Often we say when we are making decisions that we need ‘more’ information.  As Clay Shirky said in something I watched once: it’s not about more information, it’s about better filtering.  I think it’s about better perspectives, ideas and concepts.  Yes that probably is more information but it’s filtered, tailored and well suited to your problem.  Sometimes more information leads to confusion and this isn’t helpful.

What then?

More perspectives?  How about better ideas?  Why keep digging the metaphorical hole in the same place… try something else.  Get somebody from outside the problem to come in and have a look.  Quite often they will frame it in way you don’t expect.  Sometimes we are coming from the completely wrong angle… this isn’t at all helpful either.

In the long run I suppose it would be easier to say that having more information would justify the amount of weight we put on the top of a organisation.  Ultimately though, most of the time, better ideas will do.  Wherever you can find them.

I have been following the free content debate for a while and have previously discussed the issues with it here.  I am particularly struck with the idea of new business models.  A lot of the discussion was how the internet ‘levels’ the playing field.  While I think in theory this may be true, in practice it isn’t.  A better way of saying this would be: the internet could level the playing field.  Here’s where the challenge lies:

1. People only buy ‘popular’ media online.

I think the idea of the Long Tail has promise.  In fact I have it in my lectures.  You could argue that the internet is another culture with it’s own ideas on what the mainstream is, what the 80-20 rule constitutes and what they like.  The mainstream internet, things that grow to popularity on the internet, should be considered in context as being part of internet culture.   You can’t compare what becomes popular on the internet to what is considered popular on television for one very good reason.  They are two completely different mediums.  This becomes obvious when you look at how poorly the transition to the internet fiction has had.  It’s still stagnant, backwater or very very obscure.  That is internet culture. A question for artists, business people and the like is: how do internet cultures buy and sell?  How do I tell a story on the internet and support myself as an artist without losing heart?  The long tail explains the possibilities but doesn’t give us the pragmatics.

And this is my biggest problem with the ideas of internet business models.  It’s still geared towards the mainstream, just a different one: internet culture mainstream.  We have heard the mantra connect with fans and give them a reason to buy yet how do we find fans with no money?  What if you are selling something that’s unappealing to internet culture?  Then what?  This is what we need to learn.  And I am not saying that there is no long tail effect there is, my point: How much of that is simply because the internet contains so many interlocking cultures?  Can you compare the apples (TV) with oranges (internet)?  Probably but the shape, tastes and sizes of markets are completely different.   We need to look at it differently.

2. The internet could level the playing field but you have to realise it’s another field altogether

My second and final point is that the internet creates the potential for disintermediated content to become popular because it’s the internet.  Something that’s popular on television may or may not become popular on the internet.  We really need to spend more time looking at internet trends and usage before we can make the claim that it levels out the playing field.

We need new business concepts not just models

I think a way forward for internet business ideas is good quality research.  In the days of e-commerce all we had was Michael Porter on the internet.  What we need is better thinking.   I am personally hoping for this but seeing precious little more than the free culture versus copyright debate.  New ideas not the same old crap.

*Note: I am not sure this makes sense.  I am absent of mind at the moment.  Feel free to comment (constructively).

I recently got this from my ‘online fiction’ Google alert.  The first thing that sprang to mind is that EA is losing money and I was seriously questioning myself and the world I live in.  These people are the staples on the gaming industry.  Then I paused, collected my thoughts and wrote this sentence.

EA games are losing money.

Think about it.  That is a big statement.  So what are they doing to fix it:

1. Downsizing

2. Bringing out fewer games (my favourite Cricket game was one of these that suffered at the hands of this ‘downturn’.

Two things I would have thought are drastic measures for such a big player.  Why do companies downsize in a downturn?  Instead of thinking up new ideas and using the talent you have to innovate to recover lost profits, you decide to get rid of people?  Do you know what kind of message that sends to other employees?  Bringing out less titles.  Why not bring out more on a smaller scale?  As the article says:

Instead of spending $60 on a shiny new disc, many people are playing free or cheap games online, on their mobile devices and on Facebook. They are spending a few dollars here and there to buy virtual add-ons for the games, or they are signing up for subscription-based online games.

