Sensemaking

Why Entrepreneurs Make More Money Than Engineers (And Deserve It)

Majoring in engineering is harder than majoring in whatever it is that entrepreneurs study, and yet entrepreneurs make more money than engineers.

Why?

Because entrepreneurship is more highly leveraged.

Why?

Because, as Fred Wilson says, "It takes chutzpah to make it as an entrepreneur and the cereal guys can hire the CS grads from MIT easier than the CS grads can get up the courage to sell 800 boxes of cereal at $40/box." Entrepreneurship is all about sales and networking, which is something fewer people can do than engineering.

Why?

Because if you want to be an engineer, there's a step-by-step process that you can follow. It may be really hard, but if you follow all the steps then you're pretty much guaranteed to succeed. At the end of the day there are more people willing to follow this step-by-step process, no matter how hard and stupid it might be, than there are people willing to pick up the phone and call someone who might reject them.

Anyone can do hard, and when anyone can do something then by definition it isn't leveraged. A hundred years ago doing hard work was considered a virtue. Now it's a sign that you're avoiding work that's difficult.

How To Impress a Girl

"If you want to impress a girl, take her on a date to the Oscars... And then win."

That's what Peggy Orenstein said yesterday on NPR. It's very reminiscent of Stephen Colbert's advice to recent college grads:

"The best career advice I can give you is to get your own TV show. It pays well, the hours are good, and you are famous."

It's funny to think that just fifteen years ago, telling a recent college grad that they should start their own company would fall into the same category of amusing fake advice. But fast forward a few years and we have all these people like Seth, Guy, DHH, pg, etc. explaining step-by-step just how it's done. And, more often than not, organizing communities that make things happen.

Al says that we have all these people who won't admit to themselves that what they really want is to be a rock star, pro athlete, TV host, etc. because they don't think they can succeed. And maybe they're right. But if they are, I suspect not for long.

What's happened in the last ten years for entrepreneurs is about to happen for astronauts, wine makers, and race car drivers. Leaders will form tribes, tribes will offer advice, and the best of that advice will be collected and made available to everyone.

Winning an Oscar may never be sound advice for picking up a girl, but telling someone they should go out and make an Oscar-quality documentary will no longer come off as laughable. It'll just be what you do next after college.

"Of course."

Achieving Grace

John Taylor Gatto has this list of the fourteen differences between your average public school and the elite private schools. One of the differences he lists is that at public school, sports are option, whereas at elite private schools they are mandatory. Gatto claims the reason for this is that playing sports is the fastest way to achieve grace.

"Energetic physical sports aren't a luxury or a way to blow off steam, but they're absolutely the only way to confer grace on the human presence. And that grace translates into power and money later on."

Gatto is actually talking here about physical grace-- the idea that physical activities confer a commanding presence on those who can do those things well. Certainly true, but I'd take it a step further. That is, I'd argue that sports are the fastest way to achieve spiritual grace as well.

Now, since we're talking elite private schools, we're essentially talking about rowing. The average rowing team is thirty kids, eight of whom will make the first 8+. Every day of high school was a constant struggle trying to figure out how I could become faster than the other guys on my team. After all, I wanted to be in the first boat.

The problem is that even if you're in the first boat, it doesn't mean your boat is any good. The only way to win in competition is to help make the other guys as fast as possible. Which of course makes it vastly more likely that you yourself will lose your seat in the boat.

That, I think, is where the spiritual grace comes in. It's one thing to help others when you have nothing to gain. It's a whole other thing to help others when it actively hurts you. Learning to do this without feeling conflicted, in fact without even thinking about it... If that's not a working definition, I don't know what is.

What NYT Writers Can't Do

1. Express their own opinions

2. Use bold

3. Add whitespace for emphasis.

Like this.

4. Use numbered lists.

* Use bullet points.

6. Add stupid pictures.

7. Tell people to go fuck themselves.

8. Use words and phrases that sound cool when read aloud.

b) Add things later.

