Why Twitter’s IPO is looking ridiculous as well as sad

Posted on October 5, 2013 by Nigel Cameron

Twitter 6×6 (Photo credit: Steve Woolf)

It’s hardly news that women don’t dominate technology companies, or indeed most companies, or governments (though the news that Rwanda‘s parliament now has 64% women members is fascinating; I wonder who will be the next president . . .). Point is: While denizens of the C Suite and Board members need to have a really smart grasp of the business, to use the old not-many-women-are-engineers defense against women high-level appointments is becoming absurd. Here, the New York Times points out that now Twitter is in process of going public, the public knows it is yet another men’s group. The board is entirely male (and, ahem, white). One woman, a new hire, Vijaya Gadde, is to be found in the executive office (she’s General Counsel).

This is ridiculous to my mind not become it isn’t “fair” (I have consistently argued that the equity case for appointing women to top jobs is both unreasonable and dumb), but because value will not be realized in this fast, fast-shifting economy without widely diverse expert perspectives at both C-Suite and director level. This is not simply an argument for women or other “diverse” groups. It’s a value-driven case for diverse thinking, including the seriously contrarian.

We have already noted that the IPO is also sad. Sad, because at some point a major social company will wake up to the fact that the logic is for social companies to be social in their governance. We need smart thinking on governance as well as technology, and smart mechanisms that will reward founders and other early risk-takers without locking up the results of their efforts with Big Oil governance. (See Facebook‘s share system, which together with its board membership and the role of its founder locates it clearly on the Carnegie/Murdoch side of history; and Twitter’s plan for a classified board. Sigh.)

We’re waiting for the tedious old-economy governance and financing approaches of these smart, C21 companies to find alignment. It has yet to happen.

http://nigelcameron.wordpress.com/2012/04/15/we-need-to-talk-about-twitter-reciprocal-knowledge-engine-plus/

https://futureofbiz.org/2012/12/11/please-may-we-have-a-social-social-network/

Curtain Is Rising on a Tech Premiere With as Usual a Mostly Male Cast – NYTimes.com.

The Tragedy of Twitter’s IPO

Posted on September 14, 2013 by Nigel Cameron

Credit: Wikipedia

There is something quite new about social media, and it is not that it’s providing on a huge scale (of hundreds of millions) volunteer contributors of “content” that in weird and wonderful ways deliver huge sums (of billions) to those lucky entrepreneurs whose projects made it big. Well, OK, it is partly that. But if that is how we are looking at the #socmed phenomenon, we give evidence of something between severe myopeia and locked-in syndrome.

Twitter faces a double problem here. First, because of the tendency to group “social media” together (Pinterest and Twitter have about as much in common as the Stock Exchange and a town hall meeting – oh yes, people, large public rooms, engagement). From one angle it is one of the Big Four, with Facebook, LinkedIn, and YouTube. But that is the least interesting angle.

Second, because the world of media properties sees social media as just another one, disruptive in its own way, vacuuming up global advertising dollars and offering new channels for content acquisition and delivery, but essentially same old, same old.

These fallacies – for fallacies they are – are shared by many in the C Suites of the aforementioned companies, which may seem odd. But consider: Facebook, the social media property of social media properties, is is run with all the social sensitivity and engagement of Big Oil, or Big Banking. Or, interestingly, the Murdoch news empire (whatever its latest name is). Look at Facebook’s share structure/governance, and at its engagement with its user base (remember the shananigans over voting for changes? o my goodness). It is one of the least “social” companies on the planet.

Point is: There is something profound and new about “social,” but it is as subtle as it is profound, and it has left many of the engineer-innovators who gave us these behemoths as high and dry as that big majority of Fortune 500 C Suite execs who neither understand nor even use it. The point is substantive and cautionary. I do believe social is revolutionary, for business as well as for government. But these are early days, and it’s not easy to demonstrate.

