What is the most common form of communication? A greeting! Think of how many times you ask someone “How are you?” even though you know that the only socially acceptable response is, “Good. How are you?” On facebook, the poke has become the virtual equivalent of a greeting. And like a greeting, it can take on many meanings in many different contexts (see the zen of poke for more.) For better or worse, poking–and now super poking–has revolutionized how millions of people greet each other. Watch this 3 min 1 sec video to find out my take on this revolution:
It’s an exciting time for technology+politics in general, and for me in particular. I am a volunteer manager of e-thePeople.org, and I am in charge of hiring a Campaign Leader for our Voter Guide Toolkit project. It’s an exciting project, and the job is quite well-compensated as non-profits go. We’re hitting stride for the project: we already have $175k in repeat customers ready to sign up and a major site redesign underway. Here’s a short (e.g., 50 sec) video and a brief excerpt from the entire job description
The Job: Leading a nonpartisan initiative to educate millions of voters for the 2008 election, working in collaboration with leading media and advocacy organizations.
The Right Candidate: You are entrepreneurial and not afraid to take a chance on an unconventional but high-impact idea. You are politically aware and engaged, and are as committed to improving the way the whole system works as you are to any one particular cause or point of view. You have approximately 2-5 years of sales, marketing, political campaign, political organizing, or project management experience. You are friendly and comfortable working with clients, but also capable of managing expectations and saying “no” when necessary; you are organized and good at handling the occasional crisis. You are interested in the way technology is changing business, society and the government.
If I have your email address, you should expect to get an email about this too. Please help distribute the job opportunity widely!
I am finally back in the US. After three back-to-back sleepless nights as a global data cruncher, I have the final results of the first-ever European-wide deliberative poll. I’ll have more to say about deliberative polls and this project, but for now, here is a short summary of what we did and what the results are.
What we did:
For the first time ever, a scientific microcosm of Europe was gathered to a single place, the European Parliament building in Brussels, to deliberate in 22 languages about key issues facing the future of the EU and its member states. The participants became dramatically more informed about key issues and changed their views. Participants from the 12 new member countries had different starting points in their opinions but generally changed their opinions more, growing closer in their views to those from the older member states. Over a long weekend, the participants deliberated about economic, social and foreign policy, reflecting on “Europe in the World.”
* Participants were more likely to support for sacrifices for pensions after deliberation than before
* They were less likely to support for enlargement, mostly coming from new member states learning the reasons against enlargement old member states
* In general, participants from new member states changed more and changed towards old member states
* Very significant knowledge gains
* Participants were more educated than non-participants and in general had small but statistically significant difference in attitude and other measures
Here’s a great press release that has a lot of juicy details:
On that site, you can also find video and other details.
There has also been a fair amount of press too. Here are two examples:
I claim that iTunes could earn 40% more revenue than it currently does just by slashing its price from $1.00 to $.50 . Why? Let me explain.
Digital music is a virtual good. As v1.0 approximation, I assume:
- Marginal costs are essentially zero (e.g., hosting, processsing and bandwidth)
- Customers have limits on the quantities that they’d consume even if the good were costless
- Prices are somewhat inelastic because customers are price sensitive
- Each customer’s demand curve can be modeled with the classic Cobb-Douglas demand curve
The cost side of the equation is simple: zero marginal cost. These things are just digits, so hosting, processing and bandwidth costs are negligible. Sure, apple has to pay licensing fees for the music. But for the sake of argument, let say that these fees are revenue sharing agreements so apple’s profits are still proportional to total revenue.
The action is on the revenue-side. We can take a classic demand function, d=u^1(1/a)xp^(1-1/a), where d is demand, u is utility, p is price and a is a measure of price elasticity. The suppliers problem is to maximize profit, d*p.
It turns out for products with relatively elastic price sensitivity, you want to set p as low as possible. So, the itunes store should pick a low price for music because the lost revenue per track is more than made up by demand for more tracks. (Teenagers are extremely price sensitive!)
Conversely, for products with relatively inelastic prices, you want to set p as high as possible. I am not aware of any virtual products with this characteristic, but the math works out that you more than make up for the lost demand in the price increase. Perhaps some unique goods in Second Life fit this category, although there is a cost at least for players in terms of time to create some of the valuable objects.
How low should itunes set its price? In the ideal case, the price tends towards zero. But in practice, consumers have limits. How many songs would you download per week if itunes were free? 7? 14? 100? It wouldn’t really go towards infinity!
