Why The Balance of Power Will Swing To Information and Entertainment Content Creators

I was honored that many people whom I truly respect took the time to read my thoughts on 2000-2010-2020 and offer insightful feedback. One prediction that a lot of people, including Tim O'Reilly, challenged me on was my claim that by 2020 the 'relative balance of power in the media would shift from content distribution to content creation'. Tim pointed out rightly that this prediction has been made time and time again with new technologies, and tends to be proven wrong at every turn. Because of this and some other recent comments flying around about the future of privacy/content/etc., I figured it would be worthwhile to explain a bit more deeply why I am willing to make the 'content creator' bet, and more broadly the framework I am currently operating under -- humor me, this is going to be my big my big a priori exercise for the year, so I am going to start at the very beginning with a few definitions and build up -

recognizing that this is a very long post, let me give a way the conclusion up front:

A. The value of a given bit of Information's is based on its own scarcity, but its value is relatively agnostic to the value of other Information(s), because information is by definition unique. Ever greater leverage in the ability of individuals to harvest the value of information means that the spoils are shifting more and more towards content creators and away from Information distributors.

B. Entertainment's value is a function of its scarcity relative to the market of other content/supplements, but not it's own distribution/scarcity. highly efficient filtering/distribution technology (social/management structures for managing increased interactions) give content creators relatively more leverage when you get several standard deviations away from the mean, which is where we are rapidly headed.

C. Ultimately, leverage moves to content creators in the next decade because while content is abundant, valuable Content (both Information and Entertainment flavors) is scarce. The difference between Information and Entertainment is only the difference in types of scarcity that drive end value for content creators.


1: A given bit of Content can be classified as Information or Entertainment, but never both, The only way to usefully bracket a definition of Content is as value-able expression that can be reduced to binary, and whose value fits under one of two possible MECE (mutually exclusive collectively exhaustive) sub-classes, defined by how their value changes as a function of scale -- namely Information (the price of walmart's stock tomorrow) and Entertainment (harry potter books).

First, I say value-able because I would argue that white-noise, or bits that literally have zero value are not Content. It isn't Content if someone isn't willing to pay something for it in some way, shape, or form (which is at a baseline being willing to spend the time to consume it). Second, since Content is value-able, it's value can be plotted vs. another measurable characteristic, like distribution. All Content has a definite unit economic value signature as a function of scale where Information is defined as the pattern in which value per incremental unit of distribution erodes, and Entertainment is where value per incremental unit of distribution is flat or positive.

So, while you might have a composite container of contents, like a news article, where some bits are information, and some bits are entertainment, you can ultimately reduced and separate the media to its component contents (and likely in our world would likely maximize their value in so doing)...

A. Information is Content which has a fixed and finite value, and whose value is harvested with distribution. Incremental distribution always means a loss of value. A given piece of information becomes less and less valuable the more it is shared/used, and because of that the total value of a piece of Information content is finite. If I am the only one that knows Walmart's stock price tomorrow at noon (with 100% certainty) that information is priceless, if everyone knows it is worthless. In this way, you can model information as a natural resource/oil. In its pure form it begins it's life as potential value, and then is converted/liquidated into real/fungible value. Information has a fixed value that relative to distribution starts high (Potential Energy) and ends low (Kinetic Energy). **To argue this in the true abstract and talk about things like the value of the Wall Street Journal, it is important to roll in that the value of all bits of information are by definition probabilistic (what the information says * how likely it is to be true) -- but I will save that for another post because it is non-core to why content creators will get more valuable.

B. Entertainment is Content whose value stays constant, and might even grow with distribution. Unlike information, whose value is finite and absolute, entertainment's value exists only relative to the market of other entertainment content available to me. So The Dark Night is equally enjoyable to me regardless of whether everyone else saw it or not, and its value might actually increase with social distribution (as I might get more and more value/enjoyment out of it the more I can discuss it with friends), but varies relative to what else is available to me in any given moment. Overall, entertainment's value is theoretically unlimited relative to its own distribution. ** for a later post: A MEME is a flavor of entertainment where the value of the content at scale is many multiples of the value of the content without scale.

So, back to a real world and seemingly muddled case - a news article - Any grouping of bits might have components which are information and components which are entertainment... but I would expect that the trends will continue to be the disaggregation of the two into component parts because Information and Entertainment are at economic odds with one another. When you wrap Information and Entertainment into the same body, you dilute the economic power of each because your incentive set on scale conflicts with itself.


2. Information: technology is giving Content creators ever greater leverage, allowing them to harvest a larger precent of the total value of a new bit of Information: Because Information has a finite value, harvesting value from Information is a race to the bottom. When T=0 and a new piece of information comes into the world, its value is 100% of what the entire known universe would pay for it less the total expense of fully disseminating that information. When T=infinity and a piece of information is perfectly known by everyone everywhere, its value is 0% of what the entire known universe would pay for it. (of course, the 0% can actually sit at a negative absolute dollar amount as a function of distribution costs, in which case the information would stop spreading before everyone knows it)

for the sake of a silly example, let's play pirate: you get a map to some buried treasure 2000 miles away. To simply things you have 100% confidence that it is accurate - so we set aside the fundamentally probabilistic nature of the information).

- If you are the only one with the map, the value of the intel is: the value of the treasure - the cost of extraction (and you could probably sell it for $1 less than that).
- If everyone has the map then no one is going to buy it from you because it is worthless (like the good old joke about the economist that stumbles across the $100 in the street).
- If just a few people have the map, you could sell the map for somewhere between 100% and 0% of the initial value.


A. The total value of information has risen for many types of information, because the market has grown and therefor a given new piece of knowledge is worth more: Just as a warmup (not critical for our conclusion), it is undeniable that for many (but not all) forms of information the total value of information has shifted up as the total human population, and the total size of the economy, has grown. Possibly the easiest example of this is the lottery. The value of somehow knowing the winning lottery number is much higher now than it was 30 years ago, because more people now play the lottery. This absolute shift up isn't all that interesting, but it is worth noting. This is a useful illustration largely because in the lottery the value of a winning number is a pure step function with a definite expiration date.


