Why I am going to Socap09: can we re-invent currencies?

This post was originally posted on the Socap09 blog

I read recently on Edge.org an essay from Douglas Rushkoff entitled "Economics is not a natural science".
In the article, Douglas reminds us that the current economic system we take for granted is a result of history. It goes back to the middle ages, when people went from bartering what they were producing, and the main measure of value was the amount of food that could be produced from an ecosystem, to currencies based on how much gold where held in central banks. Scarcity was no longer in the ends of mother nature, but rather it became disconnected from it, and in the hands of the rulers of the land.
Since then, currencies has evolved to no longer being connected to gold either, they are just an artificial instrument to regulate exchange within and across nations.

Comes the internet, and another phenomenon appears, that Xavier Comtesse describes in his essay on "Direct Territories": we are now living in a world at the intersection of several and often conflicting layers. There is the geographical layer, several government layers (from local to national), a business layer (the corporation that spans across nation), and many other community layers. With the internet, stakeholders from these layers that typically did not have access to the discussion now can have their voice heard and can contribute to the balance of powers. Yochai Benkler in his book "The wealth of networks" gives very good examples of how this power is being re-distributed, and of the opportunities but also the risks it represents.

Today the economic crisis shows us a world where many people are without a job while there is enough work for everybody if we want to fix the issues at hand. Douglas Rushkoff concludes his essay by saying that "the economic model has broken, for good. It's time to stop pretending it describes our world". So what can we do from here?

- From the internet came the Open Source community, that has shown us how a large group of developers who were not bound by any constraint other than their own desire to contribute could self-organize to build and maintain very complex systems.

- And from history, we learn that it is possible to go around the lack of liquidity in situations of crisis by using our own currency: in 1934, and because there was a shortage of cash due to the stock market crash of 1929, a business man in Switzerland created the Swiss Economic Circle, now called WIR Bank. They started with 16 members, and there are now 62,000 businesses strong. They eventually returned to managing real currencies in 1952, but the system worked well to help businesses out of the crisis in the meantime.

One opportunity at Socap09 is to derive from these lessons and to consider what the ideal currency should be used for social capital markets, that would allow us to restore the right balance for a more sustainable world. I am looking forward to having such a discussion...

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Look for Haute Couleur ad this Sunday 8.23.09 in the NYT Magazine

"Media-Vent™ 8.23.09: NY Times Magazine on Empowering Women"

Look for Haute Couleur ad this Sunday 8.23.09 in the special issue of the NY Times Magazine on Empowering Women

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Echo is nice, but ...

Echo is nice, but until I know better Reframeit is better because it resolves a big issue for commenters, which is that comments should not be something controlled by the original content owner. If we want freedom of speech, shouldn't we be able to comment anything anywhere?


Comment posted on JS-Kit ECHO at js-kit.com using Reframe It

I also just discovered auto-post from posterous, so now this should go to my Facebook, Twitter, and to my Open Business blog. A blast!

via google-wave-robot

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Google Wave complexity does not come from UI

From What Works: The Web Way vs. The Wave Way at blog.enterprise2open.com:

"But then another task needs to be dealt with - protecting users from the complexities of the platform and helping them find ways of use, here usability of apps and sites built upon Wave must be better than what we’ve seen so far … this messy UX above reminds me of some platforms best forgotten."

Google Wave complexity does not come so much from a messy UI but rather from lack of etiquette. Once you understand the way it works and you start cleaning up your interactions, you are back to a nice and manageable environment. The stability on the Google Wave sandbox is still an issue, but otherwise using it (as an end user) is easy, and the promise that it will be better than email feels very real.


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Top 150 social capital blogs updated

I originally published the list in May 2009.

The list has been very stable. You can find the updated list here


2 new comers in the top 10:
A. Fine Blog - http://afine2.wordpress.com moving up from #16
Social Entrepreneurship - Change.org - http://socialentrepreneurship.change.org moving up from #11

Two blogs moved out of the top 10:
NextBillion.net | Development through Enterprise - http://www.nextbillion.net moved to #12
Stanford Social Innovation Review : Opinion Blog Entries - http://www.ssireview.org/opinion moved to #11

If you are planning to go to Socap09, these are good blogs to track...




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Reputation

From Masum at firstmonday.org:

"Reputation is a surrogate — a partial reflection representing our "best educated guess" of the underlying true state of affairs. Active evaluation by looking behind surface signals can corroborate or disprove reputations, while indiscriminate use degrades their reliability."

The Halo effect is a factor that will impact reputation and typically will create a disconnection between perception and the underlying true state of the affair. When a company does not perform well on the stock market, it is easy to rationalize that the CEO did not do a good job. The same CEO doing the exact same things in a market where the company does well would be presented as a reference for good management. The good read on the matter is "The Halo Effect" from Phil Rozenwieg.

But if/when we can resolve this problem, then there is a big potential. From the report:

"just as selfish local actions with market incentives can lead to collectively efficient behavior, locally maximizing actions with reputation incentives have the potential for similar guided emergent behavior that exceeds what might have been designed by a conscious planner."

I believe that this is a key element to making capitalism more sustainable. Definitely something worth working on!





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Internal Evangelist of the Year - by the Adoption 2.0 Council

If you are an "internal evagelist" or know somebody that
contributes to bringing change within your organization, the Adoption
2.0 is launching a "Internal Evangelist" award, here is a great
opportunity to capitalize on the effort...

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2009 is the year for enterprise 2.0

2009 is the year for enterprise 2.0, the data keeps pouring in...


Comment posted on The FASTForward Blog » New Study Finds Social Media Becoming Mainstream on Corporate Intranet: Enterprise 2.0 Blog: News, Coverage, and Commentary at www.fastforwardblog.com using Reframe It

Great slides from Netflix on the freedom and responsibility culture

Great slides from Netflix on the freedom and responsibility culture (thank you to Yves Granger for bringing this up).

This reminds me of Deming who talks in his book "Out of the crisis" about empowering people to do their job by providing them with the right information, and then manage by statistics, only addressing exceptions, things that get out of the standard deviation.

Freedom and responsibility is also what keeps things under control at Burning Man, a temporary town in the middle of the desert where thousands of people show up once a year. No police, no authority, self discipline to keep things under control.

William Bernquist talks in his blog about "postmodern leadership", and it is good to see it is happening at Netflix too.

Comment posted on Culture at www.slideshare.net using Reframe It

Interesting detail.

"Joltid, a company owned by Skype's founders, merely licensed some of the system's core technology to eBay when it sold Skype to the auction giant in 2005. Joltid now says that the license has been revoked and eBay is infringing on its rights by continuing to use the technology. The case is scheduled to go to court in June of 2010 but eBay is trying to replace the technology in the meantime. It may not succeed."

Interesting detail. It seems that whoever worked the acquisition of Skype by eBay forgot something, and it is now biting back...


Comment posted on Skype As We Know It May Not Exist Much Longer, eBay Says at www.readwriteweb.com using Reframe It

83% understand the meaning of Enterprise

"83% surveyed understand the meaning of Enterprise 2.0 and even how it can help their business. Over half of organizations consider Enterprise 2.0 to be “important” or “very important” to their business goals and Success yet only 25% are actually doing anything about it, but this is up from 13% in 2008."

