My awfully big adventure

I have a story to tell you. Well, two stories. But let’s start with the rabbit.

Rudy, a two-foot tall yellow rabbit, ran out of carrots on the day he planned to make soup for his neighbor. Panicking, he ransacked his house and tore up the backyard—but he couldn’t find any carrots. Luckily, though, two smart kids befriended him and together, working as a team, they managed to scrounge some carrots up in time for dinner. Crisis averted.

Now, this story probably won’t win the Caldecott, nor will it be much use to drive traffic to my blog. But in my family, Rudy the Rabbit is more powerful than anything Pixar could have dreamed up. It’s a story that my wife started for our (then) young son based on one of his stuffed animals. We convinced him that Rudy the Rabbit was, in fact, quite real—and had magical (albeit plain) adventures while he was at school. For a few years, Rudy became a staple of bedtime stories about life, love, hardship, and determination.

Little did I know that a decade later Rudy would become the inspiration for my own adventure. But more on that in a minute.

For families—and I could extrapolate this to society—stories are the bedrock of communication. Kids use them to contextualize and understand the world. Parents depend on them to frame issues, pass on family values, and entertain. Stories are a currency, passing back and forth among us, trading in an idea for something tangible, permanent, and valuable.

Most of us think about books and movies when we hear the word “story.” Curling up with your kids to read Where The Wild Things Are or tossing popcorn at each other while watching re-runs of Mary Poppins are staples of growing up in Western culture. But stories are traded in less obvious ways throughout the day: over dinner or on the phone, while playing a board game or taking a drive to see Grandma. We’re constantly narrating our lives to each other, largely to ensure we stay connected.

Connection, and how stories act as glue between us, is something that fascinates me. And it fascinates me precisely because that glue runs a little thin these days. With a divorce rate hovering around 50%, many of us live apart. A mobile society has meant we travel more, so calls from a hotel room or airport have become routine for kids trying to hear mummy or daddy’s voice. And when we’re lucky enough to be together, rituals like a bedtime story or nighttime walk get shooed away as we hurry to prepare for the next day.

Amidst this pace and chaos, networks like YouTube, Flickr, and Facebook have mushroomed largely because they help us grapple with fragmentation. They give us a chance to glue together our relationships and keep some context in our lives. And, intriguingly, they’re also new forms of storytelling. Blogs are our diaries, Flickr is the new documentary, and Facebook is the new sitcom.

For families, though, these new services and storytelling mediums don’t quite have the right form factor to provide the intimacy, context, and power of reading, making, or sharing stories together. You can upload or forward a funny clip to your kid through YouTube, but it’s microbroadcasting at best and doesn’t enable the subtle back and forth nature of shared stories. (And that’s if the kid actually noticed the email link in the first place. They’ve likely got their head stuck in Club Penguin, Habbo, or Gaia—the new Saturday morning cartoons.)

I was thinking about all this—stories, connection, and emerging digital services—when Rudy the Rabbit popped into my head. You see, a couple of years into the Rudy phenomena, my son and I created a book about our yellow-colored lapin for my wife’s birthday. I wrote, he illustrated, and we printed, bound, and wrapped it in all of it’s slim glory. Naturally, she loved it. It was her story, after all, coming back to her in a different shade, full of energy and love.

For us, though, the best part was in the making. Working together as a team, adjusting the story to suit his artistic ability (he was seven), keeping the story short enough to manage—all of the back and forth was something that made the process something close to magic. Now, not only was Rudy a way for us to frame life for our son, but it became a way to create something out of nothing. Creation culture as opposed to consumption culture.

That’s when Storybird popped into my head, a new service that my friends and I are unveiling soon. Storybird is the same process I described above, made digital, pushed into the cloud, and aimed at families and friends. We call it “collaborative storytelling.”

Storybird has a simple premise: you and I play around with some words and pictures and voila! We have a story we can share over the grid or print into a book we can keep forever.

The making of Storybird, and our goals for it, is something less simple. It’s a longer story, and an unfolding story, and something I plan to share with all of you in the months ahead.

It’s the beginning of my awfully big adventure.

Why a Kindle monopoly is good for us

Farhad Manjoo at Slate thinks we should “Fear the Kindle” and suggests Amazon will hamstring publishing the way Apple did the music industry.

We can only hope.

New markets or categories are always created by one player. It’s a feature, not a bug.

One player MUST initially dominate the new category to carve the way and make sense of it to consumers. Kodak, IBM, Microsoft, Apple, Netflix, Amazon, Miramax, and Threadless didn’t emerge as leaders so much by designing new products as they did by contextualizing new ideas. By creating understanding during times of change—in some kind of marketable form factor—they were rewarded by patronage.