B. The initial value of Information in most cases has grown throughout history, driven by ever more leverage to take advantage of in the total market. The communicative leverage you can put to work to harvest a new given piece of information is growing rapidly, leading to a rise in the initial value of information. Let's pretend that you live in Chicago and happen magically to be the only one that knows which horse is going to win the Kentucky Derby 20 min before the race is run. 100 years ago, maybe you run to a local bookie, and make the biggest bet you can based on the cash in your pocket and the local chicago market. Now, you could pick up the phone, leverage tons of fast acting lines of credit (like credit cards) and make bets all of the world. Your cost of grabbing more of the total value of the information has declined precipitously, so the information is worth more to you if you are early in the diffusion curve (value - cost).

More obvious still. Look at hedge funds (or, just the concept of using a lot of financial leverage). It used to be that if you knew a great stock pick, you could buy a few shares up to the cash you had, and benefit a bit... You could tell a few friends, they could benefit also. Now, hedge funds can theoretically pile on as much leverage as possible, and using derivative instruments, capture way more upside per $. One person can smartly capture the whole win up to the point of moving the market.

Or, back to our treasure map whose value is the value of the bootie less the cost of extraction. 2000 years ago the extraction cost was traveling half way across the world, digging it up, hiring a ton of people to help you extract it - who will likely steal the intel from you, etc.- and then of course the cost of financing/capital to get it all done.... now, just hop a jet and rent a john deere for a few hundred bucks.

In a phrase - doing things is easier and knowing things is cheaper - so knowing things other people don't know is more valuable. So, not only is market is bigger in absolute for many, but not all, types of information (which means total value is greater), but greater leverage means that individuals early in the curve have lower cost extracting more out of the total value of information... so, returns to those whom are early are even greater...


C. ... But the corollary is that information amp information's value also diffuses much more quickly, shortening the window of opportunity for high returns. Adam Smith actually made quite a bit of money throughout his life in the 1700 arbitraging gold prices in europe in more or less the same way over and over. The market didn't respond - the opportunity to leverage a tiny bit of information was relatively consistent for decades. Now, opportunities close much much more quickly. The window to use information is generally much shorter. This is because there are generally more smart and connected people talking, working on the same problems, and cheaply pushing around bits than ever before. Further, the cost of harvesting information isn't lower just for the first person to discover/create information, it is lower for everyone in a competitive marketplace. So, the area under the curve (the total value of information) is constant... and if you harvest more of it more quickly, your ability to sit later in the curve and extract value is diminished.

To really see why converting information into value is a race to the bottom... back to pirates -- 2000 years ago, if you and five other individuals got their hands on the same 100% confidence treasure map within a few months of each-other and set out at a sprint, chances are that guy number 1 isn't finished with the labor of digging up all the treasure when competitors get there... so the 5 either raise armies to try to kill their competitors (expensive) or the cooperate and share the upside. Cooperating is not as good as being first alone, but being in the first group probably means you get dealt in.... now, using my john deere backhoe, if you get the map 1 day after me, you are screwed because in that one day I will have already taken 100% of the bootie and be chilling out in Michanos.

D. So, information is ever more perishable, and if you have information this means your best bet is to harvest it as quickly as possible: If you have information of value, you need to use it or loose it. As the window on inefficiencies generally closes faster and faster, people have an incentive to leverage what they know at an ever faster rate. I don't sit on ideas. I see how highly I can leverage them, I leverage them, and I move on. There are a lot of interesting dynamics around this for a later post (prisoner's dilemma is a great way to describe why information diffuses so quickly)


E. Thus, by 2020 content creators - those who know first - will gain power on a relative basis: New information is the only place with leverage on the value chain - If you can generate true information, your ability to leverage the initial value of that information is greatly enhanced. But because the information diffuses so quickly, the window of opportunity is much shorter for follow-on by other people who gain access to your information. The distance between first and everyone else continues to grow... the those that are 'first' generally have more and more leverage. By this argument, value resides with being first to an insight... the second place prize has been seriously diminished.** (again, please note that this totally ignores the probabilistic nature of information, which is where things like the times/professional news make a big difference).

or - put in a phrase - the cost of harvesting information once it exists has become very low, so the value is in creation, not the pipes to disseminate. -- news organizations are valuable if they are fine tuned for news gathering and fact checking (a form of second derivative information), not because they have fleets of trucks and paperboys to deliver the news.

-- The result of this is increasing inequality. The earliest people/the information creators do better, everyone else does worse -- The potentially socially bad news (if you want to take moral sides) is that leverage/information content creators winning more reduces equality. Original information can be leveraged more quickly in a wider audience, so producing it is a huge deal... but the value of second place is rapidly being diminished towards zero). ** later post: argument in here for the implications on patents/IP. 18 years is far too long in our changing landscape

-- The implications of this obviously play out for all sorts of second derivatives as well (information about information, of meaningful note given my expected audience on this). This is especially critical when considering search.... again, this is a stem for later followup -- but the basic point is that these same dynamics suggest that traditional 'search' is going to get much less valuable rapidly.


3. Entertainment: competitive 'Filters' are bringing individuals so many standard deviations away from mean Content, that content I value is getting scarce, and power is shifting to content creators: Let's start by considering in a bit more detail how baseline entertainment consumption works.... Unlike information, where I have relatively elastic demand (I can use leverage/computers/companies/etc. to consume as much information as is ROI positive - and I am getting more consumption leverage all the time), my entertainment consumption is relatively inelastic. I have X hours and Y dollars a day to spend on being entertained (reduce it either way, but let's pretend I can trade dollars for hours and hours for dollars, so we are only dealing with one dimension).

