific precision gives way to the imperfection that is inherent in innovation:

[Paul] Graham compares this to the Industrial Revolution, which is a fair comparison in terms of scale, but I think we should recognize that these current changes are a kind of reversal, or inversion, or undoing of the Industrial Revolution.

Through the Industrial Revolution the economy itself gradually became like one big machine — or at least that’s how most economists tended to see it. Everything could supposedly be quantified, reduced, and rigorously predicted.

Silicon Valley represents something else entirely. . . .

Rather than expanding control and diminishing variations, the emerging attitude will be about expanding variety and accommodating the unknown. It inverts all of our intuitions and assumptions about doing business and managing the economy… Know your ecology and complexity science.

(My favourite books on this are The New Pioneers by Tom Petzinger, Surfing on the Edge of Chaos by Richard Pascale et al, and Bob Sutton’s Weird Ideas That Work… I haven’t read Jeff Jarvis’s What Would Google Do? yet — I have it on-reserve — but I think it might make my list too. Orbiting the Giant Hairball has been on my reading list for a long time as well.)

So far Silicon Valley is the best model we have for going forward. It addresses the two big defects of industrialism: the one pointed out by Roger Martin, that employees and customers are turned off by rigorous efficiency, and the one pointed out by Nassim Taleb, that the unexpected is inevitable.

The newswire of the future

Jackie Hai has a nice way to describe what follows the AP (my emphasis):

The AP syndication model works in an economy of information scarcity, whereas the web represents an economy of abundance.

Second, what the AP has failed to grasp is that the evolution of the participatory web has blurred the line between content producers, distributors and consumers to the point where everybody can be any and all of the three. The news wire of the future will not be centralized and top-down, but rather distributed and bottom-up.

Aim the gun the right way

The last time Paul Farhi and I disagreed, it was about who’s to blame for the fall of newspapers (he found journalists blameless; I didn’t). We disagree about the same topic again. This time, he’s arguing – in an incredibly long American Journalism Review piece – that it’s the Associated Press’ fault for selling content to portals.

I’m going to suggest that you compare his analysis to that of Joey Baker, who writes a heavy metal rendition of Clay Shirky’s already-legendary essay on the economics of news.

Inherent in what Farhi writes is every old assumption about the economics of media, unchallenged by others and by the reality of a new reality. The notion is that portals were empowered by having the AP’s news and that this made it into a commodity (not the AP’s homogenization of the news, not the fact that knowledge, once known, is a commodity). But as the AP’s execs and defenders say in the piece, if the AP had not been there, Reuters would have been. Indeed, Reuters was. A

nd today, Reuters has shifted to a reverse-syndication model in which it gives headlines to portals for links back, which Reuters then monetizes (sharing revenue back for the value of the links). The AP, handcuffed by its paper-owners, can’t do that. The papers should be following Reuters’ example by giving the headlines in exchange for links, which they then monetize.

The AP is, indeed, hurting papers, but not the way Farhi thinks. It’s hurting them by cutting off links to the original reporting. That is how the link economy works. (Oh, and by the way, the big bad portals are themselves crumbling. One wonders which will die first: the papers or their supposed killers.)

The fallacy in Farhi’s argument is this: “When you give away the news, it becomes a commodity. When something becomes a commodity, you lose your pricing power. And that’s where we are today on the Web.”

Now see Joey Baker shooting that through such arguments – aka “the kool-aid of the bass-akwards mind fuck that the ‘old media’ folks try to sell you” – like a machine gun:

“Our economy is based on the trade of IP, and yet, paradoxically, the internet has made information practically infinite. Therefore, attempting to make money by controlling the amount of information is doomed to fail. Put another way: controlling the scarcity of something that isn’t scarce can’t work.”

There are more bullets in his gun:

History is not a good guide here: The internet is a fundamental shift from anything we’ve experienced before. It’s as revolutionary as the printing press and as radical as the written word. It’s both asynchronous and instant two-way communication.

There are however, fundamental laws. We just don’t know them all yet. The idea that you can delay, or should delay the transition to an internet based economy is just stupid. We’re here. Welcome to the future.

We depend on competition in our economy (fundamental law), which means that the first person to figure this out is going to make a boat load of money. Delaying, will guarantee you’re not that person.

There are two camps out there: folks … who think that there is some way that we can charge users for content just because we’ve always done it (we haven’t). And folks like me, who are convinced that the internet is such a fundamental shift to the economy and information management, that charging for basic content is just asinine.

The first of these commentators writes about media for The Washington Post. The second is a student. The first lives in the old world and understands its rules. The second lives in the new world and understands its rules. Who are you going to listen to about the future? It seems obvious to me.

Heh

In Gatehouse’s anti-linking, anti-web suit against the New York Times Company, attorneys for the Times presented an email from Gatehouse digital head Howard Owens — who, of course, knows how the internet works — that says links with headlines and ledes are OK and are fair use. Heh.

