Prosuming

Opening up to open sourcing as a profitable business model is one of the newest trends among businesses. Many different companies are embracing the idea that their consumers and the public at large could produce valuable contributions to product design. Starbucks, for example, allows consumers to design their own coffee drink. Puma’s Mongolian Shoe BBQ lets the public design their own shoe. Amazon.com, IBM, craigslist, and a host of other businesses are all looking to open source as a new way to market, to design products, and to compete in what is becoming a ‘prosumer’ world.

Here are some more examples of companies integrating Open Source procedures into their business philosophy:

Fashion – Threadless

Why hire a product design team to come up with catchy phrases and designs for t-shirts when you can have the public do it for free?

Threadless is a Chicago-based T-shirt company which serves as the perfect example of a business capitalizing on prosumers. All of the tees produced by Threadless are designed and voted on by the public. Up to 300 designs are submitted daily, the favorites are picked by the public, and then the winners are awarded $2,000 per creation.

According to an article in Forbes Magazine, this translates into a T-shirt company with no product design team who made $30 million in revenue in 2009, secured 1.5 million followers on Twitter, and 100,000 fans on Facebook. Not bad for a company of only 50 actual employees.

Threadless has expertly cultivated a community of loyal fans and contributors that has proved to be the key to its success.

As Cam Balzer, the vice president of marketing at Threadless says:

“We’ve got a close-knit group of loyal customers and have worked hard to build that. The people who submit ideas to us, vote and buy our products aren’t random people, and they aren’t producing random work. We work closely with our consumers and give them a place on our site, the Threadless forum, where they can exchange ideas with one another–ideas that go beyond designing T-shirts. We have consumers who have voted on 150,000 designs, which means they’ve spent hours interacting on our site … They’re part of the community we’ve cultivated.”

- Forbes Magazine

The Web – Mozilla Firefox

The widespread use of the internet plays an integral in bringing open sourcing to the forefront of business practice. Without it, companies wouldn’t have nearly as much access to the opinions and contributions of prosumers. It therefore makes sense that web browsers like Mozilla Firefox (along with many other web-based software and applications) would be open source.

Introduced in 1998, Mozilla Firefox was designed around the idea that the internet “should be public, open, and accessible.” To that end, Mozilla brings together thousands of volunteers to aid its small staff in creating products which are available for free to the public. The company’s operations are open and transparent, the entire code for the browser is therefore a public resource, and the company hierarchy not defined by seniority or necessarily ownership, but by who contributes the most to product design and ultimately to “making the internet better for everyone.”

Media – NowPublic

NowPublic is a Vancvouer-based, online news source based entirely on stories and news submitted by the public. All of the audio, video, images, and written stories come from the public. The public even chose the lead story by voting on their favorite. The entire content of NowPublic is produced by 200,000 citizen journalists living in 5,500 different cities in 160 different countries. This makes NowPublic the largest participatory news organization in the world.

Still a relatively new company, NowPublic is rapidly making its mark in the media as reliable and remarkably current. Because NowPublic’s journalists are regular people with access to technology – whether it’s a computer, cell phone, camera, or anything else – NowPublic often finds itself the first news source to run a story. Other news sources have to bring in the reporters, ship them over to the drama lugging camera equipment in a manner which isn’t entirely expedious. For NowPublic, all it takes is one person with a Camcorder and an internet connection.

In 2007, NowPublic was named by Time Magazine as one of the top 50 websites for the year.

The Gold Industry – Goldcorp

Open Source methods have even found their way to gold!

When Goldcorp CEO Rob McEwen found himself heading up a dying mining company out of a 50 year old mine in Red Lake, Ontario, he knew he had do something different and radical to keep Goldcorp from folding.

Taking a page out of Linus Torvalds book, he decided to open up to the public and allow them to tell him where to dig for gold. McEwen published all of Goldcorp’s geological data on the web – an unprecedented move in the gold industry – and waited for mass collaboration to work its magic…. and it didn’t disappoint.

