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Archive for the ‘Crowdsourcing’ Category

Economics, according to wikipedia, is the social science that studies the production, distribution, and consumption of goods and services.

Notice money is not mentioned. But the current theories of economics socio-economic (Kondratieff (Kondratiev), Schumpeter, Kuznets) , fiscal-economic (Keynesian / Monetarist) and political-economic (Libertarian/Austrian) theories are all based on monetary markets.

Well that makes sense because MOST of the production, distribution and consumption of goods and services in society has used money as a means to relate them to another for at least 200 hundred years.  Money was a great leap forward in human history because it allows independent  transactions of goods and services. You can sell to one person and buy from any other, instead of having to set up a complex barter network with multiple prosumers or grow/hunt/forage everything on your own.
In modern times, you can also manipulate the market by artificially altering the money supply like a throttle on an engine.

Even so non-monetary based transactions have always been with us and seem to take 3 forms:

1. Bartering. Exchange between 2 people or a chain of prosumers.

2. Reputation. People will do things so that others think of them differently (usually in a more positive light).

3. Common good.  Sometimes hard to distinguish from reputation.  A good example are for-profit companies which contribute to common open source code based so they all share an updated platform to build their products on.

These have not been considered when discussing economics this century, because these types of economies were usually limited to family and local neighborhoods for most people.   A couple of examples:

1. Entering a local pie contest. (production driven by reputation)

2. Helping family members to do home improvements. (service driven by reputation)

3. Taking of your lawn so it looks as good as the neighbors’ and keeps the value of the neighborhood high.  (service driven by common good).

These are not significant to a modern economic structure.  And while wealthier people have donated to causes driven by reputation,  it is usually lumped into the other economic theories because it involved money instead of services.

Most people have been limited in terms of the amount of goods and services they can produce for these non-monetary motivations because raw materials  bought with money were usually required and then it essentially becomes a donation with a small value add. (Purchase the ingredients for brownies and donate them to the bake sale.)

Services can more easily be offered for non-monetary motivations, but their significance has also  been limited in modern times.  Usually these involve some basic labor such as fixing the neighbor’s flat tire. When they get more complicated they start to compete with opportunities to earn income which tend to limit the amount of skilled service people are willing to donate.

The impact of services offered for non-monetary motivations have in the past have also been limited in there impact to the larger economy for three major reasons:

1. Monetary costs of distribution and replication.

2. Limited distribution limits the potential impact and thus motivation for common good, reputation driven services and good.

3. Modern demands for complex goods and services limits the impact of the individual.

Social media removes these all barriers in the case of information products and services. (see more detailed explanation below)

In social media, two types of phenomena have started to change the impact of non-monetary activity to the larger economy:

1. Crowdsourcing/Collaboration (distributed production/ distributed problem solving). The best example is in software: linux, drupal, and other significant software programs which other companies charge license fees for.

2. Information distribution and analysis. Blogging in short.  Reporting on events, spreading the reports of others and analysis of news events.

3. Social Networks.  These have made it possible to impact large numbers of people if you create or collect highly relevant services or information.

Social media is technology amplified social interaction and allows for broad free distribution of information products and services.  Linux now is starting to threaten Microsoft’s dominance in the server and device markets.  Blogging has now replaced a significant amount of the magazine and newspaper industry.  (Actually newspapers seem to be hanging on by getting story leads from the blogosphere.  Don’t believe this? Check the thickness of your favorite magazine and compare it with what it was 5 years ago.)

So the big question… What does  is the impact on people of a non-monetary social gain? How do you compare it against monetary based gains?

Do we need to now combine non-monetary and monetary economics into a more comprehensive understanding of the well being of society?

Broadcast media. Monetary loss?

Broadcast media is irrevocably changing now that anyone has the power of mass information distribution.   And it is being replaced in part by largely non compensated product. The more organized the blogosphere gets, the more crowdsource news sites will popup and probably dominate.  The power of news analysis will be with in the hands of the most trusted analysts (bloggers)  rather than media distributors which many would view as a more just world.

The most significant loss related to media would seem to be the loss of an advertising based which we have relied on to drive consumer demand in the western world for the past 50 years.  If people listened to their friends, they might buy what they need, rather than be convinced to buy what they should want.  Will sidebar advertising on facebook, google and the like replace this as a consumption driver.

