Category: Four pillars

Flight School Air: Some early thoughts

I’ve been at Release 1.0’s Flight School 06 with Sean for the last couple of days. You can read his early comments here. It was another classic Esther Dyson session, she (along with her team) has this uncanny ability to spot something important going on and then bringing together all the movers and shakers into one room quickly and easily. My thanks to Esther and team.

I don’t have a pilot’s licence, don’t own a plane, and have never invested in anything remotely to do with planes or aviation. Yet I could not stay away, because of a number of things:

One, affordable aviation, even shorthaul aviation, changes lives. I know my life has changed as a result of the availability of passenger aviation. And I believe that this mode of transport, as it becomes more affordable and more ubiquitous, can make a real difference to people’s lives everywhere. Releasing time, increasing productivity, providing timely healthcare, simplifying the process of infrastructural regeneration, allowing people to sample different lands and cultures more easily, increasing our leisure options, the list is endless.

Two, the air taxi business has a number of characteristics in common with the way the World Wide Web started, commonalities that intrigue me and excite me. I feel I am watching something important happening. More of this later.

Three, there’s real money to be made. These are amorphous times for this industry, and we need changes aplenty. Changes to the way we insure passengers, pilots and aircraft. Changes to the way we provide this segment of the aviation industry access to capital markets. Changes to the communications, navigation and surveillance systems we use for doing all this. Changes to the way yield is predicted and managed. Changes to the way we signal our interest and have our demand aggregated. Even changes to the participants themselves as they buy and sell and take over and merge and list and go private. These are heady times.

Four, much of it is about IT, yes Information Technology. Air taxis, as a concept, will serve to bring aviation into the digital world. [An aside: Have you ever been tempted to look over the shoulder of an airline assistant while your booking is being checked or amended? It is incredibly saddening to watch the hybrid greek gobbledygook double-dutch they enter into the green screens, and the machiavellian sequences of meaningless keystrokes they enter as punctuation and even screen navigation]

Five, have you ever met a child who wanted to be a lawyer? A pilot? I rest my case.

Another aside. I was sitting on the porch of the hotel in my wicker rocking chair watching the sunset over the bay, and the table next to me was taken by a set of raucous holidaymakers obviously enjoying themselves. They consisted of three generations of one family. And they were talking about how things had stayed constant at the hotel while much around it had changed. And in this nostalgic vein, someone asked the paterfamilias how things were in comparison to how he expected things to be, forty years after his children were born.

The first thing he said was that he really expected to see flying cars by the time the 21st century came along, as in the Jetsons, that the absence of flying cars was the single biggest disappointment he had had.

So why do I think there are commonalities between the World Wide Web and the air taxi business?

  • 1. The infrastructure is largely there as a result of people providing for the public good, even if defence and aerospace and academia helped make it happen.
  • 2. The operating model was that everything happened at the heart of the network, with hubs and spokes and satellites as needed.
  • 3. The people who made iteration 1 happen were infected with a sense of wonder, a sense of adventure.
  • 4. Access to the first iteration was privileged.
  • 5. All control processes were built on a very Taylorist Assembly line basis.
  • 6. It was all very capital-intensive.
  • 7. It needed a lot of collaborative cobbled-together standards and agreements to make it work.
  • 8. The whole space was surrounded by regulatory and labour implications.
  • 9. And as with the Web, the incumbents under attack were conspicuous in their absence, they had other things to worry about, a classic Innovator’s Dilemma a la Christensen in the making.

Sure, there are material differences.

  • 1. Safety and security have life and death consequences in this space.
  • 2. The regulators are more open to the changes required, and even broadly supportive.
  • 3. Unlike the incumbent telcos ten years ago, incumbent airlines are largely losing money hand over fist.
  • 4. The incumbent does not think he owns the infrastructure.
  • 5. We have all learnt from Web 1.0

I’ll post something more detailed once I’ve had a chance to gather my thoughts and to get feedback. I’ll leave you with this thought:

Watching aviation become passenger- and craft-centric, seeing the implications for communications, navigation and surveillance, understanding the nature of software and hardware and communications innovations that will happen, extending all this to new relationships and conversations and transactions, putting all this together is really exciting. It’s a market crying out for Web 2.0 models and processes. And even dreaming about how customers can co-create when you give them access to these tools is uplifting.

