Can we use the GasBuddy model to create efficient economies for other industries?

I just finished reading "Content Nation" and it is a nice book that summarises a lot of what we know. I particularly like the rules that encapsulates the spirit of what each section is about. One such rule states that:

Empowering anyone to understand supply and demand builds efficient economies that benefit the most people

This is a thoughtful statement and the example given is GasBuddy, which is a website that enables users to learn about gas prices in US and Canada. It is a simple and powerful illustration of the kind of information that reveals demand and supply. Umair Haque talks about creating more markets. Revealing demand and supply is the perquisite to doing so.

Now, which industries do you think is in desparate need for a GasBuddy equvialent? On top of my head: Health Care services, Legal Services, Photography, Financial Products, Medicial drugs etc.

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The next generation of edge feeders

Fred Wilson talked about edge feeders in 2005:

Flickr is an edge feeder and the best one I know of. I could take my photos and simply post them to my blog. But I don't do that. I put them on Flickr and then from Flickr, I post them to my blog. Flickr makes that dead simple. But they also give me a badge to show aggregated photos. And they let me post other's photos to my blog. They are the photo feeder of the blog world.

Blip.tv, vimeo, and youtube are the video feeders. I could post a video directly to my blog, but I don't. I post it to vimeo, youtube, or blip.tv, and then from there I post it to my blog. These services are rolling out lots of video specific blog integration techniques that will make it even easier to be a video content creator living on the edge.

Delicious is a link feeder. I could post a linkroll to my blog, but I don't. I use delicious to host all of my links, and I use a tag (mine is linkroll) to feed my linkroll. Delicious makes it easier to be a link content creator living on the edge.

Add to these are newer services like slideshare, scribd, last.fm, zemanta etc. Edge feeders are very powerful businesses as they are viral in nature. If a blogger embeds one of these in his blog, and if his readers like it, they will also embed it in their blogs, spreading the service wide and fast.

To me however, these are first generation edge feeders. They feed the personalised media channels that services like blogger, tumblr and twitter have enabled. How they serve it is very similar to how traditional media is broadcasting its content: mostly one way and lack of real interactivity.

Now, we are seeing the next generation of edge feeder like prezi. It torn itself away from our accepted definition of how powerpoint should behave and adapt it for the Web world. It turn linear sequenced slides into notes that jumps around, back and forth, in and out. What this does is creating a fun product that is both entertaining to use as well as leveraging on the medium to which it is created for. To me, that is how the next generation of edge feeders should be.

Are there opportunities then to reinvent the current edge feeders? To have a prezi for each type of media?

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Super distribution may be upon us

The concept of distribution has been around. Umair Haque termed it as viral revenue chains in 2005 and deem it as one of the important models for content distribution:

viral revenue streams are almost a foregone conclusion, because they are a dominant solution for the public goods problems the radically decentralized and open economics of the www creates. They're, pretty simply, the most rational and efficient solution to what people think is a messy problem - dealing with digital property rights.

This was echoed by Fred Wilson in 2007 when he wrote about how superdistribution will become a new model for content and revenue distribution:

Superdistribution means turning every consumer into a distribution partner. Every person who buys a record, a movie, reads a newspaper, a book, every person who buys a Sonos or a Vespa becomes a retailer of that item. It's word of mouth marketing, referral marketing, but with one important difference. The consumer is the retailer.

Superdistribution hence seem be an important mechanism/model for next generation marketing. At stake is a new ideology of how distribution in a networked economy will look like. But before we go deeper into the subject, let's get back to basic: what is superdistribution?

Clay Shirley has defined it well and also added in its importance to our connected culture:

This is superdistribution — content moving from friend to friend through the social network, far from the original source of the story. Superdistribution, despite its unweildy name, matters to users. It matters a lot. It matters so much, in fact, that we will routinely prefer a shareable amateur source to a professional source that requires us to keep the content a secret on pain of lawsuit. (Wikipedia’s historical advantage over Britannica in one sentence.)

