Think

Billions Of Dollars Will Be Made From The Cognitive Surplus

If you want to understand where wealth creation will come from in the coming years then you should read Clay Shirky‘s latest book called Cognitive Surplus: Creativity and Generosity in a Connected Age.

His argument is so simple but so profound and that concept is this:

“A trillion hours a year of participatory value are up for grabs. That will be true year in and year out.”

If you think about how most of us spend our time, you’d recognize that it’s probably spent  consuming media. We spend hours watching TV, checking Facebook statuses, reading articles, watching YouTube videos, but only recently have we begun to collectively contribute and generate our own content. When added together, this aggregate thinking and aggregate contribution, or “cognitive surplus” as Clay puts it, can add up to value that we are just beginning to fathom.

However, that value is only as meaningful as the organizational pieces put in place to harness its true power. And this can all be done without spending significant capital.

“Organizations designed around a culture of generosity can achieve incredible effects without an enormous amount of contractual overhead.”

If you were to closely examine companies like Groupon, Kickstarter, Wikipedia, or FashionStake, you’d quickly find how they each leverage the power of groups, aggregate thinking, or aggregate financing. This is where true value lies. Being able to align the cognitive surplus in an elegant fashion so that it benefits both the community, the individuals, and the organizers.

Like I said, I think there are billions, literally billions, of dollars to be made with this mode of thinking.

Watch Clay’s TED talk here and get a hold of his book.

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Learning From Experience

Intel Booth at 2008 Microsoft TechEd.
Image via Wikipedia

School is mostly bullshit. The only way you learn things is by doing things. Real things. Things that have consequences and things that have rewards. A “C” on some school paper isn’t really a consequence, and an “A” isn’t really a reward.

A consequence is losing money on a sunk venture.

A consequence is damaging a good relationship on a failed project.

A reward is turning an idea into a reality.

A reward is getting recognition for some meaningful contribution to a meaningful endeavor.

When I was in high school I had the privilege of working for a person who threw me into the fire and showed me first hand what consequences and rewards, in the business world, were all about.  That person was Marc Harrison, President of a company called Silicon-East Inc which is a small, very technical and very experienced hands on IT firm.

On day one, Marc had me building computers. Start to finish. From hardware assembly to software installation. Up until that point, my experience with PC’s ranged from basic MS Dos to Sim City guru. And before I knew it, I was building, installing and repairing hundreds of computers and shortly thereafter, I was doing the same with servers, laptops and networks. I was on the phone daily with folks from Intel and Microsoft and attended many, many conferences including Intel Channel Partner Conferences and the Consumer Electronics Show in Las Vegas.

At a relatively young age I learned what consequences and rewards meant.

I learned that a consequence is incorrectly building someone’s computer or network  and seriously damaging their business.

I learned that a consequence is incorrectly invoicing a customer and losing hundreds (if not thousands) of dollars.

I also learned however, that a reward is making someone’s day easier by educating and selling that person on new technologies.

I learned that a reward is having the respect and endorsement to represent a company at events and conferences nationwide, even if only 15 years old, and flying solo.

Most importantly, I learned that the only way to really learn anything is by doing. Experience matters most.

Thanks Marc.

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Happiness Comes From Helping Others

Mark Suster wrote a great post yesterday called “Life is 10% How You Make It and 90% How you Take It” and it’s definitely worth a read for anyone doing the entrepreneurial thing.

He talks about how “happiness has to be a state of mind” and how “you need to constantly remind yourself to be happy whatever your life’s circumstances.”

I was thinking about this a lot over the past two days. The idea of “happiness” and what it really takes to be “happy” – a sort of corollary to Mark’s post. And I couldn’t help think about one of my most serious rescue incidents on Ski Patrol.

It was my first year “cut loose” on mount snow’s ski patrol, which meant I was able to go out on codes (which are reports of an injury or incident) and provide emergency medical care to guests. I didn’t have to shadow any of the seasoned ski patrollers. I had passed my certifications, was approved by senior patrollers to respond to codes, and was now ready to handle situations on my own.

