FEED THE WEB FIRST – New Rules https://kk.org/newrules Just another kk.org site Wed, 12 May 2010 04:57:38 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.12 Employ Evangelists. https://kk.org/newrules/employ_evangelists/ https://kk.org/newrules/employ_evangelists/#comments Wed, 12 May 2010 04:57:38 +0000 Continue reading ]]> Economic webs are not alliances. There are often few financial ties among members of a web. An effective way of establishing standards and coordinating development is through evangelists. These are not salespeople, nor executives. Their job is simply to extend the web, to identify others with common interests and then assist in bringing them together. In the early days when Apple was a cocreator of the emerging PC web, it successfully employed evangelists to find third-party vendors to make plug-in boards, or to develop software for their machines. Go and do likewise.

]]>
https://kk.org/newrules/employ_evangelists/feed/ 1
Side with the net. https://kk.org/newrules/side_with_the_net/ https://kk.org/newrules/side_with_the_net/#comments Tue, 04 May 2010 15:24:35 +0000 Continue reading ]]> Imagine that in 1960 an elf let you in on a secret: For the next 50 years computers would shrink drastically and cheapen yearly on a predictable basis. Subsequently, whenever you needed to make a technological decision, if you had counted on the smaller and cheaper, you would have always been right. Indeed you could have performed financial miracles knowing little more than this rule. Here is today’s secret: In the coming 50 years, the net will expand and thicken yearly on a predictable basis–its value growing exponentially as it embraces more members, and its costs of transactions drop toward zero. Whenever you need to make a technological decision, if you err on the side of choosing the more connected, the more open system, the more widely linked standard, you will always be right.

]]>
https://kk.org/newrules/side_with_the_net/feed/ 2
Animate it. https://kk.org/newrules/animate_it/ Thu, 29 Apr 2010 10:32:21 +0000 Continue reading ]]> As the network economy unfolds, more firms will begin to ask themselves this question: How do we put what we do into the logic of networks? How do we prepare a product to behave with network effects? How do we “netize” our product or service? (The answer is not “put it on a web site.”) Architects, for instance, generate huge volumes of data. How can they be standardized? How can the data about a physical object (say a door) flow through or with that object? What are the fewest functions we can add to glass windows to incorporate them into networks? What steps can a contractor take to allow the networked flow of information from any architect to any contractor to any builder to any client? How do we increase the number of networks our service embraces?

]]>
Apply an embedded standard in a new territory. https://kk.org/newrules/apply_an_embedded_standard_in/ Wed, 28 Apr 2010 06:15:34 +0000 Continue reading ]]> Is there a way to accomplish what you want using existing standards and existing webs in a different context? Inventing a novel standard for an existing network is quixotic. But some of the greatest success stories in current times are about firms that master one network and then use its embedded standards to exploit an established network in need of improvement. This process is called “interfection.” The present revolution in telephony is all about zealous internet firms that are interfecting the old Bell-head world of moving voices with newly established protocols for moving data on the internet (known as internet protocols, or IP). The huge increasing returns that spin off the internet give them a great advantage. Indeed, one telephony standard after another is falling before the relentless march of IP. Likewise, aggressive companies are leveraging the established desktop standard of Windows NT–with all its plentitude effects–to interfect new domains such as telephone switching gear. Even the huge cable TV networks have something to offer. The emerging standards for video transmission, such as MPEG, are trying to migrate onto the internet. In choosing which standard to back, consider dominant standards outside your current network that could interfect your own turf.

]]>
Don’t invest in Esperanto. https://kk.org/newrules/dont_invest_in_esperanto/ Thu, 22 Apr 2010 04:05:01 +0000 No matter how superior another way of doing something is, it can’t displace an embedded standard–like English. Avoid any scheme that requires the purchase of brand new protocols when usable ones are widely adopted.