Given how important superdistribution is, why are there so few real life examples? The answer is that it is tricky to operationlise these revenue chains. To make superdistribution a reality, we need (i) analytic services that can track beyond first level referrals and (ii) a payment infrastructure that is well embedded into our interactions such that we don't notice it at all. Both are difficult to achieve in critical mass on the Web.

Now however, there is an interesting device that has both of these characteristics: it is called the mobile. Mobile is our most personalised device and it knows information about us right down to the indiviudal. That can produce insightful analytics about who we share our content with and to what extend does that content gets filter through the social network. Mobile also comes with payment embedded, which is necessary to enable revenue sharing.

Hence, I was pretty excited when I read this article about Google and Apple enabling superdistribution-like features for their mobile stores:

Apple's (AAPL) new iPhone 3.0 software includes features that, if activated by Apple, may let users share software with one another, according to a person familiar with the technology. Eventually, iPhone users may even get a commission when they've induced someone else to make a purchase

If they get this right, we are going to see new models of distribution being created right before our eyes. The value this is going to release will be tremendous. I can't wait to see how this unfolds.

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Community interactions as business models for the Consumer Web

We are still struggling for business models in the consumer Web. NYtimes has an article that says how Web startups are looking beyond advertising for revenue streams:

Now advertisers have cut back their online spending. So Web start-ups are searching for new ways to make money, like selling real, or virtual, goods or asking customers to buy subscriptions.

Related to it is another article that describes how a TV network is failing to monetise the Susan Boyle's web fame:

FremantleMedia Enterprises, a production company that owns the international digital rights to the talent show, hastily uploaded video clips to YouTube in the wake of Ms. Boyle’s debut, but the clips do not appear to be generating any advertising revenue for the company. The most popular videos of Ms. Boyle were not the official versions but rather copies of the TV show posted by individual users.

While both articles pointed to the difficulties in generating revenue through advertising alone, they also hinted at a much bigger opportunity: business models that focus on community interactions.

In the first NYtimes article quoted above, it talks about how a startup in online gaming is earning revenue by enhancing the community interactions:

When YuChiang Cheng co-founded World Golf Tour, an online golf game with high-definition graphics, he wanted to make money from every player. Only 5 percent of World Golf Tour’s 250,000 players pay for things like $1 putters in the virtual pro shop or an $18 tournament entry fee, but it gets two-thirds of its revenue from such purchases. The other third comes from ads, including banner ads and tournament sponsorships.

Another example of a business model build on community interaction is Nico Nico Douga:

Japan’s second largest online video portal - Nico Nico Douga - has succeeded in engaging its target audience of young Japanese consumers.
Nico Nico Douga - a homegrown video-sharing community - grew to 7 million registered members between its January 2007 launch and July of 2008.

I have written about this before and here is what I said:

They have also show that it is possible to build a business if you give people the ability to converse, to personalise their conversations and to integrate the conversations around social objects.

So, in summary, are community interactions the path to substainability and profitability for consumer facing applications? What are your views? If you have startup in this space, does this make sense for you?

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Nuggets of wisdom from kids

Got this video from Fred Wilson's site. Although it is really short, the points articulated by the kids are really awesome.



A couple of things that I pick up from the video:

- The TV broadcast industry is in for a rude awakening. When kids as young as these think that the business is in trouble, there are real issues in the industry. Having said that, TV seems to be the most adaptive to the changes bought about by the Web. There are more experiments being tested in the industry and we shall see what it all leads to.

- Kids want their content anywhere, from computer to their mobile services. How easy have we made it for them to do so? Why doesn't every video site comes with a download-to-mobile option that compresses the video to the right resolution for their mobile devices? Whoever that makes it easy for kids to move their content around will be a clear winner.

- When kids like these grow up and join the workforce, are our companies ready for it? What kind of expectations do these kids have of work? Will they expect everything to function as easily as their Web experiences? How can companies prepare for this future?

What insights have you gained from this video? Is this representative of your experiences with kids? I look forward to your comments.

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Is it possible to create a Rockband equvialent for photos?

Rockband has been a runaway success, not only in terms of game sales but also bringing about a powerful new model for music consumption:

The success of the video game Rock Band is drumming up revenue for the music industry.

Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

The reason for this is simple. Games make music more interactive, more entertaining, more fun:

"Hopefully it helps evolve music to not just a linear art form but a more interactive art form," says Van Toffler of MTV Networks. MTV Games publishes Rock Band, along with Electronic Arts. "You look at a lot of 20-year-olds who are reticent to plop down $20 for a CD, yet they don't mind paying $25 for a DVD or $50 for a video game

Can we apply the same principles to images/photographers?

For the past few weeks, I saw my wife addicted to this simple iPhone game of 'spotting a difference'. The game was simple: 2 images were shown and the player has to spot the difference.

Today, I saw a similar Facebook game called Spotmania:

Is it possible then to apply the Rockband's music marketplace concept to these spot-a-difference games using photographs? Will the popularity of such games open up demand for unique or interesting photographs? Will such games create viable ancillary revenue streams for photographers?

Or am I just being silly?

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The economics of the $9.99 ebook

The NYtimes wrote about the issues of the downward price pressure faced by the book industry as a result of the rising popularity of ebooks:

“I love Baldacci’s writing,” wrote one reader, who decided not to buy. “Sorry Mr. B — price comes down or you lose a lot or readers. I’ll skip your books and move on!”

Publishers, of course, object to the lower pricing, citing the reason that printing and shipping are not the main components of a book's costs.

publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

Within that paragraph lies the reason why traditional publishers will not survive the digital disruption. They have not change their operating structure to leverage on the new economics brought on by the Web. Each of the functions cited (writing, editing, marketing) should not be bundled within the same organisation. They should be replaced by light weight services that are loosely connected to each other. Only with such a structure can the $9.99 price point be sustain.

Beyond new structures, we will also see new genres or formats of books that are more light weight and easier to produce. These will enable authors to produce more books. The volume sales will potentially offset the decline in prices. This is what we are seeing in music and mobile applications.

Finally, book sales will likely be only part of an author's revenue. More and more, ancillary revenue sources will reduce the reliance on book sales. This BillBoard article, for example, examines what types of revenue are replacing the loss in CD sales.

The answer is a piecemeal collection of marketing and pricing strategies, multi-rights contracts and performance royalties paid to the owners of sound recordings. Also on the horizon are revenues from multi-rights contracts (currently immaterial but expected to be of consequence in a few years), in-house artist services, and acquisitions or market share gains in music publishing.

I suspect we will begin to see similar situation happening in the book industry, although it is too clear at the moment what are the ancillary revenues accruing to books.

$9.99 might be the new price point that authors have to contend with. The way forward is not be to fight this new price but to reinvent book publishing's value chain to align with this new economics.

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Opportunities in structuring data for music artists

Data driven business is one of my earlier interest (see my earlier posts here). Exploring how structuring data can open up new business models and opportunities for artists is a natural next step. I keep on coming back to this comment by Taylor Davidson because it struck me as something that is not fully explored:

Data, data, data: TuneCore has realized the opportunity is in creating, facilitating, managing and delivering data. Ethan and Jeff’s discussion of TuneCore’s geographic trending reports highlights the vast, untouched opportunity for professionals to use data to create new business and economic models......

What are these untouched opportunities that come from leveraging data? Here are my thoughts:

Social interactionsUnderstanding and harnessing the flow of social interactions can unlock the many layer of possible relationships. On a basic level, it helps artists to better understand who their true fans are. This can then allow them to structure different incentives for different types of fans. The alpha fans for example should be given the best packages and rewards so that they continue to help spread the content.

The possibilities don't stop there. How about empowering alpha fans to sell concert tickets? How about giving friends group discounts if they all attend the concerts? All these possible if you know the social interactions between your fans.

Collaboration opportunities
With so much data, you can now identify collaboration opportunities based on what your fans prefer. Which other artists do they like, what kind of music they listen to, what is the group size that likes both artist A and B? All these allows artists to create more collaboration opportunities among themselves. Maybe a joint concert, or cross selling each other's music and products, or music collaborations etc.