It was Saturday. Sunny, blue skies, with a temp of about 35 degrees. I was wearing my new, fresh, red ski patrol jacket with a white cross on the back, had all my medical equipment in a pack strapped around my waist, and was sporting my new Burton snowboard. I decided to take a run down the front side of the mountain on the “Standard” trail (this ski trail runs directly under one of the main ski lifts). About half way down the trail and towards the top of the ski lift, I approached a group of people huddling around what seemed to be a small person laying on the ground. I quickly sped up on my snowboard and as I got closer, I could see that there was a person in a blue jacket performing CPR on a young boy who was about 12 years old. There were about 10 other people huddling around the boy and meanwhile, there were hundreds of people passing above us from the chairlift, with their eyes now peeled on the ski patroller and the boy on the ground.

The person in the blue jacket quickly identified himself as a doctor (ironically enough, many doctors are never fully trained as first responders and never get experience with emergency situations. This doctor was one of them). Witnesses told me the boy tried jumping off of a log unsuccessfully, fell back, and hit his head on the log. He was not wearing a helmet, became unconscious and stopped breathing.

Within seconds of my arrival, the boy began breathing again but was still unconscious. I performed a quick assessment, took his vitals and stabilized his neck. I radioed in (as a code 3 – the most serious of codes) for additional personnel and equipment, specifically needing a backboard, neck collars, oxygen, and suction (in case the boy started to throw up while still unconscious). I requested a helicopter to transport him to a hospital and within minutes, a helicopter was put in the air en route to the mount snow airport.

About 1 minute after I called for extra hands and equipment, 3 more patrollers were on the scene helping me package, stabilize and transport the boy off the hill. We put him in a sled and I quickly snowboarded him down the mountain and into the doctor’s office. As soon as we got him off the mountain, we put him in an ambulance that was already waiting for us, shut the doors, and watched the ambulance take off to meet the helicopter for transport.

The boy’s fate was now out of my control. I had no idea what was going to happen to him and didn’t know if my actions helped or hurt his chances of survival. That night was tough for me and I can’t imagine how tough it must have been for his parents.

The next day, I returned to the mountain to patrol and at about 1:00pm I got a phone call at the summit rescue building.

It was the doctor who treated the boy on his way out with the ambulance. He said that the boy had suffered major head trauma and that his fate could have gone either way, but as a result of my actions and that of my team, the boy was going to be ok.

I realized at that moment that true happiness comes from helping others. The bigger impact you make on someone else’s life, the happier you will be, and the happier they will be.

Win, win.

Picture of me and my daughter, Michaela.

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Alyssa Milano, Star Wars and The “Rainbow Swan” Effect

Black Swans, Purple Cows, colorful animals..

The idea that something big and unexpected could happen without notice is a joke. At this point in time, if you don’t expect big and unexpected things to happen without notice, then you aren’t really paying attention in the first place. This is why I don’t understand big banks, agency ratings and their financial models (besides the fact that I don’t really understand big banks, agency ratings and their financial models).

The financial crisis, BP’s oil mega-mis-step, earthquakes, wars…

These are all things that we know will happen, in some way, shape, or form. But now that we live in a highly interconnected world, the likelihood of these events happening are much greater and will be much more frequent.  In fact, during the financial crisis, three kids (now known as Cornwall Capital) took $100k and bet it on these “rare” events. They turned $100k into $15M which they then turned into $120M.

They essentially bet on “black swan” events.

I digress..

In today’s world, mini-black swans will occur almost daily.  We’ll call these “rainbow swans.”

Take for example these two recent “tweets” by Alyssa Milano.

The first was:

Well, shortly after, she tweeted this:

With nearly 850K followers on twitter, she was able to move a relatively large mass of people, at a specific moment in time, to a relatively unknown website. To that website owner, he has no doubt experienced a mini black swan, now unofficially known as a, “rainbow swan” event.

How was Brennan supposed to know that Alyssa Milano would be in the mood for a hemp-jacket wearing Jar-Jar Banks?

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“Premium Content” is the wrong name – will be called “Niche Content”

content
Image by neonihil via Flickr

This week was internet week. I listened to a lot of media companies talk about “Premium Content” but I’m not sure that this is the right vernacular anymore.

Large media companies establish businesses on the basis that they can create an entire line of “premium content.” Information that is assembled, curated, and distributed with a stamp of approval – that stamp is the company brand name. There is a lot of value to this process, but I don’t buy it, at least not in today’s world.