1,000 people from 50 countries competed for a grand price of $575,000 in what McEwen called the Goldcorp challenge. The virtual prospecting resulting in 110 targets being pinpointed by the public. 80% of those targets were profitable and resulted in $3 billion dollars worth of gold.

Goldcorp was transformed from the underperforming, dying company it used to be into a $9 billion company. Open sourcing proved to be the company’s savior.

A New and Open Breed of Enterprise

I’ll sign out with a quote from Wikinomics authors Don Tapscott and Anthony D. Williams from a Wikinomics series they wrote for Business Week in 2007:

“A new breed of 21st-century enterprise is emerging—one that opens its doors to the world; co-innovates with everyone, especially customers; shares resources that were previously closely guarded; harnesses the power of mass collaboration; and behaves not as a multi-national, but as something new: a truly global business. These new modus operandi revolve around four powerful new ideas: openness, ‘peering,’ sharing, and acting globally.”

Community, Consumer Loyalty, and Word-of-Mouth Marketing

When a company creates community around its products, it ensures customer loyalty. When engaged in a community, consumers no longer feel like they’re consumers. Rather, they see themselves as guests, members, and participants congregating around a common goal or belief. That change in mindset plays an integral role in up-keeping consumer commitment and in encouraging word-of-mouth marketing.

But why stop there? If community cultivating can serve as a marketing strategy and as the best possible customer care model available, shouldn’t it be able to do more?

Well, it can. A business’s community of fans, clients, followers, subscribers, guests…whatever you want to call them… can also take care of product design.

Peering and Linux

The idea of outsourcing product design to the public has become much more popular with the invention of the internet. It is the internet that has allowed businesses to source the intellect of people all over the world. What we’re seeing, as the Wikinomics authors Don Tapscott and Anthony D. Williams describe it, is a “new form of horizontal organization [that] is emerging [to rival] the hierarchical firm in its capacity to create information-based products and services, and in some cases, physical things” (22).

Tapscott and Williams call this new form of organization ‘peering,’ but the act of increasing corporate transparency and bringing in the public to help design and create a product is also becoming known under different vocabulary such as ‘open sourcing,’ ‘crowd sourcing,’ ‘peer-to-peer production,’ and ‘community-based design.’

One of the most familiar cases of outsourcing product design to the public is the example of the Linux computer operating system. Linux was started by a man named Linus Torvalds in 1991. Torvalds took the existing Unix operating system, created a simpler version of it, and then posted that version online for other programmers to view and modify. Some of the programmers made changes, for free, Torvalds ended up licensing the program under a general public license, and Linux as an open source operating system was born (Tapscott and Williams, 24).

Today, thousands of volunteer programmers make modifications to Linux on a daily basis, and because it’s reliable and more importantly, free, Linux is considered an important “enterprise software keystone” for many companies (Tapscott and Williams, 24).

Linux represents the perfect example of an organization or a business sourcing the public to help design a product. With the internet, especially the onset of Web 2.0, with our still sour economy, more and more companies are adopting the open source model. It’s cheaper than supporting a bulky design team; it can be quicker than using traditional design methods; and perhaps most importantly, the transparency and trust inherent in peering and open source strategies are incredibly effective at cultivating that longed-for sense of community and customer loyalty around a product.

Of course, with that sense of community and loyalty centering around a product, businesses are rewarded with increased word-of-mouth marketing and increased participation in product design. It’s a virtuous circle. Open up to the public, allow them an opinion on the product design, secure their loyalties and their powers of advocacy, garner more interest in the product, and ultimately receive more input in product design!

I want to go into more detail on different businesses and companies that operate on the open source model, but I think a separate blog post should be dedicated to exploring those distinct examples. Look for it next week!

Collaboration = Wealth

For now, I would like to close out with a Ted Talk by Howard Rheingold on the history of human collaboration, current economic thought on human collaboration, and the future of human collaboration. In particular, I want to draw attention to the last six minutes of Rheingold’s talk where Rheingold starts to talk about how open sourcing, peer-production, and cooperation, can transform into wealth.

