The World of the Yeltsins

I have not had the slightest piece of time, opportunity or reason this last year to revive the Kaplak Blog – or the Kaplak Log, as I think I’ll soon rename it – until now.

For one thing, Kaplak doesn’t exist as a proper company any longer, and for another I have a new job and position as a teacher of history and media. I’ve had my hands full, and I’ve still got a lot of new things to learn.

And there’s the thing, that in a company blog like this, every post always seemed like it was building up expectations for the next, even longer and more insightful piece, and it became impossible to live up to. Eventually the blog simply lost it’s pace, along with the energy and ideas which went down with the company and it’s troubled work relationships.

Yet, I have never quite stopped thinking about the problems that we worked to solve in Kaplak. If I have, it has been only briefly and because I’ve been preoccupied with other thoughts and work. But I’ve watched and used the web and tools of the web just as intensively in my new position, yet with the major difference that I no longer has to study them, just because I have to find a way to make a living out of them. I use and study them because I find them interesting, and actually find myself in the position of someone looking for obscure niche products (such as documentary films, for instance). And I’ve realized over the past year, that we’re nowhere near solutions to the problems we set out to solve – connecting products on the slim end of the long tail with their distant markets.

And this in spite of the widespread use of Twitter and Facebook, the improvements and new products of Google (Google Wave being the most interesting), lots of affiliate networks and business models (Amazon’s model still in a prominent position), experiments with paying web contributors (Knol, Mahalo, Squidoo and others). In many ways, the web seems a lot more like in a standstill today than when we started out with Kaplak in 2007. Or when I first started out working with the web in 2003 and 2004. Back then Wikipedia was still a young experiment, and YouTube was a daring startup, not yet consolidated by Google. Peer-to-peer services were alive and well – and bittorrent was looking very promising. It still is promising, but has failed to expand into popular use, despite the efforts of startups such as Bittorrent.com and Joost (which was never a true p2p service, after all) and lots of free publicity for services such as The Pirate Bay. And despite the widespread sharing practices on services such as Facebook. Facebook never became a great place for sharing torrents, as the company was very quick to ban and remove users’ links to torrent sites such as The Pirate Bay. Lots of startups have died trying, and Google and Facebook looks even more dominating in the webspace today than 5 years ago.

Noone talks much (or just as energetically) about Chris Anderson’s ideas about ‘the long tail’ as many did just a few years ago, yet I still see the same opportunities in it for transcending core aspects of western, industrial society. While the economics (one can earn more in the tail than in the head) may or may not be true for particular types of businesses and product categories, the long tail helps demonstrate (and helped demonstrate at the time), that there is much more out there today than previously, and that there is a demand for it (however slight). Whether a business model is feasible in the long tail (with or without the head to support it), however, remains, in my humble opinion, a matter of finding the right business model and cutting costs appropriately. The vital component of both these priorities is an architecture which supports them, i.e. makes products accessible to their precise markets at the right time, and at very low cost. Now, what makes this difficult is that one has to build such an architecture in a totally convergent and converging field, where concepts such as producer, product and ownership to information changes rapidly.

Connecting niche producers and niche markets much more precisely and efficiently might and would transcend our dependencies on time – just as the industrial revolution transcended our dependencies on land to our present dependencies on time. The last turned out to be a much more flexible arrangement for western societies. The workforce was no longer tied to the land, but could earn their livelihoods manning the machines. No longer could one harvest and produce only in one season of the year, production could be kept up, as long as there were hours in the day, energy provided by steam engines and electricity and a sufficiently large workforce to man the machines. Welcome to the world of economic growth as we know it.

