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The rise of the creative classes

By | Community, Innovation, Work life balance | 12 Comments

image I have just started reading The Rise of the Creative Class by Richard Florida.  It was first published in 2002, making it a pretty old book by the standards of today’s fast changing world, but the central idea is still powerful today, and it is new to me. 

Having read the title you won’t be amazed to learn that the big idea is that the rise of the creative class is one of the defining characteristics of the modern era.  I am only part way through the book, but I’ve read enough to get the gist, and I think the notion that the creative class is increasing in size and importance helps us understand a lot about today’s society and helps us to predict what might happen next – e.g. the rise in individualism, more casual work practices and dress codes, and the rise of creative consumer habits like blogging. 

That said I think the rise of the creative classes is one of several trends that are defining the modern world and isn’t as central as Florida would have us believe.  Other important trends include the increasing pace of technological development and the increase in living standards. 

Time for a definition – the creative classes include anyone who is creative in their work.  That ranges from musicians and artists, to architects, to architects of new financial instruments to scientists, to teachers and, of course, to entrepreneurs.  That adds up to a lot of people – 38m in the US in 2002 by Florida’s estimate, which was 30% of the workforce.

There are two other big groups in society are the working class and the service class – and the most important difference between them and the creative class is that workers in the working and service classes are hired primarily to execute somebody else’s plan, rather than to create something of their own.

I think the concept of the creative class has power because it helps explain the rise and possible future direction of the following phenomena:

  • The emergence of new technology clusters – all creatives, including entrepreneurs, need hang out with others in order to do the best work, and so creatives of different types congregate in hot spots for their activity.  For tech entrepreneurs that is Silicon Valley and to a lesser (but increasing) extent London, New York, Berlin and Tel Aviv.
  • The success of a plethora of web services that facilitate the expression of creativity – Tumblr is perhaps the latest to really take off
  • An increasing desire to balance quality of life with monetary rewards
  • The rise in individualism – creativity comes from individuals, not systems (although putting the right structures in place can help foster creativity, ref the rise in nice offices with ping pong and free fruit..)
  • The rise of the experience economy – creativity is fuelled by stimulation of the senses

These five are the product of a relatively small amount of thought, and the full list would be much longer.

It is not all good news though.  I suspect the rise in individualism is partly responsible for the rise in inequality.  As society places an increasing premium on people like Steve Jobs with their ability to deliver big change through creative genius then those people will command bigger packages, as will the next level down, and even the people who step up to the plate and fail.

A stress on creativity is also at odds with many of the traditional structures in society which evolved to support a very different type of worker.  I am thinking of institutions like the family, the welfare state, and the church whose upheaval over the last twenty years can be understood as a consequence of the rising importance of the creative creative class.

Big shifts like this have huge implications in both commerce and politics, but for me the important thing is to realise that whatever your view as to whether it is good or bad, it is a powerful trend and one that will continue.  That is the context in which we should seek to optimise our commercial and political operations.

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Lessons from the trials and tribulations of Yahoo

By | Community, Social networks, Web2.0 | 2 Comments

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Techcrunch wrote yesterday about Yahoo’s recent change of the Flickr logo and the other problems they have been having with  the site.  Collectively they show both the challenges of acquiring successful web communities in general and that Yahoo in particular still doesn’t understand how to manage a web2.0 property.

First the rebranding – all Yahoo did was add the ‘from Yahoo!’ that you can see in the picture to the existing Flickr logo.  Not too much to ask after owning the company for over four years you might think, but Flickr users reacted very badly, mostly because they don’t like Yahoo.  According to TC they complained on forums about Yahoo being stale and the logo being ugly.

These complaints illustrate the challenge in acquiring companies which are based on communities – unlike just about all other businesses the customers have a strong feeling of ownership which limits what you can do post acquisition – including your ability to wring out synergies, in this case at the branding level.  You may remember a similar furore when Yahoo tried to move Flickr users onto Yahoo IDs. 

Secondly, the Yahoo specific stuff.  One of the reasons that Flickr users don’t like Yahoo is that they don’t seem to understand what are probably best described as some of the key tenets of web2.0 – that you have to be open, transparent, balance your needs with that of your community and not be too high handed.  Yahoo got just about all these things wrong in a recent incident described on TC as follows:

Yahoo also got into a bit of a sticky situation with users when it removed a photoshopped image posted on Flickr of President Barack Obama that makes him look like the Heath Ledger (Joker) character from The Dark Knight. Flickr took the image down, citing a DMCA notice, adding that “We very much value freedom of speech and creativity.” Thomas Hawk had a good overview of all the gory details.