And this time around, we have the chance to get identity and authentication and permissioning and real-time intention and attention aggregation right. Because this time we have the learning of the past, and a compelling incentive. Getting it wrong kills people.

More later.

Four Pillars: On expertise

I guess it behooves me to document the genealogy of this particular snowball. I’m privileged to belong to a mail list on internet economics moderated by Gordon Cook of the Cook Report. Gordon referred me to a piece by Peter Nicholson, President, Council of Canadian Academics. You can find the speech here. And Gordon in turn was referred to Nicholson’s speech by Bill St Arnaud. The Cluetrain gang, and more particularly Doc and RageBoy and David Weinberger, have been making similar points for some years now. And the work that Andrew McAfee has been doing at Harvard tracks this from an enterprise viewpoint.

It’s worth reading what Nicholson has to say. Even if I have seen some of it in other forms and media before, I found what he said and the way he said it useful.

The World Live Web, as Doc and David like to call it, has a lot of active information. We use a lot of tools to try and create the right filters on that information. PageRanks a la Google. Link weights a la technorati. Blogrolls of people we like and trust. References in blogs written by people we trust, that lead us to new areas. Collaboratively filtered signals a la StumbleUpon. Peer-review. Serendipity. Wisdom of Crowds a la Surowiecki. Emergence a la Steven Johnson. Google and Wikipedia themselves.What Larry Sanger is now doing. Even IMDB.
And then we mash it all up at high speed within our own brains. Matt Webb gave us his own take on all this at reboot, with a presentation on Making Senses.

In a strange kind of way, we are evolving attention sensors and antennae, new reference frames for analysing that which grabs our attention, new ways of learning which attention-grabbers are worth giving attention to.

Control of attention is disaggregating; this makes all centralised expertise models shiver and shake. Which is why, as Doc says, blogging must remain provisional.

Blog posts are but a small group of inputs to this process. The output, emergently and crowdedly peer-reviewed, is measured in snowballs. It is this exciting and alive peer-review process that prevents propaganda and dogma, that nips snowballs in the bud. Far more efficiently than any previous iteration.

Copernicus and Galileo and Newton and even Einstein would have had a far easier time if they were able to blog. Because good snowballs can’t be suppressed.

Four Pillars: EAI and DRM continued

Kris Tuttle makes a very interesting point in his comment on my last post.

I have watched with awe as my children share their buying rationales with me, for devices as well as “content”. What they see value in, what they abhor. The polyphonic ringtones example is a classic.

Even if we got conned downstream, many of us were attracted by adjectives like “green” and “organic”.

Generation M will look for different kitemarks. Shareable. Copiable. Mashable.

Note that they don’t look for Free as in Gratis. It has always been Free as In Freedom for them.

While we mope around trying to look for just Playable.

I look forward to seeing things marked SCM for Shareable Copiable Mashable. Or maybe the Creative Commons CC already does this…

Thanks, Kris.

Four Pillars: EAI and DRM

Imagine this. Imagine you are part of a household of three people, living in the same house. Make it simpler, assume you are related by blood and marriage (or its civil equivalent). You have a bunch of 33rpm vinyl albums, some cassette tapes, some videotapes and quite a few CDs and DVDs. Maybe some lacquer 78s as well, and a host of 45rpm singles.

Imagine you have paid the new market price for all those things. In effect, you have done your bit to meet the business expectations of all those people involved in writing, publishing, recording, manufacturing, marketing and distrubuting all those things. You have never allowed anyone else to make a copy of those things; you may have burned the odd CD for parties or for the car, but that’s all.