83% understand the meaning of Enterprise 2.0, 25% are doing something about it, up from 13% in 2008. Clearly we are still in the learning phase. The good news is that we are moving up the bell curve.


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Testing Google Wave - part 2

I was one of the lucky users recently getting a Google Wave account (they just opened up their system to 20,000 users). And I have spent some time playing with the system.

There is a lot of chaos on the sandbox platform, which is still somewhat unstable (it crashed on me 3 or 4 times while I was testing). And since you only get one account you have no real friend to talk to, which means most of the conversations are happening through the discuss bot, with everybody doing everything at the same time.

It is interesting to see how things are slowly getting organized, and people get organized, figuring out how to use the system. As a result content also gets better organized. And in the end, I was surprised to find myself in an environment that feels very much like what I experience with blueKiwi (disclaimer - I work with blueKiwi).

True there are bells and whitles, like the clean up bot (removing blank blips) or the rosy bot (translations), or the twetty bot to publish your blips to Twitter, or the bloggy bot to publish a wave to a blog. But really what you have underlying is a communication platform where the key element is that it is organized around conversations.

First you create a wave, then you invite people to it. Just like in bK when you first create a note (or a poll or an event or other), and then you publish to specific people or to groups. And this is the key to the user experience.

This is different from what you typically see out there with other vendors, or with regular email, where you think first about individual people or a group, and then you send them a message.

This is the difference between an efficient way to communicate and a not-so-efficient way to communicate.

If anything, this first Google Wave experience makes me feel very good that blueKiwi has had the right vision from the beginning, and the Google guys thinking about what a modern communication platform should be agree with the general concept...

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Reframeit lets you keep your content where you can manage it: your blog

If you comment on blogs, you should consider using Reframeit! While IntenseDebate allows you to share your comments with others, the content remains on the IntenseDebate service. With Reframeit, I can publish my comments to my own blog, which is a better place for me to keep my own content. Something worth looking into...


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Testing Google Wave!

I was one of the lucky guys getting a Google Wave account recently (they just expanded to 20,000 accounts. While it is a bit disorienting at first, using wave is as great as what you can imagine from the launch video. I can't wait to be able to invite my friends...


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Facebook or Twitter are learning experiences

"Facebook or Twitter are learning experiences", we are still in the process of discovering how to use social media and how to manage communication through these platforms. I like the way Adriana describes the state of the industry. Worth watching...




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Adoption 2.0 council

From ITSinsider | What (2006), Why (2007), now How (2009) for Enterprise 2.0:

"Yes, the baby was born in ‘06, started crawling in ‘07, and now is running around like a maniac with boundless energy in ‘09. The Enterprise 2.0 movement is now a healthy child, growing stronger and more willful every day (just a cabinet door away from getting into trouble…) I returned from the Enterprise 2.0 conference this week rejuvenated, as I’d hoped to.

The number UNO issue on the minds of this year’s customer conference attendees was: HOW THE >>>> DO WE DO THIS??? Customers wanted to hear from other customers, not us (the so-called experts in Enterprise 2.0). The best sessions for me were definitely the unconference sessions where real practitioners could talk frankly about their challenges and share their successes."

Enterprise 2.0 is getting traction, the time is right for the people involved to discuss "best practices", and this Adoption 2.0 council is a great way to get started. I am looking forward to seeing what comes out of this effort...


Comment posted on ITSinsider | What (2006), Why (2007), now How (2009) for Enterprise 2.0 at itsinsider.com using Reframe It

Web 2.0 and Swarm Intelligence

From National Geographic Magazine "Swarm Theory" article:

"No generals command ant warriors. No managers boss ant workers. The queen plays no role except to lay eggs. Even with half a million ants, a colony functions just fine with no management at all—at least none that we would recognize. It relies instead upon countless interactions between individual ants, each of which is following simple rules of thumb. Scientists describe such a system as self-organizing."

Web 2.0 technologies create a platform to enable swarm intelligence. The article is not recent, but still very relevant. And this is a very good way to explain what is going on, rather than talking about culture and usage.


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Facebook and the public timeline

From www.readwriteweb.com - "The Day Facebook Changed Forever":

"After we wrote this post, Facebook HQ emailed to tell us that the first wave of users who get this feature will have their messages made public by default because their profiles were already marked as public, but that when they open the feature up to subsequent users - those users will have default privacy settings that match their pre-existing profile privacy settings. Unfortunately, in our tests so far (see our screencast) - we haven't been able to successfully change our default message settings back to friends-only, it stays stuck on public. When we switch our test account from profile public to profile private and then back again, the default for message posting gets stuck at "friends of friends!"

So there are some kinks to work out here. However, it appears that we may have jumped the gun and assumed something that was not said in the Facebook blog post: that the experience of all users was going to be like the experience of the first users. The feature appears not to be working correctly and it certainly wasn't communicated about well, but Facebook now tells us that it will not be opening things up quite like we characterized in this post."

Facebook and the public timeline: are they doing it or not? is this good or bad? What is sure is that the potential impact on users is big, so this is not a good place for confusion...


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A growing acceptance of social networkin

From i-penny.com:

"A June survey released by Facetime, makers of a gateway appliance for managing Web 2.0 applications, revealed the growing popularity of social networking applications in the workplace. Out of 1199 survey respondents, all IT professionals, there were more who felt that social networks played an important role in the business world than those who didn't. What's more, it appears that the IT folks are now seemingly OK with providing access these networks behind the firewall - even those that don't approve of their use!"

A growing acceptance of social networking in the workplace - good news for the Enterprise 2.0...

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Enterprise 2.0 conference - the answer is not there

The Enterprise 2.0 conference is almost over, and the lesson from this year is that all this is still a work in progress. Lots of vendors selling similar things, a few of their customers to explain what has worked for them, and consultants trying to sort it out.

The premise of the conference (from what I have seen) was to ask vendors to submit case studies that could be presented to the world. And this is what you get: stories from vendors, through their customers, on the benefits of Web 2.0 technologies used within the enterprise. This is all nice and good, but not really enough to establish a solid model on how to make change happen. And clearly not enough to make a real difference. I have talked to several people who were at the conference 2 years ago or last year and expressed frustration that not much has changed.

And why is it not different? Because the real answers cannot come from an Enterprise 2.0 show, or a Web 2.0 show for that matter. Even though technology is what enabled change, and created the opportunity for the discussion we are having now, the real issue is societal, sociological and political before being technological. It is the issue of power, control and the relationship between an individual and the ecosystem at large. It is not software vendors or their customers who initiated the change, it is the Open Source community who demonstrated that it was possible to build very complex system from a very un-formal organization. And it is users who are now defining usage and processes that can then be formalized into products.

Enterprise 2.0 will be driven by users learning what works and what does not, driving a shift in how organizations are run, first on smaller projects and probably outside core business, and then slowly percolating into the Enterprise.

So I expect a lot more from the Participation Camp (Change the Rules) coming up at the end of this week in New York city. An Unconference driven by users to resolve issues related to the balance of powers. Hopefully a place where the current power structures are challenged through discussions, and where the lessons from existing successes can define how we can work tomorrow...

