Tuesday, April 24, 2007

Coolhunt #6: Monday, April 23, 2007

Coolhunt Log #6
Monday, April 23, 2007

On Stage:
Scott Cooper, MIT researcher with the Sloan School of Management, co-author of
Coolhunting
Peter Gloor, MIT researcher with the Sloan School of Management, co-author of
Coolhunting
Steve O'Keefe, moderator

Leading the Coolhunt today is Scott Cooper.

SCOTT: Let's start with a website that I go to everyday: O'Reilly Radar at Radar.Oreilly.com.

WEB:
http://radar.oreilly.com/archives/2007/03/freebase_will_p_1.html

SCOTT: I thought it would be interesting to discuss the software program Freebase. The concept behind it is quite amazing, and what it means for bridging ideas for the future of the web. Because it's an alpha product, however, we can't actually look at it at this point.

PETER: On our 3/11/07 Swarm Creativity blog post, we discussed Freebase and Danny Hillis. Hillis created Thinking Machines, which involved a massively parallel computer called the Connection Machine.

SCOTT: He's the brain behind Freebase, a software program that is a product of MetaWeb.

PETER: Hillis wants to centralize information into one database. I don't think it will work. Things can have different meanings depending on how you look at them.

MODERATOR: The idea of centralization vs. decentralization is a topic covered in Coolhunting.

PETER: Decentralization is important to swarm creativity. The creative process happens because we bring in so many different viewpoints.

SCOTT: I agree with Peter. I thought it would be interesting to discuss how Freebase's process for pulling in information may actually have value for what Peter and I advocate. Amalgamizing and getting something of use from collective intelligence has great benefits. The question is, "How do you do it?" The technology itself behind Hillis' method is quite compelling, but it seems at the end what you get is a rather centralized view of what any given thing means.

PETER: I think it's great to look back at Hillis' first successful company, Thinking Machine. He had a massively parallel computer located in Massachusetts that was supposed to solve the problems of the world. It used centralized computing. All the attempts at solving really hard problems, such as searching for extra-terrestrial life, are done using peer-to-peer computing. It's done much better that way than with the centralized computer.

SCOTT: I'll see if we can get access to show Freebase on the Coolhunt. Until then, let's start today's hunt at Mashable.

WEB:
http://www.mashable.com/

SCOTT: This is one of my favorite blogs. It's different than a lot of other social networking blogs. Everything about the really big sites is tracked and discussed here. One of the nice things this site does is it tracks social networking sites -- such as MySpace -- and what people are doing as they create them, broadly defined. Mashable often publicizes new sites and talks about them. The other thing I really like about Mashable is the Headlines in the box at the top of the page. There's hardly ever a 2-day period that can go by without something compelling happening. For instance, the article entitled "MySpace is Better Than Porn":

WEB:
http://mashable.com/2007/04/20/myspace-porn/

SCOTT: This is a posting from last Friday. It's one of the most significant pieces of web-related news to come out in several years. It's based on an article from The Economist finding that social networking sites are about to overtake sex sites in volume of browser traffic in the U.S. any day now.

PETER: I think, Scott, you are overly optimistic. [laughs]

SCOTT: In our book, Coolhunting, we have a foreword by a very well known blogger by the name of Danah Boyd. She traces some of the initial history of MySpace and Facebook, and she makes the point that when they were first launched, they became a place for people to make "hookups." And I think that's obviously still very much the case. If people are going to MySpace or Facebook to find someone to have a sexual liaison with instead of going to something like "hotbabesinyourneighborhood.com," doesn't it represent the swarm taking over a huge part of the web from people in the San Fernando Valley companies, where the porn merchants congregate?

PETER: I just think this shows that the overall population of web users is still growing. In the past, the people desperate for sex were using hotbabesinyourneighborhood.com to satisfy that desire and now it's a much broader part of the population that is using the web. In the past, people would go to the trendy bars in the neighborhood and now they go to social networking sites to hook up.

I think it's a more natural use of our strongest desires: being social animals, being with other people. We have homophilic tendencies, which means we look for people who share similar interests and we form communities based on that. The web is being put to use by helping us become more connected, and it's becoming more mainstream.

MODERATOR: Do you know anything about Pete Cashmore, who wrote this article and put this site together?

SCOTT: He is one of the main people behind Mashable. I think he's one of the most famous bloggers on social networking issues. His writing is usually extremely thoughtful and knowledgeable. Let's go back to the home page of Mashable and take a look at the article on the failure of many web startups, which is also a Pete Cashmore post:

WEB:
http://mashable.com/2007/04/21/web-startups-and-the-lying-liars-that-lie-about-them/

SCOTT: I thought we should talk a little bit about why this happens. I think it relates to a part in Coolhunting wherein we talk about some web startups and their tremendous demise. This will give us an opportunity to talk about some of the principles of coolhunting and also of swarm creativity that have an effect on whether you're going to succeed or not.