Now, what we can do, and what we have the technology to do, is loosen our dependencies on time. We already do it, we already have it. We can work everywhere, thanks to wireless networks, we can meet and arrange to meet each other up until the last minute, thanks to mobile phones. We can keep ourselves informed and filter our incoming information streams, thanks to RSS and services such as Twitter or Google Reader, and countless other web services. We can construct our own information architectures, in our own webspaces, using free software such as WordPress and MediaWiki. We can sell our own homegrown products with everything from eBay to osCommerce. We can buy home-delivered groceries over the net, which meets our needs precisely. We can produce and sell our own soap and beer thanks to recipes found online and our own experiments. We can write, print and sell books-on-demand, more cheaply than ever, without the wasteful mass printing of big publishing houses. We don’t have to rely on schedules, workhours, heftily regulated industrial workplaces – and we don’t have to rely on the editorial filters of others.

But, and there’s a big but, many of our laws, courts and workplaces still not recognize what’s going on. Our lives and businesses are regulated nationally, even though we operate nascently internationally via the internet. We predominantly receive our salaries dependent on how much time we spend doing something, or based on how high up in the command-chain we are – not so much dependent on how useful it is what we do. We pay taxes to local institutions and obey local laws, despite the fact that the problems we have to deal with are increasingly of a global nature, from terrorism (which is, in this context, a very small problem) to the threat of environmental disasters. We may add information to radically open and globally reaching information systems such as wikis, yet our educational systems (broadly speaking) are hopelessly medieval in their narrow focus on classes, professors and courses.

The final blow will come the day, if/when the ‘old’ economic system breaks. I’m not sure the present crisis is just it – I expect a transition to a ‘new’ economic system to take longer and be more painful. There may not even be a ‘visible break’. If you can’t see or feel it now, I wonder if you will at a later stage. Many of these changes are not clearly documented or reported by our mass media-based news system, and our networks-based information filtering still needs a lot of work – it is still polluted by much noise.

The question is how deep these changes will go politically? Can our political institutions handle radically big transitions of our economies and property-based systems? One area is patents and copyright, for example. Can our political parties and institutions reform this? Is it possible? A lot of things leaves the impression it isn’t possible, yet some of us has to insist that it is. If it isn’t possible, p2p will be driven underground, reserved as an outlet for the few privileged, who knows how to circumvent the official pathways. If it is, what new institutions may emerge from the battlefield, what new types of infrastructure will we need, and what should they be like?

Lawrence Lessig once referred to himself as the ‘Gorbachev of this movement’, in the sense that he didn’t want to tear down the copyright system, but to reform it. But here we are, and even Lessig’s own talks are taken down from YouTube because of alleged copyright infringement.

It seems to me that this is much more the world of the Jeltsins. Of a web that consolidates itself into major players, which are not as intent to empower their users, as they are intent to profit themselves and keep the industrial system in place.

The reason I write this post is I still see opportunities to revive Kaplak, not as a company, but as an idea and set of ideas which can still be worked with and developed upon to build better tools, which can help take a crack at our original problem : connecting products and markets on the slim end of the long tail. But it is even clearer to me today that this battle is also political. It cannot be fought without taking a political stand. It can’t be reduced to just business or just a company. It has to have a wider scope. I will keep this blog a space to explore this further – the construction of concrete tools and information architectures as well as the politics.

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Incentives for the slim end of the P2P tail

This just in from Chris Anderson :

Bootstrapping the Long Tail in Peer to Peer
Bernardo Huberman and Fang Wu from HP labs have just released a paper describing a way to help P2P networks deal well with niche content. “It is difficult to satisfy the diversity of demand without having to resort to client server architectures and specialized network protocols… We solve this by creating an incentive mechanism that ensures the existence of a diverse set of offerings regardless of content and size. While the system delivers favorite mainstream content, it can also provide files that constitute small niche markets which only in the aggregate can generate large revenues.”

Going to dive into the research of Huberman and Wu during the following days, as their work seem to complement the thinking about p2p incentives we’re doing in Kaplak. This is what I call important stuff.

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What is a niche?

At Kaplak we’ve adopted the use of the term ‘niche’ in order to describe an aspect of the industrial economy, even though it is quite insufficient to describe the changes and challenges we mean to describe. We’ve already gotten a clear definition of ‘niche’ from Chris Anderson, which is that ‘niche is something which interests few people passionately’, in contrast to mainstream, which is what many people are moderately interested in.