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My take-away from the Online Community Unconference

I was at the Online Community Unconference today (#OCU2009 on Twitter), and this is a first braindump after the event:

- the main concerns expressed by community managers there at the beginning of the event were: what metrics to measure the health of a community? how to get people to engage more? how to get quality content?

So it seems that a lot of people there were still in the learning phase when it comes to managing online communities.

- also of note, a very strong presence from the Yahoo team, looking for answers on how to manage herds of "passionate" (or did they say "angry"?) users when you are planning to shut down a service

From the sessions, it was clear to me that we are still in the very early days of the web as a communication platform:

- People are struggling with discussions that are scattered, the distribution of the content is easy and wide, but cannot really be controlled and it is not easy to track where the discussions are happening around that content once it has gone outside of its original published space.

- Individuals have mixed feelings about their online profiles, and how to fit their personal life next to their professional life.

- And finally it is not clear where all this is going as we have not gone through a complete cycle. There is still a lot of "new and exciting" effect on Twitter for example, along with user's fatigue for some of the early adopters.
One person mentioned how she twitted about renting a GM car this morning to go to the conference and got 2 tweets back: one from the rental agency and one from the GM product manager for that car. While it is a great story, how long can this last that the PM for the car can actually track you down to talk to you when you tweet?
So the value we see today may not be sustainable over time.

For me, I see 2 trends:

- on one side, people realize the value of the wide distribution of content, through the many services that we know: Facebook, Twitter, Friendfeed, etc... It allows access to info that would not be available otherwise, and it gives a voice to stakeholders that could not be heard before. They also realize that since there are many of these services, plus blogs, plus forums, we have to deal with a distributed network of people and content, and this is not going to stop anytime soon. We need technology (at the infrastructure level) to better manage these distributed networks.

- on the other side, information overload combined with the fact that there is only 24 hours in a day forces users to limit over time what they pay attention to. The key then is to find the lens you should use: group of key people you follow and interact with. So to manage better what we pay attention to, we have to move towards a closed network - closed as in: limited to people we trust, whether it is at the personal level or at the content level. We need technology (at the personal level this time) to better manage these closed networks (lenses).

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Why Google Wave will take a long time before it takes off (if it ever does)

So now we have seen the feedback of developers who got early access to the system, and we know it is real, they report that it is working just like shown during the demo. Great!

Now I hope I can be proven wrong but I see one big issue in this rollout, and it is the same issue I have seen with Google FriendConnect, which is an excellent concept but does not seem to be taking off as much as I would have hope too. And the issue is that they failed to provide developers with a real incentive.

Unlike with the iPhone, which comes with the iStore where developers have some hope that they can make money, and a few well advertised successes have proven that it is possible, where is the money in building Google Wave gadgets or extensions?

What we have now is a great technology, that will for sure be used by at least a few, but there is no way anybody can justify spending too much time integrating the technology. So it will be done on spare time, as a nice to have, or maybe by startups looking to ride that Wave of hype. But this is not how we are going to see massive adoption anytime soon.

Google makes money selling ads, but they have forgotten that the rest of the ecosystem does not, and developers still need to pay the rent at the end of the month. And while many developers do not make money in the Apple Store, at least we have seen it happen that you can win the lottery if you try.

I hope that we will see a Gadget store at some point, or some other real incentive for developers, as I am sure that it would make a difference in the adoption of Google Wave. And I would love to see Google Wave succeed...


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Google did it again... Brilliant!

Clearly it is too early to tell whether it will take or not, and a lot will depend on how mature what they presented really is. But in the concept, this has far more potential than anything they have presented so far. Introducing conversations as objects and offering this new open communication protocol is like offering us a whole new web. If their offer takes, the launch at IO2009 will officially mark the beginning of a web 3.0, and everything that has been done so far in this area will have to adapt or look old = the stuff from before Google Wave.

If anyone can succeed at this game, it is Google. Just like with the iPhone, that only a Steve Jobs could bring to the world, they have enough brand equity in the developer community that they can make it work. And contrary to the Google phone, this is true innovation, not a me-too of something that has been done before.

And my take is that it will succeed:

- The web needs something like this: Twitter, Facebook, and companies like blueKiwi in the business world, have clearly demonstrated that there is demand from users for a new type of communication.

- It is an open system, so if it helps there is no risk at adopting it. They have elevated the discussion by bringing it into the open. Beside ignoring the whole thing, which is always possible, the only other option now is to come up with another similar protocol to attempts to resolve the same issue.

It will be interesting to watch how this will unfold...

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Enterprise 2.0 Knowledge Management - Getting started

View more Microsoft Word documents from T-systems Multimedia solutions.

OpenGoo - complete web office - Open Source!

I just discovered this (thank you Benjamin), and it seems to be a great solution for online collaboration (back end) if you want to build your infrastructure on Open Source rather than Google: http://opengoo.org/
From the demo, it seems to be an equivalent for Google Apps, and you can get the hosted version if you do not want to deal with install etc... But it is also something you can install on your own if you want to. A nice complement to Drupal, so that you can now have both the front end and back end on Open Source infrastructure. I also found people who are using it for their business and they love it.

I have become concerned with the fact that more and more of the infrastructure I use is Google, and it was a relief to see that there is an alternative. Maybe something you will like for your own needs...

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New Territories - new currencies

I discussed in a previous post presenting Xavier Comtesse work on the matter how New Territories are emerging as a result of the disconnection between the business layer and geographical limits as defined by nations or other governmental entities.

Related to this trend, it is interesting to see now more and more projects around the concept of virtual currencies.

We have the real world, and then we have the virtual world. And there is a lot of value which is being created in this virtual world which is not accounted for. And this is creating a problem, because free work or unaccounted value does not pay the rent.

One way to account for this value created online is reputation, which you accumulate as you provide good service on eBay. This value can result in more sales for yourself.

Another way to account for value creation are the point you accumulate when you contribute to a project on FairSoftware.
These points allow you to get distribution of revenues once the sofware you have built start generating cash.

And if you go further deep into the virtual, you have virtual currencies in games, where you can buy or earn points. If these games are MMOs then these points allows exchanges. Some virtual goods are purchased and sold for real money.

Back to the real world, there are also local exchanges in a few places, where the local currency enables bartering of goods and services between the people within a community.

All these things have in common that the virtual currency used represents a contract between members of a given community, whether it is a local community or an online community. These virtual currencies define an ecosystem.

So looking back at territories and the various layers within which each of us function, it would make a lot of sense to start accounting for all value created online through virtual currencies that could enable trades and bartering within people. So if I belong to several social networks, and live and work at the intersection of several ecosystems, I would accumulate real dollars from my activity, or points that I could use to get goods and services from and by other members of these ecosystems.

Today virtual currency platforms like Twofish or OfferPal are targeting the gaming industry, because this is where the work done can be monetized. And then there is one very interesting experiment with Twitter and twollars, allowing users to give each other points for valuable contributions.
The technology is available to manage these virtual currencies, and it will be interesting to watch how far we can take this concept on the business side.