Where was non-professional photography before Kodak? Multiplex art-house films before Miramax? Or crowdsourced t-shirts before Threadless? Nowhere.

Each category-in-waiting, like every idea, needs an author to shape and sell it. Once they do, consumers can understand and buy it.

And like authorship, only one person can write the story. (How many of your favorite novels were written by committee?) That’s essential to your enjoyment, but it’s also essential to the author.

Founders, like writers, must wrestle with ambiguous ideas and make sense of them, trimming unnecessary features while retaining the core. In the process, they reveal to themselves the hidden themes that make the concept valuable. It’s that clarity that helps them position their product to solve our problem.

When Bill Gates realized he could syndicate his OS, he was able to articulate his vision for “a computer on every desk in every home” and the personal computing era bloomed. In turn, WE made Microsoft a monopoly as thanks for ushering-in the digital age.

When Harvey Weinstein tinkered with foreign-film aesthetics by adding Hollywood casting and multiplex distribution, he created the modern indie and trumped Robert Redford’s Sundance Institute who had been laboring on the idea for years. As a result, Miramax defined—and dominated—film during the 90s and ushered in an era of storytelling so skilled that it was dubbed the “new realism.”

When Steve Jobs linked the player, the store, and the jukebox, he joined the ranks of Philip K. Dick and Arthur C. Clarke by demonstrating the future and articulating something we all sensed but couldn’t define. As a result, iPod’s musical ecosystem and Apple were rewarded with a monopoly.

(Hint: monopolies, like Barack Obama, are voted into power to make change when the presiding regime no longer works.)

So when Manjoo quotes Paul Aiken, executive director of the Authors Guild, as saying “Everyone is worried that Amazon will end up becoming to books what Apple is to music,” hum a silent prayer this comes true. Traditional publishing is broken. Digital publishing is a mess. We should be so lucky to have someone fix it.

The Kindle + store + wireless is preceded by Sony’s Reader by years and several other “well positioned” players. What happened? Their story made no sense. They revealed no purpose. They generated no clarity. (They’re the Jonathan Franzen of their category: byzantine and commercially unviable.)

If Amazon DOES come to dominate the market, it will be because Bezos’ unlocked the mystery of digital publishing and penned a story we could all understand (and threw in one-click convenience!)

Fear the reaper. Fear another Franzen novel. But not the Kindle.

A Tin Drum

Roger Ebert joins the growing rank of journalists bemoaning the death of the newspaper industry, curiously linking it to the glut of celebrity culture. The internets and movies? I had to comment.

Roger, you’re mixing the death of a business model (a temporary situation) with the age-old complaint that there aren’t enough critical thinkers among us. Both are true. Together, however, they are false; there is no relationship.

The sacking of film critics or the rise of 500-word limits are just further symptoms of the death of regional monopolies and the struggle newspapers face to remain relevant (or noticed) as information and conversation shift to the grid. Now, while IT IS sad to see a fairly nuanced form factor like newspapers (and all their editorial grit) disappear, what is bothersome to you is that the new landscape has not yet sorted itself out. It’s unreliable and mixes high and low, good and bad—with abundance and without relevance.  But this isn’t a failure of content. It’s simply a lack of “post filters:” tools to sort through the abundance of commentary and thought and surface those that are good. (And by “good” I mean the material you cherish: thoughtful, articulate, intelligent.)

Behold, in the last couple of days I visited:
-The Playlist, where I read a smart and sassy review of Criterion’s new release of Bottle Rocket
-John August’s blog, to research dialogue technique
-The BFI blog, to watch shorts on British shorts
-Art of the Title Sequence, where I re-watched the opening to Panic Room
-Criterion’s new Online Cinemateque, where I was able to reflect on Steve Buscemi’s favorite films (Why Billy Liar as #1?)

At what point during the golden era of film criticism could I do this? If I didn’t live in New York or LA, how could I possibly find or encounter such thought, resources, or connections? And how could any of this be considered thin or hawkish?

None of it, of course. But that brings me to the second point: your attempt to connect celebrity culture with higher minded film critique. While it’s true that CelebCult is rampant, it’s more a manifestation of a culture bent on consumption—literally eating its Gods in this instance—than the decline of critical thought, filmic or otherwise. Establishing the link between great film thinkers and the gossip of Katie and Suri’s matching eyewear is an unnecessary parlor trick. You might as well bemoan the fact that your salary—and thus your high minded prose—has been paid for by the local restaurants and “SWF seeks same” advertising in the classifieds of the Times. One simply isn’t connected to the other.

What IS connected is the death of the newspaper format, and by proximity and reliance, the death (or at least hobbling) of film criticism as a PROFESSION. However, film criticism as an exercise, passion, or activity is thriving. Professors, critics, students, filmmakers—all of them can now participate in the act and, as a collective, create a wider, deeper, and intensely more rewarding discussion about the form than a cabal of big-city scribes.