*Tapscott, Don and Anthony D. Willilams. Wikinomics: How Mass Collaboration Changes Everything. USA: Portfolio, 2008.

How Do You Achieve Critical Mass in Social Media?

There is no question about it, when you first start a blog, a Facebook page, or a Twitter account, it is HARD to build up your account.  In no way does the 1980s “if you build it, they will come” philosophy work in social media.  You have to prove your worth on the social media site, and you have to put the work in to get out there and let people know you exist plus prove to them that you’re worth spending time with.

There isn’t just one thing that brings you to a critical mass.  It has to do with the quality of your posts, your ability to understand and cater to your target audience, the focus, authenticity, and consistency of your outreach efforts… and truth be told, a bit of luck.

Hitting critical mass is quick, unpredictable, and totally exciting!  And once critical mass happens, the momentum soars.  People will come to you.  It is a glorious time!

What Number Makes Critical Mass?

At LinkedIn, users get a special prize for having more than 500 connections.  Is 500 the magic critical mass number?  Do you only need 500 fans, 500 blog visitors per day, or 500 Twitter followers, before it takes on a life of its own?

I would say it depends on the quality of your posts as to whether your critical mass will be 500, 1,000 or 2,000.  High quality posts, such as those on our client TisBest’s Facebook page, quickly allowed the company to reach 500 loyal fans.  Once that happened, the Facebook fans took off on their own – telling their friends who in turn tell their friends – and quickly the TisBest fan base surpassed 1,000, and continues growing strong.  And they don’t have to try anymore – they can focus on continued quality and timely engagement.

However, we have other clients who take longer to learn how to effectively engage their audience and turn fans into advocates.  For them, it takes somewhere between 1,000 and 2,000 fans before their accounts really take off unattended.  It depends quite a bit on post quality and well-timed regularity, as well as developing the skills to truly engage.

Metcalfe’s Law, Zipf’s Law, and The Long Tail

These three principles are often spoken or written about in discussions of critical mass.  In the blogging spirit of brevity, rather than fully dissecting them I’ll just give a brief summary and hope that in doing so I don’t grossly oversimplify the ideas so much that they are unrecognizable.

They are all 3 related:

• In Metcalfe’s Law, the value of a network is proportional to the square of the number of users who are connected within that network.  Fair enough: your network is only as powerful as its number of users*.  (Bob Metcalfe is attributed to inventing the Ethernet, by the way.)

• Zipf’s Law is a law of scale, where the quantity of (whatever it is you’re studying) is inversely proportional to its rank within a group of (whatever it is you’re studying).  So essentially the popularity of a word, website, or fan page follows a predictable distribution that is proportional to the popularity of all the words, websites, or fan pages.

Not terribly profound, but it does put things in perspective:  if you are a microfinance site, you can only be as popular as microfinance sites are – a microfinance blog’s fan size and growth is proportional to other microfinance blogs, and will not be proportional to a social media blog, or example.  Unless an unpredictable and large variable comes to play, social media blogs are just going to be more popular than microfinance blogs, so there is no reason to strive that high!

• The Long Tail is essentially a niche marketing strategy, coined by Clay Shirky and popularized by Chris Anderson in a 2004 Wired article and later a book by the same name.  A free market generally follows a distribution that favors the most popular 20% of retail items.
  

So think of movies:  the top 20% of movies are all that Blockbuster or Wallmart would ever care about and stock, because that’s all that works with their market model.  They can’t have a bunch of slow-selling items on their shelves for months at a time.  But then along comes Netflix, who is making a killing on the other 80% of the titles!  It costs next to nothing for Netflix to stock a whole lot of different titles due to their new kind of model.  The same is true for blogs, Facebook pages, or Twitter accounts.  So what if you aren’t in Technorati’s top 100 – you can still make a big impact.  Thanks to Netflix, there are a whole lot of documentaries that are actually getting seen – and changing people’s minds – because someone believed in the long tail.