Cross sell opportunities
Beyond collaboration within music, how about collaboration between musicians and other content types. What if there is data on what other types of mediums do your fans consume? If your data shows that your fans are also game lovers, doesn't it make sense to upsell them a music game? If your fans like to read, why not an emagazine?

I am sure there are more but my brain is dead. What other areas can structured data help the artists?

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Different examples of Shazam for image

Via the 7th Mass Media Blog, I came across this impressive set of revenue numbers for the service Shazam:
Shazam now has 35 million users in 60 countries and they get 1 million "tags" (music identifiation requests) per day. ..... Even if we say their global average cost is 30 US cents per tag, that works out to a very impressive 109 million dollars in annual revenues.

Shazam represents a different paradigm for mobile search. It is what I called 'point, snap and retrieve'. On the mobile, a user doesn't want to see a list of results, they want answers to what they are looking for. They also doesn't want to enter long search terms, they want to click a button (like snapping a picture) and get the results.

As I wrote about it here, the concept of Shazam is applicable many niche areas. If we look at how search in Internet has splintered into many forms of specialized search like vertical search, real time search, people search etc, I believe the same trend will happen to mobile information retrieval.

Here are the some of the examples currently in the market. They are the forerunners of what I believe to be a very big opportunity in the future.

Product Search for CDs, Books and Games
When you see a book, CD, DVD, or game at a friend's house you want to look up and bookmark instantly, fire up SnapTell Explorer on your iPhone and take a photo of it..... SnapTell automatically looks up your item and gives you links to Amazon, Barnes and Noble, Wikipedia, and straight-up search engines so you can compare prices and find out more about it.

Logo search
When a brand-specific SnapTag with a call to action is placed on an advertisement, consumers can use their mobile camera phones to access branded content, timely information, promotional opportunities, discounts, retail location finders, sales opportunities and other branded interactions.

Font Search
Ever seen a great font in a magazine ad, poster, or on the web and wondered what font it is? Whip out your iPhone and snap a photo, and WhatTheFont for iPhone will identify that font in seconds!

Bird/Tree/Nature Search (idea)
That’s what I want to be able to do. Identify a tree or a flower simply by pointing a phone at it and tapping “tag”. Identify a bird simply by letting the phone hear its call and tapping “tag”.


What other services or ideas have you come across that users the concept of Shazam for image?

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The era of API driven startup

I read an interesting article that outlines how APIs are changing the face of all businesses, not only that of web companies:
These are Fortune 500 companies in retail, travel, media, telcos and even healthcare. Their level of understanding ranges broadly from those who know what they hope to achieve by creating an API program and have established measurable goals, to those who aren’t quite sure what they will achieve, but know there is something out there happening and they want to be a part of it. They all know they need to do something new, different, and big to change their business. And APIs are going to play a role.

As I think about this, I begin to outline how does an API driven startup looks like. Are APIs the means to achieve edge competencies? How will it affect product development, marketing and business models etc?

Product Development
Product development start at the API level. Charlie O'donnell, in 2007, has already stated that an API driven product is the most appropriate model for a world of small pieces loosely joined, aggregated, remixed, mashed up. If you build it correctly, your product frontend should be created by your backend API. In that way, your service can exist in as many platforms as needed.

Related articles
"Excuse Me" APIs: Why most Facebook apps disappoint
API-First Design


Marketing
An API business designs its marketing around different principles. It focuses on cultivating the edge, empowering them with know-how, with clear roads to financial success, with ways to improve their skills. It also means measuring how APIs contribute to key metrics such as lower customer aquisition costs and higher revenue. Don't ever treat API as a cost centre.

Related articles
APIs Are The Next Marketing Platform
Netflix App Gallery puts API enabled innovations all in one place
Open for Business: Best Buy’s Social Technology Strategy
Nokia Cuts Staff, Refocuses Its Services Push


Business Models
Like product development, business models for API are build within the company from day 1. What will be your business model? Will it be Pay Per Call, Flat Monthly Fee, Open Source Support Model, Ad Placement, Syndication Partnerships or Free? Will you separate between commercial and non-commerical use? Let the latter encourage experimentations while using the former to capture the resulting value.

