Musings & Meanderings

From my oracle, OMO:

The 3 major tv networks have been conning program producers for decades (over 5 decades, in fact). Early on the networks convinced the producers that they should make series programs for the networks and accept a “license fee” for each show that was well below what it actually cost to make each show, i.e., a license fee of $100,000. for a show that actually cost $500,000. to produce.

The producers were told that “all they had to do” was remain on the air long enough to accumulate 100 episodes, and then they could put those 100 shows into “syndication” to the independent stations all around the country, and charge the indies exorbitant rates per show. In this way, they (the producers) would make back all the losses incurred when making the shows originally, plus huge profits.

They never mentioned that, of the hundreds of shows that were produced, only a handful ever reached the 100 episode level. Further, the losses involved were not only actual dollars spent in production budgets, but also the cost of money borrowed from banks to make programs at a loss for 5 years minimum. All the shows that lost money weekly, but never reached the “syndication” level, outnumbered the successful ones 20-1.

The networks, of course, paid their pittance of “license fees,” and then sold advertising in the millions of dollars per episode, per week. The producers never saw any of that money, they were busy waiting for the “pot-of-gold” at the end of the rainbow.

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Do we see any parallels to the production of web content?

It would appear, based on the types of social networks that have grown and flourished, that single purpose networks for intangibles are currently among the most successful. Intangibles junkies for music, photos, video, news, all-things-tech, and all-things-geek are achieving union and provide limited but powerful examples of how the sum can deliver more than the parts. Rating quality via popularity does deliver value, but mostly in a superficial manner.

Purely social interactive groups on the internet blossom and fade. RL connection oriented groups, whether for dating, or business, can achieve longer term stability. Smaller special interest groups can remain vigorous and survive providing they are led by dedicated and altruistic individuals who can put out flash fires (ie. personality clashes) and who don’t burn out. Each of these also has natural limits. Wikipedia is an interesting exception in the sub-set group of communal information sharing, with a substantial potential as yet not realized.

In which direction will the web grow? I see a couple of common goals being pursued by startups and serial entrepreneurs.

The first is joining lots of popular new things together. This sometimes includes improvements, but more commonly translates into creating coalitions of intangibles junkies. Some targets are user focused such as having your music, video, email and organizer all in one place, and others product-sorting focused like mashups or aggregators.

The second is quality focused, including human approved content. These efforts are usually welcome and lauded, but naturally limited. There remain plenty of niches to be commandeered in this area, but the gulf represented by costly man hours and recalcitrant tech advancement still imposes severe limits on growth.

Artificial intelligence applied to data, with the primary goal on the web being refinement of search functions, continues to occupy much effort with little result. It is highly likely that real advances in this area will be developed privately, and possibly by governments, where big investment can create insulated and long term development environments oblivious to annual returns.

The only big game in town that I’m seeing on the web, a game to which most of the ‘entrepreneurial’ efforts are aimed (whether intentionally or not), is media, which translates into advertising dollars. Certainly there are ecommerce startups, but the vast majority of these are imitations of what already exists. In the physical world, locations and traffic are fractured, so new competition is immediately visible to consumers. This is not the case on the web, where the endless re-inventions of eBay or Amazon have no way to obtain enough visibility to penetrate the primary traffic flow. New translation of a successful RL business into a web offering is showing, occasionally, the most creative efforts here.

The thing that strikes me about the current efforts is that they are so much focused on tech linked to the commodity of attention and so little on content creation. Creating new ways to use, apply, and put together the technology, make it a popular happening, and then translating traffic into dollar value seems to be the song of the day. Can this really be because there is no need or desire for more and higher quality content?

As long as the primary focus in web development remains on tech, with content being an almost tertiary byproduct of human involvement, there is relatively little new value being created for us individually or collectively. Finding the best of what there is more easily is a worthwhile endeavor, but is promoting quality really incompatible with the surge in quantity?

The single biggest phenomenon that I did not include above is blogging, which both spans and underlies a lot of the categories. MySpace is blogging. Digg is blogging. Search engines, such as Sphere, have evolved for blogging, and media is moving in determinedly on blogging. What these examples highlight, though, is the view that blogging is being valued as just one more collection of or connection to eyeballs in which the value, and therefore financial viability, is in the buying and selling of human attention.