Strangely, the company not only took down the image, but also removed the Flickr page and comments, even though this isn’t required by the DMCA. And then, in what was a totally contradictory move, Yahoo shut down the forum discussions about the political controversy, cutting off further political discourse about the image.

These are examples of a general phenomena that we have talked about before – in community based businesses customers have a stronger than usual control over strategy.  UK football clubs are a good offline example of this.

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Survey shows 5% say they would pay for news online

By | Business models, Community, Content, News | 13 Comments

image A Harris research poll commissioned by paidContent:UK found that 5% of respondents think they would pay for news online, with the vast majority saying that instead they would simply go to an alternative free site.

If the 5% panned out in practice (and surveys are notoriously bad predictors of buying behaviour, so there is considerable downside risk to this figure) then a back of the envelope calculation shows that even with a fairly modest charge of £3-5 per month the subscription revenues gained are likely to significantly exceed the ad revenues lost from the 95% who decide to go elsewhere, so there is some good news in this figure.

The bad news, however, is that these revenues won’t add up to much of a total when compared with traditional hardcopy paper sales.

So we are looking at another story of the transition to digital shrinking an industry.

The only option I can see on the table for newspapers to mitigate this development is to build vibrant communities around their properties (as I have said before).  The catch, though, is that it is prohibitively hard to build a community whilst charging for content.

It is interesting to note that the newspaper that has had the most success building an online community (the Guardian, owner of paidContent) is also the one that is most opposed to charging.

Consumer trust in reviews and brand websites

By | Advertising, Community, Consumer Internet | 16 Comments

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Computerworld reported yesterday on the results of a global Nielsen study into trust on the web.  There are a lot of interesting nuggets in the article, but my favourites are the following:

  • 90% of internet consumers worldwide now trust recommendations from people they know
  • 70% trust consumer opinions posted by people they don’t know
  • 70% trust brand websites

All three of these are on the increase. It is unsurprising that as the number of reviews proliferate and the world becomes more comfortable with eCommerce generally that trust in personal recommendations is increasing – so this is welcome news, but perhaps not that surprising.

I was, however, surprised to learn that trust in brand websites is increasing. This might be because advertisers have reacted in the right way to consumer opinions, that would make sense to me, and is also what Jonathan Carson, President of Online, International, at Nielsen is saying:

However, we see that all forms of advertiser-led advertising, except ads in newspapers, have also experienced increases in levels of trust and it’s possible that the CGM revolution has forced advertisers to use a more realistic form of messaging that is grounded in the experience of consumers rather than the lofty ideals of the advertisers.

And the stuff that from a trust point of view isn’t working so well?

Perhaps unsurprisingly, text ads on mobiles (24% of us trust these), online banner ads (33%), online video ads (37%), and search engine ads (41%).  Clearly the money is where the trust isn’t – perhaps this is inevitable.

 

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The future for news?

By | Business models, Community, Content | 5 Comments

This morning I discovered Zimbio the second fastest growing ‘member community destination’. Hat tip to cnet and Nielsen.

Zimbio is a content site that mixes UGC and professionally produced content, using proprietary technology to filter and classify stories and help users find relevant content.  In their own words:

Zimbio seamlessly blends the best of traditional media, participatory journalism, and proprietary technology. Stories and rich media from traditional news sources live along side blogs, commentary and opinion articles written or posted by readers’ peers in a new media platform, the wikizine — an interactive magazine that anyone can create or edit.

You could think of this as a kind of wikipedia for current afairs.

And it is startlingly successful.  They have 15m uniques up from 6m in July and most startups would kill for this Alexa chart, current rank 494. (For some reason the embed code won’t work so you need to click on the link to see the chart).

We see evidence every day that the old models for news aren’t working.  This model retains some professioanl journalism, but (I assume) will have radically lower costs due to the UGC component, plus the consumers get to participate much more giving them a richer experience.

This mix of technology, editorial (I would guess), professional contribution, UGC and mass collaboration might have legs.  I have no idea what the finances of this business look like (it has had one $7m round of venture which I have just discovered is from one of our sister funds) – but if the monetisation works out OK this could be a model for the future.