At the same time, completely forgetting the concept of 'filters' for a second (that comes later, stick with me) we as individuals each face a world of Entertainment Content whose value in utils/hour looks something like a Normal distribution. There is a small amount of content which is very high value (is hyper rich in utils/hour), a lot of content clumped around the mean, and a bit of truly terrible content which is really low value. Of course, this curve is personal... so something which might be very very high in value on my curve could be very very low on yours.

Part of the reason that I believe that a Normal distribution is a good general model, is because the value of Entertainment Content can be understood only on a relative basis (just like intelligence, or the more modern intelligences). Avitar did very well in 2009-2010 -- but it was very high on the distribution curve only compared to the other movies/forms of entertainment right now. If you had released Avitar in 1970, chances are it would be considered several orders of magnitude more amazing than it is today (and would have made way more money), if you release it in 2015, we might find it relatively less entertaining/utility rich.

The upshot is that in a baseline scenario, with zero filters at my disposal, an individual will tend to get the mean number of utils with my relatively fixed time/dollar entertainment wallet/budget... An individual would consume value from entertainment at the mean of all content produced. (so -- in the below I will tend to consume at the intersection of my total consumption volume (the red line and the bell curve average (blue line)--


The story of the above graph goes something like this. You are in a room with an hour. You have at your disposal a set of un-labeled books, videos, audio, video games, etc. You have no way to know which ones are good/which ones you would like or which ones are bad. On average, over enough days in the library, you will tend to consume the mean piece of content at your disposal, and will harvest the mean number of utils from your hour(s).

A. storage amp distribution costs are dropping so there is far more content at my disposal: Not too long ago, at 10pm on a tuesday I had at my disposal whatever books were in my house, whatever was on one of 5 television channels, a handful of content on the internet, and a wired phone to try to reach someone who was awake. Now, at 10pm on a tuesday I have at my disposal thousands of movies, hundreds of television shows, thousands of books (on kindle), basically every piece of music that has been professionally recorded, streams of content from thousands of friends, etc. there are several orders of magnitude more entertainment content at my disposal.

further, I also on average have a slightly larger time/money entertainment wallet if I live in the western world I am working on average less than I was 10 years ago... (not of big consequence, but worth noting and indicated by the red line moving up in the below graphic)

All that said, just because distribution and storage costs are down, doesn't mean that the average value of the content has changed, for now - again without filters - for every bit of new really great stuff at my disposal, there is a ton of Barney in Malaysian with Hindi subtitles (very valuable to Malaysian kids that speak Hindi, but of almost zero value to me).... and as the result of storage and distribution we find that we have more content, but more of the SAME content from a value distribution perspective. The library is bigger, but I get the same enjoyment out of it as I did out of the smaller library, and in either case I can only consume a small fraction of the material.


B. content creation costs are dropping, driving lower average value (utility/hour) in the content produced: If you only make one movie a year, you tend to try to pick your best script and put your best director on it. When humanity starts spitting out ?thousands? of movies a year, the average drops. So, the second thing that is changing is that the average bit of entertainment content produced in the world is dropping fast. With no hurdle to production some great stuff gets made that wouldn't have otherwise been created -- but far far far more junk gets created per incremental unit.

When there were 3 channels at 10pm I was on average 33% of the time going to end up with Johnny Carson if I randomly switched to a channel -- with 2000 channels, I have a 1/2000 shot of randomly getting CoCo, and a 3/2000 shot of getting Jersey Shore, Real Housewives of NYC, or... Real Housewives of Orange County. So, I bet money the average telegraph sent (expensive) was way way more interesting than the average tweet (cheap). Just as the average message run 26 miles up to Athens after the battle of Marathon was way more interesting than the average telegraph.

In step 2, still forgetting filters, my average media consumption has actually LOST value recently. My consumption volume is constant, but because lower production costs ultimately ends up correlating with a shift down in our average content value curve, I the content I am consuming is actually on average WORSE than it was in a content production constrained environment.


C. Of course, no one actually consumes the mean of the basket of content available to them, filters help us find content that we will enjoy in excess to the mean. we have always had content filters. Social filters have existed as long as friendships -- the are not a modern invention. People were recommending plays/books/etc. to each-other since the beginning of time helping them leverage up the value in their finite entertainment consumption wallet. The TV Networks and Record Labels are both pools of capital/knowledge, and filters that extend all the way backwards through the creative process. TV guide, the New York Times Book Review, Zagats, basically any editorial content about Entertainment is a form of a filter.

Filters look like/function by basically taking your average consumption from the mean (the blue line that has shifted down), across the orange line, up to the blue dot. The 'value' of a filter can be expressed/thought of as the length of the orange vector minus the cost of consuming the review/editorial (in time/money/etc). So, a good filter can be extremely valuable in a world awash with content. Against a backdrop of abundant content, filters help you consume more efficiently, and thereby get more utils/unit of consumption. Filters are the only way we can escape our otherwise clear fate of consuming ever lower value entertainment content (in terms of utils) as the mean content in the market continues to drop.


D. Filters are evolving rapidly: for a long time, filters were relatively simple and provided clear but modest improvements over the mean. The first filters were real world social filters (friends, families, etc)... after that traditional editorial filters evolved - TV guide, reader's digest, etc., as well as Record Labels and TV Networks screening content in early development, and filtering it through to your eyes (while simultaneously financing it, and contributing to it) ... skip forward to search engines (algorithmic filters) and now social networks (filters combining old school friends, families, etc. + algorithmic)... technological points of discontinuity (printing, scaled algorithmic processing, social graph, etc.) have a few times throughout history meaningfully allowed you to step up the entertainment content value curve in relatively sharp jolts.

The key is that the value of a filter in absolute is the positive shift in average consumption value it provides to users... but the value of any given filter is measured relative to other filter options/costs. Filters exist in a competitive marketplace within a type (newspaper vs. newspaper) but also across the whole function (social vs. search vs. newspaper) So, the value of search is not the total vector from average content to editorial options -- it is the marginal improvement that search has over editorial. the value of social is not necessarily the value of social relative to editorial, but it's value relative to search. (Again, this is another stub of an argument/many points fall out here, but hopefully the general concept is captured/serves for our end goal here)...