PETER: I think we should look at it from the perspective of the crowd. None of these imitation social networking start-ups is really about a leader; they're all followers. They're not setting up a new direction -- it's all about copying others.

MODERATOR: Imitation versus innovation.

PETER: Exactly. It does not bode very well for those startups. My advice for anyone who is doing coolhunting for really cool stuff, this might be a very good test. If it falls into these 10 categories that Cashmore writes about, chances are it won't succeed.

MODERATOR: The inventor of an item is often not the one to popularize it. Some of these "wannabes" are often the refined version that works. For instance, Friendster versus MySpace, which is covered in your book Coolhunting.

SCOTT: Yes, Danah Boyd covers that in her foreword. She discusses how one site, MySpace, gives users the power to do what they want and to solve problems and create the site in the image they want. And the other, Friendster, tries to control them more. It's a very important point. Often, any one of these sites could perhaps be tremendously successful -- even if all 10 of Cashmore's statements apply, if there are users who stumble upon it and see some value and take hold of it and move it somewhere other than where the original person had even conceived.

SCOTT: Now, let's continue the Coolhunt at Yub.

WEB:
http://www.yub.com/

SCOTT: My 18-year-old daughter uses this site. She told me it was cool because it's like a virtual mall. She didn't mean in the sense of virtual shopping, but a social network like the one suburban teens create in malls. This is reflected right at the very top where it says, "Meet. Hang. Shop." The objective is to get you to buy stuff, but the way it's done is to try to replicate some of the power of connectivity among people with similar demographics. In this respect, the developers have sought to find a way around the isolation of individuals that happens when they make online purchases. Next, I'd like us to look at the concept of swarm finance. There is a website where you can borrow money from people you don't know. It's called Prosper.

WEB: http://www.prosper.com/


SCOTT: This is an amazing idea that seems to be working.

PETER: We don't know yet if it works because it's very new. It's community-based lending. You have to be totally transparent about your financial circumstances. In return, people will lend you money at a better rate than if you would just use a credit card.

SCOTT: It's not about the rates, though; it's about the collateral. There is no collateral offered in exchange for loans on Prosper. People who are getting money from Prosper are people who might not be able to get it from traditional outlets because of lack of collateral.

PETER: People can invest in business ideas, even if they only have $10 or $100. If the idea succeeds, you will get back the original $10 plus the interest.

SCOTT: Let's look at a sample listing, the one with the headline, "Daugter needs to take summer college classes Max State Int."

WEB:
http://prosper.com/lend/listing.aspx?listingID=124674

They misspelled "daughter." Here, the loan seeker states the purpose of the loan, an explanation of why she needs the financial help, and a monthly budget to show how she will repay it.

MODERATOR: This is an amazing page we are looking at here. It contains a vast amount of information about this person, her finances, and her project.

SCOTT: On the home page, there are links to news stories about Prosper. There have been some investigative studies of it, too. The basic story is that there's no collateral for these loans, and there's a very, very low default rate.

PETER: But it's just been around for a year, so there really hasn't been time to default on it.

SCOTT: Well, thus far, the concept appears to be working. I just want to use this as an example. I'm not necessarily giving it an endorsement.

MODERATOR: This is quite a bit more elaborate than some simple social networking pages that just have contact info. This is a very detailed financial profile.

SCOTT: But it is still social networking. Click on the "Groups" tab from the home page.

WEB:
http://www.prosper.com/groups/

SCOTT: This shows borrower and lender groups. You can create your own group or join an existing group. People with similar interests come together. For example, there is a group called "Apple User Group" with 378 members for people who want to finance the purchase of a new Mac computer. Each member can get a 5 percent discount. The group has negotiated a discount from Apple. This is social networking at a higher level than just making an over-the-web connection and having 30,000 friends on MySpace.

This is also an example of microlending, which we will cover more in depth during a future Coolhunt.

MODERATOR: We are out of time. Thank you very much, Peter and Scott. Listeners, please post your comments to the blog -- whether they're about commentary on the subject of today's coolhunt or any connection problems you experienced.

MODERATOR: Join us tomorrow for the next installment of our live, online coolhunt with Peter Gloor and Scott Cooper.

Thank you.

Copyright Notice: Please feel free to duplicate or distribute this log as long as the contents are not altered and this notice is intact.

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