9. Reference memes.

10. Add YouTube videos and links to books on Amazon.

11. Write about ideas.

12. Link to other authors

13. Use long quotations.

14. Cite multiple people with the same opinion.

15. Spend more than a few hours working on their article.

16. Send it around to their friends to edit and suggest feedback.

17. Let people add unmoderated comments on the bottom.

18. Add a del.icio.us link.

19. Wait until they're ready to post.

20. Use literary devices from, say, epic poetry.

21. Go back later and fix mistaeks.

22. Admit when you're wrong.

23. Criticize a corporate sponsor.

Paul Graham says that if you've ever looked at sites that aggregate the best of what's on the web, you've probably noticed that stories from the NYT make up only a small fraction of the most interesting content each day. All of the above are reasons why the average NYT article is better than the average blog post. And, at the same time, they explain why the best NYT articles will never be nearly as good as the best blog posts.

No NYT article will ever be as good as this:

http://steve-yegge.blogspot.com/2006/03/math-for-programmers.html

Or this:

http://www.expatsoftware.com/articles/2008/05/laid-off-one-thing-you-absolutely-need.html

The NYT is really good at competing on access to famous people and grammar. You'll never beat them on their own terms, but as soon as you shift the frame it's virtually impossible to lose.

The most important graph in education

Like most kids my age would have, I assumed that because I was in the advanced fourth-grade reading-class I was smarter than everyone else. That is, not only had I achieved more, but I also had more potential. I was going places.

I don’t remember ever taking a test. But I assumed that there was one and maybe I had forgotten about it. Or maybe there wasn’t, maybe there was some secret rubric that I had maxed out on due to my luck, pluck, and virtue. It didn’t matter. I had potential and I was going places and that was that.

Or maybe not.

A 1994 study led by Aaron Pallas compared the standardized test scores of first graders to their reading-group placement. The results were shocking.

One would have expected that the test scores for the advanced reading group would have been the highest, followed by the normal ability group, followed by the remedial reading group. Instead, Pallas found that the test scores of all three reading groups were virtually identical. Students in even the most advanced reading group had only a slightly greater chance of having greater than average test scores.

The implications here are huge. To quote from the study, “Ability grouping in classrooms has traditionally been viewed as a rational way for schools to organize instruction. There is a growing body of evidence, however, that (1) ability-group placements are fallible, in that students with similar levels of academic potential may be placed in different ability groups, and (2) that placement of children in different ability groups may heighten inequalities in children’s academic achievement.”

“We found that first-grade ability-group placement can have persistent effects on children’s achievement in school over a period of several years and may shape the expectations of children’s performance held by significant others, such as parents and teachers. Whether these effects are instructional, social, or institutional, they are real, and they have implications for children’s future schooling trajectories. […] Instructional grouping may have the unintended effect of increasing inequalities in educational outcomes, largely by creating inequalities in educational resources and rewards.”

That is, students who started off at exactly the same level of measured ability in first grade will have vastly different levels of ability by the end of high school. In my own experience I know that my peers in my advanced fourth-grade reading group were the same ones that got into the best colleges almost a decade later. Were we really smarter to begin with, or were we made smarter after being accidentally selected at random as a by-product of a broken system?

Pallas himself suggests the latter: “Children in higher-ranked reading groups were perceived by their parents and teachers as more competent than were similar children in low-ranked groups, often independent of their actual performance.”

Not to get all angsty, but I do often wonder how much of my identity– intelligence, personality, experiences, etc. – has nothing to do with anything intrinsic within me, but is rather the result of a series of stochastic events and selections.

That's what I like about being an entrepreneur; going forward I steer.

Pallas et al. “Ability Group Effects: Instructional, Social, or Institutional?” Sociology of Education 67 (1994). Fig. 1, p. 36.

The Value of Brainstorming

Ever notice that proverbs and aphorisms only become useful after you've been burned by violating them a bunch of times? It's weird because you can be told them and understand what they mean immediately, but just because you understand what they mean doesn't make them meaningful. Or something. It's almost like you aren't able to fully grok the proverb until you have a certain outlook on life or the right schemas or perspectives, but it's impossible to gain those just by hearing the original saying.

I mention it because venture capitalists have this saying that it's not the idea that matters, it's the execution. Ideas are worthless.