I’d think Gatehouse would have better things to do with its spare resources and time than try to ruin the web. Let’s hope this suit dies fast.

Attention + Influence do not equal Authority

In the dustup over whether it is a good idea to sort Twitter posts by authority – defined as the number of followers one has – John Naughton rises above the cloud to see a larger fallacy in the discussion: The number of followers one has does not equal authority. It stands for influence (or I’d say, it is a proxy for attention – and then, in some cases, influence).

The problem Naughton sees is the same one that plagues analysis of online discussion using media metrics. In mass media, of course, big was better because you had to be big to own the press: Mass mattered. We still measure and value things online according to that scale, even though it is mostly outmoded. Indeed, we now complain about things getting too big – when, as Clay Shirky says, what we’re really complaining about is filter failure. That is why Loic Le Meur suggested filtering Twitterers by their followers; he’s seeking a filter.

The press was the filter. And the press came to believe its own PR and it conflated size with authority: We are big, therefore we have authority; our authority comes from our bigness.

But the press, of all parties, should have seen that this didn’t give them authority, for the press was supposed to be in the business of going out to find the real authorities and reporting back to what they said. This is why I always cringe when reporters call themselves experts. No, reporters are expert only at finding experts. Now to put this back in Twitter terms: Reporters don’t have authority. They have attention and possibly influence because they have so many followers. But that doesn’t give them authority. There’s the fallacy Naughton pinpoints.

“So we need to unpack the concept of ‘authority,’” Naughton argues.

One way of doing that is to go back to Steven Lukes’s wonderful book in which he argues that power can take three forms: 1. the ability to force you to do what you don’t want to do; 2. the ability to stop you doing something that you want to do; and 3. the ability to shape the way you think.

In my experience, the last interpretation comes closest to describing the authority of the blogosphere’s long tail. It’s got nothing to do with the number of readers a particular blog has, but everything to do with the intellectual firepower of the blog’s author.

Naughton argues that the number to manage on Twitter is the Twitter_index – that is, the proportion of followers to (what?) followees. He believes it ought to be 1.0 – that is, equal – “otherwise one gets into the online celebrity, power-law nonsense that Le Meur describes.”

I wouldn’t go quite that far, but I’ll go halfway there. When I wrote for TV Guide and People, I supposedly had an audience northward of 20 million. I’ll hasten to say that was utter bullshit on many levels – the idea that one could trust syndicated research to count readers (as opposed to purchasers) and the presumption that every reader read every page (or ad – which is the real bubble in old media). Still, those were the numbers we bragged about, as if they gave us authority.

Dare I say that this blog gives me more authority – in Naughton’s and Lukes’ terms – than those publications did? My hackneyed example of Dell Hell reached more people in a more meaningful way than any review of Babylon 5 (though I still get in trouble for panning it).

But note well that the authority in Dell Hell was not me. I didn’t have authority (I didn’t write about PCs or pretend to any expertise in customer service). It was my message that had authority or at least relevance, as that was the reason it was passed around. And it was the passing around that invested it with authority.

So to that extent, Le Meur’s not wrong when he tries to find a way to express and calculate the idea that it’s not the author who holds authority but his or her audience. But his critics are also right when they say that number of followers won’t get him there. I think there is no easy measure, but if it exists it will be found instead in relationships: seeing how an idea spreads (because it is relevant and resonates) and what role people have in that (creating the idea, finding it, spreading it, analyzing it) and what one thinks of those people (when MrTweet.net tells me that John Naughton follows someone, I’ll see more authority in that than, say, whom Robert Scoble follows – no offense, Robert – because Naughton is so highly selective). That is what the totality of the press-sphere will also look like as various players add varying value to add up to a whole (and in 3D, the sphere will look different to each of us, so one-size-fits-all measurements will become even more meaningless).

Part of the problem in the Twitter discussion is also that the number of followers is, in the end, a proxy for celebrity while links – which Google PageRank and, for better or worse, Technorati value – come closer to measuring at least relevance. As old media faced more and more competition it became more and more about fame (and that was when access to the celebrity became more valuable than access to the audience). The internet’s value is that it is more about relevance. So I think the reason some people reacted so much from the gut against Le Meur’s suggestion is that it unwittingly corrupted the new world with the crass celebrity of the old. The last thing we need or want in the web is Nielsen ratings.

: LATER: Case in point: Tim O’Reilly kindly retweets my link to this post and then I watch it get re-retweeted again and again. That happens because it’s O’Reilly retweeting and he has authority not becauase he has the most followers – though he has many – but because he’s smart and respected (he has authority); it also happens, perhaps, because my post is relevant to a discussion. Message + spreader (or author) comes closer to authority than mere reader ratings.