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Google Voice rules

Finally I was upgraded from Grandcentral to Google Voice, and I love it.
The new feature I really like is that I can do international calls from my cell phone through the call back feature: enter the number and you get a call back from Google connecting you to the other party. Very cool.
I was using Jajah for this before, and they have a nice UI, but I was struggling with it because often times it would call me back before the page had finished to reload, and the call would end up in my voicemail, making it really hard for me to. I actually had to make sure to stop the page load right away to avoid the problem, which was a pain. With Google so far, it works much better, the UI is not as nice but it is much faster AND I get access to all my contacts, without having to re-enter the numbers by hand the first time I call somebody and without having to maintain a duplicate address book for the service.
One strange thing still is that I have the option to get a call back to my PC through Gizmo (this is a left over from GrandCentral) but not to Google Talk. I guess this is still a work in progress. And really I do not need this that much at this point, Gizmo work fine with me...
I also like very much the widgets feature, which allow people to call me from my website.
Thank you Google for this great step forward :-)

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Blogs for entrepreneurs: Springstage

I have been invited to contribute to the Springstage national startup blog.

SpringStage is a network of community catalysts who are in tune with their local entrepreneurship and startup scenes. The network formally launched in early 2009, as a first step to ensuring that there is a visible resource in every community for early stage entrepreneurs.

Among the founders of Springstage is David Cohen, who is also a co-founder of TechStars, another great resource for entrepreneurs, giving them mentorship and access to funding.

These efforts are very much in line with what Entrepreneur Commons is promoting, and I am happy to be a participant in what promises to be a great network of people bringing real change to entrepreneurs.

My first post on the Springstage National Startup Blog is published here.

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Lessons from Jeremiah Owyang and the Mzinga story

Influence is power and it can be abused. Social Media is a star system, and we should be careful not to fall into the trap of following just the most popular blogs.

Reading the recent post from Jeremiah Owyand with an apology to Mzinga, I see more questions than answers:
- how come a respected pro would fall into such an obvious trap, spreading rumors before getting the full facts?
- was it a genuine oversight, or an experiment to test the results of a mistake followed by an apology. It would be a risky proposition but we have seen in the past that apologies are generally well received - Plaxo and Facebook have gone through that cycle and nobody hates them more or less after they have - and it seems to be working here, with a lot of buzz generated for Mzinga without any real damage so far.
- was it inside knowledge that was spread too soon under good intentions and is now being silenced by other forces (like Forrester the company)?

Maybe we will figure out one day. Until then, this reminds me of the day we all woke up realizing that Lonelygirl15 was actually a scripted show. We saw user generated content, until we learned otherwise.
Similarly we see Twitter-hype around one thing or another, and we will never know the real motives behind most of them.
What prevents anybody from putting on a Twitter-show, for the entertainment of his/her followers?

In the end, this star system creates some value and a lot of noise. If we want an electronic version of people magazine all is fine, and if we want information we should make sure we always cross reference with information from other sources, because everybody has their own bias, consciously or unconsciously.

The top guys have the scoops, but they have their own filters (we all need to deal with information overflow one way or another), so sticking to the top 10 is like watching Fox News. Sticking to your own friends may be just as risky. I read 500 blogs, and I read posts that are relevant to my areas of interest regardless of who the author is, and then I also try to stay aware of the context based on who is this author (influence ranking in my case and until we get reputation systems that are context aware and portable across services).

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Our chance for change - Obama says it all: what are YOU doing?

Barack Obama says it all: "We can't go back to an economy based on reckless speculation" and "we must rebuild our economy on a foundation that lasts"

We need to make this happen at our own level if we want this to work, we cannot keep doing business as usual waiting for the government to fix it for us.
What are YOU doing?

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Analysis of the Global Crisis

I just discovered through Reframeit this great blog on the global crisis. It provides a great analysis of what has been happening.
Check it out...

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The rise of business accelerator seed funds

Just read a very interesting post from First Ascent Ventures blog providing some early data on how early stage funds are doing.

I am convinced that early stage funding models like YCombinator and others do work, and with this data we can get a feel for it. The key now is to fine tune the process to find the right balance between the value to entrepreneurs and the return for investors.

I started Entrepreneur Commons to bring yet another option for entrepreneurs, there is also no question in my mind that this type of model is a much needed change in the funding process today. And I was happy to see that Reid Hoffman thinks the same - see his article "Let Our Start-Ups Bail Us Out" in the Washington Post.

The good news is that Angel investment was approximately $20B in 2007 from the numbers I have seen, so now that data is starting to document that the model works, it can attract substantial amounts of money for real change.

2009 is looking like a good year so far :-)

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Obama to unveil proposals to help small businesses

Check the story here - somewhat disappointing so far:

While this is a nice move I am not convinced this will make a huge difference. SBA loans typically still require some guarantee from the borrower. So if my house is worth 30% less than last year, do I still have enough to make a difference for my small business? And while the government guarantees the loans, it does not chance the selection criteria that banks have set, so if I did not qualify last year, I am not sure I will qualify this year.
Also banks typically require that the business has one year track record before considering the SBA loan option, and we still need money to help boost the creation of new small businesses.
The good news is that it is a cheap option for the government since the money will not really be spent unless people try to borrow, bank grant the loans and then only if the business is in default will the guarantee will be drawn from the government account.
The Obama administration had in his proposals $250M to create a network of incubators to help small businesses, where is that money now?

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Startups competitions are a lottery

This morning blogs are full of announcement for coming startups competition (see here and here). And while it is always pleasant to see money being thrown at entrepreneurs, I do not believe that this is the best way to help:
The most precious resource for startups is time, and before you rush into one of these competitions you should ask yourself whether it is worth your time. Competitions mean just a few will win, and it is a lottery game because whoever is in the selection committee has their own passions and their own agenda, and you cannot control this.
And then if you get the money, while it feels good you are no closer to getting an actual customer paying for your product or services.
So if you have time for this, fine, but you should not drive your business running from one lottery to the other…

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The cost of VC funding versus debt

Just read an interesting article from "The Vest Pocket Consultant" discussing fund raising in the current economy, and how we are in a buyer's market, people with money have the negotiating power.
One example in the article is the case of a startup that was offered $2M for 20% of the company, and that went public one year later with a $300M market cap.
While $2M for 20% could look reasonable these days, and even though we are talking about a very specific case, it is interesting to consider the cost of money in this example: the $2M worth of stock were valued at $60M the following year, so this is a 3000% interest rate. And then you realize in retrospect that if you can find $2M at 25% or even 30% interest rate, you are left much richer at the end of the game. AND you do not have to deal with people on your board, a higher cost of transaction (stock deals are more complicated than loans from a legal prospective). Unless you do not mind leaving $57M on the table, this is clearly an option worth looking at.
While this is an extreme example, it is always good to keep this in mind...

