Cluetrain and social software and digital markets

People have sometimes asked me why I was so interested in Cluetrain when I was meant to be working in technology in an investment bank. So I’m going to do something that people who know me well dread my doing. Let you get inside my head -)

It’s simple.

0. Without information there are no markets period.

1. Without trust there is no banking, there are no capital markets. How did the word “bankrupt” enter the vocabulary, apparently sometime around 1550? Look here. Sounds like people met to have conversations while sitting on benches, and when someone broke their word, the rest broke his bench. The first Latin words that wannabe City gents learnt after doing various things to a table were Dictum Meum Pactum. My word is my bond. And reputation became collateral.

2. Without conversation there are no markets either. As per Cluetrain. Enough said.

3. Conversations are more about social than transactional, as both John Seely Brown and Doc Searls have pointed out in different ways.

4. Cyberspace is somewhere with different rules, allowing all of us an opportunity to redefine trust, make markets more open and transparent, yet prevent misuse and corruption. Larry Lessig had a lot to do with setting me right on all this.

5. All this was happening at a time when markets were losing faith with capital markets institutions, in one form or the other.

6. And usable social software was arriving on the scene.

And there I was working with talented people in a bank whose culture allowed us to try these things out. Serendipity.

Open versus closed information

I am privileged to work with many talented people, people who like thinking about what they are doing and why. As we began our circuitous route on to an internal blogosphere, two questions kept coming up.

One, should we start with an open approach to information and then close those bits and pieces that need closing….or should it be the other way around?

Two, should we enforce declaration of identity or should we allow anonymity?

I think that both these questions are critical in the context of a number of debates about information, particularly those that touch on digital rights, identity, security, privacy, confidentiality and the like.

I’d love to know what you think about these two questions, and am looking forward to comments that I can learn from.

In the meantime…. my gut feel is that DRM implementations that start with a “closed” approach to information are doomed to failure. I have always believed that knowledge management and information security are kindred spirits. You impute value to an information asset. You declare who can see it. You declare who can’t. You must start with a view that information is an asset that increases in value with reproduction and enrichment and evolution and adaptation. Start with free for all. Only restrict access when there is good and clear reason. And there will be good and clear reasons: confidentiality, privacy, regulation, commercial value, whatever. But it is easier and simpler to close bits when really necessary, in comparison with trying to open bits that default to closed.

I’d be interested in knowing other views on this, whether mad or wise.

I approach the second question almost as if it is the first question. Open is better than closed. There may be reasons for stimulating or encouraging anonymous behaviour, but I don’t find them easy to understand. [I am reminded of a 20s-30s book by Julius Henry Marx entitled “Beds”. Chapter One was headed Essay on the Advantages of Sleeping Alone. The page was blank. And in a footnote the Editor stated “The Author refrained from making any contribution to this chapter”. Or words to that effect…forgive me, it’s thirty years since I last read that book.

Looking forward to the wisdom and madness.

Blogs in organisations

Euan Semple commented on something I’d posted earlier, and it stimulated me to checking out his blog, something I had been remiss about for a while. My bad. I particularly liked the David Maister piece on blogging behind the firewall. You can check it out here. I’ve been a fan of Maister’s ever since Managing The Professional Services Firm. Thank you Euan.

It?s late, and I can?t resist the temptation

I hear that 38% of the human genome has now been patented, and that that number’s growing every day.

Does this mean Intelligent Designers and Creationists can challenge the patents on the basis of Prior Art? Interesting court case as to who can prove what. -) Glad I’m not a lawyer.

Do you hug trees when you complain you�re stuck in walled gardens?

I guess there’s a Kathy Sierra Kool-Aid moment for blogging. Crudely paraphrasing her, I think Kathy posited that you know your software works when the customer says HIS software doesn’t work. The Kool-Aid moment. And for blogs, it must be when you get your first decent flame. I haven’t quite got there yet; well, nearly…. at least one reader of Gapingvoid (where Hugh referred to my starting this blog) commented as follows:

“IMHO jp seems as vacuous as all the other emergent group intelligence everything should be free and we’ll figure out how to pay for it later blog-hippy nonesense”

I’ve heard people talk that way before, they genuinely believe that challenging DRM is a political stance and unsustainable in our kind of society. So let me try and explain my position.