What I was hoping for from the big social innovators was that they would buy deeply into the culture they were helping create. If that had happened, instead of tedious IPOs exposing these complex ecosystems to traditional market forces, we would see the development of innovative models for governance and financing. Sure, let the entrepreneurs be rewarded, and let revenue models emerge for their creations. But within structures of shared governance, whether within traditional non-profit models (a la Wikipedia, and four cheers for the great Jimmy Wales), or mutualization (users are the stockholders), or something smart we have yet to devise. These subtle products of the new economy are simply treated, when the time comes, as old economy entities. Social media cry out to be handled as our supreme social enterprise companies.

As for Twitter itself, on which have written many times – while it has many uses (and I don’t mind if you want to follow Bieber’s publicist or your favorite brand’s marketing department, really I don’t), at its innovative heart it has developed what I’ve called a “Reciprocal Knowledge Engine” – a core mechanism for handling the explosion of knowledge, at the same time as opening up knowledge networks for much wider participation, to the massive benefit of all concerned. I trust this will survive the handing over of this precious thing to the more rudimentary end of the marketplace.

Twitter Files For IPO – Confidentially – Forbes.

Twitter: The Reciprocal Knowledge Engine

Facebook as the unsocial social network

Five Rules as Facebook Goes Down; and what next?

Posted on May 1, 2013 by Nigel Cameron

Image via CrunchBase

We’ve now had a number of these stories. Is Facebook really on the verge of becoming MySpace? It seems absurd on the face of it, as global numbers keep climbing and any company which can recruit over 1 billion users is in an enormously powerful market position. On the other hand, when numbers plateau or drop slightly – as these latest stats drawn from more than one reliable source suggest – it’s a handy reminder that not even Mark Zuckerberg’s clever creation lies beyond the effect of market forces. And, very specifically, beyond the logic of disruptive innovation.

Five observations, nay, emerging rules.

1.Whether seen as a bubble or not – the current crisis in the U.S. Postal Service offers a slow-motion parallel – Facebook is not forever. It is not “different this time.” True, some companies stick around for many years (though a comparison of top listed companies decade-by-decade is a revealing and sobering exercise). And we do need to face a special factor that I have suggested on more than one previous occasion: that the extent to which a company’s core technology and/or business model is digitally derived, that company will “age” faster. A disruption variable, perhaps. Think Built to Last – and add an accelerant.

2.Of course, Facebook’s very dominance has set it up as a target. Around the time of the IPO, I recall observing that the various global governance authorities in telecommunications, and indeed back of them the governments themselves, are unlikely to sit back while a single American company, controlled Murdoch-like and more by one individual, develops an essential monopoly of a major slice of global communications. Meanwhile, we have begun to see the slow growth of interoperability, which seems to me to ensure the doom of economic profit in social media – at least in so far as the business model depends on “social.”

3.While the lock-in impact which is the obverse of the network effect remains powerful –at least, sans more comprehensive interoperability – the entry of very large numbers of users into a multiplicity of platforms has begun to chip away substantially in this advantage which Facebook the first-mover monopolist has built. So, I was just chatting with my daughter in Google chat. She actually thought she was using Facebook. Whatever.

4.I have argued repeatedly that it is a thoroughly bad thing for Facebook and other social media to have chosen the IPO route instead of seeking innovative governance and financing models which would preserve the integrity of their alignment with their users and with their proclaimed social goals. Market pressures, and – as in this case – the increasingly intrusive and sometimes offensive presence of advertising, now interposed with messages from friends as well as making up that margin down the right-hand side, are substantially altering the Facebook experience.

5.It is of course the case as Facebook and others will argue that Western and some other markets have matured, which is a proper explanation for numbers in a report such as this. This raises various questions. One is whether “maturing” explains the drop in minutes of exposure to the site on the part of those who continue to use it. That is, does maturing mean that our interest has matured and is now declining (that is, we are getting bored)? For other, the success in China of alternative social media in the context in which many Western companies are blocked suggests that network effects are still largely confined to homogeneous language/cultural/social groups.

———————————————————————————

The bubble, at least, is contorting. We may feel for the people at HQ who live under market pressures to grow and grow and grow at a time when, that a remarkably, they have grown and come close to saturating the markets most accessible to them and in which there is a strong cultural match.