E. Filtering itself is becoming an ultra competitive marketplace, facing commoditization and declining margins: just to belabor the point... the reality looks more like the below, where the value of any filter is only the marginal improvement on the X axis of one dot (service) over all other possible filtering choices. So, search might plop down on the content curve line on certain categories and have a decided advantage for a while, but that advantage is ultimately eroded by competing services. The same relationship plays out in a derivative with the filters themselves. As more filters evolve, the relative value of any one over the others declines.


F. Why 'entertainment content creation' will start winning this decade, because we can surface great (and scarce content!): Filters are getting really good, and they are going to keep getting better... and this presents the ultimate rub: filters are competing each other to provide excess value so many standard deviations above the mean content, that all of a sudden truly excellent content that I want to consume (and filters want to provide me) is scarce again, which means the balance of power swings back to those that can produce truly excellent stuff.

the basic idea is that when you are just one or two standard deviations above the mean content value, filters dominate because content that hits that richness is relatively abundant and replaceable. There is far more content at the value level required than you could possibly consume, so any given content owner/producer lacks pricing power.... but, I believe that as we approach 2020, we are going to face a scenario where we are a sufficient number of degrees above average content in what is required to compete, that filters will be delivering scarce and valuable content in an effort to compete. If filters start delivering content that isn't replaceable/commodity, then all of a sudden the content owners are going to find themselves with a lot more leverage.

Below I illustrate the point at which content creators/owners gain back power -- where my daily entertainment consumption wallet exceeds the average content available to me. I am looking for a better answer than a simple filter on top of commodity content can provide. I need great content and great filters, not just great filters of mediocre content.


To keep hammering on this, Entertainment content creators will start winning this decade because the filtering business is becoming just as competitive as the content business itself. To create value you need to be so many standard deviations out on the curve that the content itself is just as scarce as the filtering/finding of the content... so, where once we were awash in models of filters/distribution leveraging under-valued content, we now find that to really do well, content and filtering/distribution need each-other.

- historically: content (easy to make), distribution/filters (scarce)
- 2020: content (easy to make, hard to make well). distribution (easy to make, hard to make well)

The result is that to get outsized returns on content, you have to produce and filter content many SDs above the norm. Where once the market had a lot of slack in it, and filters could dominate by finding marginally better entertainment content, I would argue that we now face a situation where incredible content needs incredible filtering, and visa versa to provide any sort of actual value. You need to get all the way down the curve to the extreme right, which requires both extremely good and extremely scarce content, and extremely good and extremely scarce filtering/distribution.

Where does this work?

- I want to listen to YoYo Ma play Bach
- I want to listen to her majesty by the Beatles
- I want to read stephen pinker
- I want to watch 30 Rock

G. This doesn't mean that your status update is valuable: for note now and expansion later - just because power is shifting back to content creators doesn't mean the personal entertainment Content you generate is all that valuable.... Even if your 50 friends like the photo you took and value it several SDs above the mean content they can consume, don't kid yourself - even when amassed that content isn't worth that much. Your only photo of grandma is priceless, but your 1000th baby photo is mostly worthless.

H. However, all this said, facebook and google still win - just not for the reasons everyone thinks: for note now and expansion later -- If Facebook and Google were just filters, the above would clearly imply that they have issues on the horizon... but Facebook and Google are not just filters, they are content creators. I will go into this more some other time, but for now -- just consider who really is the 'owner'/'creator' of your status update. On one hand, of course you wrote it.... but in reality wen't you just an input to facebook's Content creation pump? I would argue that the best brands going forwards are the ones which are creating contexts which drive people to generate content for them. Facebook and Google are not filters - they are content creators and owners (sorry guys, I know you don't like to think of yourselves as media companies, but I don't think it is such a dirty thing going forward, even if it was historically).


- In closing: I buy the 2020 content business as on a relative upswing information's value is based on it's own scarcity. ever greater leverage means that the spoils are shifting more and more towards content creators - entertainment's value is a function of scarcity relative to other content, but not it's own distribution. the ultra competitive filtering market pushes demand all the way out to the edge, where content is scarce and where content creators have relatively more leverage.
, the graphs get cut off in this version - view it at http://drop.io/swl

publicity is the new social norm and Heidi Montag knows it

(for starters, just a note that I am posting this en route SFO to JFK at 300 MPH and 30K feet... first time actually using in-flight wifi -- call me a child of an earlier century, but this is totally mind blowing.)

Over the last week or so I have received a bunch of emails and DMs asking me whether or not I agree with Zuckerberg's statement that publicity is the new social norm.

First, to be clear upfront, from what I have seen that isn't exactly what he said -- it is how several blogs decided to paraphrase it... But for sake of argument let's pretend that is the 'quote' we are working from --

I think this is because drop.io's mandate is private sharing people expect that I disagree with this general encapsulation. The reality is that I think the concept that publicity is the new social norm is spot on... and drop.io was actually founded on the premise that for the first time in human history publicity had become the norm, and privacy was becoming the premium service.

To explain, in late 2007 when we started drop.io and started talking about simple private sharing I had a slide in my presentation that looked like this:

the voice over to the slide went like this:


for all of human history privacy has been inexpensive relative to publicity. If I wanted to have a private conversation with you 2,000 years ago, we could sit down for a beer - much as we do today. If we were both hanging out in Rome, the cost of organizing that beer and exchanging some private words hasn't changed much. If 2,000 years ago I wanted to broadcast something to the entire world it would have been almost impossible, and require an immense amount of time and money...now, for the first time in history, it is actually easier and cheaper to be public than it is to be private. Publicity is cheap and privacy is expensive.

Now, if I want to share text/audio/video/etc. with an enormous number of people, facebook, youtube, twitter, etc. are happy to oblige me with fast, efficient, and free services. If I want to share the same text/video/audio/etc. with just my mom, the services offerings are in general not as good, and as a rule paid in some way shape or form. Drop.io looks to borrow the best design patterns from public sharing services (where all the innovation of late has gone) and make private information and media sharing as efficient as possible on a premium model.
Publicity is most certainly now the norm, and for the first time in history 'privacy' is what we pay for. The lines have crossed for the first time in history, and they are not crossing back.