Related articles
How do you monetise your API


As we move to the API economy, there will be many changes to how businesses operate. If you have experiences to share, do leave them in the comments.

Thanks for reading!

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Where will open financial data lead us to?

Freerisk is really a cool startup, attempting to liberate financial data for all to reuse easily. I have not tinker with it but I can imagine the kind of value it can potentially release.

I can imagine the power finally being taken from rating agencies. People who are capable of producing better risk models will surfaced and be celebrated as rockstars. We will see covestor type of models emerging that reward superstar financial modellers.

I can imagine many interfaces/clients being developed. Clients that lets users better understand what financial data means, alert them to risk factors, and highlight potential investments. Hopefully, all these will give people better ideas on how to invest in stock market.

I can imagine new forms of institutional funds created around new risk models that are proven by the community. Maybe we will see funds having voting mechanisms that let their investors vote on which risk model to follow, rather than blindly following what the current rating agencies recommend.

I can imagine different communities forming around the new knowledge unleashed by the open financial data. Communities that specialize in uncovering hidden handshakes, communities that voice out how green companies are, communities that want to know how well employee benefits are. Once we make it easy for communities to form around these new social objects, there is no telling what kind of groups will rise up and shed more light on things we need to know.

I can imagine metadata being added, remixed, combined etc with financial data to let us understand more. There will tons of mashups being done. Some smart folks will create light weight publishing platforms to support research analysts doing independent research.

I can imagine much more things.

What can you imagine?

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Hacking is everywhere

Hacking is our new manifesto. With the marcopocalypse staring in our face, the pressure to hack our current economy is greater than ever. Fortunately, it is also now easier to get our hands on resources and begin hacking the stale industries that need reinvention. Everyday, I see more and more of such examples. I want to share it here and hopefully inspired more smart entrepreneurs to start hacking our industries.

Hacking Uninsured WorkersDr. Ores is also a physician who runs a nonprofit health care cooperative for city restaurant workers that he sees as a model for how national health care could work.

Under the plan, he charges each restaurant a dollar each month for every seat in the establishment and pools the money. In return, any employee from those restaurants can visit him free of charge, whether for a cut finger or the flu.

The need is acute: A 2005 study by the New York State Restaurant Association reported that almost 75 percent of the city’s restaurant workers — about 120,000— have no health insurance.


Hacking Mobile Devices
“Five years ago, there were no counterfeit phones,” says Xiong Ting, a sales manager at Triquint Semiconductor, a maker of mobile phone parts, while visiting Shenzhen. “You needed a design house. You needed software guys. You needed hardware design. But now, a company with five guys can do it. Within 100 miles of here, you can find all your suppliers.”

Technological advances have allowed hundreds of small Chinese companies, some with as few as 10 employees, to churn out what are known here as shanzhai, or black market, cellphones, often for as little as $20 apiece.


Hacking Music"Talking gross numbers that come directly to the band, we have made more money already than we have on the last record in four years," said Mathieu Drouin, the band's co-manager. "Without any intermediary, we're making 77 cents on the dollar for every record we sell" on iTunes. Under a label deal, based on Drouin's estimate, Metric would have earned closer to 22 cents.

Metric also took a page from album rollouts employed by much bigger artists such as Radiohead and Nine Inch Nails. In addition, fans could purchase the album directly from Metric's own site (www.ilovemetric.com), which sold "Fantasies" at five price points, ranging from an $8.99 album download -- with an extra track not available on iTunes -- to a $64.99 "deluxe" package that included autographs, artwork and invitations to exclusive performances.


Hacking Legal
Today, Wilson Sonsini announced the launch of a "term sheet generator." It's basically a web tool that creates draft preferred financing term sheets for startups...So I think this is a brilliant step toward "open source law" which I've been advocating for a while. ....What this tool really wants to evolve to is having an open, wiki-style back end where practitioners can change and comment on the myriad of options and verbiage which would keep the tool evergreen based on the best crowdsourced legal opinions.