]]>
Seek the highest common denominator. https://kk.org/newrules/seek_the_highest_common_denomi/ https://kk.org/newrules/seek_the_highest_common_denomi/#comments Thu, 15 Apr 2010 04:21:38 +0000 Continue reading ]]> Because of the laws of plentitude and increasing returns, the most valuable innovations are not the ones with the highest performance, but the ones with the highest performance on the widest basis–the “highest per widest.” Feeding the web first means ignoring state-of-the-art advances, and choosing instead the highest common denominator–the highest quality that is widely accepted. One practical reason to pick the highest-per-widest techniques and technologies is because complex technologies require passionate and informed users who can share experience and context, and you want the maximum dispersion of usage that doesn’t sacrifice quality.

]]>
https://kk.org/newrules/seek_the_highest_common_denomi/feed/ 1
Maximize the value of the network. https://kk.org/newrules/maximize_the_value_of_the_netw/ https://kk.org/newrules/maximize_the_value_of_the_netw/#comments Mon, 12 Apr 2010 03:16:09 +0000 Continue reading ]]> Feed the web first. Networks are nurtured by making it as easy as possible to participate. The more diverse the players in your network–competitors, customers, associations, and critics–the better. Becoming a member should be a breeze. You want to know who your customers are, but you don’t want to make it hard for them to get to you (IDs, yes; passwords, no). You want to make it easy for your competitors to join too (all their customers could potentially be yours as well). Be open to the power of network effects: Relationships are more powerful than technical quality. Especially beware of the “not-invented-here” syndrome. The surest sign of a great network player is its willingness to let go of its own standard (especially if it is “superior”) and adopt someone’s else’s to leverage the network’s effect.

]]>
https://kk.org/newrules/maximize_the_value_of_the_netw/feed/ 1
MIT economist Paul Krugman has an alternative… https://kk.org/newrules/mit_economist_paul_krugman_has/ https://kk.org/newrules/mit_economist_paul_krugman_has/#comments Mon, 05 Apr 2010 09:52:53 +0000 Continue reading ]]> …vision of how information technology will invert the expected order. He writes: “The time may come when most tax lawyers are replaced by expert systems software, but human beings are still needed–and well paid–for such truly difficult occupations as gardening, house cleaning, and the thousands of other services that will receive an ever-growing share of our expenditure as mere consumer goods become steadily cheaper.” Actually we don’t need to wait for the future. Recently I had to hire two different freelancers. One sat in her office moving symbols around. She transcribes tape-recorded interviews and charges $25 per hour. The other is a guy who works out of his home repairing greasy kitchen appliances. He charges $50 per hour, and as far as I could tell had more business of the two. Krugman’s argument is that these “manual crafts” (as they are bound to be labeled when so high-priced) will level the salary discrepancies that now exist between high tech and low tech occupations.

My argument is that great gardeners will be high-priced not only because they are scarce and exceptions, but also because they, like everyone else, will be using technology to eliminate as much of the tedious repetitive work as possible, leaving them time to do what humans are so good at: working with the irregular and unexpected.

At the dawn of the industrial age it would have been difficult to imagine how such quintessential agrarian jobs as farming, husbandry, and forestry could become so industrialized. But that is what happened. Not just agrarian work, but just about every imaginable occupation of that period–especially menial labor–was intensely affected by industrialization. The trend was steady: The entire economy eventually became subjected to the machine.

The full-scale trend toward the network economy is equally hard to imagine, but its progression is steady. It follows a predictable pattern. The first jobs to be absorbed by the network economy are new jobs that could only exist in the new world: code hackers, cool hunters, webmasters, and Wall Street quants. Next to succumb are occupations with old goals that can be accomplished faster or better with new tools: real estate brokers, scientists, insurance actuaries, wholesalers, and anyone else who sits at a desk. Finally, the network economy engulfs all the unlikely rest–the butchers, bakers, and candlestick makers–until the entire economy is suffused by networked knowledge.
The three great currents of the network economy: vast globalization, steady dematerialization into knowledge, and deep, ubiquitous networking–these three tides are washing over all shores. Their encroachment is steady, and self-reinforcing. Their combined effect can be rendered simply: The net wins.