Find new models EA!  Don’t just sit around waiting for people to decide to buy disks again.  Make new models!  You are the industry leader in games and personally speaking gave me great pleasure with your titles.  What are some ways you could release a niche game cheaply and support it with trendy new ideas around new business models?

If EA games goes under then the world will end as I know it.  Well not the world… just the fun part of it.

The recent hyperbole about free business models has gotten me more than a little excited.  I have read a great deal about it, though I still haven’t found the time to listen or read Chris Anderson’s new(ish) book.  One of the things though I have noticed that’s absent from debates about ‘free business models’ is the cost that comes with running, developing and diffusing new ideas.  There is a cost.  And that cost is value.

If you want to be a leading writer, you have to write and keep at it until you get good enough.  That will take a lot of time.  If you want to sing and be the best you can, you need to practice.  Anything that’s easy or ‘at hand’ is usually simple to learn and master.   The cost versus the benefit in that equation is something like this:

Simple thing + Low Skill = Low Benefit.

However, if we raise the barrier it should look like this:

Hard thing + hard skill = High Benefit.

However, there is something missing from that equation and it’s this:

Value + Hard thing + Hard Skill = High Benefit.

You could say it this way, the more value increases the higher the cost to you and to your consumers, students, partners, chickens and whatever other relevant category you would to shove in here.

Now I have added another cost to the learning of a skill that has been overlooked.  The free business model idea hinges on value, as do most other ideas.  Without value you can work as hard as you like at giving things away and it won’t matter a damn.   If we take a poorly written book or a bad movie and say, ‘I don’t know how anyone can like that’, the answer is value.

So what is the cost associated with value?

Here’s a short thought:

Problems can only be practically solved because of the things we take to practically restrict their solving them.  People often blame politics, the environment, marketing, accounting but the biggest issue is what’s feasible or practical to do, given the known constraints.  There is a big difference between assumption and actual barrier, yet the actual barriers can be nothing else but thought in the beginning even though it may actually be a real issue that would hinder the problem solving effort.   Thinking, as someone said (sorry), doesn’t make it so.   The truth may be what happens after we do something, not sure about that; yet there is a level of pragmatism that always drives decision making in business.  We can’t do this because of that and we can’t do that because of this.   We need to think through these barriers carefully to see if they are real or a matter of our discourse.

One example happened to me years ago when I tried my hand at business.  We kept making decisions because ‘we had to’ and over a period of time the direction I blissfully steered the business to failed.  Each decision was thought out, reasoned over, implemented with an eye to improvement.  Yet as complexity unfolded, new ideas emerged which reset my decision parameters and modified my heuristics, I realised I was playing a fools game.  There was no ‘right’ answer, only what was feasible and known to me at the time and with the resources that I had to use.    Horst Rittel and Melvin Webber talked about this years ago, yet in all the work I have done, I have seen little progress in this regard.  Complexity is a bitch. Scholars like the late Herbert Simon called it decision making under ambiguity, what decisions are made that don’t contain that?  Tell me if you know.

The hidden tiger of decision making and complex problem solving is complexity.  It laughs at us when we confront it with our ideas, and changes shape the minute we make a choice.  What’s known becomes unknown and what seemed ‘right’ becomes not right after the action has been taken.  Is the truth something that happens to an idea as William James said?  Maybe.  Perhaps the truth is not just what happens to the idea but the reasons why it didn’t work in the first place.  It is elusive, nevertheless.

Previously in this series I have talked about engagement and other important things to do with hits and misses.  What I want to finish this on is the problem of timing in hits and misses or what I call the Cutthroat Island problem.  So what is this problem?