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Don Dodge and the story of Shawn Fanning and Napster

Don Dodge is a veteran of five start-ups including Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. Don is currently Director of Business Development for Microsoft's Emerging Business Team. He writes a daily blog, Don Dodge on the Next Big Thing.
You can read his full bio here

Don Dodge favorite entrepreneur story is the story of Shawn Fanning and Napster. And what is interesting is that this is a story of too much success too fast.
Napster grew from being an unknown startup to being a major threat to the major industry with over 50 million users in about 7 months time. Don was VP of Product Development during this time.
Don draws a few lessons from what happened, some of which really resonates with my own experience:
- having great vision does not help, if the market is not ready you will go nowhere. And if you are too early chances are the next guy in line is the one who will succeed. I have seen several examples of this. I met an entrepreneur who had an iPhone equivalent 5 years before Steve Job showed up on stage with the real thing. He had investors, customers, but the big Telcos did not care. I talked to these same Telcos after the iPhone was announced and they were still considering the product like a niche that would not go too far too fast. But we are seeing what happens now.
- you need to stay close to your customers, and understand what they are willing to pay for, rather than try to convince them that your solution is going to make a difference. In simple terms, listen. I have seen entrepreneurs show up with a solution, talk to their customers: they had sensed a need, but the solution was not exactly on target, and they came out of the discussion with another solution that the customer was willing to pay for. It works, probably this is the standard process most of the time.
- "test your assumptions before spending a lot of money". This one is always true, but I would add that in the case of Napster they were probably not helped by the fact that VCs got involved. The idea was big, the potential to change the world real, so it was the perfect play for VC investors. But once you get into the VC process, things are different: no need to worry about the money, so you push for the goal as hard as you can, and you have no real incentive to take it slowly, because VCs are on a timeline (need for the biggest possible exit within so many years). If you had no money, you would not spend anything unless you are sure there is a customer in front of it to pay for it. Which takes us back to the previous point.
A current example of this for me is Twitter: this is another world changing idea, powerful enough that it has become a verb (people "twit") but VCs just poured another $35M into it and are happy to say that they do not care about revenue now because they know how to make some when they decide to do it, and until then they want to go for marketshare. Well, how much is Twitter leaving on the table doing this? Are we sure the assumptions on the revenue model are good until we have actually tested them?
- "Provocative challenges make good headlines but don't make good business". This is the bad news with hype, and we see a lot of it in Silicon Valley. Another way to put this is that you should not bother making the headlines until your competition starts doing it. I have seen several "hot" startups make the front page of Business Week, Forbes or other magazines to then blow up in mid-air because they were not selling much and ran out of cash trying to look bigger than they were. For me the key to buzz is to use it only when you start competing with others in front of customers. Then trying to look as big as possible and talking to newspapers or magazines as a way to differentiate yourself from competition makes sense. Before that all you are doing is educating the rest of the world, including potential competitors, but it does not really help close deals and therefore it is a waste of time and energy.

The full Shawn Fanning and Napster by Don Dodge is here


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The Social Media ROI discussion

Just read a post from Faster Future on the ROI for Social Media. This is how I see the issue:

Calculating ROI implies that you have a formula, but as you mention it is hard to come up with such a thing for social media.

What is possible however is to draw from empirical data to get a feel for the type of return you will obtain.

The best I have seen in this area is the essay from Xavier Comtesse on the "Direct Economy", where he looked at how companies were able to improve their productivity by involving the stakeholders in the value chain. And from his studies he came up with the concept of a "value chain 2.0", showing all the possible places where involving stakeholders can save you money while improving satisfaction.
To take an example that is close to home, one of the best thing I have seen recently is what happened with airline and self service check-in: I can now print my boarding pass at home the day before, and then the day of the flight I check my luggage in myself. The result:
- only a few attendants behind the counter
- no more long waiting in lines for check-in
- I do the work, but I am happier

There are many example like this. The key is to remove bottlenecks by providing stakeholders with the necessary information and infrastructure that will allow them to participate more efficiently.

So getting into Social Media should be about a lot more than just pushing content a different way and measure impact. It should be a strategic move into a new way of doing business that has proven to be more efficient and more satisfying for people within your business ecosystem.

So I guess my answer is that Social Media should not be an ROI discussion. If your customer does not think that way, chances are his project will fail. And if he does, it is a different sale, a strategic discussion. Management consulting services rather than marketing services.

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The VC community should have a goal of investing in 50,000 startups

I just read this post on VCMike's blog explaining how good it feels to see VCs investing in innovation, as a bright spot in what is otherwise a dark moment for the economy.
While looking at 10 startups can make you feel good about the quality of innovation in this country, 10 startups are not going to create the many jobs we need.

In another similar post last week in Creative Capital, I read about VCs gathering for the VCIR conference. 300 people total gathered to look at no less than 22 companies as potential investments. Wow!

For comparison, the numbers I have seen on this are that in 2006, approximately $20B were invested by VCs, and the same amount invested by Angels.
With that money VCs invested in 700 early stage companies, and the funding gap was at about $6M (meaning they do not like to invest less than $6M on average)
With a similar $20B amount, Angels invested in 50,000 early stage companies.

This is what we are talking about. Real numbers for real impact. I would love to see VCs consider gearing themselves up to face this kind of challenge...

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Entrepreneur Commons in Silicon Valley

In addition to the meeting in San Francisco, Entrepreneur Commons is starting a monthly meeting in Menlo Park on the 2nd Monday of every month. First meeting is next week, feel free to join if you are in the area.
http://www.entrepreneurcommons.org

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Apologies to the people in my address book

I have been experimenting with Unik, and I made the mistake of uploading my address there, thinking it would be a good place to keep it. I just had to delete all uploaded contacts that were not registered with them yet because they keep sending reminders to everybody until they sign up, which after the 3rd time starts feeling like spam... Apologies to those of my contacts who have received such reminders.

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Anne Giles Clelland and the story of Tyson Daniel - Yes you can!

Following 400 blogs means spending a lot of time looking at a screen, and it is only worth doing if you get to meet people with similar interests in the process.

Going through the list of the top 150 blogs for entrepreneurs , I have met with Anne Giles, who publishes 2 blogs: Inside VT KnowledgeWorks and Handshake2.0.

Anne Giles Clelland, M.A., M.S. is the founder, president, and CEO
of Handshake Media, Incorporated, a social media public relations firm founded in 2008. She is a writer, speaker, and consultant. You can find her full bio here.

Anne's favorite entrepreneur story is the story of Tyson Daniel and how it is possible to figure your way out of the box:

Tyson Daniel is a capital defense attorney who decided to become an entrepreneur and created LimbGear® mp3-enabled sports apparel, a product line of WeighOut, LLC.

He spent 5 years working on Death Penalty cases, something he qualifies as "enormously draining". Until he decided to start his own business.

Tyson talks about "3 years, some painfully expensive lessons and more work than I would ever have imagined" to get the company fully up and running.

But this is a success: "I’ve found my WeighOut".

For those who feel "boxed in", this is a lesson that you can do it if you have it in you. Said Tyson: "I knew – as I have always known because it was how I was raised – that I could do whatever I resolved to do".

The full story is here.

Thank you Anne and thank you Tyson for sharing this great story.

Entrepreneur Stories

Today I went back to Bo Burlingham's book "Small Giants - companies that choose to be great instead of big", and I re-discovered this definition of what an entrepreneur is that I would like to share:

[...] there is obviously a kind of artistry involved in creating something out of nothing based on an ability to see what everyone else is missing. That is, after all, what artists do. In business as in art, moreover, the end result is an experience, and the quality of the experience reflects the relationships between different participants, as well as the specific medium of expression. While entrepreneurs may rely on peripheral vision rather than artistic inspiration, it's often hard to tell the difference between the two. They are both critical components of a creative process, and it takes such a process to produce something great an unique [...]