Of course, this begs the question, how did we get here? The answer is that it is all purely the result of economics. Advertising driven businesses margins go up the more a given piece of content is consumed. Whether I am sharing a video with one person or with a billion the economic structure of the content can be generally understood as:

revenue/value: advertising rate (CPM, CPA, whatever) * number of impressions + [ viral value of new user * new users ]
- costs: [ (sourcing/production) + upload + conversion + storage size * time], downstream bandwidth * number of times viewed.

If my content is private and is only used/viewed once, i need to incur the upload, conversion, storage, every time. If my content is public and viewed a billion times, I can amortize all of those costs and my margins improve. So, any advertising driven business at the most fundamental level will always tend towards being public. (Obviously, the above is just basic math. For smarter players the value of a view/impression, etc. is much more than just the revenue you directly extract from it... in fact, for explicitly virally grown systems, the more you share the more you get.)

Why does this mean people tend to go public? because the same math applies for you as an individual. It is pure economics. If you have an incremental piece of information, you want to 'sell' it in the market in return for as much physical capital/social capital as you can get, and it no longer pays to be private, because even for trivial almost worthless pieces of information like 'eating lunch' has some positive value in some way shape or form to someone.... your cost of broadcasting that information has become so ridiculously low, that there is actually positive value to moving it both for you and for your service provider.

my revenue/value for a piece of content: number of people listening * (social credit + ?sometimes a rev share?)
- costs: capturing/creating it + inputing it -

Which leads me to Heidi Montag... I was blown away reading US weekly (or something like that) over some woman's shoulder on the F train a few days ago. What I basically took away from the article is that Heidi basically pre-exposed tons of really person information/pictures/etc about her plastic surgery issues proactively. This is mind-blowing as a child of an earlier time, but very clearly the right move by team Heidi management. This is not just about a publicity stunt. Heidi is working the new modern reality to a T.

The logic is simple: In our brave new world it would have been infinitely expensive to keep private that heidi had surgery (the days of presidents secretly in wheelchairs are over).

So, Team Heidi options are: 1. embrace it and harvest the content for value amp control the initial spin or 2. let someone else profit from the content and incur the same costs without any upside. Clearly, you go public.

Is the fundamental cost structure shift of content and the resulting cultural sift good/bad? I am not sure. but it is very profound... it changes basically everything - down to strategies for privacy, which move from trying to keep information off the grid, to just flooding the grid.... and based on the new interest in privacy resulting from this and some of the offshoot conversations from my 2000, 2010, 2020 discussion... next post is my full current thinking on content.




Mon, 18 Jan 2010 00:43:26 GMT

thus begins the decade of passive data collection...

last weekend I went skiing with my girlfriend. Using my garmin watch I pulled down location (lat, long, elevation) and heartrate. easily yielding stuff like this... on day 1 on my hellbent skis I was doing 30MPH cruising - next day on my 5 stars, 36MPH was +- casual terminal speed. :)

in 10 years, this will be more the standard than the exception.

Thu, 07 Jan 2010 00:48:44 GMT

I just got tricked by RT

Daniel Delaney just tweeted:

RT @Mashable: Founder of private web storage site Drop.io, Sam Lessin (@lessin) launches yet another storage startup: cumberb.un

this was a cleaver joke back to a funny dinner conversation a month or two ago when we decided it was time to bring back the cumberbun as a fashion accessory ideal for storing tech accessories, and critically, for unfinished leftovers from classy restaurants (in a resealable reheatable pouch).

but... it took me a few min to get the joke, and I must admit that I spent a few min poking around mashable ready to reject the ridiculous claim that I had started a 'storage' company

which leads me to the humorous bit that while I love running around town talking about how people read identity into all sorts of unverified/non-identity rich system, I just got had by the same mistake.

RT is a great way to misappropriate authority
...refutable, sure - about the same as saying billy told me it was true -- but it still works as we re-adjust our expectations online.

thoughts re 2000,2010,2020

decades only happen so often.... and now feels like as good a time as any to pause and do a sketch of 2020, based on a comparison of 2000 and 2010. In Jan the BLKNY30 is going to host an event with the NYC founder's round with a similar goal - but in the meantime here is my personal take and a few calls in the form of 2000 | 2010 | 2020 --

as with all my blogposts - especially exceedingly speculative ones - the standard disclaimer applies that I am writing with an open audience in mind but ultimately as a format to clarify my own thinking, I almost never disclose conflicts of interest, I work in bracketed time so I need to apologize to my mother and proponents of english grammar and diction, and the views expressed might not actually be my personal beliefs, but rather what I choose to represent as my personal beliefs in this format (the medium is the message)

Headlines from the exercise:

A. The Relative 'Resolution' of 10 Years: It is mind blowing to me the seemingly important/formative things that fade away when you step the resolution out to 10 years.

For instance, I started the decade without an ipod, and I am ending the decade without one -- even though it was very important bit of tech in the middle. Same thing with college... which was highly formative, but actually just made up a minority of a period that fit well within the bounds of our resolution. That doesn't mean that college or the ipod weren't critical, but it does underscore just how big a decade really is (especially with the backdrop of accelerating technology)... the number of locally important world events, personal events, startups, people, etc. that get washed out of a 10 year pull-up is just staggering - Bain, Youtube, Twitter, Tiger, Giants/Patriots, and certainly rowing.