What I find ironic about your lament is that you and Gene Siskel were the ones to harness an underused film critique medium—television—to reach a much broader audience and get them to think and care more about film history, culture, and production. (Even going so far as to brand your thumbs in an effort to condense deep thinking into a singular, iconic act.) At the time, your counterparts ridiculed you. They did not believe that 3.5 minutes of banter could capture the work of Scorsese or Coppola. But you proved them wrong, citing that in television (with soap operas and late-night infomercials as your neighbors) you could inflect, insinuate, demonstrate, and project the spirit of the work in ways that were simply not possible in print. (It worked for me. I remember flicking to PBS in 1982 and catching the last minute of your review of Jonathan Demme’s Who Am I This Time? Before that review—before the clip of Susan Sarandon and Christopher Walken in a heated argument—I had never cared for or considered “film criticism.”)

I would hope, despite your sadness for the loss of newspapers as a format and revenue stream, you recognize the even greater opportunity for film criticism to grow even further beyond previous boundaries and for new voices to emerge. I’m sure you do, and the grind of CelebCult has simply stunned you with flashbulbs and momentarily blurred your vision.

Roger’s response:
Many comments here reassure me that other channels exist, that all things must pass, that I must be reconciled. I am not. I usually don’t even describe myself as a journalist but as a newspaperman. Tell me about the internet. I love it, but as Kipling told us,  A woman is only a woman, but a good cigar is a smoke.

Update: Mark at Headmine picks up the discussion and makes an elegant observation:

At the speed of light, perception is truth. When we are bombarded with information from every direction simultaneously, critical thinking is pushed aside out of necessity by faster, more holistic forms of awareness. Emotion and image take center stage.

This is as true in politics and physics as it is on the red carpet or the front page of a newspaper. It’s pointless for Ebert to go to battle over shrinking word limits in newspaper columns when we are twittering our lives away 140 characters at a time. The way we communicate is changing.

Is the link economy the key to innovation in “traditional” business?

Summary: American innovation is stumbling, reports BusinessWeek. Yet P&G reports that 10 years of innovation have doubled their sales to $80b. How? By operating in an analogue equivalent to the “link economy.”

BusinessWeek’s Chief Economist Mike Mandel recently penned “Can America Invent Its Way Back?” and highlighted that while the US spends on R&D, it doesn’t get its bang for its buck:

“Since 2000, the nation’s public and private sectors have poured almost $5 trillion into research and development and higher education, the key contributors to innovation. Nevertheless, employment in most technologically advanced industries has stagnated or even fallen. The number of domestic jobs in the computer and electronics sector continues to plunge while pharmaceutical and biotech companies lay off as many workers as they hire. And even the industry category that includes Google (GOOG)—Internet publishing and Web search portals—has added only 15,000 jobs since 2003.”

Mandel’s piece goes on to suggest that “innovation economics” are an important part of the road forward, stressing that idea management, culture, and “creation economics” are the antidote to traditional economic thinking that emphasize taxes, inflation, and cost-control.

He’s right, of course. Corporations (and the infrastructure that supports them like public labs, universities, and policy makers) are still in an industrial-age hangover, too blurry-eyed to notice that their organizational DNA—a military blueprint that favors information asymmetry and strict vertical hierarchies—is counterproductive to the post-grid era, a network model that encourages edge-competencies and group coordination.

Today, companies that act porously—enabling and encouraging the flow of IP and talent in and out of their sphere of influence—are winning. Google is an obvious example, an organization that thrives largely by coordinating—rather than suppressing—the flow of information between people and markets.

So remarkable is their success that the “link economy” has become an increasingly recognizable phenomena, a pattern that spotlights value wherever it resides and manages abundance rather than controls scarcity.

Proctor and Gamble seems to understand this, despite their distance from Mountain View. Under the stewardship of A.G Lafley the Cincinnati manufacturer, responsible for all number of household items from Tide to Swiffer to Oil of Olay, has doubled its revenue to US$80b by focusing on innovation alone.

Lafley wrote about the firm’s approach in Strategy+Business, noting a few key points about the aggregation and syndication (my words) of IP and people:

“We focused on creating a practice of open innovation: taking advantage of the skills and interests of people throughout the company and looking for partnerships outside P&G.

We grow our business in these countries only by consistently developing new products, processes, and forms of community presence. And to do that, we need to involve people, inside the company and out, who are comfortable and familiar with the values and needs of consumers in these parts of the world.

We move people around geographically. We bring people into our Cincinnati headquarters from around the world, and we make a point of moving our headquarters people to our global businesses. Almost all of us have worked outside our home region. Almost all of us have worked in developing or emerging markets. And almost all of us have worked across the businesses. We track that progress very carefully.”