Hacking University
An Israeli entrepreneur with decades of experience in international education plans to start the first global, tuition-free Internet university, a nonprofit venture he has named the University of the People....“The open-source courseware is there, from universities that have put their courses online, available to the public, free,” Mr. Reshef said. “We know that online peer-to-peer teaching works. Putting it all together, we can make a free university for students all over the world, anyone who speaks English and has an Internet connection.”

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What I have learned from StockTwits

My previous post has briefly mention how StockTwits is pioneering a powerful new community model. There are actually more learning points to that. I want to share what I have observed from using the service and looking at its growth and strategies. StockTwits is pioneering something important and we can all learn from it.

Leveraging on abundance of content but scarcity in wisdom
Stocktwits has very smartly avoided being another platform for content production. We have already too much of that. What we need and what StockTwits has provided is wisdom. They have used a very elegant tagging system to intelligently filter content from Twitter.

Letting business model 'happen'
The blogging platform it has created lets the talent have a stage to do their thing. (Note: this platform is different from other content producing platforms because of the quality of the bloggers). Where the money will come from is not too certain. They may come from subscriptions, advertisements, sponsorships or some new models etc. That is not important. The critical thing here is to let things happen. Let the people at the edge create the models. Key question is how to bring the edge back to the core?
More efficient model for talent identification
What StockTwits is doing in terms of identifying and promoting talent is not new. Publishers and music labels have been doing that for a while i.e. signing up artists. What is revolutionary is the low cost and bottoms up model they have deployed. This has effectively stripped out the inefficiencies as well as the risk of talent spotting.


I really liked how the StockTwits model works. I think it has potentially to be used in many other verticals, of which healthcare is one possibility. I am sure there are other things we can learn. Why not share them in the comments?

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Interactions that can enrich our social networks

Continuing from my previous post, I want to be sharper in drawing out the opportunities in social networks. More specifically, I want to suggest some possible interactions that have missing in many of the current social networks that we see.

The current way we conduct commerce is very inefficient. One of the contributors is the amount of resources we spent on blind advertising. Social networks can replace the inefficiencies by becoming a powerful referral network that recommends the right products and services for their communities, taking into account the members' context. It can potentially transform commerce and become the default way we buy and consumer stuff. That is the true potential of social networks.

To accomplish that, we need richer interactions that goes beyond what our current social networks offer. We need to learn from offline communities about the institutional innovations they have put in place that grows and strengthens communities. Below is a list of initial thoughts on what kinds of richer interactions are needed.

i) Celebrating the achievements of the community through awarding of status
Offline communities such as religion, or hobbyists groups celebrate achievements. They have rituals that celebrate new members as well as the contributions of current members to the community. We are missing all these in our current social networks. We need to be able to see and highlight members' contributions through explicit status (gold, sliver, bronse membership) that are given when they:

-bring in new members
-brought publicity to the community
-highlight false members i.e. companies trying to pass off as real people
-have a perfect record of attending every offline meeting
-bring in strategic partners that bought revenue to the community etc

ii) Marketplace
Social networks should come with a list of service providers for the community that can be ranked and compared. This is how social networks can become powerful referral network. A social network for startups for example should have a list of legal, rental, administrative, hosting services etc that allow members to rate and review. Similarly, a community of DIY homeowners should have a list of DIY service providers.

iii) Allowing members to reward each other
Our current way for members to reward each other is through social gestures. We can be more explicit. Why not allow a tipjar on each of the profile page so that members can give real money for the good that particular members have bought to the community? If a member has bought in 50 new guys, why can't I reward him for it by tipping him $1?

iv) Membership identifier
How can we better identify with our communities? In real world communities, we have tshirts, baseball caps etc that identify us with certain groups. Why is that missing in our social networks? The opportunity here is use virtual identifiers that can scale much more efficiently as well as create new kinds of value. Think about, for example credit cards with virtual currencies that allows members to purchase real goods and servcies.

v) Real time info on how the community is growing
People care about the communities they belong to. They want to see how it is growing, in which segments and locations, the growth of members' contributions, the total revenue generated by the community etc. Seeing growth has a motivational effect of encouraging members to be more active. However, I don't see this in many social networks. The most often used marker is the number of registered users. I think there is room for more innovations.