If I had to choose between reading content written or produced by a “big name media company” or by someone I know and trust, or someone who has a community vouching for that person’s character, credentials and opinions, and someone (or a group of people) that focus on very specific topics and are experts in those topics, I will always choose the latter. (If I could do both, that would be killer – and is a viable business opportunity in my opinion)

I was riding the NYC subway yesterday and saw a quote for a book review. It said something along the lines of:

“An ultimate matchup between….You can’t put this down, it’s one of its kind” – The some city Post

Really? Why should I care that this newspaper, a newspaper from a city I’ve never even been to before, gave the book a rave review? Who cares?

What I really care about is the person that gave the review. I want to know who that person is. I want to know what that person has done and why they are entitled to speak on behalf of some newspaper. If that person’s opinion matters so much, I should be the one to decide.

The future of “Premium Content” will be created by small groups of people and crowds. People with a passion for niche topics, and those people will intently focus on that one topic. They will become businesses unto themselves. The community will provide the seal of approval and the “big name media company” will matter less, unless their businesses change – to businesses of small, relevant, meaningful “niche content.”

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Dear Ambassadors and Respected Representatives of UW-Madison and Education – A Year in Review

University of Wisconsin–Madison
Image via Wikipedia

Over a year ago I wrote an open letter to several faculty members of the University of Wisconsin – Madison. In the letter I voiced my concerns over the broken admissions process and broken academic protocols within the school and within other universities. I also discussed the importance of building a network and more importantly, maintaining the health of that network.

Well, this past weekend I attended my younger brother’s graduation at UW-Madison and I couldn’t help but think about how broken the system still is.

This is another open letter to the faculty members of UW-Madison.

(Before reading this letter, please note that I will be making this letter publicly available on my blog. Also, kindly take note of the recipients).
To: Chancellor Carolyn Martin – chancellor@news.wisc.edu
To: Provost Paul M. DeLuca, Jr. – provost@provost.wisc.edu
To: Director of Admissions, Steve Amundson – samundson@uwmad.wisc.edu
To: Dean of Students, Lori Berquam – lberquam@odos.wisc.edu
To: Vice Chancellor for Administration, Darrell Bazzell – dbazzell@vc.wisc.edu
To: Vice Chancellor for University Relations, Vince Sweeney – vsweeney@bascom.wisc.edu
CC: Executive Director, Youth Speaks – james@youthspeaks.org

5/20/2010
Dear Ambassadors and Respected Representatives of UW-Madison and Education,

It’s been over a year since my first letter to some of you regarding my concerns over the current admissions process, concerns over the current state of affairs within various academic departments, and concerns with the overall reverence (or lack there of) for the alumni network. This past weekend, I sat in the Kohl center watching my brother and his peers graduate in the same exact 2:30 pm “Bachelor’s and Master’s degrees from the School of Business and College of Engineering” ceremony I did two years ago. In attendance from my family was, in addition to myself, my parents, grandparents and sister. Simply being back in Madison and sitting in the Kohl center brought back all of the feelings I had when I was attending school. A sense of pride, distinction, loyalty, success, and belonging. All of these feelings came back full circle, and then I watched James Kass’s charge to the graduates and his words hit me like a ton of bricks.

In his closing remarks, he said:

“So I’m going to ask you to do something starting next week after you revel in this weekend celebrating all that you’ve done and all that you are. And when you wake up next week, always and forever celebrating all that you are and all that you’ve done, I want you to ask yourself if you’re satisfied. And I don’t care where you come down on the political spectrum, even if you passionately disagree with everything I believe in. I just want to know if you’re satisfied, and if you’re not, what it is you’re going to do about it, because the system has been designed perfectly to achieve the results it achieves.”

Almost a week later, I’m still asking this question, “am I satisfied?” And the answer is most certainly and emphatically “NO.”

I’m not satisfied because over a year ago I wrote some of you a letter voicing my concerns for your methods and system. How the university showed either a lack of interest, lack of means, or incompetency when evaluating and rejecting a potential UW candidate, my younger sister (and probably others). A person that would have most certainly strengthened the UW network and its legacies, which was a theme that was addressed in one of the speeches during the commencement ceremony (so much so that the alumni present in the ceremony were asked to stand among the crowd, I among those). Well, a year later I can report that my sister, a could-have been future UW-Alumni, has just finished her first year at Penn State with a 3.8 GPA making dean’s list both semesters. In addition, she was 1 of about 30 freshmen selected among an application pool of about 250 for the nursing program. Although I’m proud of my sister, I’m disappointed with UW because she could have been an asset and member of the badger network in years to come. Perhaps if the system hadn’t been “designed perfectly to achieve the results it achieves” she would have been accepted to UW and could have been sitting next to me in the Kohl center as a badger, your peer and ambassador, and not as an outsider. So I ask, what have you changed since last year? What steps have you taken to improve?