Next up?

Meanwhile, some of us expect before very long there to be the kind of services Facebook offers available either for a modest subscription or free of charge from entities designed on open principles for global interoperability, using innovative finance/governance models in which users have ownership, which will replace the flailing US Post Office and much else from the old economy with organizations that do not look as if they were built and governed by the high-tech grandchildren of Rockefeller, Vanderbilt, and Chase.

https://futureofbiz.org/2013/01/15/state-of-social-a-report-card-for-2013/

Numbers don’t lie: The Facebook bubble may finally burst | Digital Trends.

Pistols at dawn: Om challenges Zuck – and looks ahead

Posted on April 11, 2013 by Nigel Cameron

Image representing Om Malik as depicted in Cru...

Image via CrunchBase

In a strong and curious post, Om Malik takes Mark Zuckerberg to task for his FWD.us push for immigration reform – while many of the titans of Silicon Valley have gaily signed on. The Zuck manifesto is here: http://www.fwd.us/immigration_reform.

It’s hard to argue with the initiative itself, and that is not quite what Om is doing. He’s raising the questions that in polite tech society one is not supposed to raise, about the fate of flyover country in post-industrial decline, and the naked power of those who control the new economy. How’s this for a contrarian claim: “Sorry Mark, but in the age of data, Facebook is Standard Oil and you are Rockefeller. ” And as Om notes, there are plenty who work for these new knowledge companies who do not get invited to the parties and given free iPhones. What about them?

It’s a plea for comprehensive engagement in the social-political implications of the knowledge revolution. But, of course, as we have noted, that is not how Washington works, where comprehensive and integrative and long-term get no votes. To the extent that the Valley’s efforts to win attention in Washington have had success, they have fit neatly into its approach (with the single, glaring exception of the SOPA revolt; and even that was a fit since Washington knows about take-downs, novel though the methods involved were). Whether the disruptive emerging industries will be prepared to engage with the policy community to address the vast impacts of their disruption poses an interesting question, at a time when neither one nor the other seems interested. If Om Malik is interested, we should all be.

Oh yes, here’s my take on the Washington/Valley divide.

https://futureofbiz.org/ebooks-blogs/the-valleydc-divide/

Why I have issues with Mark Zuckerberg’s FWD.us — Tech News and Analysis.

Old Wineskins, New Wine, and Bottling up Value in Technology

Posted on March 28, 2013 by Nigel Cameron

John Hagel (Photo credit: superde1uxe)

In a brief and penetrating post, John Hagel and John Seely Brown focus the question best set up (though not by them) in the Biblical metaphor of wine and wineskins. Our institutions are the old wineskins. The new wine of disruptive technological innovation is being steadily poured into them. Its value is increasingly failing to be realized. In Hagel/Brownspeak:

we are reaching a tipping point of this exponential growth, and it is unclear how the cumulative effects of technology will reshape our economy, political systems, and collective future. One thing is clear: in the hands of existing institutions—firms, schools, non-profits, civic institutions and governments—this awesome technology will achieve only a fraction of its potential.

What is especially striking to me is that those companies and business models most closely correlated with the digital/Moore’s Law explosion are proving highly resistant to evolutionary development of their systems, assumptions, and corporate culture. Worse, some are clearly throwbacks. And there may be a principle here to be noted: That when disruptive technology drives value the companies involved will hunker down and defy any cultural alignment with the innovative principle.

I’ve written about this several times, both in respect of Facebook’s Murdoch-style corporate governance, and the general failure of social media businesses to do anything other than follow the tired IPO route. We need congruent innovation of financing and governance models to enable these powerfully disruptive, tech-driven businesses to deliver value. Yet not only have they old-style approaches to governance, they are among the least “social” businesses on the planet. This huge disconnect has been noted far too little.

Hagel and Seely Brown are making a wider argument, but this seems to me as dramatic an example as one could find. New wine flows, and the search is on for antiquarian wineskins.

