Blogs and collaborative development

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As a postscript to the previous story, have a look at this article on using blogs in software development. Among others, Mitch Kapor of Lotus 1-2-3 fame is using blogs to get input not only from developers but also users. This is an example of the concept of distributed innovation I write about in Living Networks. One of my favorite illustrations of this is IBM’s alphaWorks unit, that makes early-development code fresh from its R&D labs available for all-comers in order to get their input into the development process. Both of these can be considered commercial variations on the open source software model. They provide a framework to allow varied and distributed input into the development process. Blogs are just one tool that can enable this kind of process.

More on the business of blogging…

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There’s a good article on the business of blogging in the Guardian. AOL will offer blogging to its users, which is just part of the process of making this truly mainstream. Every time I speak I ask how many people have heard of blogs. For most audiences – even ones that you think would be well familiar with the idea – it’s well less than half. I’m doing my bit in my media and speaking to spread the word. To repeat what I’ve written before, the single most important aspect of blogs is that they enable collaborative filtering, in which the most useful and relevant information emerges from the information universe in which we live.

The Guardian article also talks about how Andrew Sullivan scored $79,000…

…from his readers in his “pledge week”, and how BlogAds is enabling bloggers to make money from ads. This is too much like dot-com thinking. Only a handful will make more than enough to buy a round of beers.

Earlier in the week, when I was making an in-house presentation at a large financial services firm, someone asked whether blogs could be used for collaboration and knowledge sharing. Yes, indeed, K-logs (knowledge logs) are being used as a knowledge management tool by firms like Verizon. (see for example this list of K-log links and Business 2.0’s Blogging for Dollars). However the culture in the organization needs to be right for this to work. This would fall flat in its face in many companies; a knowledge culture would need to be reasonably well developed for k-logs to work well.

If you’ve read this far, love to get your thoughts, comments, or other links. Click on the “Post Comment” button at the bottom of this page and you’re away! Ross.

The changing world of librarians

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I’m at the Information Online conference in Sydney, where I gave a keynote this morning. The conference is primarily populated by librarians. In sitting in on some of the sessions and speaking to attendees, one of the interesting dynamics emerging is how the democratization of information searching – through Google and more – means librarians must shift up in how they add value. Many spend much of their time using specialist databases (with 110 exhibitors pusing their wares here), and clearly can play an important role in finding, filtering, and customising information, but they find it difficult to sell their importance to their senior business or government bosses.

Layoffs are rife in business libraries and information centers, with these kinds of services easy targets in cost-cutting. One of my key messages to this community was how they can and must contribute to creating a global information architecture that enables collaborative filtering. The vast majority of Internet users only look, and don’t contribute. If information professionals and others can make it easy for people to input what they find valuable, and for others to tap into that consolidated input, this will help support the emergence of the “global brain” in which we can draw on each others’ perspectives, rather than face the information jungle alone. Blogs are critical in the creation of this infrastructure. The simple act of providing a link changes the shape of the Internet, influences Google and Blogdex results, and allows others to find more easily what you think is worthwhile. We all must participate, not just observe.

Preserving the end-to-end networks

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Living Networks is about leadership in the networks. Lawrence Lessig is one of the true leaders today in realizing the true potential of the networks for all of us. In this article in the FT he gives a brief view of the underlying “end-to-end” architecture of the Internet, and why it must be preserved. He goes into this issue in far more depth in his book The Future of Ideas, a rich and marvellous exploration of how the architecture of the networks – in the broadest sense – will determine our ability to create by building on each others’ ideas. This is a good place to give another plug for Lessig’s fantastic Creative Commons project, which gives people access to customized licenses. It is the fluidity of intellectual property in all forms which will determine how fast innovation moves. Creative Commons specifically creates far more flexibility and fluidity in what is now a far-too-rigid intellectual property landscape