I’m not satisfied because over a year ago I voiced my concerns about a University that is trying “to compete in a rapidly changing world using obsolete methods and practices.” As this world becomes more complex, it will be less relevant for a student to earn a 4 year degree and some are already beginning to question its purpose. In addition, as technology becomes more advanced, it will become even easier to obtain the same level of education for a fraction of the cost. And with a fragile economy, unpredictable global markets, and diminishing job openings, what does the University do? It raises tuition for students and claims that it will benefit everyone. I ask how? How could this possibly benefit everyone or anyone? By increasing tuition for students and families, who are already struggling under current circumstances, we are supporting a system that was designed for a 9-5 industrial revolution. How can the University (or all universities for that matter) possibly expect to maintain its clout among other academic institutions when the best students either can’t afford tuition or aren’t accepted in the first place? Furthermore, why do you use broken metrics to evaluate these candidates? Metrics that look at grades from standardized tests (tests that might not be conducive to some of the brightest and most creative minds), metrics that look at grades from high school systems that were also designed for the 19th century, or worst off, metrics that do matter but are greatly overlooked – like leadership, entrepreneurship. Every aspect of our world is changing, some quicker than others, and if the academic institutions can’t adapt at least at a “satisfactory” speed, then “satisfaction” will be the least of our concerns because at that moment, we will be concerned most with survival as a society and as individuals.

At the end of the day, I respectfully ask that you take the same advice that was delivered to your students at their commencement ceremony. Like James, I’m here “to tell you that I’m not satisfied, but that I am one of many trying to do my work, knowing that it’s in your hands now and hoping that you’re willing to do yours.”

Please don’t be complacent. Please don’t raise tuition because it’s the only way. Please don’t reject exceptional students because they don’t fit your admissions template. Please don’t support a broken system.

But most of all, please challenge the status quo among other academic institutions because tomorrow is very different from today, and if you do this, you will secure a bright future for our university, its legacy, and indirectly, our society.

My Very Best Regards,

Dan Reich

Class of 2008′

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We are Wall Street

Wall Street
Image by jpellgen via Flickr

The market almost fell 10% today and one of my i-banker friends sends me this email chain…

We are Wall Street. It’s our job to make money. Whether it’s a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn’t matter. We would trade baseball cards if it were profitable. I didn’t hear America complaining when the market was roaring to 14,000 and everyone’s 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I’ve never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.

Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.

Go ahead and continue to take us down, but you’re only going to hurt yourselves. What’s going to happen when we can’t find jobs on the Street anymore? Guess what: We’re going to take yours. We get up at 5am & work till 10pm or later. We’re used to not getting up to pee when we have a position. We don’t take an hour or more for a lunch break. We don’t demand a union. We don’t retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we’ll eat that.

For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We’re going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I’ll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.

So now that we’re going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we’re going to stop buying the new 80k car, we aren’t going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We’re going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.

The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it’s really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.

We aren’t dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?

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Will.i.am is the Man – Creating a New Era of Music Media Platforms

Picture from the event

I always knew there was something super advanced and different about the Black Eyed Peas. My first sign was when I saw them perform at Intel’s private launch party for their Core 2 Duo processor at the 2006 Consumer Electronics Show in Las Vegas (thanks to Marc Harrison – pictures below). It was the first time I ever experienced a collision of mainstream music, technology, celebrities, and media all in one room, at one major event.

Yesterday I read an article in the Rolling Stones by Chris Norris titled “40 Reasons To Be Excited About Music” and sure enough, coming in at No.1 was “The Black Eyed Peas – Will.I.Am and the Science of Global Pop Domination.”

The entire article is certainly worth a read for anyone that’s in to music, but the piece that really hit me was this…

“To Will.i.am, songs aren’t discrete works of art but multi-use applications – hit singles, ad jingles, film trailers – all serving a purpose larger than music consumption. Creatively, he draws no distinction between writing rhymes and business plans, rocking arenas and PowerPoint, producing albums and media platforms, all these falling under a cleareyed mission to unite the largest possible audience over the broadest range imaginable. It’s a mission he communicates with a combination of Pentecostal zeal and Silicon Valley jargon, suggesting a hybrid of Stevie Wonder and Steve Jobs.”