Personally, I don’t think any one of these principles stands on its own as a guide for how we should think about critical mass in social media.  But together they do begin to paint a picture of the types of things that play a part in success.  And the greatest factor of all is still the creation and maintenance of an infrastructure of true engagement.

All three principles fall flat if they aren’t effectively set up and maintained.

*Note:  there is some argument that users do not equal Metcalfe’s original description of “compatibly communicating devices”, but we’re interpreting loosely here anyway.

Speaking of the Long Tail….

Sometimes it Just Takes One Person

At One Green Generation, I have an advocate who has brought me far.  That advocate just happens to be one of the top respected people on reddit.com.  That means every time he or she posts a link from my site, it has the potential to go up the reddit ratings very quickly.  On January 4, 2009, when many people were just starting to enact their “go green”new year’s resolutions, qgyh2 posted a link of mine, and my blog stats rose from 500 a day to nearly 3,000 in one day.

While most of those 2,500 new people did not stay and become regular readers or subscribers, a few did.  And, because there were so many people coming to the site, one or two of those reddit users also had a StumbleUpon account, and happened to have a lot of clout there.  The next day, reddit and StumbleUpon users together brought almost 5,000 people to the site.  Then more people Stumbled the post over the coming weeks and months, and still today I have at least 150 readers each day coming to read that one post.  And over those two days, my site surpassed its critical mass.

Which brings me to….

Sometimes it Just Takes One Post

Now don’t get me wrong, you can’t have a site full of crappy posts with one good one.  Yes, people will come and read that good one, but they won’t stick around.  Overall quality needs to be paramount.  It is important to occasionally spend quite a bit longer to write a well-researched, well-laid out article that people will pass on to their friends.  These longer, deeper articles are ALWAYS the ones that end up Stumbled, reddited, and bringing in hits long after I’ve posted the article.

But note that these posts will generate high traffic only if they come at the right time, and when you’ve already hit critical mass.

Typical articles that work well in this category are How To or Top Ten articles.  They’re also articles that get to the heart of whatever field your blog plays within.  And finally, something I have never done, they are the posts that list a lot of other bloggers and essentially bolster their egos.  Magazine and newspaper blogs do this:  The Top 100 Bloggers of the Year, for example.

And one final note:  it’s rarely predictable when critical mass will happen, and when a post will go “viral.”  You can’t get disappointed if you spend 24 hours creating the best article you’ve ever written, and it doesn’t get any play at all.

Viral Happens More On Some Days Than Others

Watch your site stats.  Watch your comments.  When is there the most activity on your site?  What time of day do your readers most like to read your posts?  Answer these questions, and then make sure your most important articles are posted during the peak times.

If your site is virtually dead on a Sunday, don’t post the article on Sunday.  If it peaks on Wednesday afternoon (many sites do), post on Wednesday morning so it’s there and waiting.

Don’t Discount SEO

The intricacies of SEO are for another post, but I encourage you to not take SEO lightly.  Some of my most loyal readers came to my blog via a recipe they found on Google, or a solution for how to get rid of ants sustainably on Yahoo.  How do I know this?  They have told me so.

Follow Your Own Path

I want to conclude this article by recognizing the incredible human-ness of the internet and every social media site.  The internet is people, through and through.  People are not always predictable.  And people are not always good predictors.  So write good articles and posts that follow best practices, write them frequently, tell your friends and acquaintances about them, and have the infrastructure in place that allows for good strong engagement.  If you do all of those things well, and have a little patience, you’ll probably do just fine!

Have You Experienced Critical Mass?

Please share your tips with all of us, or ask questions if you have them!

When I walked into Re-Vision Labs headquarters for the first time to discuss the design of a new website, I was struck by the open, naturally lit and inviting environment. They may have had little say about the architecture of the building, but architecture only contributes so much to the environment of a place. The working relationships and communicative energy of the partners and fellows filling the space practically begged me to grab a dry erase pen and go to town on the nearest white board.

No one’s ideas were unwanted and no one’s ideas were without value to the collaborative process.  I really did leave the space with world changing ideas developed through constant constructive collaboration, the ethos Re-Vision Labs passionately champions.