And on their substantial retooling of Febreeze for the Japanese market, he notes:

“This is a story we tell ourselves at P&G to drive home the need for integrative thinking. The project started with a consumer-centric concept. It involved people in a variety of functions and at least two regions. It opened our team members’ eyes to other possibilities. And it came to fruition because we were skilled at having the kinds of processes and conversations that would lead people to synthesize their ideas.”

Makes sense, doesn’t it? Work across boundaries and find value wherever it resides, use integrative thinking, be open to mistakes and possibilities, and, importantly, include people from “outside” the firm with cultural differences to highlight opportunity.

What’s ironic (or sad, or both) is that while Lafley’s been talking about this for ten years, P&G’s peers—big, traditional, manufacturing-oriented companies—still don’t seem to get it. “Most companies are unwilling to draw on outside expertise,” notes Mandel in his BusinessWeek piece.

Furthermore, most are scared:

“Globalizing research and production can also alter the direction of technological change—with potentially negative effects on U.S. prosperity. MIT’s Acemoglu, who holds dual American and Turkish citizenship, argues in his work that in the past U.S. companies directed their research to take advantage of the well-educated American workforce. Now, as more multinationals move operations overseas, they are developing technologies adapted for their less skilled foreign workforces. In other words, offshoring is affecting the direction of innovation in ways that are more favorable to countries such as China and India. In particular, says Acemoglu, “China is going to have a major effect on technology.”

Perhaps CEO’s would find Threadless a less intimidating case study than P&G. Skinny Corp, the Chicago-based owners of Threadless, have proven that peer-production—a native business model in the network economy—can provide high margins AND avoid commoditization.

Threadless sells t-shirts (a commodity business if ever there was one) but does so by aligning the t-shirt designers with customers—much the same way that Google connects publishers and advertisers. Their monthly design contest receives thousands of submissions from designers around the world (none who work for them) and tens of thousands of votes from their rabid fan base.

The result: a business that manages abundance (t-shirt ideas), provides value through transparency (the audience becomes both editor and consumer), and values the flow of IP and talent through them—rather than by them. (Doc Searls calls this kind of value “a shift from “making money with” to “making money because.”)

Can applying “link economy” strategies work for “traditional” companies? Here are Jeff Jarvis’ four principles. And below is a modified version, applied to companies in pursuit of innovation:

1. All companies must be transparent. Your talent base and IP must be exposed and connected. They’re not useable unless they’re linked.

2. The recipient of IP and talent is the party responsible for monetizing them. The more you enable the flow of IP and talent AWAY from you, the more it comes BACK—with greater value and skills to monetize. Just watch how Hollywood operates.

3. A porous organization is the key to efficiency. In other words: do what you do best and link to the rest.

4. There are opportunities to add value atop the IP and talent layer. This is where one can find business opportunities: by managing abundance rather than the old model of managing scarcity. The market needs help finding the good stuff; that curation is a business opportunity.

A final note. The roots of the link economy are empathy (rather than “ego,” which is the root of the industrial economy. More on that in another post.) Abundance causes anxiety. Those who can carefully manage, curate, design, and syndicate value reduce customer anxiety and create stronger links.

And in the “all this has happened before” footnote, consider the strategy of retailer Rowland Macy who, 140 years ago, counseled his employees to help shoppers find what they were looking for even if it meant sending them across the street to their competitors. Sending people away, just like Google, established Macy’s as the definitive department store.

Data portability, the Potter parable, 21st century demand mechanics, and zombie attacks

Summary: Want to understand data portability and the fuss between Facebook and Google’s Friend Connect? Watch the river.

A few months ago Wired ran an article on Gavin Potter, a retired British consultant who was out to crack the Netflix challenge and pocket a million bucks.

While the interview focused on Potter’s use of psychology in contrast to the usual algorithmic glue that solves complex sorting issues, a side comment jumped out and has stuck with me since:

“The 20th century was about sorting out supply,” Potter says. “The 21st is going to be about sorting out demand.”

I’ve been thinking about that quote in relation to the recent noise about data portability and the fuss between Facebook’s closed view in contrast to Google’s (seemingly) open strategy.

Jeff Jarvis got me going when he posted:

“Any choke point of control, via ownership, decreases the value of the network. Enablers increase the value of the network. The network will abhor and find ways around choke points. The network will value enablers and that is the point at which value may be extracted from the network. The value in networks in the open future is not in ownership and control but in enabling others to control.”

But it was Fred Wilson who cemented the Potter connection for me. As he notes, the crux of the issue is less about ownership and more about flow: the service that enables an effortless flow of your data—and experience—will hold your attention. Whether you “own” it isn’t the key issue since a) average people don’t know how to “own” it or b) don’t care to “own” it. If the service works, after all, what’s the problem?

