A few months ago, I posted this analytical piece arguing that itunes should charge less to earn more. Interestingly, this software designer has experienced in real life what I was theorizing about. He reduced the price of his software package from $40 down to $10. Guess what? He only made $4,000 at the $40 level, but he made $58,800 at the $10 level. Yup, he experienced 15-fold increase (1470%!) in sales volume at the lower price level!
Check out the entire post for more details and analysis. It’s pretty interesting, and I think useful advice for anyone who is in the digital goods business.
Ok, ok, I concede! I have gotten several emails and even comments to my blog post about Stewart vs. Cramer showing me the errors in my ways.
Let me see if I can count the ways that I was wrong. First, it was Stewart vs. CNBC (and business journalism in general) and not Stewart vs. Cramer. Second, Cramer and CNBC were losers. However, on a third point, I am or more may not be wrong. Perhaps Cramer and CNBC have a wake up call (like this viral petition to “Fix CNBC” going around) to make a change. But after being wrong on the first two points, I might be willing to entertain the idea that Cramer/CNBC/etc cannot turn save their ailing enterprises.
In a past post, I asked “Can you crowdsource Watergate?” Well, Yochai Benkler lays out the case in this provocative commentary that crowdsoucing can indeed speak truth to power. I agree with him on several points: newspapers are in rapid decline; non-profits, remaining newspapers and new players like bloggers can help fill the gap somewhat; that the NYT’s credibility was used by the Bush administration to bolster its Iraq war claims rather than used to speak truth to power by the Bush administration.
However, I think that Benkler is not entirely correct. These forces will surely mitigate the decline of newspapers, but something real will be lost. These new players, like the blogs, are increasingly fragmented. With the decline of newspapers, I think it will be harder to make related advocacy groups struggle with areas of conflict.
Here is a personal example of mine. We created a GOTV campaign in 2000 called “RegisterToVoteOrNot.com.” The NYT covered our campaign–on page A1. (As a side note, think about the relative prominence of an above-the-fold NYT article versus a story on the homepage of NYTimes.com.) The spin? “As Public Records Go Online, Some Say They’re Too Public.” Whereas we were advocating civic participation, they forced us to address privacy concerns. In a world where privacy advocates have their own blogs and newsletters and civic participation advocates have a different set of media, it would have been hard to come to the reasonable compromise that we ended up with.
And of course, there are many such conflicts including ones of much greater import than ours. I think that these tussles are of central importance to a functioning democracy, and they may be diminished as newspapers decline.
1. technology, 2. politics
I am trying to watch all the major Oscar nominees, and so of course, I had to watch this year’s most-nominated film, The Curious Case of Benjamin Button. The premise is weird: Benjamin is born an old man in 1918 and grows younger throughout the film. What might make a passable short story, however, is an interminable 2 hr 43 min movie. The plot is completely disjointed and the point, if there is one, is captured in Brad Pitt’s obvious, trite statement: “I was just thinking about how nothing lasts…and what a shame that is….”
Unlike Benjamin Button, you and I grow older if we waste our time watching pointless movies. So, skip this movie when there are so many other good ones currently out in theaters for your viewing pleasure.
3. et cetera
This article in the Onion was an instant classic from the minute it was printed 8 years ago. A rare article that is funny well beyond just a great title: “Bush: ‘Our Long National Nightmare Of Peace And Prosperity Is Finally Over’“.
Today, the NYT is reporting that Merrill Lynch’s problems are causing Bank of America to need more bailout money and there is talk about nationalizing the banks. Here’s an email that I sent out to some of the smartest Wall St guys I know on Sept 18, 2008, where my concerns were roundly dismissed. Here’s what I wrote then (emphasis added now):
When Nick and I were playing golf at Stanford yesterday, Nick said that something that puzzled me. He said that bank of america won’t go under with countrywide and merrill lynch because they have all these deposits. There was something to that effect in the NYT too, and John Mack is using it as a justification for merging with wachovia. But here’s the puzzle: deposits are a *liability* for a bank.