It’s the idea that media and music are really one in the same. That business and music are thought about the same way and are less complimentary but more interconnected.

Over the past year, the lines between technology, software, media, music, marketing and news has become increasingly blurry.

Here are just some examples:

  • Meredith Media, a company that used to be a traditional publishing company is now acting as a fully integrating marketing agency.
  • Global advertising holding companies like Havas, OMD, and Publicis are now looking to build their own technology units in house in an attempt to replace the need for Ad Networks and control the entire online advertising stack.
  • Software is Media, says Fred Wilson in a recent post –  “Media are the tools that are used to communicate. And software that runs on the web is part of the media landscape.”
  • NBC recently launched a new program called “Behavior Placement” which is “designed to sway viewers to adopt actions they see modeled in their favorite shows.”

And even today there’s news about how Hearst, another traditional publishing company, is looking to buy the digital advertising firm iCrossing for $375M.

As are lives continue to digitize, the companies and artists that continue to take a longer, interconnected view on culture, technology and media, will be the ones that succeed. Will.i.am and the BEP are definitely on “that next shit now.”

Intel – Black Eyed Peas

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Nice’n Niche

A lot of people recently asked me about internet based businesses. Things like: How to start a blog or website, what is twitter, how to use twitter, how to increase followers and traffic, how to register a domain name, what is a domain, how to create a mailing list, how to use analytics, what is a good number of followers, how to obtain affiliates, how to create partnerships, etc.

These things may all seem trivial to anyone in the tech space but to those just entering, they seem non trivial, foreign perhaps, but very attainable.

Simply put, the evolving web has made things easy. The barriers of entry to creating an online business are much lower, but creating a long-lasting business under this premise is much harder.

It seems to me like this is one thing that is severely overlooked these days. I’m all for starting new projects and businesses, but if you plan to do so, you should also recognize that you are most definitely not the only one.

One way to overcome this obstacle, and perhaps the best way (without knowing how to write code) is to start a business with a very niche focus. If you are successful, you can certainly expand your focus, but to start, you probably want to try to build a loyal following first. And to do that takes hard work.

In the beginning, try to be the very best at something very niche. That’s what I would do.

Take it from this guy (Gary Vaynerchuk). He certainly has.

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Oreos are Good, Especially The Audience Layer

Photo of an Oreo cookie on a white table.
Image via Wikipedia

Doug Weaver wrote a great piece today titled The New Oreo, Part 3: The Audience Layer.

“Anyone mildly plugged into digital advertising in 2010 can’t possibly ignore the noise and energy around audience buying.

…

There are many people in our industry who can go a lot deeper on this topic than I…”

I’ll attempt to take it a bit “deeper” but will do so around his 4 premises.

  1. It’s a Different Marketplace: “Audience buying is happening, and it is going to happen more”, but today, the market is not transparent. There are many companies out there that can sell your data for a price (and if not tied to media its probably much less), but what value are you getting other than a new, arguably small revenue stream? Are you learning about data strategies for your own organization? Are you learning about audience data collection, segmentation and optimization? If you’re going to invest time and effort in a new partnership, understand how the “data” company can make you smarter and affect your business in a meaningful way. One that adds long term value. Remember what ad networks did to your business?
  2. Create a Trading Desk: “Segregating and centralizing the audience selling activity inside your organization is a good idea. Keep your ‘page sellers’ focused on selling the value of placement. Let your specialists manage the relationships and requests from DSPs and interact with your optimizers.” I would take this one step further..in the opposite direction. Publisher that can take the lead and sell audiences on top of their placement should see increased CPM rates and differentiation from their competitors. If this is where the market is heading, might as well start understanding it now.
  3. Demand See-Through Tags: If a company is tagging your site, you should not only understand who pays the freight, but you should have some visibility into the actual shipment. Simply put, you are entitled for more insights other than just a paycheck.
  4. If You’re a Data Enabler, Get Paid for It: Publishers should absolutely get paid for their data, but they should work to optimize the use of that data by looking at and leveraging the individual behaviors as well as applying that data towards multiple revenue streams. Companies that can offer revenue streams for media and data, using the same data source, can help the publisher over the long haul in establishing a meaningful, multifaceted business.

(Disclosure: The post can also be found at Lotame Learnings. Lotame is my current employer)

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