So a guy logs into Facebook. He posts a message on some girl's wall. This makes her socially obligated to reciprocate. The whole transaction is public.
What he said doesn't matter. What she said doesn't matter. Each creates social capital for the other.
So what?
Now Girl C comes along. She visits the profile of Guy A. She sees that Girl B posted on his wall. He looks non-threatening. Maybe even a good guy to get to know better...
(Trust me, this totally works. I read it on a blog. I think it was Guy Kawasaki.[1])
This is what Facebook was made for.
Facebook isn't a platform for "connecting people." It's a platform for creating and distributing social capital.
Take a look at the most popular apps. The majority do one or both of the following
Strategy #1 is the tried and true. The best non-facebook example is the ringtone industry.
Why does a twelve-second ringtone sell for $3.50 when the whole song is only a buck? Because it lets you express yourself. In other words, it makes you look cool.
How much is that self-expression worth? Apparently at least three billion dollars a year.
While it's unclear whether Where I've Been will achieve profitability, there is clear precedent for people shelling out on this type of prepackaged self-expression.
I think though that the real potential of Facebook comes through strategy #2. That is, making your friends look cool.
There was this running joke this fall that instead of giving my girlfriend little gifts, I'd give them to her friends to give to her instead. That way not only would she know that I'd been thinking of her, but so would all her friends.
(If a girl thinks her friends would date you, she's much less likely to break up with you. Trust me, this totally works. I read it in a magazine. I think it was PC Gamer.[2])
On Facebook, doing nice things for others has these multiplicative effects because it's something that others can see. Not only does doing something nice show the other person that you care, but it also makes them look cool. And with any luck they'll reciprocate and make you look cool back.
Several of the top ten Facebook apps take advantage of this phenomenon. Apps #2 Graffiti, #7 X me, #8 Superpoke, #9 Free Gifts, #15 Superwall, #16 Foodfight in particular.[3]
There seems to be a pattern.
With all the hype these days you'd think that in five years Facebook will be used for everything from shopping to ordering takeout. I doubt it. The user interface isn't good enough. The user experience would be incoherent.
People don't go to Facebook to buy. They don't go to Facebook to sell. They go to Facebook because they care about their friends.
And the real strength of the platform lies with this, with the creation and distribution of social capital. And I expect that in the long term the most successful Facebook apps will be the ones that realize this and leverage it.
[1] False. But now he's socially obligated to link back to my blog. Unless he's a bad person. You're not a bad person, are you Guy???
[2] False but accurate.
[3] True. Source: Jeremy Liew
If you take a dump in the woods, Google knows where you dug the hole. And if you ordered from campusfood.com, they even know what you ate beforehand.
From click streams to purchase history, Google's got a file on you that'd make even the current administration blush.
But what if Google got it wrong? What if the real money is somewhere else entirely?
I've got these friends that are working on this thing. The idea is simple. They put coupons on the web.
The small business owners they work with have never heard of clickthrough. Maybe they've used Google, but they'd never buy a text ad. Sounds like a pitfall. But that's the brilliance of it.
The indian guy selling frozen chicken masala doesn't need to know his CPM or CPA. Either someone hands him a coupon or they don't. It's binary. He doesn't even need to know how to turn on the computer.
And the businesses LOVE this.
They know the power of the web. They know the web can make them money. They just don't quite know how. In the past that was a problem. But not anymore. The thing is this:
As the value created by the Internet increases, the relative cost of paying someone else to harness that value decreases.
We've got all these tools out there that have this huge potential. Unfortunately, sometimes the people who stand to benefit most don't know how to use them.
The entrepreneurs know this. They're able to take these coupons and embed them all around the web. Everywhere from Facebook to the local paper.
The businesses don't know what the hell is going on. All they see is the extra customers.
People buy stuff. They make money. They're happy.
It's a little bit brilliant.
It's an important question. Consider the implications. If we had an answer, we could quantify the effectiveness of school. We could judge the quality of books, articles, and blog posts. And we could find new ways for startups to create value.