The idea basically is that to have a ‘hit’ you must understand timing.  Books like the Tipping Point go a long way to explaining the ‘how’ but leave out a very important ‘why’.  The best example I have found of this kind of resonance is Cutthroat Island.  It actually bankrupted an organisation yet it was about pirates, adventure and has since proven to be a winning formula.   What went wrong?  Timing for one and before you start and say what most people say when a box office hit FAILS, no the movie wasn’t all that bad either.  A lot of people didn’t go to see it, which is why it’s a timing problem.

When timing fails so does everything else.  You can be first to market, as I was, with ideas that are now being taken up and sure it makes you pull your hair out and still fail miserably.  Why?  People aren’t ready they haven’t developed the need for it and the cycle of innovation hasn’t reached it peak.  I call to memory Kindle versus the Rocket E-Book reader and others.  You can argue that it’s the technology or the framework, which it may be, but it my mind it’s timing.

The best example I have found of this is e-learning.  Years ago (1996) we were told that the ‘internet’ was going to replace formal education structures because this new technology would revolutionise education.  Thirteen years later and a recent announcement by the incumbent Vice Chancellor of University of New England states that ‘blended learning’ (e-learning pretty much) is the way of the future!  It was the way of the future in 1996!  Why is there a massive uptake of it now?  People are ready for it.  People weren’t ready for Geena Davis back then but they were very ready for Johnny Depp.

In finishing up the hits and misses series I want to say that it’s horribly complex.  A hit is often the result of pipe size and audience engagement and resonance.  It is also a matter of the right time.  How can we know if people are ready for our products?  Research?  It’s very hard to say.  It could be like Rittell and Webber argue that we will not know what works until we try or what William James said, ‘the truth is what happens to an idea’.  The truth is unpredictable, complex, ever changing and multifarious.  Yet if we study the patterns of engagement and the time in which popularity occurs we can begin to understand what a hit is and a what a miss is.  And yes we should seek to understand these things through a systemic strategic lens!

In my previous post on Hits and Misses, I talked about Pipe Size. In this post I plan on talking about ‘engagement’ and why things become popular.

Engagement

The level of excitement we feel for something and the degree of participation that it causes us due to that excitement, is what I like to call engagement.   Engagement is not purely participation, that connotes mere activity; engagement is more an emotional and social response to things that excite us because it provokes activity.  When you watch the news for example there will be a story on it at some point that grips you.  It will grab a hold of you and shake you in some way.  For me, it’s stories on the housing market.  Stories such as how there will be another boom.  It causes me to swear, rise up out of my seat, and wave two fingers at the presenter.  It engages me and causes me to engage.  The biggest reason things fail is lack of engagement.

Examples of lack of engagement

Whether it be the failing of a university program (INFORMATION SYSTEMS) or the decline in interest in television shows, the ultimate failure of any mass produced vehicle is the result of declining engagement.  Great, you say, that’s wonderful… I already knew that.   Ok smart ass, what then is the primary reason why people stop engaging?  Interest?  Probably, I believe it’s because the program in question no longer creates ‘engagement’ space for participants.   This means creating new opportunities for conversations and new examples of how to create those conversations.  A key example of this can be found in the recent movie, ‘Tenacious D: Pick of Destiny.’

The movie itself is largely for fans, herein lies the problem.  The fan base for Tenacious D probably couldn’t generate 40 million dollars worth of movie dollars. Why?  Well the movie didn’t create the engagement space for people who weren’t fans.  Watching it, I loved it because I am a fan, and I could relate to at least 60% of all the jokes on screen.  I had seen it before, I had heard the riffs that are used as cues in important parts of the movie and I was aware of the history.  If my wife watched that she would have no engagement space there because she has no idea about Tenacious D or their history.  In all honesty, Tenacious D probably should have made the movie more accessible to non-fans.   Then again, maybe they still wouldn’t have engaged because they didn’t know who they were anyway?  On the other hand maybe they can’t grow their fan base?