]]>
https://kk.org/newrules/mit_economist_paul_krugman_has/feed/ 3
The progression by which the old economy… https://kk.org/newrules/the_progression_by_which_the_o/ https://kk.org/newrules/the_progression_by_which_the_o/#comments Mon, 29 Mar 2010 04:48:49 +0000 Continue reading ]]> …migrates toward the new follows a relentless logic:

  • Increasing numbers of inert objects are animated by information networks.
  • Once the inert is touched by a network, it obeys the rules of information.
  • Networks don’t retreat; they tend to multiply into new territories.
  • Eventually all objects and transactions will run by network logic.

One is tempted to add “resistance is futile.” The overwhelming long-term trend toward universal connection may seem Borg-like, as if all things will lose their identity and become part of one large mindless swarm. Two things should be made clear: 1) constant, ubiquitous connections do not per se eliminate individuality; and 2) by “all” I mean an ongoing trend that approaches an asymptote, not a finality.

One might say that industrialization eradicated hand-crafted production to the point where all objects are machine-made. That is true by and large, and it accurately describes the destination of a trend. But the trend has a few notable exceptions. In an era of objects made completely by machines, hand-made items are a scarcity and thus command very high prices. A few–but only a few–shrewd artisans and entrepreneurs can make a living crafting items by hand, items such as bicycles, furniture, guitars, that would ordinarily be stamped out in a factory. Resistance is marginal, but profitable.

The same will be true in the networking of the economy. Resistance will not be futile. In a world of ubiquitous connection, where everything is connected to everything else, scarce will be the person not connected at all, or the company not pushing ideas and intangibles. If these mavericks are able to interface with the networked economy without losing their distinctivness or value, then they will be sought out, and their products priced high. One can imagine a successful idea-artist in the year 2005 who does no email, no phone, no videoconferences, no VR, no books, and who does not travel. The only way to get her fabulous ideas is in person, face-to-face at her hideout, live. The fact that she is booked 8 months in advance only adds to her reputation.

]]>
https://kk.org/newrules/the_progression_by_which_the_o/feed/ 1
Because information trumps mass, all commerce… https://kk.org/newrules/because_information_trumps_mas/ Wed, 17 Mar 2010 04:02:06 +0000 Continue reading ]]> …migrates to the network economy.

MIT Media Lab director Nicholas Negroponte guesstimates that the online economy will have reached $1 trillion by 2000. Most tenured economists think that figure is terribly optimistic. But actually that optimistic figure is terribly underestimated. It doesn’t anticipate the scale on which the economic world will move on to the internet as the network economy infiltrates cars and traffic and steel and corn. Even if all cars aren’t sold online immediately, the way cars are designed, manufactured, built, and operated will depend on network logic and chip power.

The current concern about the size of the online market will have diminishing relevance, because all commerce is jumping on to the internet. The distinctions between the network economy and the industrial economy will likewise blur and fade, as all economic activity is touched in some way by network rules. The key distinction remaining will be between the animated versus the inert.

The realm of the inert encompasses any object that is divorced from its economic information. A head of lettuce today for instance does not contain any financial information beyond a price sticker. Once applied, that price is fixed, too. It doesn’t change unless a human changes it. The economic consequences of lettuce sales elsewhere, or a change in the general global economy do not affect the head of lettuce itself. Instead, lettuce-related information flows through wholly separate channels–news programs or business newsletters–that are divorced from the lettuce itself. The lettuce is economically inert.

The realm of the animated is different. It’s vastly interconnected. In this coming world a head of lettuce carries its own identity and price, displayed perhaps on an LED slab nearby, or on a disposable chip attached to its stem. The price changes as the lettuce ages, as lettuce down the street is discounted, as the weather in California changes, as the dollar surges in relation to the Mexican peso. Traders back in supermarket headquarters manage the “yield” of lettuce prices using the same algorithms that airlines use to maximize their profits from airline seats. (An unsold seat on a 747 is as perishable as an unsold head of lettuce.) In relation to the net, the lettuce is animated. It is dynamic, adaptive, and interacting with events. A river of money and information flows through it. And if money and information flow through something, then it’s part of the network economy.

]]>