“The social graph itself is being commoditized as all things get commoditized by the subversive technology we have created on the Internet.

What you cannot commoditize is the desire to create a social graph on a web service and the desire to maintain a social graph on a web service and the flow of data into and around that social graph.

Social web services need not fear data portability. They need to fear others providing a better experience. Because when others do that, the flow of data moves and they aren’t in the middle anymore. They might still have your data but they won’t have you. And that’s where the value is.”

That last paragraph is the Potter parable, in my mind. The 21st century is about sorting out demand. Where the 20th century grappled with real and artificial constraints of supply—how do we get these raw materials into this product that we can deliver to those regions—the post-grid generation must grapple with the real and artificial constraints of demand flow, a tidal wave of data and interactions that constitute our relationships to one another.

Interestingly, the architects of the supply side needed to address flow in a similar, albeit analogue, format. Transportation routes, shipping schedules, manufacturing output: to succeed, friction needed to be removed between the flow of objects (read “data”) from one port to another. The more elegant the solution, the faster and more durable the flow.

And, of course, artificial constraints were also introduced into the supply side to manipulate flow, from the good (Treasury limits money supply to avoid inflation), to the bad (five-year plans to regulate food production), to the ugly (manipulating markets, politics, and war to control diamond supply).

We’re now dealing with the same flow and constraint issues on the demand side. As Jarvis points out, services that unnaturally restrict data flow will have to grapple with the consequences of rigging and what to do with excess. In some situations, flow will organically adjust itself and simply bypass the obstruction (read “new service”). And in other cases, as Wilson notes with Facebook, flow tampering is semi-sustainable if the consumer doesn’t feel the consequence.

The real opportunity in flow constraint, though, is putting capacity to use and amplifying the effect. Data is like a river: you can dam it and generate electricity.

That’s what Google did with search. They created a machine that, as we pass through it on our way to find something, harnesses our collective energy and turns our data flow into the most powerful asset of this generation. And interestingly, they did it by subverting the prevailing notion of search: the portal, a benign (if not annoying) throttling technique that tried to control flow by creating smaller tributaries.

Really, life in general is about flow, from our biology to our relationships to our communities. And the study of flow almost always deals with “allowable constraints.” What we give versus take is situational and contextual, but it’s also the simplest and most profound way to recognize the value of flow—supply or demand.

Raves, Clay Shirky, and interaction surplus

If you’re a Clay Shirky fan you’re probably aware that he’s published a new book called Here Comes Everybody, a collection of observations and examples on how the Internet is enabling group action in fundamentally transformative ways.

Shirky spoke at O’Reilly’s Web2.0 conference last week and spun a thread from his text on “cognitive surplus.” (Text here. Video here.) His thesis is that in order to grapple with a particularly stressful stretch of time, society engages in some mind-numbing activity that, by consequence, creates a cognitive surplus. Eventually, this surplus overflows and new forms of value are created. He cites post-industrial revolution Londoners blanking out with gin, only to then build many of the modern institutions we cherish today, and post-WWII Americans sitting slack-jawed watching I Love Lucy and Gilligan’s Island, but now using the Internet to produce Wikipedia and, to a lesser order, lolcats.

A lot of folks dissed Shirky for his optimistic view of the grid and his pessimistic take on television. But I think the contrast is more for entertainment. His core argument makes perfect sense:

“…the cognitive surplus…is…so large that even a small change could have huge ramifications. Let’s say that everything stays 99 percent the same, that people watch 99 percent as much television as they used to, but 1 percent of that is carved out for producing and for sharing. The Internet-connected population watches roughly a trillion hours of TV a year. That’s about five times the size of the annual U.S. consumption. One per cent of that is 100 Wikipedia projects per year worth of participation.”

What struck me as intriguing in all this wasn’t our cognitive surplus, though. It’s our surplus of interaction.

Society has always had cognitive surplus—just unevenly distributed among the rich, the educated, or the professions. Aggregating it to the Internet changes that, of course. Centralized information spreads the value and, like compound interest, generates steady returns over time. The more people who chip in to create, upload, and share, the better the returns.

Interaction surplus, though, is new. From RSS to email, flickr to FunWalls, posts to pingbacks—we’ve never before had to deal with an abundance of two-way interaction. And unlike the subtle effect of compound interest, hooking more people up to the grid creates a personalized form of Metcalfe’s law, a signal to noise ratio that is overwhelming and, over time, numbing. Watching “connected consumers” tweet, IM, tag, upload, download and go viral is not much different than a Saturday night rave: a blur of consciousness, ephemera, and not a little dizziness.