So, I sat down to design a site that emphasized”Re-Vision Labs” with its first impression. Melinda Briana Epler and I had gone over some basic ideas of what the partners wanted portrayed, which conveniently fell inline with the idea of RVL I was already forming, so I went with it. I wanted to design a site that said, “We’re cutting edge, we’re knowledgeable, we’re idea generators and community builders.” The image that stuck in my mind, that said all of this to me, was those white boards leaning up against the wall.

I whittled all the content I was handed for the site down to what could fit on Post-it Notes, laid them arbitrarily on a white cutting board and spent hours moving them around, swapping pieces out, drawing arrows from here to there, indicating menus and sub menus until I had what looked more or less like the structure of the homepage as it is now: clean, clear, and sometimes-a-little-showy functionality.

The hand-drawn elements were a long debate in my head. Clean graphics adhered to the minimalist sensibility, but ultimately the rough sketchy look adds the “we’re always innovating” personality of RVL to the site. As it stands now, this site was one of my favorite design projects. So rarely does one get handed the job of representing such an inspired group of individuals. It is my hope that everyone who visits RVL’s new site reaches that homepage with a more complete understanding of their mission and purpose.

The below are two home videos. Aside from their obviously amateur style, can you can tell which one was filmed with a $2900 over-the-shoulder digital camera and which with a $300 hand-held?  Or which was edited using Final Cut and Soundtrack Pro and which with only in-camera editing and a simple (legal) iTunes import?

I know, right?

Hence this post.  Employment is generally an exchange between human capital — experience, education, aptitude — and physical capital — work space, computer, office supplies, etc. In the traditional employer-employee contract, you apply your knowledge to the employer’s tools to synthesize a product that ultimately supports everyone’s pocketbook.

But with the growth of small (startup) firms, especially those propelled by the Great Recession and those in the technical and “creative” industries, it is increasingly necessary to possess your own equipment (or have access to it, though that too is not free), and know how to use it before applying.  For example, software engineers and web developers needed to have had, at the very least, access to modern computer equipment prior to the job (likely throughout their youth or young adulthood).  Aspiring creative directors of advertising agencies need a polished “book,” graphic designers need a portfolio, filmmakers need a film.  This cannot be achieved by using the public library.  All of these require pricey hardware and software that is a) not easy to purchase oneself and b) barely accessible unless you’re paying tuition at a university or vocational school.

Clearly, purchasing and accessing the tools necessary to develop these technical and creative skills has serious implications socially, since those with the means and access to capital consequently get the job and perpetuate the cycle.  Fortunately, tools once available only to large firms and professionals can now be found under the blue light at Walmart.  On the hardware side, digital media equipment ranges from thousands of dollars to less than a hundred.  Thankfully, software is now frequently bundled into differently priced packages- I can purchase Adobe’s Photoshop Elements 8 for $80 instead of its Master Suite Collection for $2500.  Everyone can now be a filmmaker, to the loosest sense, with the most recent iPod nano (priced at less than $180), or with a right smartphone (which can be obtained very inexpensively with savvy finagling).

My musing stems from an indecision about whether to invest roughly $3,000 into my own 15″ Macbook Pro with Adobe Creative Suite and Final Cut Studio.  I want to excel at using production software to develop attractive digital media, but this cannot be achieved from ordering a textbook alone.  I need my own equipment.  I need to play with different tools, creating and re-creating, building a language of modern technical jargon and skills.

Or do I?  The question I’m now considering is whether I can do this with equipment that is “good enough” but not necessarily intended for professionals.  Can I keep my 4 year-old HP laptop or do I need to buy a modern Mac?  Will using the $79 Adobe Premiere Elements be as effective as the $179 Final Cut Express for generating quality YouTube videos?  Can I achieve great videos with the $179 Final Cut Express instead of the $1000 Final Cut Pro or is that equivalent to asking for a Zima at an upscale bar?  Will a 2.8 GHz processor be noticeably faster than its 2.66 GHz counterpart?