No matter how many times I've heard this, it never really sunk in until this week. For Seth's alternative-mba program we had to come up with 111 business ideas. There are 9 of us, so that's 999 business ideas total. This was a great exercise for two reasons:

1) It ensures that we aren't just going with our first decent idea because we don't think we're capable of coming up with more. We have hundreds, so we get to be selective. Not only do we have more ideas to choose from, it actually forces us to think about what makes a business idea good in an entirely different way. Suddenly "I had this idea and it doesn't obviously suck" doesn't cut it anymore.

2) It proves that ideas are worthless, because we're capable of coming up with dozens of billion-dollar ideas.

Ideas seem a lot less valuable once you have more than one. And execution suddenly seems to matter oh such much more... Sort of like what those VCs have been saying all these years.

What follows are 68 of my best ideas. FREE!

1. A way to ensure that each person can only create one account on a website, without having to sacrifice anonymity.
2. A day planner that plans my day for me; based on my to-do list, what my friends are doing, and also what's going on in the local area. Also, populate the bulk of my to-do list automatically based on what my friends in the same classes are adding to theirs. Plan social dates for me based on when my friends and I are free. Introduce me to people I don't know but should know.
3. A website that provides a semi-standardized way for people to build up a reputation without needing a college degree.
4. An IMDB for people who have won awards. I want to a quick way to find the professors with the most citations in any given subject, the chefs in the area with the best zagats reviews, the local high school football players with the most touchdowns, etc.
5. An academic search engine targeting people who are college educated but who don't necessarily have extensive experience with the inner workings of academia. Right now there are really good ways of accessing journal articles online, but really poor ways of learning what academic journals to look in. There's no way to know which journals are respected and which aren't. No easy way to translate plain English questions into the keywords that are used by academics. For example, if I want to know how grades correlate with how much money you make as an adult, there is no way to know that academics use the term "future earnings potential" and stuff like that is published in the Journal of Applied Whatever.
6. A way to turn recipes on the web into peapod orders. A way to turn the customized diets that Weight Watchers or WebMD create into a peapod order.
7. A food service where you can email them your mom's recipes and have them make it for you and deliver it during lunch time.
8. Connect people who want to learn similar things. For example, if there are ten people who all want to learn the material from Structure and Interpretation of Computer Programs, introduce them all to each other. The site could even be monetized by allowing the people to rent a conference room to work in for a week or two. The idea being that this is stuff they could learn on their own, but they will all start at the same time and help each other and whatnot. (Ivan Illych proposes this in his book Deschooling Society, which was written in 1971.)
9. A website that connects people with Objects of Sociability. For example, you have a group of friends you want to do something with and it connects you with an open hibachi table or a deep sea fishing boat rental. You can also rent objects of sociability, so for example you could rent a bread maker or a super nice tea set with 30 looseleaf teas. It would also connect people to third places that would be suitable for, say, a first date.
10. A mobile job fair in a tractor trailer that pulls up in the parking lots of offices of businesses performing massive layoffs. You then make money by renting out space in the trailer to companies in similar industries.
11. A consulting firm that does a roll-up of social science professors. So, for example, a new dating site wants to learn about the 20 most counteruitive scientific findings on internet dating that will help them be more successful than their competitors. Or a grocery store wants a quick way to find someone who can optimize their layout around the way that people make purchasing decisions. There are plenty of social science profs who would consult for 500 bucks an hour if they didn't have to find the clients or do the paperwork, and there are plenty of organizations who want to do stuff like this, except for that there is currently no easy way to go about finding the right person.
12. A trend of the month club, where each month you get mailed something hip with a glossy booklet explaining how cool that item is about to become. Limited to 5,000 people. Gives you a cool story to tell yourself for the rest of the month, and something to talk about with your friends.
13. A store for really obscure food products that change regularly. Every time a customer checks out, you ask them if there are any products that we don't know about that we should know about, and if there is then the customer ten dollars off their bill and that product shows up in the store within a week or two. Maybe even more narrow than just foods in general, so for example a store for niche meats that come from animals you've never heard of.
14. A "cheesebox" that makes call centers transparent. Generates a line graph that's updated on real time of the average hold time and posts it to the web. That way customers know when the down times are so it evens out the call flow, saving the company money, and at the same time makes it easy for the company to hold themselves publicly accountable for great customer service.
15. A touch screen digital picture frame that can be used by my grandma. He can't use Google to find new content, so the key thing I need is the ability to send him podcasts and videos of booktalks that queue up sequentially as if they were blog posts in an RSS feed. What I also need is the ability to check online to see if he's already viewed something, and if so the ability to get rid of it and add more stuff to his queue.
16. A hyperlocal iPhone app to find food, but for a series of use cases more specific than what zagats and yelp are designed for. For example, list the best 3 food places within one mile of each highway exit that take less than 20 minutes. Or what wine tastings are within 10 miles of me within the next week.