The decentralization of the networks

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The recent Supernova Conference in Palo Alto explored the theme of decentralization – of the networks, software, communications, and media. So many of the attendees were bloggers that it’s easy to get a good feel for the conference and content through what they wrote. As attendees reported, the clicking of keyboards throughout conference sessions testified to the live logging of ideas and impressions. The conference set up a group weblog, with another list of conference blogs here. Salon.com also had a good article. In many ways, the theme of decentralization is that of the living networks. Emergent behaviours come from the unstructured combination of many participants. Open source software, distributed innovation, and peer-to-peer content distribution are just some of the examples. One of the key issues discussed at the conference was the postulated emerging “end-to-end” nature of networks. Connectivity – the pipes provided by telcos – will be dumb, and the value-added activities provided at the ends. Web services can be applied not just in application integration, but to making everyone’s touchpoint to the networks encapsulate highly customized functionality.

Creating the transparent corporation

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Aaargh! Being on the road means I’m getting stimulated by lots of very interesting stuff, but it’s hard to find a moment free to blog it. I’ll try to get a few things down… Last week I got dragged in at the last moment as a pinch-hitter to speak at the KMWorld (Knowledge Management) conference, the largest in the field in the US, in San Jose. It was in the “ROI and Measuring Value” stream, which is not what I spent most of my time on, so I decided to title my talk “A Financial Markets Perspective on Intellectual Capital”. The KM crowd don’t tend to get exposed to finanial markets thinking much, so it’s worth giving some insight into how investors view non-financial or intangible indicators. The story in a nutshell is that it has become increasingly obvious that non-financial indicators are vital in getting an accurate picture of the value of a company. Employee turnover and changes in customer loyalty are just two examples of a myriad of things that investors would very likely want to know, but don’t get told.

Over the last 10 years many have attempted to build models that take into account these intangible indicators. After spending a lot of time several years ago looking closely at these issues, and talking with the top people in the field, I came to the conclusion that there was no simple answer. The heart of the issue is that investors use different valuation models—that is they assess the value of intangibles differently. That’s what makes a market. Steven Wallman, who was then SEC commissioner and now runs the very interesting customized mutual fund service foliofn, stated it clearly. Currently financial reports aggregate all of the vast amount of information inside a company. What is required is a shift to disaggregation of that information, so it is all available to everyone, who can then choose to aggregate it into the financial models of their choice. We have yet to see whether companies, large investors, or regulators will drive this shift, but 10 years is the sort of timeframe we have to expect for it to happen. What could help accelerate this dramatically is XBRL (eXtensible Business Reporting Language), which is an XML-based standard for financial reporting that I discuss in Living Networks. This makes it very easy for analysts to take financial information into their own models. A recent study showed that analysts accounted for stock options in reports more accurately if they were presented in XBRL format rather than in a PDF. The beauty of XBRL is that it is extensible, so it can easily be used to report on non-financial indicators as well as financial ones. XBRL offers the promise of disaggregating information flows in company reporting. Investors will be far better informed, and be able to make decisions based on what is actually happening in the company. Earlier this week I met the executives at the American Institute of CPAs who are driving XBRL. They believe it will be far harder for the Enrons of this world to get away with what they did in an XBRL world. Companies will be far more transparent. And a little further down the track, we will shift to real-time reporting, when you can see what is happening in a company as it happens rather than two months after the end of the quarter. It’s hard to exaggerate the potential impact on how business is done. I will post my slides from my KMWorld presentation in the next couple of weeks, with a link from this article.

Participate in this blog!

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This blog has become participative! You can now add your own comments and thoughts to any article, and rate the comments made by other visitors. There will also be reader polls. The system is based on the open-source software PHP-Nuke, a fine example of users collaborating to create the software they want. Anyone can use and adapt it to their own purposes. One of the features I most wanted on this blog was the ability to rate each other comments. This is a fabulous example of “collaborative filtering”, which is a central theme of the living networks. This is marvellously illustrated by the seminal Slashdot site, where much of the value is being able to sort through and access the comments made and adjudicated by an extremely sophisticated community. I hope and expect that many very smart people will be visiting this blog, so please do contribute your thoughts! Slashdot and its foundational principles are well known to the self-confessed “nerd” community. My intention is to make these ideas more broadly known to the business community and beyond. Please join in the fun! Special thanks to Rodney de Pater for implementing the system – a fine job!