Understanding Twitter’s next phase of growth

By | Community, Consumer Internet, Facebook, Twitter | 8 Comments

Cnet reported yesterday on Twitter saturation at SXSW – with the particular problem being too much traffic on the SXSW hashtag #SXSW:

This year because of the conference’s impressive growth and Twitter’s broader mainstream appeal, it has become almost impossible to find the same value as in the past. I did a search for the “#sxsw” tag on Saturday afternoon and found that there had been 392 tweets with the term in just the previous 10 minutes. That number mushroomed to more than 1,500 in the previous hour.

For those that don’t know Hashtags is a system which enables tracking of in-message tags that Twitterers add to their messages, similar in a way to Flickr photo tags or blog post tags – full description here.

as Alan says this is a bit of a storm in a teacup, as you can get round this problem by using different search techniques.  Further as Twitterati points out this is a ‘quality problem’ that can be innovated around:

All these problems are nice to have because they’re growing pains. The challenge will be creating tools that meet these pains. Two areas that might get a lot of attention in 2009 from third-parties may be noise filters – services that intelligently eliminate inane updates (e.g. remove any mentions about lunch or coffee”) or smarter, easy-to-create groups.

Tweetdeck is already working hard on this, and I’m sure there will be others.

I’m not sure that tools are the only answer though.  The more observant amongst you might have noticed from the LivingSocial widget in my right sidebar that I recently read Lessig‘s Code2.0, a book in which he talks at length about how communities are governed and regulated.  He persuasively argues that for there are four modes of regulation – architecture/code, law, norms and the market (more details here) – Tweetdeck et al are code based solutions to the problem of the too much traffic on Twitter, but the other modalities or regulation (as Lessig would describe them) are also important. 

Norms are already at play with lots of discussion about what is appropriate to Twitter, what is an appropriate frequency of Tweets etc., and as another example there is a section on norms for the use of hashtags on the page I linked to above:

Suggestions and tips 

The use of hashtags is still an emergent phenomena, and as such, etiquette is negotiable, though some have already expressed their distaste for hashtags. 

Used sparingly and respectfully, hashtags can provide useful context and cues for recall, as well as increased utility for the track feature. Used excessively can cause annoyance, confusion or frustration, and may lead people to stop following you. It’s best to use hashtags explicitly when they’re going to add value, rather than on every word in an update. 

A good rule of thumb to follow is to focus on your update first, and only if it quantitatively adds value, to append one-three hashtags. There are no hard and fast rules, but Twitter should continue to be about answering the simple question: “What are you doing” rather than “What tags apply to what you’re doing?”

Market as a force will start to come into play subtly as Twitter gently bends the service towards areas where it can make money.  The recent focus on search could well be an example of that.

To complete the discussion of the four modalities there is the obvious point that I doubt we will see any direct application of law – either as direct regulation from government or ‘policy’ from Twitter (note this is different to Facebook).

It is pretty clear to me that as the community grows something is going to have to change – and as I have written before it is instructive to think of the Twitter community as an emergent system with rules that need to evolve to ensure that the signal to noise ratio is maintained at a sensible level whilst keeping the service growing.

Facebook went through a similar problem when they launched applications – initially apps took off like wildfire but after a while all the application invites became annoying.  FB responded by changing the rules which governed the number of invites that can be sent out, something they were able to do because they operate a closed system.

Because Twitter is such an open system the rules will evolve in a different way.  On the positive side they can let third party developers like Tweetdeck innovate and experiement for them – benefiting from the success of the winners but not suffering from the failure of the losers.  That benefit, however, comes at the cost of a lack of control.  The health of the Twitter community (as with all communities online and offline) is 100% dependent on the rules, and to an extent Twitter will have to stand by and watch what happens to theirs.

UPDATE: Integration with Facebook makes this a much more pressing issue as the volume of messages we have to deal with will rise signficantly

Shared data services – examples from Thomson Reuters and Salesforce

By | Community, Innovation, Social software | 7 Comments

Last week I wrote that shared data services might be the next frontier for innovation.  That post was largely inspired by Paul Miller and I met him for a coffee last night to explore these ideas further.

This post is an attempt to make the abstract concept of share data services a little more real.  It draws on the conversation I had with Paul last night and some stuff I have been reading this morning.  I have two things to say.

Firstly an elaboration on the nature of shared data services – they are apps/services built on top of large bodies of existing data – news, facts etc..  For a startup to play in this space that probably means built on top of a large publicly available data set (e.g. from Twitter, or the CIA factbook, or I guess Wikipedia).