17. A company like 800CEOREAD that does bulk book rentals. So for example you could rent 1,000 copies of Jeff Jarvis's new book for a month instead of purchasing them.
18. A website that aggregates places you can go for factory tours. Like Ben & Jerry's, the Cape Cod potato chips factory, etc.
19. A store completely filled with weird vending machines.
20. A service that gives well-known business people a public email address, so that if an email get sent there you can read the email and then read the response. The idea being that it will give you insight into the mind of the person and what made them successful, and it will also teach you how to write good emails and learn email etiquette.
21. A store that sells all inflatable products. So, for example, large inflatable cushions that kids can use to make play forts that compress flat afterward. Good for Manhattan apartments where you buy a 30 dollar toy that takes up $800 of floor space.
22. A company with a large list of jobs that you can sign up to try for a week or two as a hobby. For example, but a bike messenger for a week.
23. Roof-mounted Active Denial System (pain ray) to keep deer out of your garden. Or possibly a sounder laser. The system would be mounted next to a camera with an image recognition system that could pick out a deer.
24. A website that gives NYC street artists a web presence based on where they hang out. There are a bunch of people that sell photos on the street, but then I ask them and they don't have a website. Maybe a web presence for people who hang out in the same place in the city each day in general, like food vendors and crazy religious people and whatnot.
25. A travel guide website where people can make pages about virtual destinations. So for example people could make squidoo type lenses about Second Life locations. Currently people can create cool in-game buildings and items in second life and gain social status in game, but there is no way for users to showcase their creations to users outside the game. And, similarly, there is no way for people interested in Second Life but who don't want to spend all day wandering around to find out what's cool. For example I don't want to make a Second Life account to take a virtual tour of Harvard, but I'd like to see what the buildings look like and what activities the Harvard island hosts if I could do that via the web. Then for actual players there is a Second Life link syntax, so with one click you can teleport to that location in game.
26. A website that teaches you about what is involved in the day-to-day training for different sports, so you can make an intelligent decision about what sport to take up instead of just choosing based on what it looks like on TV. Has links to where you can go to take up a sport as a beginner, what the competition structure looks like, how far you typically have to travel, etc. Can drive traffic to consultants who help get kids recruited to college, to genetic testing firms, to sports physiology labs, etc.
27. A website that users can program in advance to take some action if some event happens. For example, a national chain of tire stores could send an email reminding its customers to get their snowtires on two days before the first predicted snowfall of the season in that user's zipcode.
28. A site that gives you a step-by-step system to build a large web presence and a large group of followers, and makes it easy to track how many people are reading your blog, commenting, sending you emails, etc. so you can work on growing your number of followers and increasing your influence as efficiently as possible. Gives you detailed instructions each step of the way based on your performance.
29. A website or iPhone app that finds places for large groups to hang out in real time. So for example if you're wandering around union square with fifteen friends at night, find the nearest ten places that can accommodate that many people right now.
30. Web-based devil's advocate service for startups looking for someone to critique their ideas. Perhaps also provides referrals to cheap services for startups, like cheap graphics design, cheap business plan feedback, etc.
31. Pandora for clothes. A service that drops off a different set of clothes for you to wear on whatever days you want each week. (E.g. only on Friday and Saturday.) It shows you a complete wardrobe on the website, and if you don't like it then you get to veto it. You get up to three vetos each day, and if you veto three wardrobes then you automatically get the fourth. Then the clothes get delivered to your apartment. You have the option to buy the outfit at the end of the day, but if you don't buy it that day then you never get the option to buy it again.
32. A blind date site where the site picks you will date, but you gain karma by going out on good dates with people. The more karma you earn the better people the site picks for you to date in the future. After each date the site sends a rubric to the person you went out with, and you can gain karma for things like showing up on time, buying the other person a drink, being nice, being a good conversationalist, not being clingy, etc. The site starts out as a blind dating website, but then other people get to write about you and post pictures of you. So essentially your identity is created by other people through what are at first blind dates, but as you gain karma and reputation becomes like a more traditional dating site but that is verified by the masses. The experience would be designed by merging the latest research and theory on dating with the latest research and theory on digital identity.
33. A crowd-sourced social filter. So you type in something you think would be funny to say or do to someone else, and the site tells you whether it's actually a good idea or whether it would be wildly inappropriate.
34. A chain of theme restaurants similar to the hard rock cafe or the rainforest cafe, but where everyone eating dinner was participating in some sort of game show. Buzzers at every seat of every table, with some sort of thing in the middle for the best contestants going into the final round. The food would cost twice as much as any other restaurant, but there would be some sort of prize for the winners. Maybe the winning contestants at each location would get together in one restaurant for a chance to win a car or something.