However, this is looking at things from the viewpoint of an industrial economy, not from the perspective of the people and businesses who live and experience a particular field of expertise, meeting and selling to particular customers.

Inevitably, to begin with we’ll have to use the vocabulary of the industrial economy to describe what’s happening in the new economy of a digitally connected world. Along the way we’ll find if the meaning of the terms we use change to mean something else, or if we need to invent completely new concepts to describe what’s happening.

If we want to understand how niches work, we need to get in touch with you, who may be our future user and customer. What do your online activities entail? What do you produce? How do you sell it? What are your greatest opportunities and challenges? To paraphrase Steve Blank, “opinion is inside the building, data is outside the building”. This is what we need our mailing list for. We hope to obtain your help to give us a refreshing reality check on “what life is about on the slim end of the long tail”. If you’d like to help out, you can do this, by signing up on our mailing list here. We’ll get in touch.

[Note: The mailing list has been suspended for the time being - please follow our feed or create an entry about yourself in our wiki if you'd like to help out.]

This blog will keep on investigating the challenges we face, not just theoretically. With your help, we’ll seek to unfold more examples of online niche communities and businesses which shed more light on the day-to-day methods, practices and challenges in what we (so far) refer to as branches of a global “niche” economy.

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The Mainstream Problem

I’ve previously referred to a phenomena, which I’ve chosen to term the mainstream problem. The mainstream problem describes the effect that distribution of information and cultural expressions acquires “hitlist” characteristics, when subjected to limited space, time or attention.

Chris Anderson, spokesperson for the advantages of the online niche economy in his book The Long Tail, describes ‘mainstream’ as that which many people are moderately interested in, while ‘niche’ describes that which passionately interest few people.

In industrial mass media such as the publishing, newspaper or television industry the scarcity of ressources means that one produces the product which sells well enough to finance it’s production. Since most people collectively demand the mainstream product, this product sells best and is therefore the one produced. This does not imply, however, that the mainstream product is the best. But it is the best possible product given a specific set of economical conditions, borne by specific means of production, which are too expensive to fulfill the needs of the niches.

A limited space (such as a webpage, the frontpage of a newspaper, television air time or the size of a screen) leaves space for just some information, in place of other information. Given the economical constraints discussed above, this space will be distributed according to ‘most popular’ hitlist criteria, meaning that the mainstream information, i.e. the information which hits the most people moderately, but none passionately, takes up the space.

The effect of displaying information this way is often amplified, since more people will take a closer look at the contents of the frontpage and further strengthen the visibility of the mainstream information. On the web, social recommendations strengthens this hit economy, in what has been termed the Justin Timberlake effect. On websites such as YouTube it has the effect, that few videos have millions of views, while millions of videos count below one hundred views.

As the amount of information on the internet grows (millions of new websites are created every month globally) the mainstream problem becomes a greater and greater problem for our access to relevant information on the web. The information may well be accessible somewhere on the net, but it is no good, if noone sees it or is capable of finding it – or rather, if people who wants it doesn’t see it or is capable of finding it.

Even Google will have a problem showing search results which are more than just moderately interesting for the websurfer, unless he or she has the patience to trawl the search results for the results which are passionately interesting. A main component of Google’s PageRank-algoritm is how many incoming links a given website has. This makes Google vulnerable to the same problem. The more who link to a website, the more visible the site will be on Google, all other things equal. The more visible it becomes, the more people will likely link to the site.

What is interesting to us, is what happens, when the economics change. Because they have already changed, and they are changing fast. There are no expensive means of production, which justify the limitations imposed on cultural production. The means of cultural production today equals the costs of a computer and an internet connection. But it is only slowly dawning on us. We have become so accustomed to the economics of limitations, that it is difficult adjusting to the economics of abundance.