Something’s gonna give – suddenly, and with the dramatic impact that will leave the leaders of our current top social/search brands stammering with surprise. My money is on the emergence of socially-aligned governance models based on some version of mutualization and giving users ownership.

We need a social social network:

https://futureofbiz.org/2012/12/11/please-may-we-have-a-social-social-network/

https://futureofbiz.org/2012/11/21/unsocial-networks/

Hagel and Seely Brown:

http://techonomy.com/2013/03/whats-next-in-the-techonomy/

What’s Next in the Techonomy? (techonomy.com)

Instagram and Life in the Haze: When Will Users Wake Up?

Posted on December 18, 2012 by Nigel Cameron

Twitter 6×6 (Photo credit: Steve Woolf)

Twitter is hot today with Instagram‘s TOS changes, which mark Facebook‘s intent to bring their acquisition more fully into line with their own policies and emerging business model. The company quickly jumped in with a clarification – so brief it can reasonably fail to get to grips with the issues at stake. What this signifies is yet another sampling of the underlying problem with mainstream social media platforms and their way of seeking to do business.

In a word, it is use consciousness. Users sign on to these services in a haze of enthusiasm and with at best a partial understanding of how it is that company XYZ intends to make a bunch of billionaires out of giving you free stuff. And no, it is not by magic.

As we know – and as Twitter has kept reminding us, somewhat painfully – it is considered OK by investors to get a service up and running without needing to have that question resolved – the 21st century version of 1990s dot-com eyeballs hopefulness. But there is not an indefinite number of ways in which this can be done. Three are obvious. Sticking ads in front of your noses. Grabbing a portion of your intellectual property. And messing with your private info. The first and the third may work together. The second and the third are subsets of the same thing – su casa es mi casa, as it were.

One of the great mysteries of our time is why none of these companies has taken a traditional commercial approach to the issues involved – and offered their services (search, social, pics, whatever) on subscription; and/or offered a fee to purchase or licence your stuff. Given the vast sums we pay every month to the telecoms who enable us to access all this “free” stuff, it is hardly as if we don’t give evidence of valuing the service.

But my core point: The uber biz model under which most of these web-based services are operating, and on which they have raised many billions of dollars from the wise/gullible/hopeful investment community and recruited hundreds of millions of subscribers, is that the user will be happy to live in the haze, signing endless consantly shifting TOS and privacy statements unread, and handing carte blanche to those who can turn their 0s and 1s into serious cash flow.

Here’s my take. Users will begin to wake up, in ever larger numbers. They will grasp that their increasingly quantified selves are traded in a human meat market. They will (as the Instagram imbriglio illustrates) really resent the notion that the work of their hands, brains and eyes is available to their new feudal masters to use as they choose. And whoosh, down will come the empires built on haziness and the naive and disrespectful assumption that users don’t care.

And so? Well, first, as I keep saying, the financing and governance of companies in the social space needs to be aligned with, um, well, the social space, and not the top-down awfulness that drove the steel barons a century back. But I am not holding my breath. Second, for the moment, we need the steel barons of our digital lives to do their users the honor of treating them like decision-making consumers and economic agents. Yes please, I want search; what’s the monthly fee to access it and retain 100% control of every ounce of data you get from my end? Yes please,.email; and what’s the extra perm month to add on the pic app?

What’s ahead? Huge advantage for Facebook-esque options (as barriers to entry keep falling and interoperability handles the network effect issue) that are run like Credit Unions with some form of mutual ownership and capitalization, and on the leading edge of socmed business. And, in tandem, fee-based services that leave us with our privacy and IP intact. And, of course, the option to sell, rent, lease all what we have, should we so choose.

The future is not life in the haze.

Instagram Rings its Own Death Knell and Leaps to the Mainstream | Constellation Research Inc..