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Is there money in social networks?

Social networks have a very bad name. Whenever some startups open their pitch saying: we are a social network for XXX, many people would roll their eyes. I was one of those people. I thought that the social networking game has already been won. However, after reading the book "the social network business plan", I realise we may be on the blink on seeing what social network can unleash.

One of the reasons we write off social networks is the narrow perception we have of them. We have a fixed view of the kinds of interactions that social networks enabled . Typically, we are restricted to think of interactions such as friending, poking, updating profiles etc. That is too limiting.

If we expand our view to include 'social networks' such as Threadless, PatientsLikeMe etc, the scope for powerful interactions will increased. The opportunity then is to apply these interactions to new markets that required such organisations. Think of markets as radical as fighting terrorism, conducting medical research etc.

One way to spot these markets are the gross margins of current companies in that market. A high margin might suggest some form inefficiencies that the companies are using to exploit the consumers. Social networks are a way to shift the power back to consumers.

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Why social tags are more powerful than tags

I think tags started at the wrong foot. When early services like Flickr and Del.icio.us began the tagging movement, it was primary used as a organising tool. Unfortunately, it never took away. The tags were too inconsistent to be useful and you need critical mass before aggregation provides any sort of value.

Right now, I am seeing tags evolving into social tags. On Facebook, people love to tag photos which their friends have appeared in. Similarly on Twitter, people like to use the @ tag to send message, links, comments etc to their social network.

The evolution of tagging as an organisation tool to a social gesture mechanism is an important one.

As a social gesture, tagging has become more viral and people centric. Its communicative nature has open up new ways which coordination can be done. Consider the following scenario for open source development:

- Instead of photos, imagine being able to tag software codes during development to people who can help you solve particular difficulties.
-Tags can be address to multiple developers who can each contribute their time and effort to solving the problems
-Developers now have a stream of requests through this process which helps them to decide how to allocate their time
- Through this process, coordinating open source development can be more productive and targeted.

This is just some simple thought exercise. I can't see the end game yet for social tagging but I think there is a lot of potential.

Thoughts?
(Note: imagine if there is mechanism here where I can address this post to through tags (e.g. @igniter, @tdavidson), we can have more productive discussions here).

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Search, tags and follow

Organising or structuring information is a key value enabler in this age of abundance. Be it conversations, tweets, data etc, organization provides the key to efficient attention allocation. Currently, I have seen 3 scalable forms of organisations.

Search
The most commonly used form of organisation, search instantly organises information around your stated interest. However, as information increases, the cost of search is going up. Not only that, search itself is limiting in discovery and doesn't fit into our way of uncovering stuff.

Tags
Tags is different from search as it is more discovery based. Interfaces like tag clouds encourages explorations. Now, with the use of tags on Twitter becoming more and more common, we might see innovations in tags related forms of organisation. We are not done with tagging yet.

Follow
Social filters are the latest in information organisation. The breakthrough for me was the invention of 'follow' by Twitter. Before this, we can already bookmark or subscribe to people so that they can act as filters for information. This process however is cumbersome. 'Follow' provides an elegant way for people to easily select their social filters and create their personalised streams of information. What's more, the information tends to be diverse due to the human aspect of such organisation.

What is interesting is when these models are mixed and match. One example is searching through the #tags in Twitter search. That is a combination of tags and search. What other models are possible?

1) Tagging the people you follow and then searching through the people you tag to find relevant answers on particular topics

2) Follow tags from the people you are following to explore the areas they have interest in

3) Follow searches by the people you are following and bundle them with tags

4) Follow people who are searching the same terms or using the same tags


What other combinations do you see? More importantly, what other ways are there to help us organise information?

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The value of links in next generation media (continued)

Scott Karr touched a very important point about links that I failed to convey adequately: they are currencies which relevance can be determined. Without relevance, you cannot build effective distribution for next generation media because you don't know what to send who.