Merriam-Webster defines learning as "gaining knowledge or understanding of or skill in by study, instruction, or experience."
Unfortunately, this definition is non-actionable. As such, I'd like to propose a new working definition
You've learned something if you can answer a question that you could not have answered previously.
Before we proceed, a couple of caveats. First, this model only works for cognitive learning. That means things like muscle memory are out. Second, this model treats actions as implicit questions. For example, if we learn how to drive a nail then we've answered the implicit question "How do I use a hammer?"
I've challenged several people to find an example that breaks my model. So far no one has succeeded. Even if there is some corner case that breaks the model, I think it's pretty safe to say that it holds for 99 and 44/100% of cases.
The implications here are huge. I'll start with books and blogging, and then I'll tackle school and entrepreneurship.
Good (non-fiction) books answer questions. Often, but not always, the questions answered are right in the title. Glancing over at my bookshelf, I see the following
Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes. The question here is easy to spot: What is the trouble with gold stars, incentive plans, etc.?
War Is a Force That Gives Us Meaning. Again, there is a clear implicit question: How does war give us meaning and what are the implications for the individual and society?
What Is Calculus About? Self-explanatory.
As a rule of thumb, the clearer the question the better the book. Which perhaps explains why most textbooks are so poor. Next to me is a copy of a textbook called Marketing. This answers no question. Or if it does, it's a trivial and ill-formed question like, "What the deal with marketing, yo???"
So if you write a blog that answers no questions, does that mean you're stupid and your blog sucks? Not necessarily.
In The Age of the Essay, Paul Graham writes that
An essay you publish ought to tell the reader something he didn't already know. But what you tell him doesn't matter, so long as it's interesting. I'm sometimes accused of meandering. In defend-a-position writing that would be a flaw. [...] But that's not what you're trying to do in an essay. An essay is supposed to be a search for truth. It would be suspicious if it didn't meander.
Certainly true. But I suspect that what makes the best of Paul's essays so good is that they do answer interesting questions. And while they often meander, the meanderings add interest precisely because they introduce further interesting questions.
But enough about writing. What about school, yo??
So you do your homework. But have you learned?
And you go to lecture. But have you learned?
And you get your `A'. But have you learned?
Can I answer a question I could not have answered previously?
But if the goal isn't to learn, no need to ask yourself these questions. Or any questions for that matter.
(And if you think about it, I think you'll see that working harder doesn't mean learning more.)
12:01:30 AM Helen: i bet readers will ask at some point, the dichotomy between good and bad learning
Well, my theory is that information only becomes useful or non-useful because of the questions it answers. Like say, for example, you learn what Britney Spears ate for breakfast. Certainly you've learned a new fact. But perhaps there are more useful facts (or ideas or theories) we could have learned. How do we know?
The problem is there isn't really any way to compare two facts directly. After all, they're facts. The only way one can say that one fact is more important than another is because it answers a more important question. So if learning what Britney Spears ate for breakfast can be said to be trivial, it's only because the only question we can answer there is, "What did Britney Spears eat for breakfast?"
If facts, theories, and ideas are the atoms of human thought, then questions are the glue that binds them together. Information with no intuitive model connecting it is useless or gets forgotten or both. That's why you read a book like All Marketers are Liars and it's seared into your brain. But then you open a textbook called Communication and you're asleep by page three.
Instead of grouping facts and theories by the questions they answer, textbooks group facts by how `similar' they seem. This actively thwarts the sensemaking layer of human cognition, preventing us from transforming information into understanding. If you've ever read through a textbook that seemed like a list of unconnected facts, it probably was.
Which is a problem, since being well educated is a function of the questions you can answer, not the facts that you know.
There is this common misconception that we've entered the information age, implying that information is somehow intrinsically valuable. Nothing could be further from the truth. The driving factor of the last half-century hasn't been information, but information-technology. What is IT? Information-technology applies technology to information to answer questions that wouldn't be answerable by looking at raw data alone.
For a full theory of applying technology to information to answer questions, check out Bret Victor's essay Magic Ink. It is one of the more insightful articles on software design ever penned. The basic premise here is that web entrepreneurs should exploit their medium to answer the user's questions.