Another example of how to maintain an engagement or to put it simply: keep people talking, can be found in the on-going popularity of Lost.  At each turn they introduced something new, exciting and interesting, that create the engagement space for on-going conversations.  There was a point at which it did seem like Lost was, ‘everything happens for a season.’  But now, the bigger picture is being unveiled and it’s creating conversations.  This doesn’t just apply to movies either, can you do something where you work to create conversations?

Why Things Become Popular

Ok, so I don’t have a social psychology background or enough of an idea to explain why things become super popular.  Here’s what I know, for me it comes down to a few key things.

1. Creating Engagement Space (or creating conversations)

All of human kind communicate.  They share information with each other and have done for centuries.  In order to facilitate the popularity of something you need to have something that people will talk about.  This is why excellent service increases business overtime and why programs fail … it works both ways.  The concept of leverage provides a useful metaphor here.  If you have something that people want, you have leverage and provided you find a way they can talk about it, they will.  This works in the negative and the positive.  For instance, if you have a degree program that is failing the first thing to do is to find out why.  How do you find that out?  By talking at length to participants.  My first instinct is: why aren’t you spreading the word about how great we are?

Sure you might be tempted to make a whole lot of people redundant, transfer load or worst do nothing.  Find out why people aren’t talking positively about your stuff and boom I guarantee you will turn things around… if you catch it in time. Negative leverage is as easy to create as positive leverage… especially in a social network where trust, sharing and conversation abound.

2. Facilitating the conversation

You can’t control what people say but you can control what you do in order to help them say what they say.  Here’s an example: I went to sea-world last year and I wanted a coffee.  What I got was hot watery milk.  I went to Borders the other day and asked for a book (Outliers) and I already had $200 worth of books in my arms.  The lady told me it was out the back and promptly returned to doing something else.  See?  Now I have told you because Borders made it easy for me to facilitate a negative conversation.  Sure, I could just suck it up but I was amazed that they didn’t want another sale… I left after that because I didn’t want to spend any more of my faculties money!  They didn’t want me to spend my money.

3. Making the transition from conversation to action easy

William James said that the truth was something that happens to an idea.  It’s the active part.  When we go from talking about something to using it, if we find it difficult and hard to manage.  When I was in business last time this was the single flaw that stood out more than others.  What I was trying to sell wasn’t easy to use.  I could start conversations but they would always end in a bad experience for the customer.  It isn’t enough to create conversations, you have to make it easy for people to access and use what you are talking about.  Make it hard and the engagement fails and people will begin talking about alternatives.

4. Maintaining the conversation

Once we have access to the material, keep us there.  You know amazon made a fortune of it’s recommendation engine?  It nearly went broke until it realised (or they realised) that selling things to existing customers helps your bottom line.  Maintenance… simple maintenance!  Things become popular and stay there because we ‘maintain’ the conversation.  Stop doing that, yes you who don’t answer your email or respond to customer queries online… YOU, and people will talk about something else.  Keep the flow of customer interaction going.  Don’t believe me?  Go to twitter search and look for a product.  You’ll see why Dell made 3 million dollars off twitter.

5. Creating new spaces for engagement and innovating conversations

In closing this second part it’s important to look for ways to create new conversations and use those to develop innovation.  Things maintain popularity because they keep us talking and constantly create new ways for us to do so.  Without discourse and then action you have nothing.  New conversations must continue the old ones and add something interesting to the existing one.  The Lost people do this by keeping us guessing.  Others are much better at this and do it by testing the boundaries of the audience.

In the final part of my epic blog trilogy I want to talk about the ‘cutthroat island’ problem and some things that are conversation worthy don’t become popular.

The theory of the day is the long tail, a reworking of the Pareto Principle (i.e. 80% of the wealth of Italian landowners is concentrated in the hands of 20% of the people), which seeks to explain why hits and misses wind up where they do.  In real terms the idea is a useful w to explain why, in theory, 80% of all that’s consumed accounts for 20% of all products and so on.  Ironically, this is not a reflection on taste as the following video explains, it’s a reflection of the method of distribution and supply (I call it pipe size).  Yet this is not what determines a ‘hit’.  Not in my opinion.  A hit is determined by many different things… which I will talk about in a minute.