That people use an interactive medium to become passive and numb is a tad ironic. While Shirky reflects on the upside of just 1% of us adding to a wiki and becoming active contributors to the matrix, I’m thinking of how 99% of us turn to it, consciously or unconsciously, for the same reasons we drink gin or watch Friends: to mask the pain, boredom, or drag of life.

This isn’t good or bad in that the grid doesn’t care why you engage with it so much as you include yourself as a node. Technology is always neutral. It’s us that are busy automating our neurosis and anxiety.

The design of everyday relationships

Khoi Vinh, art director of The New York Times online, was recently interviewed by design chronicler Stephen Heller. Vinh, always thoughtful, is bang on with this comment about the shift from “designing inward to outward:”

We’re entering a new era of design where the brands and experiences we create are no longer closely held, highly controlled cathedrals, but rather bazaars of commerce and conversation. Historically, graphic design has been a discipline that deals in control, in creating carefully managed, organized experiences that are then distributed to people to be consumed in whole. Digital media has upended that equation, and now—yes—the audience is an active participant in the process of design.

In fact, the process is now a conversation between designers and users.

That last sentence reminded me of MIT Professor Donald Schön’s observation that design is a “conversation with materials.” In many ways users have become “materials” as much as participants. We not only engage them explicitly through interaction design to create discrete features, but also in aggregate as social systems and platforms amplify their implicit actions to create value.

Flickr’s a good example of both these kinds of “conversations.” Their perpetual beta is nothing if not an active, explicit dialogue with members to remove friction from, or add features to, the system. And “interestingness,” their intelligent aggregator that surfaces the most promising photos from the database, is, in essence, a “conversation with materials” in that the algorithm constantly jockeys members implicit behavior into new value. It automates the conversation Vinh describes into a never-ending telepathic exchange that asks nothing of the user, if only to watch over their shoulder and make some notes.

In that respect, the flickr team is both engaged in a conversation while simultaneously designing the conversation. As my pal Jeff Faulkner would say, “they’re designing the thing, and the thing about the thing.”

If that notion seems tricky to grasp—or at least master—it gets even trickier when you think about designing “on brand.” Tomorrow’s designers not only have to think about how to engage their users and interpret their actions into features or systems, they have to consider how the results reinforce the brand—a particular kind of relationship—and the quality, tempo, and durability of the exchange.

Look at how LastFM, which deals with recording artists with whom you have no direct relationship, lets you “ban” a song from your playlist. Flickr has no such mechanism baked into a member’s photo page feature set. You can “fave” a photo, but you can’t explicitly use the system to denigrate a contribution. And why should you? Flickr relies on almost 70 percent of their users to publicly share their photos and build on their brand promise to “see the world.” If you share a photo—a little piece of you—are you incented to share more if visitors are actively encouraged to hurt your feelings?

The end game in Vinh’s comments is that we’re not just designing the bazaars of conversation—we’re designing the conversation itself. We’re specifying often intangible and implicit nuances of how people interact and create value together.

That’s hard work. If relationship design is ambigous and complex, so are the relationships between the designers. Interface, systems, interaction, aesthetics—rarely are these talents invested in one person who can birth a solution outright. Rather, in an ironic twist, the architects of participation must first be able to grok their own relationships and sort out “the thing” or “the thing about the thing” before they engage their community.

Update: An eloquent and vivid example of visualizing “the relationship of relationships.” Via Danah.

Image: Mike Rohde, SXSWi 2008 sketches

Want to sell value? Bundle. Want to create value? Unbundle.

Summary: Bundling helps you sell something good alongside something not as good. Unbundling helps you distinguish between the two.

The smartest decision Ringo Starr ever made was joining the Beatles. On his own, Ringo wasn’t much. As the drummer for the Fab Four he was, well, fab.

The smartest decision John Lennon and Paul McCartney made wasn’t forming the Beatles. It was allowing Ringo to join the Beatles. Stars need players on the team to distribute the wear-and-tear of interaction and create the right form factor. Adding Ringo was an insulation factor for the duo. It enabled them to be stars and focus on the core asset that people were paying for.

The bundle
That’s the power of the bundle. The bundle enables the less-than-stars to be sold alongside the stars, insulates the stars from the cost of interaction, and adds the appropriate form factor to make the bundle attractive for consumption.

Bundles explain just about everything in the marketplace. Albums bundle two great songs with eight so-so songs. Neighborhoods bundle three great streets with ten mid-list streets. Cars bundle a beautiful shape with a crappy engine. Cable companies bundle good internet services with not-so-good VoIP services. And so on.

Bundling is a fact of life. Most things in life are average. Few things in life are exceptional. Bundling the latter with the former means you can sell more things that people might otherwise not buy. To sell value, bundling is the way to go.

But to create value, you unbundle.

