Entries in web 2.0 (3)


Book Review: You are Not a Gadget by Jaron Lanier

The ascendant tribe is composed of the folks from the open culture/Creative Commons world, the Linux community, folks associated with the artificial intelligence approach to computer science, the web 2.0 people, the anticontext file sharers and remashers and a variety of others. Their capital is Silicon Valley...their favorite blogs include Boing Boing, TechCrunch, and Slashdot, and their embassy in the old country is Wired.

Thus Jaron Lanier describes the "cybernetic totalists" or "digital maoists" whose rising influence Lanier fears is leading us down a path of online culture where appreciation for humanity is displaced by blind trust in technology. In You are Not a Gadget Lanier laments recent trends in the online world - belief in the wisdom of crowds, reliance on algorithms for recommendations rather than people,  mashups and other piecemeal appropriation of others' content, templated web 2.0 designs - and argues that this failure to appreciate individual expression in the web world may have grave consequences for creativity and culture.

Click to read more ...


For transparency...in government and p2p micro-lending at Kiva


Lawrence Lessig's article "Against Transparency" in The New Republic has sparked a lot of debate about the perils of going down the road of "naked transparency".  Lessig fears open data for government may end in citizen cynicism and withdrawal from the political process. Rather than being actually against transparency, he makes clear in his follow-on article and this interview that his real concern is that people will see transparency as the sole answer rather than the necessary combination of transparency + meaningful campaign finance reform.

I agree that transparency is not a panacea, but I believe he overstates the "perils" of open data. Take a look at the Sunlight Foundation's display of health care lobbyist contributions to Senator Max Baucus, author of the current main health care reform bill being debated in Congress. Will citizens reach "unwarranted conclusions" upon seeing the nearly half a million dollars Senator Baucus received from these lobbyists while he was shaping health care reform? It's a scandal that such a revelation does not lead his career to "be destroyed".

Of course, Prof. Lessig is in support of such thoughtful analyses and he is right to bring up the broader reform issues.  I believe we need more of the kind of transparency and analysis that the Sunlight Foundation has fostered, but the cynicism question raises an important point. One can imagine a scenario in which people are participating in a process that is ultimately good while ignorant of some of its messier internal mechanics. Should that process be made transparent at the risk of alienating the participants or is ignorance really bliss?

Take the case of Kiva. Yesterday the Harvard Businesss Review pointed out that the peer-to-peer lending platform tells a story that is not entirely true. A large part of Kiva's appeal for lenders is the implicit promise that your money goes directly to the needy entrepreneur of your choosing. In reality, the $25 that you donate on Kiva to Ndidi Bienose, for example, is routed through his sponsoring NGO, Lift Above Poverty Organization (LAPO). LAPO collects all lender money and in turn distributes it to their entrepreneurs. This is one reason for the unexpectedly high repayment rates of Kiva (~98%) -- individual losses can be easily disguised within a group under an NGO. Microplace uses the same model, but has always been straightforward about it.  Kiva, however, has been vastly more successful because of their more appealing, albeit untrue, story.

This unplanned transparency could turn into an example of what Lessig fears: that the exposing of the behind the scenes action will turn previously happy do-good Kiva lenders into cynics who now see P2P micro-lending as just as corrupt/misleading as the more traditional forms of aid that it hoped to supplant. Due to the attention problem that Lessig identifies, lenders will not take the time to learn that the end result of Kiva's and Microplace's approach is actually more effective and more efficient than direct peer-to-peer lending.

It's too soon to tell whether some Kiva lenders will be turned off enough by the revelation to stop participating, but I'm optimistic that the real Kiva story can be told effectively.  There is a powerful fact that Kiva can stand behind : Lending through a field partner is more reliable than direct lending and smooths the process for the benefit of the entrepreneur that the lender is hoping to help. The bottom line of Kiva remains the same -- to alleviate poverty through microloans -- and in the end, your money still goes to Ndidi Bienose. In Seth Godin's parlance, the P2P story is still authentic, even if it is not entirely true.

So is the new transparency in Kiva a good thing? A few lenders may be lost, yes, but the ones who remain will have full knowledge of the process and will no longer be duped. The strongest and most engaged communities are built on honesty. The same is true of government.

Flickr credit: bgblogging via Creative Commons, where I get all my photos and a concept for which I thank Lawrence Lessig for pioneeering


How Do Companies Harness the Power of Web 2.0 Technologies like Prediction Markets?

Broad participation is key to successful prediction markets: the more the better!Web 2.0 technologies are tools that utilize broad participation, collaborative creativity, and social mapping as a means to generating value. They include blogs, wikis, social networks, podcasts, information tagging, and prediction markets. When properly implemented, these tools have the ability to create great value for companies. However according to a group of surveys conducted by McKinsey, the number of executives dissatisfied with their company’s adoption of Web 2.0 technologies is the same as the number of those who are satisfied.

McKinsey’s recent publication points out that one important factor for effective Web 2.0 adoption is to clearly understand the differences between today’s Web 2.0 technologies and the corporate technology adoptions of the 1990s (such as supply chain management and or customer relationship management):

Corporate Technology of the 1990s

Web 2.0 Technologies

  • Direction given from the top
  • Engages fewer and more senior individuals
  • Does not require interactive participation
  • Technically complex to implement
  • Strong bottom-up element
  • Engage a broad base of workers
  • Require high degree of participation to be effective
  • Requires users to generate new information or edit content
  • Technically simple to implement








Based on the unique nature of Web 2.0 tools, McKinsey suggests the following six tips for making Web 2.0 technologies work:

  1. The transformation to a bottom-up culture needs help from the top.
  2. The best uses come from users—but they require help to scale.
  3. What’s in the workflow is what gets used.
  4. Appeal to the participants’ egos and needs—not just their wallets.
  5. The right solution comes from the right participants.
  6. Balance the top-down and self-management of risk.

How does this apply to prediction markets and internal corporate information markets? Some of the tips above are relevant: scale and quality of participation are key to effective prediction markets. Participation can be fostered when the use of a prediction markets bears relevance to employees’ daily responsibilities and also when employees recognize that senior management values the results of the prediction market. However, unlike other Web 2.0 tools, appealing to a participant’s ego instead of wallet, works against the logic of prediction markets which require an environment of anonymity and a fertilizer called “putting your money where you mouth is” in order to bear fruit.

Another interesting question that comes up from this McKinsey publication is whether combining prediction markets with certain other Web 2.0 technologies can help to make them more effective and widely used?

For more information read the McKinsey’s article here.

Flicker credit: ChrisL_AK