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I was at a meeting of secular humanists the other day. There were about 45 people in the room when the organizer asked “who discovered the meeting from meetup.com”. 15 people raised their hand. 1/3 of the audience, and the group has been active elsewhere on the web for years. This was not a group of techies or hackers, these were ordinary people with a common passion.

Over the last few months I have been increasingly considering web properties in relation to reality, instead of other places on the web. thefacebook.com (that’s what it was called back then) was the first web service that really changed the way I lived my day-to-day life. I was just beginning my first year at McGill when it arrived. It hit 90% penetration, at least within my rez hall, within a month. This was long before the news feed, the mobile version, beacon, or even photos - but it was still a big deal. Facebook wasn’t like my abstract experiences on IRC, Usenet or ICQ. It wasn’t like AIM or MSN, which merely replaced a phone call or SMS; this was the beginning of an augmented reality. These were real events that I could go to, and they existed in parallel between Facebook and my life. Technologist might argue that this was a minor, evolutionary, turning point. It wasn’t for me.

Fast forward four years and my life involves a constant flow of Tweets and Whrrl check-ins, GPS lookups and iPhone Google searches. It seems fitting that the telephone, the first virtual reality invention (the telephone), should continue to fill this role (albeit in a much sexier iPhone 3G form). The mobile phone is increasingly becoming a lens to capture, and contextualize, reality.

The web no longer exists for the web’s sake. Solving a problem created by the web is now a short-term, unambitious, vision. Changing the way we experience reality is a loftier, and more rewarding, aim for a new breed of social services.

Meetup is fantastic example of this new type of service. There are many online services that are in the ‘events’ space; however, they all share two constraints: they rely on mirroring events already existing in the real world (Upcoming, Eventful, etc.) or they rely on having people already know the organizer (any eVite service). Meetup is unique because it adds a third element; a cause. People who are passionate about something, whether it be photography, fringe politics, or transhumanism, can join together and form new networks to enact change. It is what Clay Shirky describes as the highest order type of online activity: “Collective Action”. In the same talk, Shirky describes this as the most difficult form of online community to create because it requires an unparalleled level of commitment from its members.

“We keep all kinds of paper in the house,” drawled J, “we have photo paper, note paper, just some plain white paper.” The house smelled of rotten food; the conversation barely audible through the din of Family Guy in the background. The two men sitting in their living room looked like they hadn’t slept in weeks. I glanced at their arms for track marks, then up to their lips for the trademark crack/meth burns. None. I was shocked.

“So, how much are the utilities?” I asked.

“I like to buy the extra thick paper for inkjets, makes everything look purdy.” If J wasn’t a junkie, there certainly had to be something else, very, wrong with him.

“How long have you been living here?” I inquired, out of posterity.

“We keep some note pads in the office…”

“I have to go now.”

There has to be a better way to find a roommate, I thought.

There are

If craigslist was an accurate sample of the city of Seattle, the sanitariums would be overflowing; the economy would have ground to a halt long ago. Ordinary people can’t all be like the ~30 I’ve met on my search for a roommate or we, as a society, are doomed. There have been houses with livestock, crumbling walls, heroin addicts, as well as the usual kinds of bad roommates (control freaks, excessive mess, excessive cleanliness, etc). Of course, there were also a number of very kind, decent, potential roommates with whom things just didn’t quite ‘click’. Finding a roommate is tricky business, but I didn’t know it would be this hard.

Craigslist is, as I have discovered, far too democratic for my tastes. Don’t get me wrong, I have tried every other roommate site available: Roommates.com, Roomster, Facebook Marketplace, NWsource classifieds, Kijiji, and a dozen smaller sites - but Craigslist has the volume. As an economist, I would conclude that the system with the lowest barriers to entry, the broadest inventory, and the lowest transaction costs would produce the best results. I would be wrong.

Craigslist has been evangelized in the tech media as a model business, run like a charity, forgoing profits for the greater benefit of its users. In the next series of posts I will form a series of arguments for how craigslist can, and should, be bested across a number of categories. I don’t imagine Craigslist will go away any time soon, it is a necessary evil, but I certainly would like to live in a world where it isn’t necessary for me.

I have been reading Umair Haque’s blog(s) for a couple of years now, and I frequently agree with him. There is, however, one meme that he repeatedly spreads and which I vehemently disagree with. Umair has discussed ad nauseum, how Facebook is evil and Microsoft-like. I don’t see it.

So, let’s break down why Facebook is ”evil“.

1) Beacon/SocialAds transfer value to Facebook, not consumers or advertisers and mostly appeal to unpopular brands trying to force messages down consumers mouths.

2) The Facebook platform is structured to create adverse selection

3) That they are tricking platform developers into investing time into a structure with no/little present value

4) That they are trying too hard to “monetize” their users and/or lock them in

They’ve certainly made many mistakes that fall outside of these areas, but those are mostly amateurish, not strategic.

Response:

1) First of all, while Facebook completely dropped the ball for the first month of Beacon, and still have some unanswered data retention questions (so does Google, btw), the program is delivering all kinds of value to users and advertisers.

Beacon items are generally as interesting or relevant as any other news feed item, perhaps more so. The person is voting with their walllet or their time. Someone’s profile might say their favourite film was Citizen Kane yet they rent Big Mamma’s House II. That’s interesting information. Direct (one-to-one) recommendations are the only thing more powerful than these broadcast endorsements, but lack viral loop potential. Let’s also remember that users derive value from feeling “influential” in their circle of friends. Beacon is great for that.

Umair is right about Blockbuster not being a brand people luv, but they do have movies people love. Beacon allows Blockbuster to share people’s passion for movies, without having to take any extra steps. A similar business model to beacon is also being pursued by FriendFeed. Why? Because endorsements are powerful and can be made implicitly.