The power of social networks to set behavior standards and norms should not be underestimated. The July 07 New England Journal of Medicine had a 30 year longitudinal study which showed that obesity can be spread through social networks.  The messages sent through social networks are powerful.  Broadcast media for the last 50 years has supplemented social messaging with profound effects on society.  From the newness of the car you drive to the size of the house you ‘need’ to live in and has greatly affected consumer demand and is largely responsible for the ‘need’ now to have 2 earner households in the US. (IMHO.. havent had time to do the research yet).

Software and the long tail. Monetary gain?

Linux is growing rapidly as both a server and desktop operating system (though desktop adoption is still small).  IBM one of its biggest supporters though sees an advantage in linux as well as a significant number of its own patents being freely available for anyone to use and innovate on.

The advantage lies in the power of the long tail when it comes to technological innovation.  It turns out inviting people who should know very little about the core of a complex project, often know something very significant about an aspect of the project which is critical or at least important to its overall success.  The one guy who contributes one thing which turns out to be a critical patch against a hacker attack adds tremendous value to the project.  The more complex technology becomes, the more important the long tail is.   And on the opposite end, the less successful closed door efforts are in creating complex solutions.

Skeptics will say that Linux was paid for with money, that it is just a service based model. And for the most frequent contributors that was true to some extent. But the majority of the long tail contributions do not seem to have been paid for and while some programmers may have done the work on company time, it seems clear others worked on their own time. In either case a contribution to something accumulative and distributable to people who were not their clients is clearly a non-monetary contribution, even if services were paid for one time. The net result is a paid short term service plus a freely distributable enhanced product.

Overall win or loose?

The death of mass media while significant in the short term, means that people will more in touch with the reality of others in the world, rather than having vision created for the purpose of selling product.  I argue that mass media is in some ways a result of technological limitations because natural human communication is 2 way with all parties having the ability to choose to broadcast or  listen.  Hopefully this more tightly knit online world community can help prevent the potential damage which could occur as we go through the current deflationary cycle.

According to socio-economics, we need a significant technological innovation in order to bring about the next economic boom. While some have assumed this would come from nanotechnology or robotics, I think it may come from the development of a knowledge or semantic web. A semantic web could be brought about more quickly by using crowdsourced techniques to create the necessary underlying ontologies or definitions in a ‘Linked Open Data’ model.

So if social media can be utilized to bring out the next economic boom based upon a crowdsourced knowledge web platform, it would definitely result in an overall economic gain.

Look for more soon on why a knowledge web would lead to the next economic boom.

Why social media removes barriers to impact of non-monetary goods and services.

In business when you offer a skill, you create mechanisms to make it repeatable or widely distributed to multiply it’s economic effect.  Repeatability and distribution mechanisms have normally been costly in time, labor or infrastructure,  so were not used normally utilized in non-monetarian economic transactions.  And because they have lacked these features,  non-monetarian economic productivity contributions have normally been considered insignificant.  Also the limitation of distribution and replication have also limited the motivation to produce these goods and services.  Social media has removed the cost of distribution and replication for information based products and services.

The need to complex services for greater impact has also limited the economic impact of these non-monetary distributions.  Traditionally it has been difficult to collaborate on voluntary efforts because the small amount of time people have had to put into non-monetary efforts.


In James Surowiecki’s Wisdom of the Crowds he argues that for a collaboration to be successful it must have 6 elements:

Knowledge must exist in the audience
Independence of contributors
Diversity of opinion
Focused on compatible goal
Aggregation of information
Decentralized Process/Local Knowledge

I thought KIDFAD is a good way to remember since there are still people who think that is what social media is.
Not sure if he mentioned the focus on the compatible goal explicitly but I thought it was implicit in his argument. What I mean by compatible is that the individual goal must line up with the purpose of the aggregation. So in prediction markets, the win of the individual is compatible with the market obtaining an accurate prediction, because the determinant of the win is the same as the goal of the market (accurate prediction).

In the case of google mining the behavior of searches, it is reasonable to presume that individual searches want to find what they are looking for quickly and the purpose of the search engine is to provide it.

Anyway it helps me remember, hope it helps you.

In my last post I started to examine the claim of the cluetrain manifesto that a more networked audience is more intelligent or at least a better detector than an individual. The #Mumbai victim list twitter distribution illustrated 4 ways which a network can apply truth filters and 2 ways in which the network affects might work against detecting falsehoods over the short term.

One recent tweet from Deb Lavoy questioned whether crowdsourcing will always generate good ideas, because after all a mob is also a crowd. Mobs are famous for poor and emotionally driven decisions and actions rather than intelligence and innovation. So how do we prevent crowdsourcing from becoming mobsourcing? Do connections between audience members, which a mob seems to have, mean better decision making?