Incidentally, Paul Graham takes this one step by advising entrepreneurs to treat the business idea as a question.
The initial idea is just a starting point-- not a blueprint, but a question. [...] Treating a startup idea as a question changes what you're looking for. If an idea is a blueprint, it has to be right. But if it's a question, it can be wrong, so long as it's wrong in a way that leads to more ideas.
One last point before we're done. So who gets to decide if your question is answered?
To borrow some logic from Seth Godin at Gel 2006, if you think your question has been answered, it's been answered. Other people will try to convince you that they think they've answered your question. I DON'T CARE if you think you've answered my question. If I don't think you've answered my question, you haven't answered my question.
Thesis-driven investment is the process of making investments based on theories about the future. The basic process is as follows
Having a better understanding of the future than everyone else is a great reason to invest. It's also a really lousy reason to start a company.
Don't believe me? Ten years ago I bet you could've told me that most people today would get their news online. Almost anyone could have told you this. Except of course for the newspaper owners themselves.
So why didn't you create Digg?
Don't get me wrong, a solid thesis is certainly non-trivial. But its importance is dwarfed by another less tangible factor.
Our understanding of human nature.
How does understanding influence our design decisions? Allow me to explain through example. Below is a list of three assumptions about human nature. See if you can figure out which startup(s) they go with.
The problem with assumptions is that they're usually correct. For certain people, at a certain times, in certain places.
The danger isn't that you'll sometimes be wrong. The danger is that you'll always be right.
That is, your assumptions about human nature will be true, but less useful than those of your competitors.
Consider online video. Five years ago anyone could have told you that online video was going to be big. The truth of the thesis was self-evident. But it took Chad Hurley to figure out the money was in the half-hour after lunch when employees were too comatose work. YouTube didn't make it big by having a better thesis, but rather by having a better understanding of human nature.
This is why thesis-driven investment works for venture capitalists but not for entrepreneurs. For VCs, merely having the best thesis is good enough. After all, they get to look at every solution to a given problem and evaluate each on a binary basis. All the assumptions are built in, and the product either works or it doesn't. If you saw a prototype of Digg then you'd have probably been smart enough to invest. Or maybe not. But at least the decision-making process involved is relatively straight forward.
Compare this to actually solving problems. You don't get to choose your solution from a list. You need to solve it yourself.
All too often people start businesses after finding a cool new problem. Bad idea, because being the first to find a problem confers zero advantage. None.
Think about it. Now you have two problems instead of one. First you have to convince others that there is a problem. Then you have to solve it. In practice so much of your time is spent on the former that you're lucky if you even get to the latter. And even if you do, you're just as unlikely to be successful as everyone else.
But what do you do if you REALLY REALLY know what the future is going to look like. If you've found all the cool new problems. The ways to create value. The areas for innovation. What then?
Go have a beer and let someone else work on it.
Much better to wait until you've discovered something new about human nature. Something that makes your assumptions more accurate for more people, more of the time, in more places. Something more useful. Something more actionable.
Call it assumption-driven entrepreneurship.
The best part is that theories are invisible so they can't easily be found and copied. Your theory of human nature is your hidden sustainable competitive advantage. Make sure you have one. And use it wisely.
All websites are tools. But some websites are more than tools. They make meaning. That is, they define us as people.
How do you know if your website makes meaning? Easy.
Ask your users how they relate to the site. If their answer starts with "I can" then it's a tool. If their answer starts with "I am" then it defines them as a person.
"I can use Amazon to buy stuff" vs. "I am an eBayer."
"I can get news on CNN" vs. "I am a Slashdotter."
Not all websites should be designed to make meaning. Sometimes the best tool for the job is... a tool. But if you're out to make meaning, then for each proposed feature first ask yourself the following. Is this an "I Am" feature or an "I Can" feature? The results may surprise you.
Wikipedia articles drift in quality over time. Some days they get better, some days they get worse.
