Aggregated customization
A new business called DayJet – based in the US – is about to launch a new airline that allows business travelers to fly direct to regional airports thereby avoiding time-consuming connections at big airports and also avoiding unwanted overnight stays in small towns and cities. So far not that exciting, right? What’s interesting is how Day Jet plans to do this. First the airline has ordered two hundred six-seater micro-jets at a cost of US $1.3 million each. This will bring airliner style performance at a fraction of the cost. But that’s still not the interesting bit. The airline has no set routes and no fixed prices. Instead the airline will aggregate demand ‘on the fly’ linking small groups of people that want to go to the same place at roughly the same time. Routes and pricing will thus fluctuate in real time as demand comes and goes and customers will be offered a series of different prices depending on how flexible they are willing to be (give a little, gain a lot). What’s really fascinating about this idea is how the business model combines some of the hottest trends that are around, all of which will affect everyone in some shape or form in coming years. What are the trends? First there’s mass customization. This allows customers to order a customized version of a standardized product. Second there’s dynamic pricing. This is where the cost of a product or service changes depending on demand or supply. Finally there are social networks. This is how the Internet pulls people together that have similar interests or needs.
The wisdom of crowds
In terms of hot business trends, I’ve written extensively about open-source innovation, the long-tail effect and simplicity but here’s a new one – collective wisdom. The idea is simple: the wisdom of a large group of people is nearly always greater than the intelligence of any single member. The theory is especially hot in Internet circles where obviously it’s very easy to access the collective intelligence of users but it’s also emerging as a hot forecasting tool in financial markets. The idea is as old as the hills, but it’s re-emerged due to technological developments (e.g. convergence and social networks), and a book called The Wisdom of Crowds by James Surowiecki. Goldman Sachs, Deutsche Bank and Hewlett-Packard are all using group wisdom to predict everything from next quarter sales to future economic indicators. Group prediction can even be played for fun on various websites like www.ideosphere.com, www.hsx.com and www.longbets.org. Is this a future trend or just a short-term management fad? What do you all think?
The haves and the have nuts
It might not be the biggest publishing phenomenon in Britain but Nuts magazine could well be the most significant from a sociological perspective. If you’ve not heard of it, the magazine was launched a little over two years ago and has a circulation of 300,000 copies every week. Not much admittedly but quite a lot for a weekly men’s magazine. But what’s really interesting about Nuts is that if magazines liked Loaded and FHM defined the interests, attitudes and sensibilities of New Lad culture in the nineties, Nuts has its finger on the pulse of the typical British bloke in the noughties. For one thing the title is totally enthusiastic and does nothing to make its readers anxious or insecure. It also steers well clear of anything that could be regarded as an opinion that could offend anyone. However the real genius of the magazine is very simple: it doesn’t put too many words on a page. Does this make Nuts a dumbed down read? Well yes, but that hardly matters. There’s a kind of fraternity in stupidity these days and the magazine has also found another formula that works do what the successful tabloid newspapers do but get rid of the boring news.
Where are all the women?
An article by Amy Sullivan in the Washington Monthly recently asked the simple question: where are all the great women thinkers? The context for this question is the media and, in particular, opinion and editorial (op-ed) writers, but the question is also applicable to public intellectuals. The answer, it seems, is elsewhere. In most serious newspapers and magazines the ratio of male to female op-ed writers in 4:1 and at some publications the ratio for submissions is 10:1. Indeed, the number of serious women writers in the media is probably the same as it was a quarter if a century ago. So the obvious question: why? The answer is firstly that politics and political opinion are fairly male dominated arenas where bluster and puff count as much as insight and intelligence. The same is true on talk radio, where 70% of callers, and virtually all shock-jocks, are men. Moreover, the gender bias is probably no more or less than you’d find anywhere else in society.
Malcolm Gladwell’s recent book, Blink, notes that ever since orchestras have been required to audition performers blindfold (ie behind screens) the number of female musicians has increased by 50%. A study discovered a similar quirk in the art market, where buyers were prepared to pay more for a painting if a woman¹s name was switched to that of a man. Then again maybe this silent bias is simply due to a couple of centuries of women being told to keep their opinions to themselves.
The raw data of the global network economy
For some time now I (and quite a few others) have been talking about the “global network economy”. The best way to understand the way the global economy is in considering the global networks of flows of goods, services, money, people, entertainment, aid, and ideas. Now Professor Miguel Centeno of Princeton University has taken the concept deeper, using network analysis methodologies to study globalization. He has set up the International Networks Archive, which has a fabulous array of data on globalization from a network perspective, much of it in Excel format for those who like going to source for their data and analysis. This is a fantastic resource, and I certainly intend to play around with some of the data available here. Prof Centeno is now using the network analysis and visualization software Netmap (which I’ve previously written about in its intelligence applications) to bring the data to life. Part of the things that you can pick out far more easily in this network-centric view of the world is the interdependencies of the world. Simplistic views of say US and China relationships dissolve in the far more complex global networks in which single relationships are set. These are great tools for politicians, activists, and anyone else seeking to really understand the nature of our inextricably interrelated economic existence.