Rather than trying to fit entrepreneurs into a list of skills, I will try in the coming weeks to share entrepreneurs stories that will help paint a picture of who they are.

Stay tuned, and feel free to send me your own story as well...


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Top 150 "Social Capital" blogs

Because Entrepreneur Commons is a not-for-profit, located at the intersection of the business and non-profit worlds, I am also tracking about 500 blogs talking about "Social Capital". The definition is still very vague, as we can see in the discussion we had on the subject on SocialEdge, but what it is for me is a mix of blogs related to Philanthropy (where the money comes from originally in most cases), Non-profits and Social Entrepreneurship (where and how it is spent by whom), and Social Media and Non-profit marketing (how to get the money and communicate about what is being done)

I have published the list here, maybe you will find it useful for yourself :-)

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Updated list - Top 150 blogs for entrepreneurs

I just updated the list of top 150 blogs for entrepreneurs here

No major change at the top, the list seems fairly stable, which is a good sign :-)

Top 10 movers up
17 http://blog.pmarca.com
109 http://www.ariwriter.com
95 http://www.johngannonblog.com
74 http://shiftingcareers.blogs.nytimes.com
101 http://www.startupweekend.com
93 http://www.appfrica.net/blog
91 http://www.techflash.com/venture
42 http://www.altgate.com/blog
77 http://www.socialcapitalmarkets.net/blog
89 http://www.thisisgoingtobebig.com

Top 10 movers down
139 http://blog.ecairn.com
140 http://www.epicchange.org/blog
88 http://www.getentrepreneurial.com
150 http://www.energybyte.com/blog
132 http://www.afpr.com
142 http://english.martinvarsavsky.net
137 http://www.delbourg-delphis.com
102 http://www.gifthub.org
63 http://www.businessweek.com/the_thread/blogspotting
113 http://blogs.forrester.com/colony

The biggest jump is the pmarca blog, which was #174. Probably due to the fact that I included him in the list late. It seems that it takes a few days for the ranking to be completely acurate after new entries are included...

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Recovery plan - more details

While we are waiting for the recovery.gov website...



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Top 150 social media marketing blog - update from eCairn

eCairn just published their update for their top 150 social media marketing blogs list, including info on who is up and who is down.

From what I see, the top 10 movers up:
http://www.brandandmarket.com
http://www.mattjmcd.com
http://www.asourceofinspiration.com
http://www.stopwatchmarketing.com/blog
http://www.telltenfriends.com/blog
http://themarketer.typepad.com
http://www.mokummarketing.com/blog
http://blogs.forrester.com/charleneli
http://blogs.forrester.com/marketing
http://www.edelman.com/speak_up/blog

Interesting to see Forrester in the list, they are still low in the list but making huge progress. It seems that the traditional players are catching up...

The 10 biggest drops are:
http://www.doshdosh.com
http://www.searchenginejournal.com
http://www.adverblog.com
http://youngie.prblogs.org
http://www.imediaconnection.com
http://www.searchengineland.com
http://www.searchengineguide.com
http://www.prworks.ca
http://www.tpemurphy.com/blog
http://weblogs.hitwise.com

eCairn mentions changes in urls for some blogs as the reason for some of these drops. I hope this is the case for Hitwise, otherwise "the leader in online competitive intelligence" is loosing its relevance. I was surprised to see them in this list...


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Coming soon - recovery.gov

Waiting for the passage of the bailout package: http://recovery.gov/

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How to manage engagement and participation - the democratic process in a web2.0 context

eCairn recently published a very interesting analysis on what happens when you open a site and ask people to contribute ideas. They mention Dell Ideastorm and the Obama administration Citizen's Briefing Book from the Obama administration, and I have to agree with the conclusion: you have to know what to expect when opening up the doors to input with no filtering. And where and how you "listen" to your audience makes a difference:

1- if you ask everybody to provide input on a website, and then use a rating system to decide which issues are important, then what you will get is not what the most important issues are for the community as a whole, but rather what the most important ideas are for the best organized group within the community. Huge difference. Basically chances are that one or a few communities will take over the site and monopolize the conversation. And if there is no moderation, then you will end up just listening to what they have to say regardless of what others may think.
In the case of the Obama experiment (Citizen's Briefing Book), the winning idea is "legalize marijuana", and while I have no doubt that they won their ranking fair and straight, I have a hard time believing this is one of the most pressing issue right now.

One site did try an improved version of the process: Change.org had a 2 phase selection:
- First anybody could submit any idea in various pre-defined categories
- Second, they qualified the top 3 ideas of each category to then have them all compete together for the final selection of the top 10.
Legalizing Marijuana is still in the final top 10, you have to give credit to this community for being very good at mobilizing their supporters online, but there are other ideas that were able to emerge from the process, and it was a good attempt at leveling the playing field so that other ideas from not so popular categories could be considered.
As it is done with elections in the US, maybe one extra step could have also been considered: having each category elect an equal number of representatives to represent their specific concerns, so that they are the ones that vote in the second round. Then it is no longer an issue of how many vote for an ideas, but rather how many of a representative sample of the population get convinced by the ideas that were selected.

2- the other option (other than opening a site to invite input) is to map conversations happening everywhere in the blogosphere or other places, then you can have a much better idea of who is talking about what where. And you will have a very different view of which communities are active on the web, and what their top issues are. And then you can specifically target these communities (based on how relevant they are to you at a given time) to address their specific issues.
With this second approach, we still have an open space where everbody can express their opinions (the blogs or the web in general), and then the leadership can decide what to do with what they see. No ratings involved, just the good judgement of whoever is listening. Individuals are doing it today, they pick and choose which blogs they want to read and comment on, and they may have their own blog(s) to contribute to the conversation. Corporation and the government should at a minimum do the same. And then decide if they want to engage in other ways (back to #1 above).

Having said this, and since this post was inspired by an analysis from my friends at eCairn, I should also mention that the service that they have developed is perfect for doing just that: teams listening to conversations, engaging with bloggers and measuring the impact to this engagement. Something you may want to consider for your business...

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Big Brother - another good one

After ATT (see my previous post), here is a new feature, from McAfee this time, to protect me from myself: SiteAdvisor.

So I have McAfee Total Protection, and the latest update (I assume that this is where it comes from) was installed automatically recently. And then I discovered when reading my own email that because I have the url of my blog in my signature I am entitled to a big red square box telling me that "this message includes a link that will lead you to a site with potential phishing".
Very friendly - I can imagine the effect this will have on the people I communicate with. My friends will smile, but I am not sure what the rest of my correspondents will think.

There is no phishing scheme on my blog, the only subscription widget is generated from Vertical Response which I specifically installed because I want users to feel comfortable that I am not going to abuse their email information. And then there are a few widgets from known services, but nothing custom or homemade that could be assimilated to hacking.
But somebody somewhere decided that I was guilty until I prove myself innocent, when I thought the normal was the opposite. I guess security software is different, and we are all hackers out there if we are bloggers.
I am a good citizen, and I try to follow process, so I went and registered on the SiteAdvisor website to claim my innocence. But there also, there is one more roadblock: I have to upload a file on my site to prove that I own it and that I am legit. The problem: I am using Blogger, a service provided by a small company called Google, and I do not have access to the service to upload whatever file I want. So now I have to submit a request into a big queue, and wait for somebody to pick it up and take a look, and then I have to pray that they will agree that my blog is ok. Hopefully the content is not too subversive, and I fit within whatever criteria they have that I can be cleared.