The big question is whether Wikipedia as a whole will continue to improve, or whether it will "peak out" and gradually slide downhill. It's very difficult to say, since there are no precedents in the area.
Or are there?
Written between 600 and 800 B.C., the Iliad is the ultimate model for successful longterm asynchronous collaboration. Arguably the greatest story ever told, this epic was passed down from generation to generation. Each poet was free to add a little here or subtract a little there. The end result? Perfection.
This process is much the same as is used to create Wikipedia today. Which is hugely exciting, if only because it means that Wikipedia has the potential to be every bit as good. But there's no guarantee.
The biggest differences between the two projects are the social incentives involved.
1) The Iliad would have taken years to learn, but once memorized would have acted as a huge source of social capital.
2) Because of the time invested and the social capital at risk, petty vandalism was unlikely.
3) The project attracted only experts. Not because the Greeks were credentialist, but simply because of the intellectual barriers involved.
4) It's safe to say that the epic poets weren't going for edit count.
In the short term Wikipedia continues to improve, but in the long term it's hard to say. If we want Wikipedia to retain its value ten, twenty, or one-hundred years from now then perhaps we should design the social incentives of wiki contribution to mimic those of the oral tradition.
Either way, the next century for Wikipedia will be a hell of an Odyssey.
You have five friends who ski. Three are on the ski team. You think about joining, but ultimately decide against it. But then the other two join, and soon so do you.
This illustrates the first law of social network growth: The probability p of joining an online community is a function of the number of friends k already in that community.
No surprise.
What's more interesting is this. If your friends are also friends, you're significantly more likely to join. Almost 2.5 times more likely. That's huge.
Social networking theory has this concept of triads. Let's say there are three people, A-B-C. Person B is friends with person A. Person B is also friends with person C. If person A knows person C, the triad is closed. If person A does not know person C, the triad is open.
So we know that having more friends in a group makes you more likely to join. And if your friends all know each other, your chances of joining go up even further.
The paradox is this: The higher the ratio of closed triads a group has, the slower it grows.
If each individual is more likely to join the group, how can the group as a whole grow more slowly? It seems impossible.
One possible explanation is that tightly connected groups become cliqueish. Indeed, there is some evidence that groups based around common bonds between users are harder to join than groups based around a common identity. However, if cliqueishness really were the reason these groups grew more slowly then why are individuals so much more likely to join groups with many closed triads? This theory seems questionable.
Another possible explanation is that when the network is growing very fast, the nodes don't have enough time to connect. When the rate of growth slows down, the nodes then play catch-up and connect along the edges. This theory also does not feel entirely satisfactory. Social networks go to great lengths to reward those with many friends, and users go out of their way to add anyone they can think of.
While more research is needed, the preliminary results already raise valuable questions:
Why should the fact that your friends in a community know each other make you more likely to join?
Does large density of closed triads represent cliquishness?
What are the structural features that influence whether a given individual will join a particular group?
What are the structural features that influence whether a given group will grow significantly?
The answers are still up for debate. There's still so much we don't know. But in some ways, just having the questions will give future designers an enormous advantage.
Source:
Backstrom, L., Huttenlocher, D., Kleinberg, J., & Lan, X. (In press). Group formation in large social networks: membership, growth, and evolution. [PDF]
You'd think that if you wrote something really great, you'd get praised. And if you wrote something really dumb, you'd get trashed.
But that's not the way it works.
Instead, if you write something really great then everyone tells you how dumb you are. And if you write something really bad, you just get ignored. Ask any blogger and they'll tell you its true. But why is this?
People naturally respond to what they read. If someone loves what you write, the natural response is to forward it to friends or post it on Digg. But what if someone hates your blog? They can't unforward it, nor can they delete it from the collective memory.
So they trash you. Because really, it's all they can do.
There are times when the blogosphere seems terribly uncivilized. Recent events like the Kathy Sierra death threats make this all the more salient. But not everyone hates Kathy. In fact, most of her readers love her. They express their love by reading her posts in the first place. But this support is largely invisible, so sometimes all that's left to see is the hate.