Patent madness

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“Watch your step: If you’ve ever exercised your cat by having it chase the reflected spot of a laser pointer, you and kitty may be in violation of a bona fide U.S. patent. Don’t believe it? Take a gander at Patent No. 5,443,036, Method of Exercising a Cat, issued by the U.S. Patent and Trademark Office in 1995.” writes Lauren Weinstein in Wired News. Weinstein, like many others, points out how crazy the patent process is, and how it often dampens innovation. Indeed, the heart of the issue is the quality of the work of the US Patent and Trademark Office and its peers around the world. If they only grant focused and relevant patents, the problem would be minimized. Patent examiners get an average of 20 hours to review a patent, which is now often 30-40 pages long itself, and usually requires reviewing 50 or more articles. For example for complex biotechnology patents–applications for which are growing at 24% per year–this is insufficient.

In Living Networks I describe how when President George W. opened the way for federally funded research into stem cells, it came to light that a quiet biotech firm called Geron held patents that covered almost all embyonic cell lines existing at the time, as well as the methods to produce them. So in principle they own the results of almost any future research in the field. The USPTO’s attitude has been to grant patents easily and let them sort it out in the courts, but this means engaging in the intellectual property field requires substantial funds, and creates a domain in which intellectual property is blocked rather than allowed to flow freely. It’s easy to say patent processes must change. It’s harder to do. One thing that would help is if Congress would give back the $90 million it has taken away from the USPTO’s budget for each of the last three years.

Technology enables personal creativity

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Creative people now have far more choices about how to market what they produce. The New York Times yesterday reported about authors who have successfully self-published. One author, for just $99, had her book laid-out in a print-on-demand format, and on the basis of its succes shortly after got a large advance from a publisher. Another established author chose to self-publish a book that subsequently reached #1 on Amazon.com. As the article goes to pains to point out, these are the exceptions. Very few self-published books are more than moderately successful. However these new channels for distributing intellectual property (with parallels in music, art, design etc.) open up possibilities. In the chapter in Living Networks titled “Liberating Individuals” I described the generic model for distributing personal creative content.

In the first stage, people use digital distribution to attract attention and demonstrate to publishers (labels, distributors etc.) that they can generate an audience. They then achieve the peak of their career with major publishers, but subsequently go back to self-publishing in order to take a larger part of the rewards. The authors above are respectively at the early and late stages of this cycle. Many aging rock stars, like David Bowie and Todd Rundgren, are distributing direct to take more of the rewards than music labels would usually give them. One of the most important dynamics of this emerging model is simply how much content becomes available as everyone can market themselves directly. The publishers and labels do play a role of filtering that is useful, but they overplay their importance. Collaborative filtering, which helps us collectively to sort through what is out there and identify the best, will be at the heart of information flow moving forward. More anon

Profiting from peer-to-peer file sharing

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Lion’s Gate, an independent film producer, is promoting its forthcoming film Rules of Attraction on the peer-to-peer (P2P) file sharing system KaZaa, as reported in this LA Times article (free registration required) . In Living Networks I noted how Capitol Records – part of EMI – had used the feared and hated P2P system Aimster to promote Radiohead’s Kid A. Content firms will find it very hard to succeed unless they get their wares flowing freely through the networks, as just a few are starting to realize. Other major movie and music companies are suing Kazaa. Interestingly, Microsoft is picking up the tab for the P2P promotion campaign, presumably to help promote Windows Media. In a related article, Wharton professor Peter Fader says “record companies are shooting themselves in the foot” by trying to stamp out peer-to-peer file sharing. A fine balance, or rather integration of protection and promotion is required, but they are definitely pursuing sub-optimal strategies at the moment.