And secondly some examples of live shared data services:

  1. Salesforce yesterday released a customer service application based on shared data – it is called Service Cloud.  It seeks to capture ‘crowdsourced pools of [tech support] knowledge’ from around the web and make them readily usable by commercial customer service teams.  Service Cloud includes plugins to online forums, Facebook, Google, Amazon etc. and also offers access to  proprietary data resources like the corporate intranet, IM and email history.  They then make it easy to share portions of the knowledge base with partners – presumably for mutual enhancement. Screenshot below.

  2. Paul blogged yesterday about the Thomson Reuters Calais service which makes content shareable, intelligent and machine readable by the application of structured metadata.  The service is intended to be a building block for other shared data services.  Their example application is SemanticProxy which is really only another building block.  SemanticProxy translates the content of any URL into its machine readable semantic representation in RDF, Microformats or HTML.

Hopefully this makes an abstract topic a little more real.  It has certainly helped me.

Update Steve Gilmor talks more about Service Cloud here.  I particularly like the way he calls it a ‘Sams Club for data’ and the way he ties it back to Cluetrain – a link I hadn’t thought of.

Threadless – the crowdsourcing company

By | Business models, Community, Online retail | 2 Comments

At dinner on Monday Daniel Ek of Spotify described Threadless as the ultimate crowdsourcing business and this post has been building in the back of my mind since then.

Threadless is a t-shirt e-tailer and the cool thing is that they crowdsource both supply and demand.

This is how the site works, from Wikipedia:

Members of the Threadless community submit t-shirt designs online; the designs are then put to a public vote. A small percentage of submitted designs are selected for printing and sold through an online store. Creators of the winning designs receive a prize of cash and store credit.

On the supply side the community submits designs to the site and then votes on which designs should be produced – so Threadless crowdsources the design and selection of their merchandise.

And then the reason the whole things works so well is that people who have voted for the designs are then much more likely to buy them, which is what I mean by crowdsourced demand.

Using communities for marketing

By | Advertising, Business models, Community, From mobile, Social networks | 10 Comments

There was an article on Techdirt on Friday pointing to an interesting paper about how Swedish record labels engage fan communities as part of their marketing efforts. Apparently they do so pretty successfully, which is good to hear.

The raison d’etre for the paper is to say that this shouldn’t be thought of as exploitation in the ‘clever music labels get fans to do free work’ sense. Rather, we should see fans as individuals who make rational trade-offs about the value they put-in and take-out from their relationships with brands, a lot of which is non-monetary. Moreover they are conscious of the risk of exploitation and take steps to protect themselves.

I warm to this view of fans (or any member of any community) as intelligent people with feelings and complex motivations. That is much closer to reality than the one-dimensional money focused view of some economists and the ‘witless pawn to be exploited’ view of some other commentators.

The notion of ‘fan communities’ working with product companies (aka brand owners) for mutual benefit is, of course, applicable beyond music, as is the notion of the value equation.

I am hearing more and more examples of companies creating communities around products that on the face of it might not seem interesting enough to generate engagement, but which have come up with seemingly compelling value equations. It is early days yet for many of these and it will be interesting to see how they develop, but I like the way they are thinking.

This sort of development could herald a shift in the way marketing budgets are allocated away from buying media and towards hiring community management personnel.

If anyone knows of any good lists and/or stats for projects like this I’d be keen to see it.

From mobile stuck in my hotel room in China, so apologies for the lack of links and formatting.

Too much linking to yourself is a bad thing

By | Blogging, Community, Content | 12 Comments

Tim O’Reilly has a post this morning about the growing trend for sites to link to themselves so they don’t lose traffic. I was called out for doing this the other day by Nils Geylen, which made me think about the issue for the first time, and it isn’t a good development.

O’Reilly cites numerous examples, and Techcrunch is one of the guilty parties:

[Since] Techcrunch launched Crunchbase … rather than linking directly to companies covered in its stories, Techcrunch links to one of its own properties to provide additional information about them.

And he also sums up the dilemma nicely:

I understand the value of linking to other articles on your own site — everyone does it — but to do so exclusively is a small tear in the fabric of the web, a  small tear that will grow much larger if it remains unchecked.

and

The web is a great example of a system that works because most sites create more  value than they capture. Maybe the tragedy of the commons in its future can be averted.

I agree entirely. The web will be a much, much poorer place if sites only link to themselves. So this issue needs to be out in the open, and if sites link to themselves too much like Nils we should call it out. Leave a comment and potentially take your traffic elsewhere.

The web is still a new medium and standards of good behaviour are still being defined. We all have a part to play in that – as O’Reilly says, it’s up to each of us.