35. A combination blogging platform / analytics package for high school teachers that would let students put their writing online. The idea is that the software would teach students to write something that people actually want to read, using the analytics to track how many people read the writing and how much time they spend reading it when they don't have to. Students could then compare their writing with kids in other classes and at other schools, and the best student writing would be featured internally within the community via some Digg-like interface.
36. The vast majority of niche file types are currently not indexed by Google. Even though these file types make up only a fraction of a percent of what people are looking for, if you were able to create a search engine that covered a wide variety of these then there might be some opportunity. For example, if your search engine can index .sfg files (for Go players), .mm files (mind maps), etc.
37. A way to get more people involved in Internet-mediated locally social stuff. For example, improve the techniques of using the Internet to organize people playing capture the flag in central park or somesuch.
38. A site that aggregates what people or companies are working on and makes it searchable. So if you have a great idea, you can see which companies and people are already trying to solve that problem or similar problems.
39. A website that teaches kids how to do quant trading. The site would come with a data feed, dozens of pre-packaged statistical tests that could be deployed or combined in various ways, and the ability to do backtesting to see if this strategy would have been effective on previous data.
40. A website that creates a place for up-and-coming athletes. The site tracks their performance in competition and connects them to scouts and sponsors, in addition to letting them meet each other.
41. A site that aggregates naturopathic medicines that have been shown to work to peer reviewed journals, but which for whatever reason aren't prescribed by mainstream doctors. The site would then show the medicines proven effective for each condition, with a link to the journal article or clinical data or whatever.
42. A non-profit that works with town governments on writing laws that create incentives for landlords to make their homes more energy efficient. There are already best practices available for solving the principal-agent problem, they just need to be put in place at the local level.
43. A website that aggregates tastemakers. Collect the people who do for other things what Fred Wilson does for music. Give them a really good platform. Give them points for picking up on trends before they go mainstream.
44. Zagats for churches.
45. A website for elementary and middle school kids that helps them build a portfolio of their best artwork, writing, sports accomplishments, etc.
46. How to monetize this list: we buy a domain for each good idea, and create a high quality pitch and story around that idea. We then get people to fall in love with the idea and the domain and then sell the domains for a couple thousand bucks each.
47. A website that aggregates gaps in our scientific knowledge that would make good research projects. "The sum of all human ignorance, available to anyone for free."
48. Netflix for freshwater aquariums. If you get bored of some of your old fish you can swap them out for new ones.
49. A company that tests each individual fish for mercury and PCBs, so your plate of sushi comes with the story and the numbers printed on a nice heavy stock card.
50. A place where you can go and pop bubble wrap. Possibly a bar of some sort.
51. A website that aggregates people who want to complain about their college. Something along the lines of myCollegeSucked.com.
52. A YouTube VC firm, that will invest money in people who are willing to do stupid stuff on video in hopes that the video will go viral and they will make a profit.
53. A site like intrade that would allow investors to make bets on analytics type data, like the number of page views Wikipedia will get next January, or how many copies Malcolm Gladwell's new book will sell.
54. A site that does for intrade what Ning did for social networks; in other words, you get to make your own intrade for your organization or business, or just with your friends.
55. A company that sells high quality sawdust / sand in bulk to put on the floor of restaurants or bars. The company would then be responsible for removing the old material and replacing it when necessary.
56. Glow in the dark non-toxic washable paint that you can spray on your kids/pets when they are trick-or-treating so they don't get hit by a car.
57. A company that sells framed book covers, so that you can hang the covers of your favorite books on the wall of your office.
58. Netflix for conversation pieces. Get bored of your coffee table book and send it back for another.
59. A unified affiliate marketing program for every store on the web.
60. A virtual world future's exchange, so you can bet on how much a Linden dollar will be worth in US dollars six months from now.
61. A consulting firm that helps apartment building owners set up their own Ning group and community events.
62. A mmorpg computer game with plot elements that reward meeting other players in real life.
63. A site that mines zagats and yelp and restaurant reviews to tell you what the best menu items are at each restaurant, and which to avoid. There are a bunch of restaurants that have one amazing thing on the menu, but everything else sucks. (Example: Rockmeisha has the best ramen in NYC, but nothing else is especially notable.)
64. Netflix for home exercise equipment. Swap out your ergometer for an elliptical and then swap that for a treadmill.
65. A national chain of tool libraries. So you can subscribe and then check out a hacksaw or an awl, without having to own your own set of tools.
66. A website that will sell you a really cheap airline ticket to a foreign country anywhere in the world, but you only get to pick the day you're leaving and coming back. The site picks where you're going on vacation for you.
67. A website that aggregates food in grocery stores that is about to expire and gives you a big discount on it. This would help to greatly reduce the millions of tons of pre-consumer food waste each year.
68. Really good collaboration software for creating mindmaps, with version control that's as easy to use as Wikipedia's history tab. Uses the same open data format as FreeMind.