2) Sure, competition from Facebook creates some adverse selection for top applications. That seems to be unavoidable, though, as Facebook cannot commit to features it will/won’t develop years into the future without destroying their own potential innovation. The true test of good/evil is if their crackdowns are good/bad for developers and users as a whole. I think the answer is a resounding yes. The platform has no value if it is filled with spam, Facebook is a trust based economy. Many individual developers may complain about rule changes that hurt them (just like the outcry every time Google changes their algorithm to squash link farmers), but this is positive selection as the developers who are hurt worst are the spammiest. Their switch to tracking Daily Users was also a move towards positive selection. This seems to point to the changes being a net positive for users too, who are seeing less Zombie invites than when the platform launched.

3) Isn’t this how business models happen? By letting competitors in before you completely dominate a market. By allowing terms of service to evolve to meet changing needs/use cases. By allowing a thousand flowers to bloom, and not charging anything for a developer kit.

4) Of course the Microsoft ad deal is a vestige of old strategy, and bad strategy at that. I’m surprised anyone clicks on them at all. Every Facebook employee must look at the low-CPM matchmaker/SMS ripoff ads and shudder, but it pays their salary until they figure out a better way to monetize social networks.

Facebook’s prbolem is actually that they have become almost too revolutionary and given away the farm. The price of a sponsored group went from 300K/quarter to 0 when they released Pages. The (free) Beacon message is the most valuable part of the program, the part that they are selling (the ad underneath) is the least valuable. That’s not good for Facebook, but it isn’t evil either (so long as the ad is suitably relevant).

That tackles monetization, what about lock-in?

Facebook’s APIs are wildly under-publicized and under-utilized. The APIs have been around since 2006, before they were so fashionable and allow for much of Facebook’s data to be exported in a secure fashion. The APIs are not a symbolic gesture or a pyrrhic victory for openness - they have been revised and improved a number of times since their launch. The main reason Facebook isn’t more open is security. I am yet to see a model for data portability that is secure enough that I would want to try it out on 60m+ users. I would rather have my credit card number published to the web than my Facebook private messaging history.

Even more dangerous than data leaks is the potential for their viral distribution platform to turn into a ‘virus distribution platform’. They have a distribution mechanism that can scale at a before unknown pace and that currently holds far more trust with its users than email has ever had. Just look at iLike’s first week application growth numbers again: there are exponential curves like that all over the f8 platform. A Facebook transmitted virus, spreading at that rate, would destroy the trust that they are trying so desperately hard to retain, not to mention do real economic damage.

So, to sum up this incredibly long post: I’m happy that Facebook is a little closed and I’m disappointed that Umair went through such great leaps of logic to slam them. I’ll take security over strategy any day of the week.

I like Youtube as much as anyone, but a competitor to television it is not. Aside from the pirated content and a few diamonds in the rough online video is not ready for prime time. Sure, the production values are much closer to Public Access than HBO. Sure, the video quality sucks. The problem, however, goes much deeper than those techical issues. The creative process has not caught up with the distribution mechanism. Now that anyone ‘can’ create content, it’s time to decide who ’should’.

This list is adapted from a talk I gave at BarCamp Montreal 2007.
1. Start with a script. That is the big one. What would Saturday Night Live be without a room of 16 writers bouncing ideas off of each other all day? What could it be if there were 1600 writers? 16 000? Once a video goes up on the web, it’s pretty difficult to change anything. Scripts can be tweaked, edited, rewritten, or scrapped within seconds. The web is the best focus group in the world, so why are we only using it to judge finished products?
2.  Stop focusing on consumption. If half the energy that was spent on distribution and recommendation on the web was turned towards letting people be creative together, we would end up with far more interesting content to watch.  Companies like Cambrian House and Kluster do a great job of helping people join together to start businesses, and Basecamp lets teams work together. Where is the version of this software designed to maximize creativity, not productivity.
3.  Incentives matter. Incentives are at the heart of any economy, yet very little attention is paid to how they should be structured for the web. Should they be granular or all-or-nothing? Should they be easy or difficult? Carrots or sticks? Occasionally this becomes a topic of discussion on the web, but it is far more important than REST vs SOAP APIs, another social media funding round, or just about anything on Valleywag.

I had the pleasure of seeing a lecture by one of my favourite economists/authors, Bjorn Lomborg. Of all the people who call themselves environmentalists, I think Bjorn has the most rational and level-headed view on climate change. He doesn’t argue that global warming is a hoax as some people do. Instead, he takes a pragmatic look at what the problem means to humans. If you break it down, it can be more accurately viewed as a bunch of smaller, and fixable, problems. As any good economist would, he backs up his statements with plenty of  data that I think Mr. Gore would find quite inconvenient.

Through cost/benefit analysis it becomes quite apparent that the problem has been overstated, and that there are many less costly solutions than CO2 reduction.Here’s a fun example: did you know that if the temperature rose enough to kill an extra 2000 people per year from heat exposure, 20 000 people would be saved from freezing to death. There’s a whole lot more data just like that. Don’t believe me? Buy his book and let me know what you think.

The takeaway message from the lecture was simple: when people make a decision with a gun to their head, it is very rarely a good decision. A quick look through a newspaper, magazine, or film will demonstrate that this is exactly what is going on. People are being sold on the urgency of the Kyoto protocol because of fear, not compassion.If you really wanted to save lives, the best way to do that is not to take hundreds of billions of dollars out of the global economy. It’s to make sure that there is enough money out there to invest in solutions to todays problems, and tomorrow’s.