B. Acceleration: Chronological time seems ever more disconnected from other measures of definite meaning.

Chronologically the last decade was exactly as long as the one before it (give or take a few seconds based on the speed of the earth's revolution I believe), but in almost any other unit that is not even close to the case. If we measure time in terms of the amount of unique content created, the last decade was probably 10X as long as the one before it. Worldwide births, probably 1.2X (just guessing - not looking it up). If I personally measure it in terms of percentage of my life to date, the number of messages I received, dates I went on (almost all with the same girl :), beers, dinners I ate out, hours I spent in lectures, hours I spent earning money, flights I took, miles I ran, or a myriad of other factors, 2000-2010 looked nothing like 1990-2000, nor will 2010-2020 look anything like 2000-2010. The world is accelerating, and so am I.
C. Core beliefs amp big challenges: I don't think that my core belief system has changed very much/will change very much 2000,2010,2020. In 2020, just as in 2010, just as in 2000, I suspect I will strongly believe that people are good and that free markets solve most problems very well (or at least orders of magnitude better than anything else we have come up with).

In 2020, just as now, I will believe that our big challenges exist where short term incentives and the immediate interests of one generation run counter to our own longer term interest and that of the species. The biggest problems we face now and will face in 2020 involve a growing set of situations where stakeholders are not yet around, or not yet empowered.

I will be then, as I am now, most concerned at a macro level about the environment and privacy, two clear cases where our short and long term interests are diametrically opposed. I will also be increasingly concerned about the worldwide technological/economic/social/and political monoculture that are forming ... because mono-cultures have an unfortunate way of not lasting very long, and not degrading very gracefully - and we seem to be building one at an accelerated rate.

D. Friends: this was a big decade re: personal relationships.

Unlike 1990-2000, where I carried through as friends no more than a handful of people, I truly suspect that the people I became close with 2000-2010 will remain central to my passion, creativity, and enjoyment well through 2020. Further, I suspect that in terms of new meaningful human relationships the next 10 years will be far less important than the last. I think this generally fits into a natural lifecycle, but I also think that I just had the incredible luck, honor, and privilege of coming into contact with and developing personally meaningful relationships with some of the most interesting and wonderful people in the last 10. A very high bar has been established.

E. Technology, moving towards implicit data and central services, maximizing value/bit, with all the pluses and minuses:

We are currently in a period of explicit gestures (double confirmed declared facebook 'friends'), status updates, 'checkins' - we are going to a world of implicit gestures culled from real action by 2020. Not who you declare your friends to be, but how you actually transact with other people... etc. Moving away from 'may I ask who is calling' and towards caller-ID. This is part of a constant trend of maximizing the value/bit of information transmission because while we are *relatively* not storage constrained, we are constrained by our own human IO and processing on the edge.

The winners will be people who have asymmetric privileged information about and around those transactions. Facebook, Google, Credit Card Companies, AWS, and anyone else who can compound their accuracy by owning the throttle points where people give up more and more of what the Betaworks guys call 'data exhaust'....

Because the value of all of this is based on asymmetry (if everyone can plug into your dataflow then your dataflow is worthless) all this will compound around centrally controlled services. Which means that there isn't much room to attack smart incumbents in the next 10 years without some sort of massive discontinuity in the economics of technology.

Leading to the good news and the bad news. The good news is that central power is great for creating new and useful information and services -- The bad news is that this value will be centrally controlled with potentially hugely negative implications for privacy (which matters by my thinking only in so far as there is a feedback loop where the nature of the channel effects the nature/value of the message itself -- living in public alters how people live and think), and certainly for equality. We need to start to watch out for new incarnations of authoritarian regimes - which will not in any way resemble our parent's conception of authority.

F. Ultimately: the world will still be fascinating, I will still love working with wonderful people to make things, ideas will abound, the real value will be execution

--

1. easy stuff: I will get older, I will more than likely follow a normal life trajectory - I will physically maintain myself because I am highly committed to doing so. I will do things I love, and be surrounded by people I care deeply about.


age: 16 | 26 | 36
formal education: high-school | college AB | college AB
living: New Jersey | New York | Northern Hemisphere
living with: Mother, Father, Brother, Sister | Solo | Married
approximate flights/year: 8 | 50 | 50
skiing days/year: 15 | 15 | 20
-- heli skiing days/year: 0 | 4 | 4
biking miles/year: 0 | 600 | 1000
boxing ability: 0 | 0 | recreational
kite-sporting days/year: 0 | 10 | 10
running miles/week: 25 | 20 | 25
maxed out mile/min time: 4:50 | 5:50 | 5:50
resting heart-rate: ? | 66 | 66
human priority: self, family | self, family, friends | self, family, friends
favorite foods: cheerios, cottage cheese, and tortellini | unchanged | unchanged
major illnesses or injuries requiring hospitalization: 0 | 0 | 0

2. technology interfaces amp physical lines:
the trend will be towards interfaces generally becoming commoditized and getting really cheap and open (how original, I know). I don't think we will care very much about our specific boxes that host our connectivity in 10 years, just as now we don't care about a lot of the components that were once central. Apple is the only company that has a even shot of maintaining a premium position in the human interface market.

laptop: Sony Vio | MacBook Pro | Mac XX or vanilla -- laptop is still primary interface
point/shoot digital camera: cannon powershot 10 | cannon powershot 200 -- integrated with phone/irrelevant
cell phone: startac analog | iphone amp blackberry | open handset/disposable -- maker is irrelevant
default screen: 20 inch sony 'flat' CRT | 32 inch dell flatscreen | 44+ inch LCD -- maker is irrelevant
Primary input device: static keyboard | static keyboard | static keyboard, but up to 25% of input via touchscreen.
mobile music: creative nomad | iphone | integrated with phone/not a device -- maker is irrelevant
home projector cost: $15K | $800 -- maker is irrelevant | $150
primary hard drive size: 5GB Seagate | 250 GB -- maker is irrelevant | 5 TB
Primary OSes: windows XP | OSX amp windows XP | Chrome/Browser as OS amp OSX
cell provider: verizon | ATT amp verizon | open/all of the above -- crossed fingers for openness
home connectivity speed: dual tied isdn | cable amp wimax | last mile fiber
TV provider: Direct TV | None | None
Wired Phone: Yes | VOIP | already not worth talking about
Truly Functional Battery Life on laptop: 2 hours | 5 hours | 12 hours

3. messaging/how we speak to each-other: Email will technically still be dominant, but it will have evolved so far (all be it on a relatively kluged core system) that the fact that it is technically email amp called email will not really be relevant to the end user experience - gmail squared is NOT wave. voice phone use will be down on a per user/per month basis... IM and SMS will be massively up, but will be so deeply integrated that we won't think of them as separate services, rather than just irrelevant communication routing options.