Blogging itself, however, has as much in common with Wikipedia as it does with social networking. There have long been dedicated individuals on the web whose efforts to share knowledge, information, learning, and passions form a solid foundation for the very existence of this place. Blogging, by making it free and easy to publish, has multiplied their numbers. There is a fractured and scattered resource here that could and should be much further enabled.

They sound so idealistic and selfless, those sharers and bloggers, don’t they? …academics and socialists one would assume… wrongly.

Among their (our) numbers, are hundreds of thousands, a number which could become millions in a heartbeat, of experienced business people who are sophisticated consumers as well as lifelong students and de facto teachers. People are traders. We transact with each other through all our waking hours in one form or another. Exchanging useful information for like rather than financial consideration is a daily business practice as well.

We should be building a transactional web, where people can both offer and find value. Building flexible structures for financial consideration (when appropriate) into it on a micro-cosmic level is also essential. When individuals can freely and fully determine value for themselves in every human transaction we have the very definition of free enterprise and a solid foundation for community values. By characterizing web content as only free or paid, creating no online societal mechanisms for content valuation, we are doing ourselves a harm that will, perhaps, ultimately disable the full potential of this medium.

We all love getting something for nothing, but the vast majority of us also happily transact for whatever is of highest value to us. The power of this medium is in its scope. That scope can both create value, as in the item from the ancestor’s attic finding a 20x price via eBay, and lower price dramatically via plain old fashioned economies of scale. Much as I miss the learned and often delightfully eccentric small book shop owners of my youth, I also do not regret the translation of segments of the publishing industry into forms which offer access to an important works for a lower cost based on scale. Those people who owned those bookshops of yore …they’re unlikely to be techies… there should be more enablement and equivalent places on the web for such troves of interesting knowledge.

What about a public trust of knowledge? Even without financial means or access to the best education, I can still learn as much as I have the appetite for through access to libraries and museums. Successful people in a free society do give back, even many of the most materialistic of us. Creating a web focused on individual valuation of quality, I propose, would swiftly and greatly enhance the contributions and content of, for example, our wikis, by virtue of the attention it will attract. A business will use excess profits to grow itself whereas an individual will commonly use excess profits to benefit their community and those around them.

My oracle’s comment on Fox’s plan to debut new television show episodes on the web, as reported yesterday by TechCrunch:

TV networks are one trick ponies. Advertising is sold by guaranteeing a rating. If the show doesn’t get the rating the network has to “make good” by giving additional advertising. They see the internet as nothing more than additional eyeballs. Someone put one over on the advertising agencies to allow the network to “make good” with internet eyeballs. Fox shows do so badly that they all have to “make good.” If not for the internet “make goods” Fox would have nothing left to sell after “making good” on all the “make goods.”

How many people do you know that you would trust as business partners without a written agreement? My own definition of trust for this question includes being confident of a level of loyalty that is heightened and reinforced when your back is turned.

The real estate developers I met and learned from when I started out in business were old school entrepreneurs who led the North American post war building boom. The heyday of their youth was the 1960s. Some cut their losses in the 73-74 recession and gave up mainlining risk and growth for a somewhat more leisurely lifestyle, but for most the challenge of winning, building, and acquiring could not be set aside any more than drawing breath.

A majority of these developers had a European or Russian heritage, many of the developers Jewish and much of the companion construction business dominated by those of Italian ancestry. Whether they were first generation, arriving after WWII, or even second or third, they all derived their bases for trustworthiness from relatively insular communities and old fashioned values. The communities remained insular for generations to a great extent because of our WASP dominated class system. The father of an ex and late partner of mine worked as a waiter on the top floor of the Park Plaza hotel in the 50s and 60s, and would have forfeited his job if his employers had found out that he was Jewish.

Sure, there is unethical and dishonest behavior to be found in any society, but overall those smaller societal systems deal with it pretty well through time honored methods of community, reputation, respect, and peer groups. I watch with interest how such societal constructs might be re-developed within new peer groups in a flat world and without the very effective checks and balances at work constantly in a small physical community.

Those old time entrepreneurs are mostly gone from the business landscape. It has been a couple of decades since I saw a true partnership formed based on notes on a cocktail napkin and a meaningful handshake. I could write several posts on the reasons, but will just pick a few of the obvious for now …blame it on the lawyers, on the stockies, on those who leverage money.