In my post on creating a link infrastructure to empower fans, I touch on dentralising the relevance derivation mechanism as a critical third step. Without that, it is almost impossible to build a scalable distribution channel. In fact, decentralising the link creation, link distribution and relevance generation mechanisms are ways to send money back from Google to the people who deserves it: the creatives, the fans etc.

Strangely enough, this is exactly the same point Umair Haque made four years ago when he states that free culture is subsidising Google. However, at that time, pieces were not in place to build a next generation distribution play that is based on links and are geared towards bringing value back to the creative folks. I think now is the time and whoever gets there first has a shot of building something really powerful.

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4 ideas for empowering fans

The most effective web API is still the link. Simple and powerful

This summarises very nicely what I have written about the importance of links to next generation web. It is the most simple and most wide spread API that majority of Web users knows how to use. With such wide penetration, isn't it time for us to fully extend its capabilities?

One of the most fruitful areas is to enable links as the foundation of which to rethink fans from consumers to distributors, empower fans to spread AND sell content, viral marketing AND viral distribution.

How shall we begin? These are my 4 principles that I am thinking about:

We need a tumblr for media links
Tumblr made posting different media a breeze. Be it image, videos, text etc, they made it dead simple to post and more importantly, to turn up beautiful. We need the same thing for links. A bit.ly that has different tabs to accommodate different media types. The functions of each link can then be different. This is to create the most effective links that leverages on each media's unique characteristics.

We need to make such a service widely distributed
Once we have figure out how to do the above, we need to turn this service into a dumb pipe. Let anyone be able to tap into the service and built different interfaces for different platforms, be it blogs, social networks, mobile applications et al.

We need to decentralise the organising principles
Beyond enabling link creation and distribution, we need to enable consumers to employ some organising principles to better allocate the attention of their social network. These principles must surface the most relevant and interesting links. If we can allow users to decide how to surface these recommendations, then we are in effect creating masses of attention allocators as well.

We need to ride the collaboration curve
With a distributed network of fans in place, the final thing to consider is how to upgrade of the entire network so that each fan becomes better at what he/she does. This is the collaboration curve that John Hagel and company talked about. Corporating this into the network is what will scale the entire model to new heights.

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Empowering creative talent in next generation media

I have been talking about next generation media for the past 2 posts. I want to conclude by saying how we can leverage on these important changes to empower creative talent (i.e. the musicians, the photographers, the artists, the authors etc). In this, I want to draw reference to a powerful article on Nine Inch Nails (hat tip to Ethan Bauley) that has illuminated how media will evolve but also raised some important issues.


Value capture for creative talent is still a challenge: he sold 250,000 numbered copies of the CD. The album is also available on iTunes for $9.90.

Most of the innovations we have seen and discussed on the Web are on the value creation side. This is important because without value creation, there is no basis for growth. However, at some point, we need to talk about value capture as well. Even Google needs to capture some (not all!) of the value it has created. However, this is very elusive for next generation media.

NIN has innovated for its fans and as a result, has successful created lots of new value. However, in the value capture side, the innovations are far less impressive. The article mentions CD and iTune sales, as well as concerts. All these are traditional ways of capturing value. How we invent new ways of doing so? One possibility is to rethink the ecosystem of creative talent and their fans.


Fans are critical value enablers: users could tag items on Flickr and YouTube and have them pop up on NIN.com, where other users will find them neatly ordered and ready for viewing

Fans are your natural viral distributors but they can go beyond that. It is time to think about how to elevate your community to truly power the businesses of creative talent. We need to go further than allowing fans to share, to remix stuff, to moderate community etc. We need to create new organisation models that allow the most passion fans to be part of the creative talent's business ecosystem.

Each creative talent and all their assets, be it music, books, images etc are markets whereby fans can innovate on. Think about software marketplaces like App Store but apply it to creative talents. How do you design insitiutional rules that allow any fan to be a manager, a promoter, a merchandiser, a radio station etc and profit from your talent and creative outputs?

It is only by recognising that value capture needs to be done at the ecosystem level than can we reimagine new business models for creative talent in next generation media. This is just a thought. I look forward to hearing your comments and views.

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