Everyone’s happy.

Now to play all this you have all the necessary gadgets as well. Which you have also paid the ruling market price for. You have a Victrola, a turntable, a cassette tape player, a videotape player, a CD player, a DVD player and a gazillion iPods. And maybe some MP3 players, half a gazillion computers and something that aspires to be Sky+ or Tivo.

With the advance of technology, you can now digitise all this and make it available to yourself to watch or listen to wherever you like. Any room at home, and even while on the road.

And someone stops you. Stops you from watching or listening to the things you’ve already paid full market price for, using the devices you’ve already paid full market price for, stops you spending your own time and money converting all these different formats into one elegant whole. Stops you despite your having ponied up at every stage already. Stops you despite the investment you made in getting broadband and ethernet and broadband wireless and Airport and whatever else you may have acquired.

And calls it customer choice, somehow insinuates at the same time that you’re stealing money from the artists you already paid by doing anything with the stuff you paid for.

I guess you’d get slightly irritated. And rail at Apple or Microsoft or Sony or Hollywood or everyone else involved in this mess. And then meekly put up with it.

Is that harsh? Calling us meek? I don’t think so.

Why ever not? Today, that’s how it feels to me when I look at information in any organisation. First we pay for creating it or acquiring it, but it stays with the “devices” that are lock-stepped with the “content”. Our devices. Our content. Then we pay for a whole pile of EAI and “middleware”, to try and release from lock-in what we have paid for at least once already, probably much more than that. Then we pay for making this humongous beast “secure”, and in the process ensure that we spend even more money trying to extricate from our own dungeons what is ours in the first place. And, just in case we feel we haven’t spend enough money on this, we start introducing more and more DRM, which makes a fine art of data/device lock-in.

We do this meekly today. And the enterprise IT equivalent of napster and downloads and kazaa and everything else is called opensource. Commoditised future-proof bug-free scaleable attractively-priced infrastructure. Infrastructure which has created an ecosystem that allows us to move our information around without EAI and “data mining” and “business intelligence suites” and whatnot.

[An aside. Think about who pays to bury in six foot of concrete that which you later “mine”. Think about who gets the gold that you mine.]

The truth is, it has taken time for us to be able to work on a common infrastructure with market-driven standards and the possibility of operating without device or other lock-in, and EAI was an opportunity for people to make money while we got there.

But surely not now. Not now when we don’t have to. Not now we have the technology.

Yet we put up with it in every enterprise.

Generation M is round the corner. They perceive value differently, they perceive time differently, they perceive many things differently.

And they’re not going to put up with it. EAI or DRM. They’re not going to put up with paying premium money to do things that are fundamentally closer to deckchairs and Titanics and arrangements than anything else. That’s why Napster and Gnutella and Kazaa and Skype and BitTorrent. That’s why Linux. [Another aside. With all the supergazillions spent on R&D in the technology and telecoms space, just how many of these things came from incumbents? Why? I wonder. Clayton Christenson come back all is forgiven.]
We don’t have to do anything. But if we believe that people are our most important asset, if we believe that the social cost of implementing systems is a magnitude greater than the physical cost, if we believe that we have gained anything at all from Moore and Metcalfe and Gilder, if we believe there is a war for talent, and if we believe that the best business strategies begin with “First Get Good People”, then we may have to do something.

Because competition for Generation M is just one layer of DRMlessness away. One layer of EAIlessness away.

Think about it. What these things represent is equivalent to your being told your ability to drive on a particular road should be tied to the age of the road and the age of the vehicle….

Just a thought.

Four Pillars: Further musings on trust

As recommended by Coding The Markets, I ordered Larry Harris’s Trading and Exchanges; and as recommended by Martin Geddes, I ordered Adam Seligman’s The Problem of Trust.

I’ve now received both books, and I’m working my way through them. Thanks again to both.