You must have a good estimate of the price elasticity, the utility and the maximum quantity demanded to solve the pricing problem. In particular, you pick the maximum price such that the consumer still demands his maximum amount.
For example, let us assume that digital music has an inelasticity coefficient a=0.4 and that a teenager would download a maximum of 20 tracks a week and has a u=2.2 (which implies that she currently downloads 7 tracks a week at $1 each on itunes). Note: all of these numbers are just my best guesses. The ideal price would then be $0.51, which would generate $10.10 in profits per week per customer rather than $7. That’s a 44% increase, and the kids would get nearly triple the tracks per week!
Of course, itunes has other considerations. They do have to share the profits per track, and I think that ituntes may have negotiated a flat rate rather than a percent of revenue. (A flat fee deal structure leads to deadweight loss, where the labels, Apple and consumers all lose.) In addition, they claim to have other considerations like “simplicity” in pricing and the labels are certainly wary of undermining their CD sales.
Finally, there are other constraints that I haven’t considered in this simple analysis. Teenagers have budgets, so perhaps $7 a week is the maximum that they can spend. (I doubt this.) Also, I totally guessed at 0.4 for the price elasticity. But actual itunes data bounds the possibilities. We know that itunes actually makes $7 in revenue, so values greater than .45 are implausible. We also know that consumers only buy 7 songs a week at $1, so values under .3 are also implausible.
This range, 0.3 to 0.45, is great to know if you are launching your own virtual good. Without additional data, you should use something in that range as your initial value. Similarly, you can also use u=2.2 as a starting point for knowing your utility. How attractive does your virtual good seem in comparison to digital music? Ratchet that number up or down a little. And as data comes in, you can tweak the parameters and figure out the best price.
This is a simple but useful model. Some possibly important complications: How much should you raise prices to signal higher quality? What if you have a means of discriminating per customer, e.g., should you charge different prices for heavy and light users? What you can discriminate by product, e.g., should you charge different prices for popular and unpopular products? I will examine some of these more advanced questions in the future because I suspect that iTunes (and other providers of virtual goods) could have an even greater increase in its profits by intelligently using dynamic pricing.
Someone in South Africa found my video on youtube about facebook that I previously posted here. Here’s his question to compare Ning vs facebook and then my response. Isn’t it cool how sharing works on the net?
I saw your video on youtube: http://www.youtube.com/watch?v=HzAG9wGF2QA
I want to find out, you listed a whole bunch of other alternatives that you tried out, and in the end I assumed that you settled on a Facebook group, but you don’t mention it. Were you planning on building a Facebook app or what happened there? Also, what were the reasons that you didn’t end up using Ning?
I’m very interested in the Facebook/socialnetworking space at the moment (product manager for a youth social network), but I’m interested in how Facebook fails to deliver on giving brands and other communities more functionality than a basic group.
And then here is my response:
Thanks for watching my video.
I produced that video to recruit a team at Stanford University, but I wasn’t able to attract any developers to work on the project. So, sadly, it’s not an active project at the moment.
Depending on your priorities and concerns, both Ning and facebook are possibilities in my opinion. If you have the resources, Ning seems to be highly customizable. If you use Ning, you also have to invest a lot of effort in gaining members and convincing them to use your social networking tools. Ning offers a neat technical solution, but as you probably know, there’s a lot more than technology to create a successful community/social network.
Facebook has the promise of attracting new members as well as tapping into the existing profiles of your members. The main problem with groups on facebook is that they don’t give you, the organizer, many tools to work with. As I’ve written about before, facebook is very open to letting you put more information *in*, but it doesn’t let you get information *out*.
And here is another blog post on the topic if you are interested in more…
Wow, people can really post mean/vile/nonsensical things on e-thepeople. The good news is that the collaborative rating system ensures that this stuff is mostly buried, and that everyone who reads it at least knows that there is no need to respond to this junk. But after 6+ years, it is kinda funny that a member called d_jinx took the effort to review the worst of the worst. A few of my favorites:
1. The KKK will rule again by aek755, Popularity -17
So this member posted an invite to join the Klan, giving out his & his Klan buddies’ email addresses. I know some smart people & some Klan people, but I don’t know any smart Klan people.
3. Everybody “D” This Article! by kent wicker, Popularity -15
Using the direct method, Kent Wicker just asks for D’s & lands third place. Sorry Kent, I didn’t D this. I wasn’t a member then & D’ing now’d be cheating. :)
7. Several Types of Firewall Techniques by firewall_download, Popularity -12
Geek spam with no formatting nets the D’s & the subject is up there with watching paint dry in the thrill department. A surefire “make it go away” vote getter!