The same questions contribute to my indecision over a video camera.  Should I get the $200 Flip or spend twice as much on a Canon FS20 for its 2000x digital zoom and in-camera editing?  If both offer High Definition image quality, what additional quality am I paying for?  And will purchasing an additional $50 microphone plug-in produce much better sound quality than simply holding the video camera closer to someone’s face?

Essentially, what is the additional benefit to my development as a digital artist per additional dollar spent?  Is marginal reward directly and reliably proportional to the marginal cost?  Will I be comfortable with the resulting equilibrium?

The projected consequences of making the “cheap” decision in the face of hyper-competition and a deep recession is daunting.  Forget being the best, or even the best of the best; you have to be awe-inspiring to land a job in the creative industry right now.  The ramifications on social equity of this are daunting, as mentioned.  Are those privileged enough to own the best equipment more marketable?  Are those who don’t even in the running?

The question comes down to:

1.Will my potential employer be just as impressed with a good YouTube video as he or she is with a stylishly-printed DVD with original music mixes?

2. Is my employer (and/or myself) interested more in content or pretty packaging?

The answer, I believe, is that it depends.  Don’t you hate that?  Just another ambiguous, flexible variable to plug into the formula for success.  But it does depend on what your goal is.  Are you competing with indie filmmakers to get into Sundance?  Or are you advertising a product on Facebook?  What kind of product?  Who are your customers?  The Flip would probably be perfect under one scenario and infuriatingly too limiting in another.  And as I’ve learned the hard way, without a good storyline and footage, no amount of post production will turn nothing into something.

You probably agree that we can’t afford the wait of turning people into environmentalists one person at a time. A Seattle-based non-profit understands that it makes more sense to inspire whole communities to move progressively along the sustainability spectrum.

OUT for Sustainability was established last year as a platform for catalyzing community-based environmental and social change. The audience addressed comprises only 3-10% (or more…) of the American population. But once this community turns green, the US is meaningfully closer to being the country environmentalists everywhere want it to be. The non-profit aims to galvanize queers who have learned that the successful organizational efforts paying off in increased legal protections and benefits can be applied to improving environmental challenges we all face.

And data show promise for attitudinal shift within communities. A 2009 survey supports that 21% of lesbian, gay, bisexual and/or transgender (LGBT) adults identify as “environmentalists,” while only 13% of heterosexuals do. Other survey results show that LGBT adults feel a deeper sense of accountability for environmental impact (see graphs below).

"I Believe..."

Thought and emotional leadership via the web is likely accountable for some of this intra-community conversion. One example is the It’s Easy Being Green column of The New Gay, an online collection of blogs on LGBT-related topics. Subjects range from the need to increase corporate efforts targeting queer communities with eco-product advertising to vegetarian recipes and cooking demos. While the author voices occasionally feeling like an anomaly rather than the norm as a gay environmentalist, Web 2.0 is a proven change agent.

Which community might you help lead along the sustainability spectrum?

How is social media changing the world? Check out this week’s hottest hits in global development!

1. Crowdsourcing Platform  Ushahidi Breaks Barriers with Innovative Design

New open source web platform allows for the crowdsourcing of global development related ideas, updates, and information.

2. Activists Use Social Media to Spread the Word about Copenhagen

NGOs take advantage of new social networking and social media tools to disseminate information, tweet elected officials, and track progress during the conference.

3. Hopenhagen: The Social Media Experience!

Founded under a mission to “give everyone hope and a platform to act,” Hopenhagen, an interactive website that unites global participants around the Copenhagen conference, allows their collective voice to speak loudly and clearly.

4. Al Gore Introduces “Repower America” Campaign, Rooted in Social Media Dynamism

Al Gore used the platform of the Copenhagen conference to introduce a new grassroots movement entitled ‘Repower America’ that will focus on garnering public support for Congressional approval of clean energy and climate legislation by Earth Day of 2010. The main focus of the campaign is an interactive wall where participants, celebrities, etc can post videos and photos representing their thoughts and feelings on climate legislation.