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The LEGO niche community

I have been looking around for a way to start Kaplak’s looking into the workings of online niche communities. We have some great examples in our own local backyard, but I wanted something, which showed how the internet has come along and changed things.

Looking around I stumbled upon this video by Jake McKee on what we may simply term the “LEGO community”. Everybody knows LEGO, but few know that LEGO is not just a children’s toy. LEGO has a large following of playful adults around the world. See the video and judge for yourself.

One of the interesting points of the video is that all these scattered individuals passionate about LEGO have been connected with the internet. Where many of these people were isolated before, the internet has made them aware of each other’s existance, globally. One gets the impression that this has helped spur a new vitalization and outburst of their creativity. New possibilities to show off creative endeavours (like this video, shared with YouTube, is an example of) and get inputs back, has caused something we may term an “awakening”, with an expression borrowed from Lawrence Lessig.

Personally, I’ve recently refound a lot of joy myself in my old LEGO’s and have been surfing around on sites such as Brickset, which offers an online database on most of the LEGO models ever produced. I’ve also played around with LEGO’s official Digital Designer. This program engages LEGO fans to help design new models, which can also be “uploaded” and sold via an online marketplace. The LEGO Digital Designer and marketplace is one of Chris Anderson’s examples of how a company can utilize the long tail of interests in different LEGO models. If, that is, the program was not artificially limited to a specific range of bricks, which it is, for industrial reasons… In order for LEGO to be able to sell the models you build with the Digital Designer, you have to use bricks currently in production. You can’t use ‘outdated’ bricks. It seems odd to me, that one should re-experience that old problem one always had building things with LEGO, that you always missed a particular piece, in a 100% digital product.

What’s more interesting to Kaplak, though, is the exchanges taking place between LEGO fans themselves, and the eventual capabilities of fans to share and eventually sell their creative endeavours to other LEGO fans. There’s nothing more than trademark issues (i.e. the protectionism of a traditional business model scared of copying, which we’ve touched upon before) to prevent users from creating their own models, trade in bricks on eBay, and share or sell their construction instructions, in spite of anything LEGO has to say. And maybe even issues like these won’t stand in the way. The awakening of this niche community is in many ways also an empowering of individual fans and entrepreneurs, who is so far perfectly capable of building their own databases and wikis.

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Chris Anderson Talks About a Radical Price

Please enjoy this recent video with Chris Anderson, introducing the ideas of his forthcoming book FREE: The past and future of a radical price, at Nokia World 2007 in Amsterdam :

Thanks for the tip to Guy Kawasaki. You can find the video in a slightly better quality here (where you may be better able to pick out Anderson’s slides).

I venture to say, that the ideas of Anderson’s next book at a first glance seem a lot less radical than those of his first (The Long Tail (2006)). By giving something away for free, which is abundant, you can sell something else, which is scarce. This is not a new business model, but just one, which can help create interesting and astonishing things, when used cleverly in combination with the internet. According to Anderson, technology have opened this model up to a wide range of industries – this is what makes it interesting. Nokia and the rest of the mobile phone industry can give away their phones, because there’s money to be made on talk rates and services connected to the phones.

Anderson’s model on the scarcities of the economy on the internet seems, however, too simplistic. He divides these into four broad categories : time, money, attention and reputation, in which the attention and reputation (hyperlinks + PageRank) converts into traffic and money to be earned on advertisments. True, this is the ‘conversion mechanism’ used by Google and others today. But I’m not sure I buy that attention and reputation are really scarce ressources, independently of the technological architectures, which shape attention and reputation on the internet now or in the future.

The attention span of any individual may be limited, but then we may be attentive towards very different things. This is a central point of Anderson’s first book. And reputation may simply, also according to The Long Tail, be a question of technological architecture, of ‘bringing customers down the tail’, as Anderson puts it, in the way Amazon recommends titles ‘other users also bought’. Attention and reputation on the internet are artificial constructs. Our current architectures make something more visibile to someone, than something else. This is only a problem, in so far, that the someone wants the something else before the something.

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