If you have any doubt that the world is a very messed up place, I think this is another good example. Technology which should be making our life better is just creating more constraints on everything we do. I do not really feel like I own my computer anymore: my brand new computer comes with pre-installed junk programs (marketing teasers) that I have to remove if I do not want the clutter, I have automatic updates because I get problems if I don't, and I get problems if I do, just different ones.

Because of all this, I make sure I stick to Open Source whenever I can. At least with open source, I get what I want and nobody can claim control of what I get to the point when it becomes obnoxious. It may not always be as cool or as fancy, but the protection from any corporate abuse is a huge feature for me...

>>> Update >>> the good news is that I have been cleared. The bad news is that people who are getting the message should re-install SiteAdvisor. So to anybody who is still using the wrong version I will be presented like a hacker unless they uninstall SiteAdvisor and Re-install (which would be assuming they care enough about me or the issue to go through this). Not as much comfort as what I was hoping for...
===
McAfee SiteAdvisor Support
dateWed, Feb 4, 2009 at 12:45 PM
subjectRe: "Open Business" blog erroneously rated as potentially dangerous

Hello,

After some investigation, we have discovered that this error was related to a bug in an earlier version of the SiteAdvisor program, which has now been fixed.

Anyone who sees this error should uninstall SiteAdvisor, and then reinstall it from http://www.siteadvisor.com.

Please write back to me if this error is still occurring after these instructions have been followed.

Sincerely,

Andrew
Customer Support
McAfee SiteAdvisor
<<


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Big Brother is watching you!

I am stuned... At a time when we do a lot with the web and when you would think we are getting more and more freedom to access and share content, the opposite is actually happening.

I just subscribed to ATT U-Verse, and I discovered an amazing new feature on the DVR service: "Nickolodeon does not allow the recording of this show".

So now I am paying for the content, and I am paying for the DVR box, which was sold to me as a great improvement to the existing solution because I can start watching a recorded show in my living room and then I can go to watch the end in my bedroom.
EXCEPT (small detail) that I cannot record the shows I want, just the one that ATT and the channels in my mix allow. Oops.

So technology, which is supposed to make it easier for me, is actually turning into a way for the big corporations to have more control over my life.
It used to be that I could program my VCR to capture the feed from any show on a tape. It was taking time and space but it was all here for me. But the new improved version of the same functionality is that I cannot record the Nickolodeon shows anymore. Nickolodeon want my kids to be in front of the TV at 6pm when it is diner time or at 9pm when they are supposed to be in bed. And if they are not, sorry, you cannot watch.

It reminds me of when I was traveling to China and I was watching TV5 in my hotel bedroom. Every now and then, the TV would have black outs, something that looked like a problem with the connection and would only last a few seconds. But something so systematic across many hotels that you know somebody was editing the feed to make sure I was not given subversive news that would pollute my mind.

This is also my user experience with Facebook: I can send messages to my friends, but when comes the New Year and I want to send all of them my best wishes, I can only send it to 40 of them and then I get a big red message warning me that "I AM ENGAGING IN A BEHAVIOR THAT VIOLATES THE FACEBOOK POLICIES". How friendly is that? And what kind of social network am I in that only lets me communicate to 40 people max.
Who decided that I am clearly a spammer if I have more than 40? Wouldn't people report me if my message was offensive or inappropriate in any way? Isn't it the beauty of social networks that your reputation is always at stake and therefore you tend to behave better because you know there would be consequences otherwise? Or is it just Facebook worried that I advertise by sending direct messages instead of paying their advertising department?

And the same is happening with Apple store, where I am not allowed to download Qik for my iPhone, forcing me to jailbreak it if I want to stream videos to the web through their service. How is this helping innovation? Why do we have to go to hacks to get what we want that is available and works on the platform?

The world is changing and we can do more today than we could before, but Big Brother is watching and the corporations are fighting back.
We have to pay attention, and we cannot let them have the last word...

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A computer in your kitchen

The mobile phone was stuck in the PC paradigm with a difficult UI until Steve Jobs came up with the iPhone and finally offered users a UI that makes sense for the size of the device. The same thing is happening with Tablet PCs, and my friend Olivier Seres is now offering a Device/UI that is really easy to use for the form factor. Imagine a pumped up iPhone, with the power of a real computer accessed through an easy to use interface:



Check it out...

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My Obama speech favorites

There was a lot of expectations, and Obama was his best self again. The full text of the speech is here (thanks to a twit from @chrisabraham) and my favorite extracts are here:

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

[...]

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths.

Today is a good day :-)



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He is the Man, We are the Wire

From Erik Adigard on Axiomenta, referring to “Man on Wire” the high-wire walker who in 1974 walked a wire between the twin towers of the World Trade Center:

As president-elect Obama takes leadership of a broken nation. He is the Man and we are the Wire.

[Read more - Watch the video remix]

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After Change.org, Change.gov - please vote for the Entrepreneur Commons idea

The Entrepreneur Commons idea finished 7th out of 106 ideas in the Social Entrepreneurship category on Change.org.

We now have another opportunity to present the idea through the Change.gov website:
http://citizensbriefingbook.change.gov/ideas/viewIdea.apexp?id=087800000004tZt

Please vote for the Entrepreneur Commons idea there, then send the info to 10 friends.
And if you voted - Twit it


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Visions of Leadership - Managing Innovation "on the edge" event on 1/30/09 - mark your calendar

Please join the conversation on 1/30/09 at 8:30am at Orange Labs in South San Francisco, USA (801 Gateway blvd), or at 5:30pm on the HEC Campus in Jouy-en-Josas, France (1, rue de la Libération).
Details here
Register here

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The End of the Financial World as We Know It

Just read this very interesting article in the NY Times from Michael Lewis explaining how a lot of people suspected that something was going on with Madoff, but nobody had any incentive to do anything about it. Worse, somebody (Harry Markopolos) wrote a letter to the SEC on Nov. 7, 2005 to demonstrate how something had to be wrong with what Madoff was doing. And nobody listened.

This reminds me very much of what is going on with another part of the financial world: the Venture Capital world. Nothing as bad certainly as what is going on with Madoff, but another example of something not working, people knowing about it (VCs will tell you privately that there are issues with the model) and nobody doing anything about it because nobody has an incentive to. Except for a paper published by Ludovic Phalippou and Oliver Gottschalg on April 2007 (already discussed in this blog) where it is clearly shown that Private Equity returns are not that great (the paper shows that on average and once you factor in the fees charged by firm it is S&P minus 3%). But also in this case, and as discussed previously in this blog, nobody cares. Up until now that is.

With the current crisis, people have started questioning what is going on, and the word is out (TheFunded presented the case that "The canary is dead")

Not all is bad with VCs, but the model is certainly working more for them than for entrepreneurs or even investors. I am convinced that 2009 will bring changes to this world as well. While Michael Lewis presents in his article the very sad picture of what should or could have been done and has not been done so far with the banking system let's hope that VCs and their investors will be more efficient in tackling the issue. And it starts with going back to the basics: providing real support to entrepreneurs as a whole to keep the ecosystem healthy.