Pipe size has to do with a number of things.  We all have a certain amount of influence and as such we can distribute messages to people via our own methods of communication.  When someone in the family dies or a baby comes along, the pipes of family communication get to work and the word spreads.  Some us are more influential ’sneezers’ as Seth Godin calls them, and we can have a broader impact.  But it’s not a formula and neither is it a constant reason why.  The concept of ‘engagement’ or ‘resonance’ as someone else I know put it, explains why things are spread around.   We participate.  When this occurs on a massive scale the network gets bigger, the pipes get bigger and massive demand is generated.

The long tail works as a technical explanation quite well, that is, it explains how ‘pipe size’ and demand and supply corroborate to create ‘hits’.  Yet, it fails to adequately explain why hits occur.  This fails in the realm of the unpredictability of human ’systems’.   Human systems form groups, make meaning and do what I call ‘engage’.  William James said it this way, ‘the truth is something that happens to an idea… not the idea itself’ (that’s a paraphrase by the way).  While I don’t wish to debate the idea of what truth is, I want to touch on what James was saying in my lateral understanding of it anyway.  Why things become popular can be stated as: they become popular because we engage with it on a massive scale (big pipes), we spread it around and share it (talking –> see Tipping Point, Idea Virus), and we resonate or engage with it.   This latter concept, the idea of engagement is the most understated yet most powerful because big pipes don’t guarantee a hit, engagement does.  What level of participation do people have in an idea?  A high amount, then you have success, a low amount depending on the context you have a different kind of success, or you have a failure.

Success and failure come down to audience engagement yet we cannot ignore pipe size, marketing or methods of supply.  We have to consider these as important, yet the level of engagement, discussion and talk around a product or idea and the overall level of activity, is what propels a product to success.  This is what the publishing, music and other industries know and exploit all the time.  Consider this qoute from a well known literary Agent Donald Maas:

The fact is that roughly two-thirds of all fiction purchases are made because the customer is already familiar with the author.  In other words, readers are buying brand-name authors whose work they have already read and enjoyed.  The next biggest reason folks buy fiction is that it has been personally recommended to them by a friend, family member or bookstore employee.  That process is called word of mouth.  Savvy publishers understand its power and try to facilitate its effect with advance reading copies … samplers, first chapters circulated by email, Web sites and the like.  In most cases, someone reads a novel, gets excited about it, and tells a friend. (Taken from Writing the Breakout Novel by Donald Maas).

Now we know this and we can reliably track all success (yes I said ALL!) down to people.  You know why, everything social is social.  Wow, it took three degrees for me to work that out but it’s true.  Everything social is social.  Nothing happens without people.  We have fancy ideas such as those found on the shelves of Borders yet in reality the process of sharing information and excitement has not changed ever.   What is hard to know is what is likely to be a hit and what is likely to be a miss.  Pipe size has a lot to do with it of course.  The bigger the pipes, the bigger the exposure.  Yet, in this world of media falling apart and the growing disintermediation of media, the pipes are awfully big and the potential for sharing for word of mouth is the biggest and most responsive it has ever been thanks to the internet.   Still this is no guarantee of resonance, or engagement, big pipes don’t guarantee success

I will finish part 1 with a story on the recent television phenomenon Flash Forward.

A colleague of mine pointed me towards twitter search a while ago and sent me a link when Flash Forward was on.  I watched as real time feedback about the show, jokes and other randomness came up one tweet at a time.   I saw people saying what they liked and didn’t like about the show to their friends on the twitter (sorry couldn’t resist) and then sharing with others in other networks these thoughts.  Watching the conversations go through in real time showed me how unpredictable and different we really are, and how the idea of the long tail is relevant.   Now on to Part 2… Coming Soon: Engagement and why things become popular!