Want to see all 999? Check out Hamster Burial Kits & 998 Other Business Ideas

You don't have a Wikipedia-thong problem

There are two types of user-generated content sites. The first is designed to generate content that's useful to the end user. For example, Wikipedia, Amazon, Rotten Tomatoes, etc. The processes for submitting content to these sites is entirely designed around creating something the end user is looking for. For example, every user who goes to Wikipedia is looking for an encyclopedia article. The whole "anyone can edit" philosophy will be dropped as soon as it's no longer the best way to produce encyclopedia articles worth reading. Jimbo has said as much multiple times.

The second type of user-generated content site is designed to make the user feel good about contributing. Cafe Press falls into this category. When Cafe Press makes money off people looking at Wikipedia thongs, it's not because there are tons people who want to buy one. It's because people get there by accident through Google and then click on ads or else get taken to the top 100 products, which they might actually have some interest in buying. No girl actually wakes up with a Wikipedia-thong problem. (If anyone knows any girls who do, please introduce me.) The reason that Wikipedia thongs exist is that the site is designed to make the person creating the product feel good about having made something like that.

Before launching any web 2.0 site, ask yourself this:

1) Do users contribute primarily because the site is designed to make them feel good for contributing?

2) Or do users contribute because the site is designed to create something qualitatively different and better than, say, the book reviews on Amazon. In other words, the user participates because they are part of a larger effort to make something the masses will find useful.

One isn't necessarily better than the other, but each comes with a different set of questions to ask and a different set of metrics defining success.

There are two types of user-generated content sites. The first is designed to generate content that's useful to the end user. For example, Wikipedia, Amazon, Rotten Tomatoes, etc. The processes for submitting content to these sites is entirely designed around creating something the end user is looking for. For example, every user who goes to Wikipedia is looking for an encyclopedia article. The whole "anyone can edit" philosophy will be dropped as soon as it's no longer the best way to produce encyclopedia articles worth reading. Jimbo has said as much multiple times.

The second type of user-generated content site is designed to make the user feel good about contributing. Cafe Press falls into this category. When Cafe Press makes money off people looking at Wikipedia thongs, it's not because there are tons people who want to buy one. It's because people get there by accident through Google and then click on ads or else get taken to the top 100 products, which they might actually have some interest in buying. No girl actually wakes up with a Wikipedia-thong problem. (If anyone knows any girls who do, please introduce me.) The reason that Wikipedia thongs exist is that the site is designed to make the person creating the product feel good about having made something like that.