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Open for questions

The Obama administration is open for questions. They have announced a second round of questions on 12/29/08 in their blog on Change.gov


My question to the Obama administration:

How will you spend the $250M in your program for a national network of incubators to help small businesses? Will you trust government employees or paid consultants or will you let entrepreneurs decide how they can help themselves with an open model?

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Getting started with 2009: what has happened so far and what's next

In 2007, I met with approximately 150 entrepreneurs, worked more closely with about 30 (based on the quality of the idea but also the chemistry with the entrepreneur), and I have now narrowed my focus down to a handful that I am convinced are going to make it in 2009. The typical 1% selection rate that you also see with VCs or Angels, which inspired me to figure out something better to help entrepreneurs at large - an open model allowing peer support and transforming what is today a competitive process into a collaborative one.


In 2008, I started Entrepreneur Commons to do just that.

Entrepreneur Commons is the continuation of a similar concept that I started experimenting with in 2005 and that was implemented in San Francisco through a "Club Entrepreneur" with the Swiss American Chamber of Commerce and a "Business Booster" with the French American Chamber of Commerce. 

The Entrepreneur Commons idea is very simple: on one side provide mentors to entrepreneurs to help them mature their business plan, and on the other side provide financing resources for those entrepreneurs whose business idea is mature enough. What is new with this is the combination of mentoring and financing in the specific context of entrepreneurs in developed countries. The model was inspired by the success of Microfinance and Mutual Guarantee Funds in Europe, which are proven sustainable models. As a result, Entrepreneur Commons is a not-for-profit for and by entrepreneurs including a platform hosting a social network of entrepreneurs and which manages a seed investment fund offering loans to startups. 

The long term goal is to change the way startups are being financed, as the current model works for VCs but not really for entrepreneurs. And as a result, it is also to change the way we think about capitalism, going from individual trying to maximize their profit as the force that drives the system to fostering collaboration for a more sustainable capitalism.

To achieve this, the short term goal is to build a network of of 100 to 150 entrepreneurs on one side, and raise a fund of at least $3M on the other side, so that we can do 30 loans of $100K to entrepreneurs in the network. This will be the proof of concept that will demonstrate the model.

The idea was presented during the first few month after launch to many entrepreneurs, angels, VCs, Limited Partners, lawyers and bankers to discuss the idea and collect feedback, and has received mostly positive feedback: yes this is something that is needed, and yes the concept is good on the paper. The goal now is to make it happen, which is not a question of "if" but rather "when". The one lesson I have learned is that it will take time, and from my experience on past projects, I have only limited control on the timing :-)

So far: 

• Entrepreneur Commons has a first chapter in San Francisco, with a handful of entrepreneurs meeting once a month to share their successes and discuss their business issues, and we have had interest from entrepreneurs in other states (Texas, Florida, New York, Germany, France, Israel) who are considering starting similar efforts.
• Entrepreneur Commons has already received soft commitments from investors interested in the concept.
• Entrepreneur Commons was invited to present at Socap08, as a platform that is especially useful to Social Entrepreneurs who are typically left out of the classic funding processes currently offered to entrepreneurs.
  
• The Entrepreneur Commons concept was submitted as part of the idea contest running on Change.org, and collected 339 votes to finish 7th out of 106 ideas submitted in the Social Entrepreneurship category.
  

As for 2009, I believe that this is going to be a great year of many opportunities. The financial crisis had the benefit of bringing a lot of people out of their comfort zone, and there is enough of a mess that people start questioning the status quo. This is a good start. 

Then the presidential election in the US, with Obama getting elected by voters but also getting majority support from people from all origins in almost every country in the world has started a process that cannot be stopped. People have realized that the world needs to change, that nothing will happen unless they start doing something about it, and that Web2.0 technology gives us the power today to make it happen if we decide to. Obama has been riding that wave, and the wave is bigger than him as it is the rise of a peer to peer civilization. The coming years will see big shifts and therefore big opportunities for the people who are at the right place at the time. This is a game entrepreneurs like: 2009 will be their year.

Best wishes for 2009 :-)

Change.org - remember to vote before 12/31/08

After 12/31/08 only the top 3 rated ideas from each category will make it into the second round. The second round of voting will begin on Monday, January 5, and each qualifying idea will compete against the qualifying ideas from all other categories, and then the top 10 rated ideas will be presented to the Obama Administration on Inauguration Day, January 20, 2009 as the "Top 10 Ideas for America."

If you have not done so, please consider the Entrepreneur Commons idea:

http://www.change.org/ideas/view/sponsor_a_structure_for_entrepreneurs_to_support_entrepreneurs
Click on the "vote" button showing the current number of votes

And if you like the idea, please forward to as many of your friends as possible, as we need many more votes to make it to the top 10.

Thank you for your help.

Best wishes for 2009 :-)

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Social Capital and Social Business definitions

An interesting input from Michael Cayley in the Social Edge discussion regarding the definitions of Social Capital and Social Business:

Social Capital (Nan Lin's definition): resources embedded in a social structure which are accessed and/or mobilized in purposive actions

Social Business (from Michael): "ALL businesses are social in an era where meaning & perception is derived from broadband empowered individuals rather than capital intensive broadcast communication networks."

This is very much in line with what I had in mind when I started the discussion on Social Edge. And seems to fit a lot of the other comments that came up.
And it reinforce my conviction that we need something like the Vindex to attach a number to the concept, and make it easy for everybody to understand and visualize the value.


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Gizmocall.com - new cool widget

The nerd in me likes this one...
Thank you Gizmo project :-)




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Please join the "Social Business" discussion on SocialEdge

We are currently discussing the definitions of "Social Capital" and "Social Business" on SocialEdge:

http://www.socialedge.org/discussions/responsibility/social-capital-social-business

My take on this is that the success of Muhammad Yunus with Grameen bank and microfinance in general has resulted in a narrowing of the definition of "Social Business" to what he specifically focuses on: poverty.
Meanwhile there is a broader definition that we should look like, as a way to prevent the concept of "Social Business" from being marginalized. We cannot afford to fall into the comfortable idea that "Social Businesses" are focusing on fixing the world issues while the rest of us are doing business as usual. We need to reverse the trend by moving the concept of "Social Business" from being a niche to being the standard.

Please give us your input on this idea and how to go about it:
http://www.socialedge.org/discussions/responsibility/social-capital-social-business


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Linux, Open source get patent protection program

A very interesting announcement today from Information Week (thank you Elie for pointing this out):

Open Invention Network (OIN) unveiled a program Tuesday that aims to make it easier for patent and trademark office examiners -- and others -- to access prior art, increase the quality of patents granted, and decrease the number of poor quality patents. [...] The sponsors hope the program will ultimately promote their goals of greater freedom in the open source community to expand the Linux platform.

Full article here

Another step in the right direction. Sadly patents are often used as a way to prevent other people to do things. Large corporations are often times filing many with no real intent to build anything but more to make sure that if somebody else tries they will have a way to stop them or at least slow them down while they try to catch up...


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