One of the cool things about teaching technology related courses is that you often get to use language that makes you seem like a mystical twat.  This twattery, gives you access on a broader scale, to language of another community.  Load Balancing, sharing the load or passing things between devices to manage data better is a common practice.  When I thought about this concept, it was an apt description of our lives in two ways.  Firstly to manage your life you need the discipline to fit in the things you need to do and the things you should be doing.  I am the worst at this.  For example, I should do a lot more exercise.  I need to make time in my schedule to allow for this load.

Secondly, you need to manage what to put into your life and what to take out.  Hmm… this is harder and involves constant challenges to us because a lot of the time what is ‘best’ for us isn’t the course of action we are likely to take.  If you know in your heart that you want to be a fireman, you aren’t studying or even finding out about what it takes to put out fires you will, at some point, have to take something out of your load to make room.  There are some givens here: family (yes the cat counts), work and spare time.  You may have no spare time.  The thing is, if you want something bad enough, you have to find at least a small amount of time to create that load.  Before you can find a foothold in your fireman career for example, you need to create a reason for people to hire you.  That takes initiative, work and connections.  You can’t do it without these things.  How does this work?  That’s another post but for this one, know that part of load balancing your life means time devoted to giving time to your desires.

We often hear about ‘work-life’ balance but what we don’t hear is ‘gift-work’ balance.  How much time do you spend developing and stretching yourself?  Much time?  You don’t have time?  What’s it worth to you?  A few hours, a few days a few minutes?  Think about it.  Do you really want it… are you prepared to learn your craft and then spend the time mastering it, even when you don’t have time or can’t find a way?  If you are serious about this gift or talent or whatever, you will not find personal satisfaction until you spend this time developing it.  If I offered money-back guarantees… this would be the one thing I would stick my neck out for.  You can’t become brilliant until you first master the art of load balancing to make room for what you need and what you want.  It’s not about balance but about development time.  No development time, no mastering of craft, no matter how talented you may be.

Despite the on-going endorsement of gurus like Seth Godin, I am still very suspicious about the internet’s ability to be a legitmate place of business.  Now, I am not saying that internet business is failure personified… no I am talking about the lack of proactivity in stopping fraud and moreover the scamming of the general public.

A key point of what I am saying can be traced to companies that thrived during the recent Acai berry and Government Grant fiasco.  I have a theory, some people will go into business with the mindset that making money is paramount… at the expense of ‘ethics’.  It can be very easy to make money online, especially if you want to go to jail (or at least it was until recently).    Here’s where I am wondering why business lacks heart… how can we knowingly sell false promises and false hope to people?  Because of the money.  What differentiates such companies from drug dealers?  I can’t think of a thing.

A common excuse you hear is this: Well I am in business to make money and what customers do with the product (or even if IT ACTUALLY WORKS) is not my problem.  I recently bought a batch of DVD’s online believing them to be genuine, alas they weren’t.  What about Ebay?  What a pathethic sham they have for customer service.  Honestly, you get the same automated email when you are robbed by a greedy dangerous powerseller that you do, when somebody sells you a phone that doesn’t work.  And don’t get me started about Paypal.  They are equally as poor and care LESS about customers than Ebay does. They simply don’t care.  Which brings me to my point:

If we are to build ’successful’ online businesses then we must do so with integrity.   If we plan to sell a service, we must support and completely believe in the product we sell.  The internet holds so much promise, yet we continue to stuff around with important things like customer service.

What can we learn from these things?  Do the opposite of Ebay and Paypal!  Actually be proactive in meeting customer needs.  Be reputable as an online company.  Foster communication, take feedback seriously and most of all: answer your dam emails when they are sent.  We are people, not items on a budget sheet.   You need to help us buy stuff from you, and no matter how much you automate it, you cannot replace human contact.

If you are in online business, please take what I am saying seriously.  Customer service has taken a bashing (especially here in Australia) in the last few years and I for one would love to see a return to better service, better feedback and overall a giant overhaul of 21st Century Business.  After all, it’s the future…. isn’t it?