Mobsourcing vs Crowdsourcing
Of course this is dealt with quite well in James Surowiecki’s Wisdom of the Crowds and I dont mean to say that these observations in any way change his conclusions. I am just using this blob as a scratchpad to prove it to myself by trying to understand the actual behavior in an audience which produce the effect.

First what is our working definition of intelligence? From the cluetrain theses, it seems they meant the ability to filter out inauthentic information. So basically, a networked audience is a lie detector in a way because it will filter out inauthentic sounding information which I talked about in the last post and came up with 4 elements which work in the networks favor of filtering out false information and 2 which can work against it in the short term. From a Surowieki analysis, we found 2 problems: Can you trust the aggregation mechanisms which are very informal in twitter? Are the contributors acting independently or does the emotions compel them to go along with the mob?

Of course the problem is as in the case of a lie detector, what if the originators of the lie, believe the lie to be true? If our audience is large and well networked, we hope it can confirm the factual nature through multiple sources and if there are differing views, we hope the network would prefer the one which is most aligned the individual members’ realty or partial knowledge as Surowiecki says. But the more emotionally relevant the information (as we saw in the case of the Mumbai list), the faster it spreads, even from a single source. So it seems the more emotionally compelling the information is to act on, the less likely it is to be verified by the network effects. The audience becomes a mob and acts as an amplifier for a single source which strikes a deep chord with the influencers in the network. So it seems a way to keep the crowdsourcing from becoming mobsourcing, is to slow it down and force deliberation while maintaining independence. I guess Surowiecki would say that the emotional element pushes people toward conformity or maybe as he quotes Arthur Schlessinger’s comment on the Bay of Pigs planning, it is urged to assume consensus. I wonder if the motivation to want to conform is because the need for belonging seems to rise in the face of many emotions such as fear.

Surowiecki also mentions the need for people to express their objective independently of others as a prerequisite for effective crowdsourcing as well as having a diversity of experience. So in the moment of an attack, the emotion felt by most in the audience would tend to give them a shared overwhelming experience which I would guess would seem to lesson the amount of diversity and independence in the audience though strengthen their common focus on the problem of finding out what is happening.

Of course the task of the Mumbai list of victim names seemed to completely authentic. Also the twitter seem to correct false information by outing a college student pretending to represent the indian government. So with these tenets of crowdsourcing working against, why did it seem to make the right decision?

The question before the audience was is the list authentic, and the shared emotion, need to conform etc actually seemed to heighten the need to pass truthful information about victims as well as not to be a source of inauthentic information. It also gave the normally busy audience motivation to spend time on the subject and try to be useful. So these normally problematic influences in crowdsourcing actually heightened the communities interest in verification in the list and is probably why the impersonator of the Indian government was investigated and quickly found out. Maybe the people needed to do something and couldn’t do anything else but work to discover more information. Is that why it worked.

OK so emotionally charged crowds are good ones to make decisions? Seems to depend on the question and the emotion. I wonder what the crowd in the moment would have thought an appropriate response would be? I think the answer to that is a strong case for inserting deliberation into decisions of actions in most cases.

So it seems to avoid mobsourcing, we need to increase the time it takes to make decisions on actions but in this case and may be others, the ability to spread the information quickly doesn’t seem to do harm when it comes to crowd based lie detection.

Side Note: I guess those guys who invented the US Senate had some insight into rules of callaboration, since they purposely made what at the time was considered almost lifelong terms in order to make the Senate a more deliberative body. (Watch for a future blog post on how the American Revolution was a social media product…Saw PBS Liberty recently and can’t shake the similarity to changes being brought about by modern social media experiences to those which made the revolution successful.)

Note: I have not verified the list of the Mumbai victims referenced here nor do I take a stand on its authenticity, accuracy or morality. I think its a very interesting example of how a networked audience behaves differently than an non-networked audience.

The mention of the increasing intelligence of a networked audience is what really struck me about the 95 theses at cluetrain.com. Mass calloboration, a way to deliberately request help from an audience is talked about in more detail in James Surowiecki’s Wisdom of the Crowds and emerging intelligence from networked audiences in Howard Rheingold’s Smart Mobs. The premise in the 95 theses is that once the early free flowing social media sites got started we were permanently on the path to more networked audiences. And that the networked audiences behaved differently and according to cluetrain, more ‘intelligently’ than the former broadcast centered audiences. This is very appealing, but is it true? I decided to do a series of posts trying to understand this in depth.