Facebook’s Instagram monetization plan: License users’ photos without paying for them (bgr.com)

Unsocial Networks

Posted on November 21, 2012 by Nigel Cameron

Mark Zuckerberg, founder and CEO of Facebook

Mark Zuckerberg (Wikipedia)

Facebook’s decision to draw back from one of the few evidences in the governance of social networks that they understand that social is actually coming to mean for the future of the corporate effort is perhaps no great surprise. For a company whose governance is designed top-down like that of a 19th century steel magnate (or, to be fairer, well, 21st century News Corp), the anomaly of leaving users free to make actual decisions, always open to being “exploited” (aka used) by users actually interested in said decisions, could not long endure.

But the question is raised, yet again: when will it be that companies in the ever-broader “social” space will evolve governance (and financing) models that are actually suited to social?

None of the major players has given that thought much thought, so far. The Facebook voting thing being nixed was a vestigial organ from an earlier, pre-IPO, day when the visionary aspects of the company had more logic than they do now (though, for my part, I have no reason to believe that MZ believes them any less). Something much bigger, and strategic, is needed for these companies to align their social mission with their social identity as vast networks of users. The future will not lie with playing cat-and-mouse on privacy and imposing corporate policies from (in Fb’s case) unbelievably non-diverse boards. And for future read profit.

I billion and rising. Well, we shall see. Think Kodak and RIM and HP and (ouch, ouch) Apple for curves whose rise is halted.

My take? MS soldiers on; Apple crests very soon in all respects; Fb is close to its zenith. MZ, like SJ and BG, has earned his place on Mount Rushmore. What interests me is what, and who, come nest; and how they manage to align their corporate efforts with their users. Hint: it may involve actually engaging this thing we call “social.”

Oh, and Twitter? As a company, it is in the balance, for just this same reason. Its daily users include some of the very smartest minds on the planet – from @rupertmurdoch down. The interest of the Twitter high command in what they/we think is somewhere around zero.

Facebook to users: Please vote to abolish your right to vote | Internet & Media – CNET News.

Unsocial Media: The Uselessness Of Facebook And Google+ (warrenellis.com)
Facebook to share data with Instagram, loosen email rules (reuters.com)

Brands will shape Global Labor Standards: Apple-Foxconn Company

Posted on October 30, 2012 by Nigel Cameron

Tim Cook, Apple (Photo credit: Wikipedia)

When Apple signed on to Fair Labor I wrote a column in which suggested that the logic of their decision – a big shift in approach post-Jobs – would be to bring about alignment between western and Chinese labor standards. Nothing that has happened since has changed my view. Not that this will happen overnight, of course. But it’s the result of several potent forces that are shaping, not least, this company’s effort: branding and global communications. Whereas these forces twisted the unwilling arm of Nike what seems a long time ago, the superlative quality of the Apple brand and the explosion of social media are together pouring gas on the flames.

While it has been traditional to label western brand efforts to ensure decent manufacture conditions for their products as “corporate social responsibility,” the logic of the Apple case demonstrates that it is naive to see CSR as an adjunct effort, or a marketing ploy, or as anything other than central to value. It’s a case where the values-value connection (another theme of mine) is especially glaring.

The harrowing case of the Foxconn worker with severe brain damage, whose family is now going to the Chinese courts to seek to maintain full company support of their son, drives the point neatly (if tragically) home. This man is, as all can see, a de facto Apple employee, whose conditions of service are so far removed from those of the guys at HQ as to be hard to compare. As his family struggles to ensure that he has long-term care after an undenied industrial injury, they have a bullhorn to the world, and that includes the fashionistas for whom the latest Apple gadget is a must, and who have helped drive up its astronomical share price and stack up a mountain of dollars that could buy Facebook twice over for cash (or buy everyone on the planet a half-decent bottle of wine). As the technological gap, and the design gap, between Apple products and those of its rivals narrow, the brand magic is going to be even more key – and therefore even more exposed.

It was a smart move for Tim Cook to jump into Fair Labor, and then arm-twist Foxconn into big wage increases. It would be even smarter for them to leapfrog the moral/CSR competition and drive excellence in Chinese manufacturing and labor practice without needing to be pressured further.

http://bclc.uschamber.com/blog/2012-02-03/csr-and-burden-outsourcing-apple-opens-door

Foxconn goes to court over severely injured worker | Business Tech – CNET News.