Unbundling is the mechanism to find the real value within a system.

The unbundle
Shawn Fanning unbundled the music industry with Napster and discovered that fidelity mattered less than distribution efficiency. The MP3 is a crappy music format, but it’s frictionless distribution quality revealed gaping holes in the music industry.

Larry Page and Sergey Brin unbundled paid links from organic linking. Pagerank revealed the true value of the citation and radically changed the efficiency of search.

Stewart Butterfield and Caterina Fake unbundled the meaning of photography. Flickr revealed that photo storage and printing were inconsequential next to public photo sharing.

Unbundling provides you with important insights:
-it highlights the real star of the system
-it spotlights the flaws in the system
-it reveals how the system evolved

What do you do once you’ve cracked the code?

You bundle. You extract the star feature/idea/offer, insulate it with a new cast of complimentary features/ideas/offers, and craft the right form factor.

Un/bundle
If “public photo sharing” was the flickr insight, then their interestingness algorithm is the #2 feature of the flickr bundle. It supports the key notion and makes it better by removing friction from the system. (Interestingness is the citation and tracking system that surfaces the most intriguing photos in any tag category. ) Interestingness is to flickr what Paul McCartney was to John Lennon: a vital counterbalance that made the star asset accessible and scaleable.

Google bundled Pagerank with Adsense and Adwords. Search is the star—but Adsense and Adwords are the brokers. They ensure the system’s sustainability, synchronize the connections, and keep everyone talking about Google. They insulate the star by distributing the cost of interaction (ie. they generate the revenue so R&D can continue exploring search innovations).

Shawn Fanning didn’t get to bundle MP3s with a new system, of course. He was sued out of existence. The job of bundling MP3s with several supporting “features” went to Steve Jobs. Today, iPod, iTunes, and the store are a massively successful bundle around the MP3.

Strategy vs phenomena
The trick with un/bundling a system is that sometimes it’s a natural phenomenon and sometimes it’s a strategic initiative. In other words, sometimes you can do something about it and sometimes you can’t.

In flickr’s case, the founders knew sharing would distinguish the service. They also knew the need for interestingness. They may not have expressed it as such (who would?), but they were making strategic decisions about bundles.

Google knew they were unbundling search with Pagerank. But they didn’t grasp how to bundle their new asset until years later.

Fanning didn’t understand his role or the importance of Napster. He was part of a phenomena that only later was bundled into the right form factor by Apple.

No worries, though. If you miss an opportunity to bundle, you might have the chance to unbundle. They’re a bit yin and yang, a little recursive and repeating.

Right now, the grid is creating perpetual opportunities to un/bundle new products, services, and industries. Friendfeed is unbundling Facebooks’ News Feed. ETSY is unbundling Wal-Mart. Ponoko is unbundling traditional manufacturing. Etcetera and so forth.

What are you dismantling?

Three cheers for innovation

A lighthearted post wherein the spectacle of a cheerleading competition is backdrop to the theme of nurturing innovation. Managers, take note: you are the parents in the story.

If you’ve ever fought for a unconventional idea and been defeated by the righteousness of the “safe and secure,” you can find solidarity with the girls of the St. Mark’s cheerleading squad who placed third at this weekend’s Ultimate Holiday Cheer competition in Stittsville, Ontario.

That they were trumped by two other teams is not injustice, given all the teens in the competition were enterprising and deserving of some reward, but it was a subtle and rather sad commentary on what we teach our youth about risk, creativity, and the pursuit of innovation.

For those not among the six hundred or so squeezed into Sacred Heart’s High School on Saturday, let me provide this quick background: cheerleading competitions pit teams of roughly 20 girls against one another and ask them to develop a three-minute routine that consists of much body flipping, hip-hop, and eyeliner. Apparently by scorecard, the judges dole out points for technical and creative application in much the same way they do at the Olympics (whether there was collusion between the French judge and Russian performers I can’t be sure: there were far too many pubescent boys ogling the competitors and blocking my view).

The point about the Olympics, though, is what left me shaking my head as the St. Mark’s team was ranked third. While they had made technical errors—and clearly enough to push the other two teams to second and first place—their routine was by far more imaginative, daring, and—as I assume cheerleading is supposed to be—entertaining.

This seemed as lost on the cheerleading judges as those at the Olympics, whose awarding has become so technical in order to remove the prejudice of taste that they have eroded creative enterprise by rewarding enterprise alone. Any casual observer can tell you that gymnasts now favor a series of safe maneuvers to create a strong composite score rather than attempting risky expressions that are prone to misfire. Watch any floor routine and you’ll notice just that: routine. No magnificence from movement but rather, magnificence of mechanics.