A few quick observations:

1. When I looked at Harris’s definitions of trustworthiness and creditworthiness, I was more intrigued by the sentences that followed the definitions than by the definitions themselves. I quote:

People are trustworthy if they try to do what they say they will do. People are creditworthy if they can do what they say they will do.

[So far so good, but here comes a snowball designed for me].

Since people often will not or cannot do what they promise, market institutions must be designed to effectively and inexpensively enforce contracts.

End of quote.

Wow.

Before commenting, I’d like to recount a tangential tale from Seligman’s book. In his conclusions, as an aside Seligman discusses his changing behaviour with respect to smoking. When it was legal for him to smoke anywhere, he was always courteous and asked people around him whether they minded. Once someone else (e.g. “the state”) decided where he could smoke and where he couldn’t, his behaviour changed. Now he no longer asked for permission. If he was legally entitled to smoke somewhere he did.

I think the two stories are linked, and are all about covenant-versus-contract behaviour. In a covenant, when you hit a problem, you try and fix it. In a contract, when the same thing happens, you look for recourse. Someone to blame. Someone to sue. Someone to pay. Anyone. But not you.

And in a weird kind of way it’s linked to all the stuff we learnt about Quality First. If you remove responsibility and accountability from an actor, then you do not get quality. Instead you get output that is explicitly designed to keep the relevant  Inspection Department fully occupied. Why complain? Surely that’s the reason you set the department up in the first place. Inspectors inspect. That’s what they do.

As a complete aside I am reminded of the work done by Erik Brynjolfsson et al on Incomplete Contracts, some of which you can read here. I quote from Erik’s paper:

….unlike the contracts typically analyzed by agency theory, real world contracts are almost always “incomplete”, in the sense that there are inevitably some circumstances or contingencies that are left out of the contract, because they were either unforeseen or simply too expensive to enumerate in sufficient detail.

Random walk over. What am I trying to say? 

Larry Harris seems to be saying that people often don’t do what they say they will do, and that market structures have to take this into account. In fact he goes further and says “Attempts to solve trustworthiness and creditworthiness problems explain much of the structure of market institutions.” And he sees contract enforceability as the way to solve it.

Adam Seligman seems to be saying that people behave differently when they no longer need to negotiate bilateral or multilateral agreements on what is mutually acceptable, especially driven by nanny- behaviour, be it state or regulator or firm. Here the enforceability of the contract (“I can smoke here but not there”) creates undesired outcomes.

Erik Brynjolfsson seems to be saying that real world contracts are incomplete anyway.

Which leaves me thinking. Just what is it we are trying to do with trust? Why are we mixing it up with contract when it is patently not contract? It seems strange to design for failure in a market, talking about trusting people but expecting them to fail; it seems strange to talk about using contracts to enforce what happens in failure when most contracts are incomplete and probably expensive to enforce; it seems strange to empower people by increasing inspection that reduces their accountability.

The costs of this set-up-to-fail design couldn’t be low. It’s a bit like planning for pilferage in supermarkets, something else that makes less than perfect sense to me. There seems to be a lot of scope to revisit what we think about trust. I will continue to read Harris and Seligman and continue to have conversations with people, because it looks as if there may be scope to think differently. I remain grateful for the pointers, so please keep them coming.

An aside. Opensource communities work on the all-bugs-are-shallow-to-many eyes principle. How come this improves quality rather than decreases it? Two reasons. One, there is no implied de-skilling of the knowledge worker, in fact peer recognition issues have the opposite effect, people want to exhibit quality work. Two, the inspectors are not a class apart, but themselves developers. Development and inspection are interchangeable roles, interchangeable within the day.

If you design for inspectors to find faults you will have faults. If you design for Post Closing Adjustments to financial figures you will have Post Closing Adjustments. If you design for Second Chances at auctions you will have Second Chances. If you design for market participants to fail then some will fail.

Alternatively you could have covenant, and the occasional ruptured bench. I must check just how many benches the merchants of Lombardy broke.

Just a thought. More later.