Primary digital communication channel: email | email | email
'email' provider: hotmail | gmail | gmail amp facebook
email client: outlook | web based | web-based, but we won't talk about it that way
IM: AIM | AIM, FB, Gchat all abstracted via addium | web based basically ubiquitous fully integrated amp abstracted service
SMS/week: 20 | 50 | 0 not differentiated as an interface/price/etc., fully integrated
Phone min/month: 200 | 400 | 200
Full video teleconferencing/min/month: 0 | 100 | 500+

4. central 'web' services: google will still lead search, but search for static answers will be a relative commodity, and adwords will not be as high margin a business as it currently is (though likely it will be far larger in terms of absolute revenue and dollar profitability). Facebook will dominate identity by dominating the socially validated 'graph' and feed will provide leveraged scarce information - the social 'graph' will not be open, but other communications forms and transactions will provide different topologies of people, places, and things. Overall there will be massive consolidation of time spent on the internet, and most services will go hyper vertical or completely commodity.

search: alta-vista/baby goog | goog | goog, but relatively commoditized
identity: nothing/fractured | facebook | facebook, and hugely dominant
payment: baby paypal | paypal | venmo
marketplace of choice: ebay | ebay | ubiquitous commerce/vanilla % of my personal data in the cloud vs. on the edge: ~2% / 98% | ~30% / 70% | ~70% / 30%

5. content services: content is everywhere and always accessible.... people stop caring about owning it locally entirely and everything is subscription and/or pay as you go. The conduits of content are devalued. The best content creators do relatively well - though the average content producer does much much worse.

TV: tuner card in my desktop | hulu/apple | google
movies: dvds | apple amp amazon | apple, amazon
music: napster | lala/thesixtyone | ubiquitous distribution and consumption
books: NA | Amazon | ubiquitous distribution and consumption
winners in the 'news' game: yahoo news | google consolidating free sources | WSJ/Bloomberg/Reuters, the core guys win
balance of power in media: distribution | distribution | creative talent


6. Personal content: I think that I will passively capture far more about myself in the next decade than I did in the last two, but will actually explicitly capture less as the process of recording/memorializing/storing becomes natural exhaust of the event itself:

photos I take/year: 100 | 2,000 | 500
videos I take/year: 5 | 100 | 200
average length/video: 30:00 | 2:00 | 5:00
long form blogposts/year: 0 | ~50 | ~50
short static explicit message updates/year: 0 | ~300 | ~600

7. public market amp law: Amazon and Facebook will be targeted from anti-trust perspective. we will be meaningfully concerned about oil and water. Most other political macro issues/trends will sadly remain unchanged.

facing anti-trust issues: MSFT (OS) | GOOG (Search) | AMAZON (Cloud) amp FBOOK (Graph)
US 'real' income: flat | flat | flat
resource: OIL | OIL | OIL and Water
reported US unemployment in Jan: 4% | ~10% | 14% (actual rate much higher)
Issue people are fixated on: Economy | Economy amp Terrorism | unchanged
Issue people should be fixated on: Education | unchanged | unchanged
health care: Unchanged | Unchanged | Unchanged
primary innovation driver: US | US | US
dominant currency: US | US | US, but on last legs
dominant economy in terms of GDP: US | US | US (but with China at 75%+ of US and clear path to dominance)


8. startups: traditional advertising is starting to decrease because it has fully shifted online and it turns out it doesn't really work at scale very well anymore. Good content does well and is paid for. Algorithmic search is about finding personal rich media from a sea of content, social technology has basically lost the word 'friend' to oblivion but the concepts still apply. Location is not it's own interface business - thought from a fundamental perspective it is interesting, in 10 years it will finally be ubiquitous (after 20 years of promise) but as a parameter of social. The internet will still be very interesting, and a small handful of longterm meaningful internet companies will be born -- but the rate of turnover of power will change significantly. Web applications will be mom-and-pop businesses built on scalable clouds and highly abstracted languages. Biotech/Nano/Robotics/Health will actually be meaningful in the real world, rather than just promise (yes, I am willing to say that after people have been wrong it in decade predictions for the last 50 years)

Content Monetization Buzz: CPC/Eyeballs | CPA/analytics | Real-time Generated Personal Offers
Content Monetization Reality: Doesn't Work (isn't ROI positive at scale) | Doesn't Work (isn't ROI positive at scale) | People Pay For Valuable Scarce Content
Search Technology Trend: spyders | realtime based on tags | real-time deep algorithmic contextual search within non-scale media
Social Technology Trend: finding your actual friends | qualifying/defining the edges of 'friendship' | 'friendship' is passe as a term, but central in reality... we move away from explicitly declared to implicit understood networks.
LBS - location based: visible world | everyone and their mother playing | ubiquitous as a parameter of social (facebook), no meaning in a vacuum/no new services.
'languages' which conceptually exciting to me: PHP | Ruby/Sinatra | I have a guess...
'Cloud' dominated by: N/A | AWS | AWS
Personal Quantification Trend: hard drive space | short explicit messaging | passive data, especially health related.
Robotics: not real | almost real | very early but in commercial market
Nano: not real | almost real | very early but in commercial market
Bio: not real | almost real | very early but in commercial market
Health: not real | not real | some basic stem cell therapy for very rich
Energy: not real | early investment | starting to be meaningfully deployed, but still under 10% of power.