So is this a networked audience more intelligent? It’s not hard to get consensus that it is definitely different. The problem with intelligence is there are so many definitions. At our last workshop I cited the google doc which listed the injured and dead from the recent Mumbai tragedy. This appeared on my twitter feed while the terrorist attack was still ongoing. While I don’t know for certain who was responsible for the list, it seemed to be created by netizens not journalists nor government officials. Before we go on I want to acknowledge the 2 big objections usually rise to this sort of unofficial information:
1. Is it accurate? Probably not 100%.
2. Is this how such sensitive information should be disseminated? I am not sure there is a good answer to that. It probably is different for each family member and the entire answer might turn on whether it is accurate.

My point in talking about the list is that it is unarguably a different type of audience behavior during a terrorist attack than we are accustomed to seeing. As to intelligence, the information which was sent sped through the network very quickly and was believed. So to the extent the networked vetted it for authenticity which is the intelligence process we seek out from the official news media, this could be perceived as a type of intelligence.

The list was disseminated around the world within hours, then was apparently reported on by one of the biggest news agencies on the planet as a source of highly relevant information. (I have heard a report that this list and twitter was referenced by the BBC during the early reporting (unconfirmed). ) I would argue it was the most personally relevant information during the attack which is why is flew through twitter.

So regardless of whether the list should be posted, I think no one can question, that the posting and dissemination of a victim list during a terrorist attack is a significantly different behavior made possible and largely due to the fact that the audience is networked.

I trusted the Mumbai list to be authentic and mostly accurate even though I only received it from a single source and only heard mention of the BBC reference only much later. And while I had only heard about it from one source, I had reason to believe it was being tweeted by many twitterers.

One reason for the trust that I gave the list is that the community through which it flowed is preestablished and highly active. I received the link from Shashi (Social Media Swami) at Network Solutions and he is a very active twitterer. I know he must have believed and probably received it from sources which he has heard from before. So length of time can be offset by trust in the community before this event and how well the audience members value their reputation. The social technology and community itself can affect how well one values the reputation. Twitterers value a large following and usually their goal is to achieve it. They can loose that following very quickly, because it is easy to start unfollowing someone. Of course if it is highly valuable to them to disseminate the message, then it is more likely they will risk reputation.

The message also plays a role in whether it is likely to be believed. The more detailed a message is and the more ways it allows verification, the more authentic it sounds. The Mumbai list quickly reached over 200 names, so it seemed to be authentic and verifiable. Also we hope that someone who would attempt to release false information about such an emotionally charged subject, would not be a part of our community.

There was a presumably false piece of information which flowed through twitter at the same time as the victim list. Apparently a college student in Boston originated a message asking people to stop twittering about Mumbai while the attack was still going on and claimed to be part of the Indian police or government. It is likely that this person thought they would be doing good by disseminating this message. Initially probably a lot of people accepted this statement to be coming from the Indian government, but it was within hours reported on Twitter as being inauthentic.

It would hard to imagine much value in disseminating the Mumbai list and it would be a very high risk to reputations if it was false. It traveled through a network which can punish false messages quickly but it is highly emotionally relevant would also make it go through the network quickly as well. It also provided ways to verify itself eventually, though not immediately. These seem to be the elements which helped it to be accepted as true.

So elements which would made this message seem more authentic are:
1. Pre-established Community
2. Valuing of reputations.
3. Flowing through the community through multiple pathways.
4. Detailed information which could be verified later.

Elements which made it more likely that a message would go quickly and not be carefully verified
1. Timeliness on the importance of delivering the message.
2. Highly emotionally relevant.

So do these combined components make the audience more intelligent by trusting it to be a lie detector?
Of course lie detection is not the only type of intelligence we want to see in a crowdsourced or collaborative activity. We want original ideas which solve real problems or at least original ways to send information in a more relevant fashion (i.e. better marketing).

By the Surowiecki analysis, it seems this kind of event comes up short in a number of ways. Independence of contributors is definitely a problem in online social networks. Surowiecki himself questions how collborative the blogosphere is in a Ted talk.

Aggregation is also a bit tricky, its hard to see if the networked really aggregated the list or it was merely passing already aggregated information and people assumed it was organized by individuals?

Certainly there was a strong focus on a common goals of getting important information spread quickly and discovering more facts.

Well.. I still believe the list is real….Am I part of the problem?