Of course, if you remove the prejudice of judges and rely on the marketplace, you’ll find creative expression wins hands down. That’s why people crave iPods, howl at Chris Rock, and, in something closer to cheerleading, flock by the millions to catch Cirque du Soleil. We seek inspiration and cherish those who deliver it.

So why complain if these kids will find this out for themselves? Why bother to mention that the process of innovation and the output of creative thought will help them succeed if it’s all around us? Well, because they’re kids, that’s why. Because they go to school to learn about what they’ll need to survive in the world. And when the tyranny of a few judges gets them down, they need to be reminded that even if they didn’t win, their creative instincts where bang on.

To the grown ups in that gymnasium (or any other gymnasium), I ask these questions: when should we reward our kids? When they win? Or when they inspire us? Sometimes they do not come hand-in-hand and we must choose.

As for me, I salute the girls of St. Mark. While I think you need to wear more clothes (a point my son will most certainly disagree with), you needn’t feel less proud.

Postcards from the edge

Summary: Umair Haque believes edge principles can restore economic equilibrium. He forgot the human factor.

If you study or build platforms you’ll eventually run into strategist Umair Haque. His BubbleGeneration blog is chock full of dense posts about edge principles, strategy decay, and the coming macropocolypse.

I’m a big fan of Haque and I’m intrigued by his almost biblical view on the “macropocolypse.” His thinking goes a little like this: companies have strayed from their original mission of co-creating value between them AND customers; instead, they now transfer value AWAY from customers TO shareholders. Aggregating value without positive redistribution is, in his mind, disingenuous, non-sustaining, and evil.

Haque certainly has no difficulty finding evidence of strategic rot in the current financial crisis. CEOs pocketed millions as their banks tricked everyone into a pyramid scheme that now the Fed, using our money, has to bail out. It’s a great example of Capitalism gone wrong.

I differ, though, in thinking that edge principles can fix things. In Haque’s view, co-creation and p2p value exchange have the ability to restore balance to our unidirectional system. He cites companies like Google and ETSY as platforms that provide equilibrium among the actors and grow stronger by doing good rather than evil. ETSY, for instance, provides the framework to return us to cottage-scale industry and ensure the buyer/seller value system is 50/50. Google, who delivers value by enabling the p2p voting system we lovingly call Pagerank, grows in perfect step with the user base. The more we use it, the more value it returns TO us, rather than AWAY from us.

These edge mechanics are self-sustaining, essentially, because both parties get what they want. When partners in a relationship both get what they want, there’s no room for deterioration.

Unless you introduce fear.

Here’s where I think Haque misses the issue. Every human-made system disproportionately aggregates value—because of fear.

Fearing invaders and barbarians, farmers relinquished control to Feudal lords. In return for protection the lords amassed the farmers labor and resources. Worshipers surrendered their souls to God lest they burn eternally, enabling the Church to amass enormous wealth and real estate. In return for law and order, citizens gave up personal power to governments who in turn accumulated taxes and legal jurisdiction. And as a “you’re welcome” for helping us keep up with the Joneses (ie. social disinheritance), corporations have aggregated pretty much everything on the planet.

Men trade their assets for the perception of protection. As a result, their assets are aggregated. Aggregation, if you study physics, creates mass, which in turn creates gravity. Gravity is power. It exerts a level of control over its subject that is immutable.

These rules don’t change in the post-grid era. While it’s true that ETSY provides a measure of equilibrium between buyer and seller, it does so in return for control of the platform and the data. That ain’t trivial. Controlling the data means ETSY can monetize the long tail, an aggregation effect that does little for individual sellers or buyers but certainly does something for Jim Bryers. Controlling the platform is everything. If they push you off—you don’t exist. No access to the global, frictionless, one-click market they’re building.

The same for Google. Pagerank gets better the more we use it, but Google owns my data. And aggregating my data has done more for them than me. Thanks to Adsense and Adwords Google is one of the world’s most powerful corporations. What do I get for my Pagerank contribution? I can quickly find videos of the A-Team.

The same is true for every platform on the horizon from 23andMe to flickr to Facebook. Our fear of being diseased, disconnected, or disenfranchised leads us to trade our assets for the perception of protection. We continue to plug into the network because our unhappiness does not outweigh our fear of being unplugged. (Isn’t that what the Watchowski’s were trying to warn us about?)

That’s where edge principles fall apart. Once someone can aggregate and control the platform (social, economic, or political), flow stops being bi-directional and co-creation becomes a shell game. The platform owner amasses close to absolute power. And, as many a good writers have reminded us, absolute power corrupts absolutely.

The future of Capitalism may be in doubt, but the networked future has the certainty of the past—a few control the many using whatever nomenclature suits the few and soothes the many.

…

PS. I promise my next post will not include fear as a central point. (Hey, I didn’t create the human condition. I’m just observing it