Gutter Balls:

major well understood but unaddressed issue: environment | environment | environment
major social issue: hard to disaggrete | privacy | privacy
sleeping giant issue: | | authoritarian implications of central web services
dark personal information: we are going to have a lot of it, how to search it
health-stats: those are going to go in the exhaust category

Completely loaded statistics that have a lot of unaccounted for nuance under them but that I still want to wager on (this is before you take out lots of drivers like unemployment, etc.:

US hours spent watching TV per week: 2X
US hours spent playing video games per week: 3X
US hours spent 'online' per week: 2X
Price of oil in 2010 dollars: 1.5X
US penetration of hybrids + electric cars: 3X
more...

Sun, 27 Dec 2009 20:04:39 GMT

Is it time for a Social Graph CDN/ Facebook CDN (+ Wirehog thoughts)

a long long time ago there was a great service that briefly co-existed with facebook called Wirehog. One way to put it, it was the first 'connect' app.... it meshed your local files with your social graph. It was cool, and maybe just a bit ahead of its time.

Anyway, out of some thoughts about old wirehog, and a really interesting conversation at the drop.io hackathon (which has been a blast)...,

what about building a facebook connect based CDN/content accelerator?
The general idea is that if you are watching video/interacting with content, and then sharing it on your facebook feed, you are basically pointing a bunch of socially (and quite likely physically) close people to the content, and I bet FB could tell you a lot about who is likely to click on it and how much.

If you listen to a song and the post it/like it/etc -- you are basically kicking off a chain where that content will be hit more often by a defined group of friends/and friends of friends.

So, while right now facebook redirects you through to the content/given endpoint that you have indicated... what if you wrote an app that started caching the actual content locally while you are at it. Rather than redirecting back to the original source/origin, why not just keep the bits/some of the bits local and reserve them yourself to your friends.

do the physical distribution while you are doing the social distribution.

I have been taught to be skeptical of peer-to-peer in most instances... you need hyper dense content for it to normally work... but it is interesting to think of meshing a content network with a social network... especially as social networks tend to drive more and more of the hits against content networks... why not spread the content itself along the same social lines that hits to the content spread.

Double Blind Distro: why tumblr is way racier than fb and twitter. When the medium changes the message

for a long time I didn't really get tumblr, now I do... The reason it is really really good, and the reason it matters, is double blind distribution means that I can consume pure content without social overhead.

To explain. -- Let's *pretend* I want content from Jenna Jameson.

Facebook bidirectional friend relationships help grow their system, but also clearly structure and force me to curate my content and connections. Friending someone has a positive value and a definite socially enforced cost structure. I don't want to be friends with jenna because I don't necessarily want her to have access to me and my information. If she did, it would negatively impact my ability to share high value information in the network.

Twitter's unilateral follow is lower touch in several ways, but there is still enforcement. If jenna follows me, it isn't a big deal... Because twitter is open, I fundamentally can't share anything on it that I wouldn't want on the front page of the wall street journal anyway... and she doesn't get much with her follow.

But if I follow jenna, that is a horse of a different color. I am giving information that I want her content/am consuming her content to others (like my mom) OR I need to play where is waldo and follow tons of people (diluting my stream value)

Tumblr is perfect for following jenna.. It is content without implicit social capital flow, only explicit gestures like reblog...
So, with tumblr I don't have to display who I am following, and she doesn't know I am following her!, and I still get the content in a nice streamed format.

I can use tumblr for pure content minus the social strings BECAUSE it is double blind. Making tumblr far racier... (and far more honest perhaps?)

The cool part is that this construct seems to play out - tumblr is about content, no strings attached - and so it is far racier (and has far more book deals)...

And, what is even cooler is that just because the tumblr blind graph isn't shown to users directly doesn't mean it doesn't exist or is worthless... It is actually super valuable data.
Growth implications: The only issue is that double blind doesn't grow on the same dynamics, twitter and fb skim existing social capital to grow, tumblr doesn't - but with scores and reblogging, tumblr tries to short circuit these issues...

UPDATE: a few people have pointed out that you can get a list of followers on tumblr (i hadn't known that!) most of the above still works/applies because that list is private... but I guess Jenna will know I am in to her after all (even if my mom doesn't know it)

spell check is nice - but I want emotion check

Before I send an email, I want a button next to spell check that says emotion check, when I click it google grabs the words and phrases (+ some historical sets) and computes:

1. The negative/positive tone of the email relative to other emails I send (0-1 scale)

2. The relative negative/positive tone of the email to all emails sent by all people (0-1 scale)

3. The negative/positive tone of the email relative to emails I send to that person (or that person receives)

4. Most impt: the expected response rate and time to respond.

5. The expected negative/positive tone of the response.
I bet you could pull this stuff out using: words and phrases in the email, the recipient, gender?, ethnicity?, historical emails sent and responses, etc.

Cap it with a suggest function (a la spell check), that tells you to add a smiley face here or there, or switch words/phrases.

Eventually, get to a health meter next to all of my contacts showing the imputed positive/negative stance of our relationship based on message flow, I like it. Time for Gmail Labs to get crackin'.

URL shorteners, 'this link will self destruct in....'

I just read the WSJ article (http://wless.in/shortener ) about the risks associated with bit.ly / tinyURL etc and maintaining link integrity. The ideas, as has been commonly addressed in the tech industry for a while, but is crossing over into mainstream consciousness, is that if a redirection service, like URL shortener, disappeared, billions of links would go dead. People who want to preserve those links feel that this is 'risky'

I totally agree that this is a big risk if you want to preserve your links... but it actually got me thinking that there is probably a value in a service that actively removes those links after a window of time or non-use. For instance, the WSJ article speaks about a risk around legal discovery -- if you send a link to someone, and then the link dies, how will people know where you were sending them? Thinking that a bad thing seems to be only half of the equation.

So, just like 'going off the record' in Gmail chat -- perhaps it is time for someone to create a self destructing redirection/URL shortening service -- so that when you email your buddy a link and he stores it in Gmail -- the link itself will only works once, or for a day, etc. Not sure how big the market is, but I suspect it would provide value to someone.