Delivering tomorrow’s paper
If Rupert Murdoch is predicting the end of newspapers as we know them, then we should probably listen. In 1960, 80% of Americans read a daily newspaper. Today the figure is closer to 50% and falling. Globally circulation is falling too. Between 1995-2003, global newspaper circulation fell by 5%. In Europe the fall was 3%, and in Japan, 2%. Many young people (‘digital natives’ as Mr Murdoch calls them) don’t read a newspaper at all and, if the current trend continues, the last newspaper (probably read by a digital immigrant) will be thrown into a bin sometime in the year 2040. So what is going on? The explanations are varied and legion. More people are reading news on the Internet, fewer retailers deliver newspapers door-to-door (less children doing paperounds), less people are using public transport (and drive to work listening to the radio instead) and less people are sitting down to breakfast at home (less opportunity to read newspapers). And you can¹t just blame the Internet either because the decline in newspaper circulation predates the web. It’s not all bad news though. Some local papers are thriving and in the UK sales of quality papers are actually increasing thanks to innovations like compact editions. However, Internet-based news and opinion does have a significant advantage over paper-based products because of functionality and interactivity. Phrases like conversation and discussion really mean something on blogs because readers can actually contribute. OhmyNews in South Korea, for example, is produced by 33,000 citizen reports and read by 2 million Koreans. Add to this developments like photoblogs, video blogs and podcasting (blogging with sound) and newspapers are looking like yesterday’s news. Incidentally, to put this piece into perspective, it¹s interesting to read in Prospect magazine that in 1892 London had 14 evening papers. Now it has just one (the Evening Standard) plus a free afternoon paper aimed at women called Standard Lite.
Internet video and video on demand
Of all the media trends that are around at the moment one of the biggest is digital video. This is variously called video on demand, mobile video and Internet video. Whatever you call it it’s changing the media landscape forever thanks in part to devices like Apple¹s video iPod and tie ups like the recently announced deal between Pixar and Disney, which puts Apple firmly in the driving seat when it comes to unlocking Disney¹s digital attic. Of course there are still issues like bandwidth, but the rapid uptake of broadband will partly solve that problem. Implications? We’ll be watching a lot more old (retro) TV and film content as and when the digital archives are opened up. We’ll also be watching what we want, when we want on whatever device we want which will lead to a further decline in families sitting down to watch TV together. Families will still be watching TV but they’ll be watching different shows on different devices in different places.
What is a mobile phone?
What is a mobile phone for? The question used to be an easy one a mobile phone is a phone that you can carry around to make and receive calls. These days the question is a bit trickier. Mobile phones (like computers) have converged with communications and it is difficult to see where the join is. Mobile phones are mail boxes, cameras, video cameras, entertainment centres, newspapers, music centres, TV sets, messaging systems, scrap-books and devices you can make and receive calls from. A book called Thumb Culture : The Meaning of Mobile Phones for Society asks this question to a cornucopia of 25 technology experts and academics and comes up with some interesting answers. Two of the more interesting ideas are whether mobiles are anti-revolutionary and whether bloging (mobile blogs or moblogs in particular) are journalism or just exhibitionism.
Reader created news
A newspaper in the US has taken the idea of customer co-creation a step further by asking its readers to choose which story is used on the front page each day. The Wisconsin State Journal (the State’s second biggest selling newspaper) allows readers to go online between 11am and 4pm each day to vote for one of five top stories. The winner usually appears on page one the following morning. We’ve seen reader created newspapers in South Korea and a magazine for MTV and Nokia in Europe that’s written and illustrated by customers but this appears to be a first. Consequences? One thing nobody expected was that sports stories have started to appear on page one.
Social networks and search
Two years ago I did a four-city speaking tour of New Zealand under the auspices of SmartNet. Before my lunch presentation in Wellington, I sat out on one of the tables, and was astounded to find that the person I was chatting to was an executive of Eurekster, which was at the time a hot new player in applying social networks to search. I’ve never come across much public mention of this, as they present themselves as a US company, but much of Eurekster’s development has been done in New Zealand. The news today is that Microsoft, in endeavoring to integrate social network functionality into its own search offering, will either buy or partner with Eurekster, according to BusinessWeek.
While there are a number of approaches to what is being called “social search”, the heart of it is drawing on the experiences and search results of people with similar interests. Rather than using pure algorithms to rank relevance, it makes a lot of sense to use as inputs what people have found to be useful. This can be done in bounded groups, so for example racing car enthusiasts could form a social group where all the members can draw on the search processes or interesting results others are finding. A search for “fiat” would give very different results than it would in a generic research, or even for a car buyer’s interest group. However I think that forming specific search groups is only a preliminary step down this path. Everyone has many interests and roles, and it is not easy to find and join relevant search groups for each of these areas. In the long-term, collaborative search must automatically draw on people’s most relevant peers and their search results. This relates to how reputation networks will develop, where you have an implicit trust rating for each person’s input into the system. This may be through personally knowing that person, or it may be by how they – or the information they uncover – are viewed by your peers. There is no question that social search will over time give far better results than pure algorithmic search. But what Eurekster, Microsoft, and Yahoo! are doing now in this field are very early steps.