Before launching any web 2.0 site, ask yourself this:

1) Do users contribute primarily because the site is designed to make them feel good for contributing?

2) Or do users contribute because the site is designed to create something qualitatively different and better than, say, the book reviews on Amazon. In other words, the user participates because they are part of a larger effort to make something the masses will find useful.

One isn't necessarily better than the other, but each comes with a different set of questions to ask and a different set of metrics defining success.

What Makes Twitter Twitter?

IT creates value by applying technology to information to answer questions.  Some websites answer lots of questions. Google, Facebook, MySpace, Wikipedia, etc.

Not Twitter.

Twitter is a one question startup. That question: "What are you doing?"

For the uninitiated, Liz Lawley on Many-to-many sums it up best

"If you haven’t tried it yet, Twitter is a site that allows you to post one-line messages about what you’re currently doing—via the web interface, IM, or SMS. You can limit who sees the messages to people you’ve explicitly added to your friends list, or you can make the messages public."

What makes Twitter interesting is its multiple use cases.

First, one can use the service either actively or passively. When used synchronously, users view new messages in real time. Whereas asynchronously, users glance down every so often to get a general impression of what's going on.

Second, the one-line format lends itself to two distinct styles of communication. The first possibility is that the value of a message is in the information conveyed. For example, if I tell my friends where I'm at then they have the ability to come find me. The second possibility is that the value of the message comes from the message itself, its presence. That is, when your friends send a message like "hi!" or "poke!", the value comes not from the content but rather from merely knowing that your peeps are thinking of you.

The combination of synchronous/asynchronous with information/presence leaves us with four possible distinct possibilities. To borrow some descriptive vocabulary from Rheingold's Smart Mobs and Ito's Personal, Portable, Pedestrian, I'd say the use cases look something like this

	Synchronous	Asynchronous
Information	Smart mobs	Virtual communities
Presence	Telecocooning	Lightweight digital refreshment

Smart mobs and virtual communities should be self-explanatory. Telecocooning is the term used to describe people who are physically separated, but who inhabit a common virtual space using mobile wireless. The idea is that these people exchange "presence pokes" with their three or four closest friends several times a day to create the illusion of togetherness. Lightweight digital refreshment is a term used to describe mobile entertainment used intermittently throughout the day. The idea being that one glances down from time to time without interrupting the state of flow any more than, say, taking a sip from a cup of coffee.

To quote again from Liz

"What Twitter does, in a simple and brilliant way, is to merge a number of interesting trends in social software usage—personal blogging, lightweight presence indicators, and IM status messages—into a fascinating blend of ephemerality and permanence, public and private."

The rich and variegated use of Twitter seems to be a case of technological constraints forcing creativity. One can't help but wonder, "At one point does less become more?" When adding new features we worry about increased cognitive load and reduced usability; should we worry about damping creativity as well? And is it possible to purposely restrict functionality to encourage ingenuity?

Maybe Twitter hit the jackpot by accident. But maybe not. Perhaps there's a lesson here worth learning.

See Also: The Asymptotic Twitter Curve

What is the value of a formal business education? [Pics]

Business is far and away the most popular undergrad major in the United States. According to the National Center for Education Statistics, 22% of the 1.4 million bachelor's degrees awarded in 2004 were for business. This is up from 13% in 1970.

As such, it seems only prudent to take a closer look at what these 307,000+ undergrads are actually doing. That is, when parents encourage their children to major in business, what is it exactly that they're really encouraging? And when they discourage their kids from dropping out, as almost 50% of entering freshman do, what is it that they're actually discouraging?

Perhaps the best way to judge an academic program is by looking at its textbooks. As such, this post highlights a few examples from the following

• Kerin, Berkowitz, Hartley, and Rudelius. Marketing. 8th ed. McGraw-Hill, 2005.

• Hilton, Ronald W. Managerial Accounting: Creating Value in a Dynamic Business Environment. 6th ed. McGraw-Hill, 2006.