So, the answer to the puzzle is that banks have reserve requirements that protect banks (and hence the deposits). And many of the deposits are FDIC insured. I also was thinking about Glass-Steagall act. By covering risky bets with reserve capital, what’s really happening here is that investment bankers are undermining the purpose of reserve requirements.
In other words, as McCain and Obama decry the bailout of AIG, everyone is missing the fact that Thaine and Mack are planting the seeds of a potential crisis of even greater proportion. If/when the government has to bailout large commercial banks to cover deposits, we will be in deep, deep doo doo. And I wonder if anyone is watching as this happens.
Am I just being henny penny here?
So, I do not think that we’ve reached the bottom of the financial crisis yet.
Here is my three point plan to solve the current financial crisis:
- Offer tax cuts to people who buy houses in the next six month
- Offer tax cuts to financial companies that offer credit in the next six months
- Offer temporary immunity from recourse to people who default on their mortgages (or renegotiate it to reflect the current market value of their home)
I have written about my reasoning behind this plan and hope to spark a discussion about it on e-thepeople.org.
3. et cetera
I was asked by PARC to present again on the psychology of facebook. (Why do some applications go viral? You can read my speaking notes or watch this 1 min 52 sec screencast that is almost identical in content or grab the slides or handout.) But the main reason to reprise that post is to link to this pdf of my academic research paper, “Six patterns of Persuasion in Online Social Networks.” The paper makes that case that online persuasion follows simple patterns that can be explained with social psychology. Enjoy!
My friend Richard sent me this interesting link and email in response to my post yesterday:
[Intrade.com is] moving beyond prediction markets that try to determine who will win
the election, towards markets that predict the effect of someone
winning the election. In other words, markets that attempt to predict
the price of oil, interest rates, # troops in Iraq, etc. conditional
on the person or party that wins the election.
The design of these markets is theoretically interesting as are
questions as to whether you can get enough liquidity in these more
complex markets to get good results.
But beyond that, there is the potential, mentioned in the blog post,
of using these markets to help people decide how to vote. On one
hand, this seems ridiculous – and maybe even open to abuse or
manipulation. On the other, it’s eminently reasonable. I really want
to vote for the candidate that will be the best president and have the
best outcomes for the country. To the extent that I feel that the
markets are better predictors of these things than I am alone (or in
conjunction with the spouting of pundits or even deliberation),
shouldn’t I base my vote on them?
In my opinion, the most important questions facing voters are: what is the consequence of your voting decision? How will the world be different if one candidate wins rather than the other? Using prediction markets to understand these consequences seems entirely reasonable to me.
1. technology, 2. politics
Here’s a link to the slides from the other presenters from our facebook expo. Lots of interesting ideas and data, even if it’s a little decontextualized without speakers’ notes.
Here’s a nice outline of raw notes of the 2hrs of demos that we presented yesterday. It may or may not make sense to you if you aren’t involved in the space, or if you didn’t actually attend the event.
One other note: Facebook changed it’s status function by removing the previously mandatory ‘is’. I think that the students that created ‘Super Status’ can claim credit for finally swaying Facebook to make this change. I imagine that many facebook app developers and even facebook employees themselves will be applying the lessons that we learned in this class.
[Revised: I’ve been informed by my friend Dean that facebook had been rolling the changes to a subset of users as early as last week. In other words, the change cannot be attributed to our presentation on Thursday. It seems that the change was just a weird coincidence.]
I guess it’s hard to have an original idea anymore! Here’s a cartoon from June 23, 2007 that is remarkably similar to the idea I posted about earlier this week (“Can you be fooled by a dog on facebook?“)
And more follow up. Here’s a story about a political blogger who posts under the pseudonym, Jon Swift, was banned from facebook and then reinstated after a firestorm among famous bloggers. I guess it possible to create a fake facebook account, but it takes an effort on par with leading a double life.
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…
3. et cetera
In my facebook class, we are responsible for forming three person teams: a marketer, a technologist and a manager. I’d like to manage a team that creates something useful for e-thePeople and other membership organizations, so I put together this video to solicit interest. I am pleased with the results. Check it out yourself:
1. technology, 3. et cetera