In light of this background, my current experience is interesting. As many people as I’ve met and worked with in dozens of professions over the years, there are a few, met recently, that I recognize as people I would trust in the old way, based on communication leading to agreement on a common goal and sealed with a handshake. (lawyers documenting the thing after the fact being secondary) They are developers and geeks. This era’s dreamers and visionaries and entrepreneurs.

I’m starting to believe these new relationships can grow into something that’s worth more than just making money together. How far can that go toward the continued forming of new types of virtual core communities? So far, the virtual communities that are deep enough to establish that kind of reputation and trust among peers are pretty limited. My own place, the place I’m working toward in that landscape, is within broadening the number and scope of those overlapping circles in non-tech areas. To move forward on that, I’ve had to back into the core, and am very encouraged by who and what I’ve encountered so far.

This article in the NY Times would indicate that I’d be moving further ahead much faster in a different location, except for one thing. The core groups in the worlds I’m building for are in NY, London, continental Europe and Tokyo. I’m in Toronto, which is a secondary locale, yet connected enough, in the same way that Miami and Chicago are. If the fastest brains aren’t available to build platforms and bridges for non-business and non-tech interests, will the development of the web simply lag further and further behind for these interests?

Considering the following examples has me musing today on the ramifications of small differences in points of view.

1. In 1992 I was sitting in a movie theater with my younger son, when suddenly the world tilted and fell. I had ‘lost my balance’ completely (cause: neurological). It did not return. Over the next several years, I re-learned balance, or most of it, from scratch, the way that a stroke victim does. I rented a portable wheelchair long enough to have paid for it at least 20 times over. My refusal to purchase it was an expensive act that was symbolic of my determination to eventually overcome the need for this aid.

Needing the wheelchair also meant needing a friend or family member to push it around on any excursion. It was a surprise to discover that, no matter who my ‘driver’ was, every one of them did the following. Upon spying something that they wished to investigate more quickly and easily than could be done with me in tow, they’d say, “Wait here a sec …I’ll be right back.” and park me facing a wall. Neither their relationship to me, nor whether they had experience with or an affinity for taking care of others, seemed to have any bearing on this behavior. I could make book on it. Initially frustrating, it finally became humorous.

2. I don’t like insects. I’d rather deal with a temperamental stallion or play with a snake than confront insects. I’m in awe of anyone who can pick up a live spider and carry it outside. Therefore, if I spy a spider or such, and someone else is present, I naturally ask them if they would please deal with it.

Insects have a talent for blending in. When I point to one that is not in an easily describable place, my companion of the moment will look in the direction of my pointing …from wherever they happen to be in the room. A common first response is, “Where? I don’t see it.”. When I suggest that they move to my exact position they might pause and hesitate. A natural response is often something like, “I can see perfectly well over here, just as well as you.”. This comes as often from people who are perfectly comfortable with close physical proximity in different circumstances.

The first example is more about learning empathy and the second about how we create barriers for all kinds of subconscious reasons. What examples like this illustrate to me, though, is that we often resist seeing each others’ exact viewpoint. For one thing, how to do so is rarely as obvious as, say, wearing a blindfold for a couple of days to gain more understanding of a family member who is blind. More relevant, I think, is our fervent devotion to our own view, our personal space, and our belief in ourselves.

The fact that one’s best friend or spouse sees things from a slightly different angle can easily be one of the most wonderful things about our relationship with them. My thoughts here are more about how we can better understand and communicate with those outside of the small handful of our immediate personal relationships.

In group psychotherapy, it is common practice to have each member describe their unique view of a conflict or situation. Doing this verbally and in a free-form manner has many specific benefits.

Conversely, in gathering business information, from focus groups and consumer product testing to political polling or surveying community needs, we almost invariably use an interviewer tool that is designed to break the responses down into manageable categories, making the resulting data easier to manipulate. This approach is further refined by medical and scientific researchers.

In terms of really getting to know and understand one another’s POVs, though, in communities or marketplaces, a brief written description of what each interviewee sees when presented with a situation or theory or product, can be more productive in a very different way, often introducing new and surprising components. Discovering, for example, what someone expected to see, spent time searching for, and didn’t find, can sometimes be more important than how much they liked what was there.

My wheelchair experience reinforced for me the importance of avoiding the assumption that others will notice what is obvious to you.