I've chosen these textbooks because they are well representative of the overall quality of textbooks used by undergrad and graduate business programs today. Each can be found in campus bookstores everywhere from the Ivies to your local community college.

So enough talk, let's have a look

• The first example comes from the Managerial Accounting text. Let's have a look at the typical paragraph:

  "All organizations need information, whether they are profit-seeking or nonprofit enterprises and regardless of the activities they pursue. As a result, managerial accounting information is vital in all organizations. Ford, Lands' End, American Airlines, Marriott Hotels, Prudential Insurance, American Express, Cornell University, The United Way, Mayo Clinic, the City of Los Angeles, and the Department of Defense all have managerial accountants who provide information to management. Moreover, the five basic purposes of managerial accounting activity are relevant in each of these organizations."

  As you can see, the author has chosen to help you out by highlighting the name of each and every corporation and organization in blue. This trend continues throughout the entire text. This makes the names easier to remember for when you are tested on them later.

• The second example, from the same text, is a typical sample homework question. Below is the text of a similar problem from a later chapter
  
  "Visit the Web site of one of the following organizations, or a different organization of your choosing:

                                                                                                               

  All State	www.allstate.com
  Gallo Winery	www.gallo.com
  Mayo Clinic	www.mayo.edu
  Sheraton Hotels	www.sheraton.com
  Walt Disney Studios	www.disney.com

  Required: Read about the organization's activities and operations. Then list three activities that you think the organization would need that would likely be established as service departments."

  The word Required is in bold.

• The Marketing text and the Managerial Accounting text actually share many similarities. For example, the Marketing text contains the following passage:

  "The third component of income is discretionary income, the money that remains after paying for taxes and necessities. Discretionary income is used for luxury items such as a cruise on the Queen Mary 2."

  And here is a similar passage from the Accounting text:

  "Diverse organizations use budgets for a variety of reasons. A cruise line, such as carnival, uses budgets to plan for meeting the payroll and operating expenses and to coordinate operations by matching staff with projected cruise demand."

  In both books, each passage is accompanied by a huge color picture of the cruise ship in question. The textbook authors were even kind enough to provide links to each cruise line in question in case you wanted to book tickets. Note that the Carnival Corporation owns the Cunard Line, which operates the Queen Mary 2. Also note that both texts are published by McGraw-Hill.

  Marketing -- Page 1
  Marketing -- Page 2
  Managerial Accounting -- Page 1

• The Marketing text has many helpful case studies. Here is a sample paragraph from a twelve page case study on Roller Blades.

  "If you're going to buy a pair of in-line skates, it only make [sic] sense to buy from us," says Stonier, "because we're the ones who started it, perfected it, and continue to push the innovation." As evidence of Rollerblade's innovation, he points to a number of firsts, such as the use of polyurethane boots and wheels, metal frames, dual bearings, and heel brakes. Other firsts include breathable liners, push-button adjustable children's skates, skates designed specifically for women, and the award-winning Advanced Braking Technology (ABT) that allows braking without raising the toe of the skate."

  The case study even comes with a handy chart telling you the advantages of each model, how much they cost, and where you can purchase a pair.
  
  Rollerblades picture one
  Rollerblades picture two

• Last but not least, another example from the Marketing text. Are you one of the millions of college students who has never heard of the iPod? If so, you're in luck. The authors of this text have generously included a full color photo to enlighten you. They were even thoughtful enough to include both a web address AND a phone number in case you were interested in purchasing one. Of course, the insight and enlightenment doesn't end with just the iPod. There are also full page color inserts provide by Ben & Jerry's, Anheuser Busch, Volvo, Reebok, 3M, Gatorade, Priceline.com, Gillette, Apple, Target, Disney, and more.

This concludes our tour through America's most popular undergraduate major. Hopefully you now know a little bit more about what 307,000+ students spent their time last year "learning."

Possession of Social Capital With Intent to Distribute

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

1. They make you look cool.
2. They make your friends look cool.

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.

• A good app lets you buy an mp3 for a dollar. A great app lets you buy your friend an mp3 for a dollar.
• A good app makes your taste in clothes look cool. A great app makes your friends' taste in clothes look cool.
• A good app lets you poke yourself. A great app lets you... Well, you get the idea

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