1. Nobody I know wants to prevent creators getting paid for their creation. There is a lot of research on alternative compensation models as people try to figure out how to exchange value with creators without making a set of bad laws worse. Try reading William (Terry) Fisher’s work on this subject, it will give you an idea. Excerpts can be found at

2. Much of where we are going is “co-creation” of value, and we are going to find it harder and harder to make the laws of prior paradigms work. Try reading Rishab Aiyer Ghosh’s Cooking Pot theory and you may get an understanding. This is true for East and West, the web does not know borders. Not even in China -)

3. Some societies have been co-creating value for a very long time now, and as we seek to globalise the old-paradigm law, it keeps failing. You could do worse than read CODE edited by Mr Ghosh to get a broad-based view on the issues this creates.

4. There is growing evidence that by trying to treat intellectual property as analogous to physical property, we are creating unsustainable complexity in the law-base, to the point where it is collapsing. In simple terms, you cannot draw the boundaries of the digital property well enough to make the law work. Again, if you are interested, read James Bessen’s works on the subject. He has gathered empirical evidence that such patents actually decrease the incentive to invest in innovation.

5. Some of the ways in which IPR is being protected is downright insane. I have yet to have a single person explain to me how Region Coding on a DVD helps creators or consumers. Talking about region coding, there is a (possibly apocryphal) story going around. Major Hollywood studio wants to enter large-budget blockbuster film for the BAFTA awards. Get advised by consultants and legal eagles that they should take extreme steps to protect against piracy. So they build a single-use DVD player which destroys the DVD if tampered with. 5000 of these get stuck in UK customs. “You are importing these, what’s the commercial value, the retail price?” “None, not for sale”. “In that case, how much did they cost to make?” “Gazillions”. Customs agents rub hands with glee. Long negotiations, fruitless. Hollywood studio refuses to pay the duty. Running out of time, goes to Plan B. Sends 5000 copy-protected DVDs by courier to the homes of the judges. Judges can’t view the film. Time runs out. The DVDs were all Region One. Even if this is a complete fiction, I think it makes a point.

6. If I look at what happens in large institutions in terms of yanking out info from proprietary systems and trying to move the info around to share and enrich it, we appear to build walled gardens there as well. By our own accident. And then spend piles of money trying to knit the broken pieces together. Our own info. Our own infrastructure. Walled gardens of our own making.

7. I come from a school of thought that says Jerry Garcia had the right idea when apparently deciding that anyone could record their live concerts and do what they like with the product. There’s a deep and wide market for Bootleg Dead. And a deep and wide market for physical and digital Dead as well. In fact I like Garcia ties as well, and love Cherry Garcia. The Arctic Monkeys appeared to learn from all this. Great.

8. Every time there’s been an advance in reproduction technology someone has come along and tried to tax the copier. Xerox, tape, CD, even radio. And I cannot, just cannot, understand why. Let me give an offbeat example. Libraries in the UK buy lots of books which then get borrowed by people. And it could be argued that authors get paid less for this and should be compensated. And so they should be. And so they are. Public funds are set aside to compensate the authors for this. And guess what? When I last looked there was a cap of £6000 per annum per author, so that the fund pays out to as many authors as possible. The alternative compensation models made possible by digital technology can be much fairer than that.

9. We are underestimating the ways people get motivated to do things. Maslow was a long time ago. Since then, Nohria and Lawrence have done some great work which can be found in Driven. Crude summary. Four drivers. Drive to acquire, to bond, to learn and to defend. Operating in parallel but with varying intensity. We are underestimating the value of peer recognition and feedback loops, something the opensource movement and the youth of today find easy to accept and trade on. And anyway, opensource is free as in freedom not free as in gratis. And (at least in the UK) kids will pay five bucks for a ringtone download yet dither at paying ten bucks for a CD. Different values. Not an urge to steal.

I will elaborate on all this some other time. But those who are interested should check out what is happening, not just with the references above but also Larry Lessig, the Creative Commons, Eric von Hippel, Cory Doctorow, the Electronic Frontier Foundation, Yochai Benkler, James Love’s Consumer Project on Technology. This is no tree-hugger movement, the trees are banyans and giant redwoods out in the open and not in walled gardens.

The cost of reproducing information is dropping. The value of information shared increases in the main. There are issues related to current patent and intellectual property and copyright law that, if handled correctly, will not just enrich life but, in medical contexts, will even save lives.

Nobody wants to avoid rendering unto Caesar what is due to Caesar. But we run the risk of old bad law doing new bad things, and we owe it to ourselves to prevent this happening.

As I said, more later. Apologies for a long post. I will also try and touch on how identity and authentication and permissioning need to get with the program.