10. HELP!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!! by debby, Popularity -10
Short but LOUD, this is aggro rant at its best. Paranoia like this is a rare & awesome thing. In the presence of the master, I feel the urge to clean my Glock.
I was talking to Nathaniel yesterday about an idea for a facebook application. (Facebook is a social network that has opened the doors to third-party applications. Read my past posts on facebook here.) Facebook applications are frequently viral because they are easily passed from friend to friend. But many viral applications burn fast and bright. Is it possible to have sustainable viral marketing?
Most viral content that we think of likely fits into the “fast and bright” category. Consider Jibjab’s awesome video in 2004 called This Land. It reached perhaps ten million people via email in under 48 hours. But what happens next? After becoming “infected” with the humor, you develop an immunity to it. You move on to something else.
In epidemiology, jibjab is a little bit like the common cold. It spreads easily from person to person, has a short term impact, and then you become immune to that particular strain of the virus.
In general, viruses can be characterized by the virility, gestation period and the mortality rate. Ebola is highly viral and deadly but has a limited gestation period, so at least it can be contained effectively with quarantines. AIDS is viral but has a long gestation period, so it much harder to quarantine.
With the release of facebook apps, there have been quite a few of the jibjab or ebola-type viral applications. For example, millions of people have signed up for “zombies” that allows you to bite your friends and turn them into zombies. Extremely viral, but also very annoying very quickly.
In contast, facebook is viral but of a more sustainable nature. The adoption rate is something like 3% increase per month. That’s very fast, especially when you consider that 45 million people use it daily! But it has been steadily increasing for three years, and not an overnight flash-in-the-pan.
I think there is an important lesson: there is a tension between ultra-fast and sustainable growth. I think that the Internet, first, and facebook, second, increases the possibility of faster yet sustainable growth, but it hasn’t eliminated the tradeoff completely. In future posts, I hope to explore what makes stuff grow fast or grow sustainably, or both.
My 3 year old daughter was watching the Berenstein Bears today and I remarked at the crazy verse of its theme song:
They’re kind furry around the torso
They’re a lot like people, only more so!
More like people than real people themselves?! Holy cow. But the show that my 18 mo old son watches is even worse: Barney. how do these shows get their tentacles around our kids?
“Pseudo-gemeinschaft” is loosely translated as false community. “Pseudo-gemeinschaft” is a powerful technique for persuasion , because a sense of community is a basic human need. Professor Nass at Stanford drove the concept home by deconstructing the nightmare that is Barney. Consider how manipulative Barney’s theme is:
|I love you||“I” — a guy in a purple dinosaur suit on the TV!|
|you love me||You, whatever you are, tell me to love you! Oh, the audacity|
|We’re a happy family||family! that’s pseudo-gemeinshcaft for ya|
|With a great big hug|
|And a kiss from me to you||Pretty intimate, don’t you think?|
|Won’t you say you love me too?
|I love you|
|You love me|
|We’re best friends||Best friends?|
|Like friends should be||*should* be?|
|With a great big hug|
|And a kiss from me to you|
|Won’t you say you love me too?||I submit….I love you Barney!|
And don’t forget that we ask the kids to sing along (see any of these 300+ videos on youtube made by proud parents). Creepy, isn’t it?
I hate music labels, and their abuse of the courts gives law a bad name in my opinion. Yesterday, Jennifer Pariser, the head of litigation for Sony BMG, testified in a file-sharing case. On the stand, she was asked whether it was wrong for consumers to rip their CDs onto their iPods. Her answer:
“When an individual makes a copy of a song for himself, I suppose we can say he stole a song.” Making “a copy” of a purchased song is just “a nice way of saying ‘steals just one copy’,” she said.
I am not a lawyer, but I certainly hope the courts take a broader view of fair use than this music executive. Would the public good be served by such extreme protection that allowed the labels to dictate where, when and how we consume digital entertainment? I think entertainers need no further incentives, and such restrictions would only serve to harm the benefits of freedom that fair use provides.
It doesn’t surprise me that the labels are attacking CD ripping. Why? Because purchasing CDs and then ripping the songs to mp3s is the best and fairest way to consume digital music. I think it is better in most cases than purchasing online if you value fair uses like backing up your music without permission, etc.