Chapter 4: Turning Community into Commerce

The author pontificates a bit on the nature of communities. His take is that people gathered into groups for the sake of survival - that it is easier to hunt as a group, and a group can defend itself better than a lone individual. But within tribal groups, there are few functions and no specialization: all the men of a tribe were hunters. As society evolved, specialization occurred to the point that there were people who did different things - in a village, most farmed but some tended to specialized tasks such as carpenter, blacksmith, doctor, and the like. And in present-day society, specialization has gone so far that most people do a portion of a task: a factory worker attaches one part to a product, an accountant gathers and calculates data about the work others perform, a clerk puts items on shelves.

Most of the duties that employees in the modern world perform do not create anything consumable. One cannot create value doing the work of a bank teller outside of a bank. And so it now requires large organizations of people, each of whom performs a very minute task, to produce something of value to a customer. And in many instances, this is still the case. A single person or a small household can grow and sell vegetables, but it is beyond their means to manufacture and sell jet airplanes.

This tends to limit the opportunities for independent producers, as well as for crowdsourcing, to products that are largely intangible. A person can create a song, write a novel on a personal computer, or develop a smart phone application in their own home. A group of people in different locations can contribute to an open-source software application. These are very easy things for individuals and the crowd to do.

He then marvels at the size of "the crowd," suggesting that across the globe there are more than a billion people who are online. (EN: The current estimate is about 3.1 billion, but the definition of "online" is hazy as it may include people who connect with a mobile device or game console, as well as people who have intermittent or infrequent access or who are members of households in which one person has an internet-connected device. There can be no accurate estimate of the whole internet population - but it is rather large.)

He also concedes that "the crowd" is not one thing. It includes many individuals who have online access, but who are not often in touch with one another. There are groups and online communities (a person may participate in several) but there is no common identity or culture across all users. People whose signals pass one another through fiber optic cables are not connected in the same way as people who pass one another on the street. And even people who pass one another on the street and live in the same apartment building are not members of the same community.

On that note, social institutions are failing and people are becoming increasingly isolated. Membership in fraternal organizations is plummeting and participation in community activities is likewise disintegrating. People are largely detached from their physical communities and have little contact with their neighbors. The online medium is not a substitute for this loss of connection. While there are "virtual communities" there is little connection among the members: they exchange messages online but wouldn't recognize one another if they passed on the street.

It's also mentioned that consumers far outnumber producers. That is, the vast majority of internet users contribute no content and merely consume content created by others. Even in virtual communities, many more people "lurk" than participate in conversations, and many "participants" in conversations are simply snipers who make an occasional remark but are not fully engaged in conversation.

And for the producers, it's merely a labor of live. Few people make a living online. Many commercial blogs offer no payment for contributors, and online communities seek volunteer moderators. This isn't a matter of greed, but a matter of resources: most commercial blogs don't make enough money from advertising revenues to pay contributors. Very few sites have been successful at attracting paying customers - as there's too much information available for free online.

There's a story about Gannett newspapers, who sought to enlist readers in providing content for their online edition. They found that the public was generally good about posting announcements ("church picnics and school closings"), but they also found that readers contributed valuable and researched content. For example, when the paper reported that a city was charging residents thousands of dollars to connect to the sewer system, a reader contacted the city works office and posted additional information to the comments of that article. Normally, the paper would have had to assign a reporter and published the detail days or weeks later, if at all. So in this instance the crowd contributed real value to the site.

There's another loose bit about the value of the community. Consider that Google paid $1.65 billion to acquire YouTube. It would have cost the firm much less money to simply build its own video sharing site that had the same capabilities - but it would have been an empty playground (a mistake that they had made with their social networking attempt). So in a very real sense, it was buying the community of users, not the technology or other business assets.

(EN: This isn't really anything new. Very often companies will buy a brand as a means to buying its customers rather than creating a duplicate product and attempting to win customers over to their own brand.)

There's another abrupt switch to the nature of employment. Traditionally, companies hired permanent employees to do jobs. In recent years, short-term contractors and temps are increasingly in use because firms are unable to predict their needs - it's not just a matter of balancing out seasonal fluctuations in workload, as companies are doing entirely different things to generate value. The Internet adds even more flexibility - in that a firm can hire someone for a few hours at a time. Or when a task is crowdsourced, it can purchase a few seconds of time from millions of people.

Shift again: there is a concept of "downsourcing," which entails shifting some work to the customer. The ability to purchase products online is a basic example: rather than calling an operator who keys the order into the fulfillment system, the customer goes online and does their own data entry top place an order. Creating communities of customers to come up with new product ideas is described as another form of downsourcing - a company with a strong and vocal community doesn't need an R&D department to figure out what customers might want if the customers, themselves, are connected. Wikipedia's allowing the crowd to write and edit content is another example, which is all the more poignant when you consider that Encyclopedia Britannica had a staff of four thousand to manage the content of their publication.

Community Function

The origin of human communities is self-interest: people benefit personally from their membership in a group. Even our most primitive ancestors found that their chances of survival were better if they ganged up to hunt and defend themselves from predators. If there were no benefit to the individual, a group would not have formed, and we would be no more social that other species whose only interaction with one another is a brief encounter during mating season.

Over time, our roles became differentiated and specialized. In primitive tribes, all members were hunters - and then there because the opportunity for one to become the medicine man. And then vocations emerged: blacksmiths, carpenters, tanners, and other specialized functions emerged in the following millennia. And with industrialization, our roles became so segmented that they no longer produce any value in isolation. A carpenter working along can still produce a table, but a cost accountant working alone cannot make anything of value.

In the present day, some critics suggest that communities are losing cohesiveness. That is, people are becoming self-obsessed and isolated, not making acquaintances with others in the community, and as such the social fabric is becoming unraveled. It's certainly clear that there is less of a sense of community in America, less participation in civic activities, less of a cohesive social identity, and the like.

Some blame media such as the Internet and mobile phones for eroding the social fabric, but the author suggests that they might instead be its salvation. Passive media such as television is about consumption and isolation, but Interactive media is about communication and contact among people. It facilitates connections among people who would never meet face-to-face. And in that sense, it is not destroying the social fabric, merely replacing it.

The Third Place

There's a brief consideration of the virtual communities that preceded the Internet - bulletin board systems created groups of people who interacted. These were pure communities, as there was no commercial interest or publisher, just a few moderators to keep an eye on the behavior of participants. But it was all discussions and file sharing among the people who participated.

The early internet was much the same - USENET discussion groups and Gopher servers where people exchanged files. Commercial interests were kept out until 1993, so it was computer nerds and college students. The original intention was to create a categorization system for discussion groups (so that those who were discussing physics could be separated from those discussing biology), and then the taxonomy became even more granular to create very focused groups.

Over time, people who participated regularly in the same groups came to recognize one another and form virtual friendships that would sometimes spill over into meatspace. Particularly for topics that were specifically isolated to a region, a "meet and greet" was not unusual.

The author suggests that the modern internet is an extension of those communities and their consolidation into larger communities. He suggests that Facebook has 70 million participants (EN: It's currently estimated at about 1.4 billion users who have logged on in the past month) and names a few defunct community sites.

(EN: What he misses is that while the number of participants has increased, the sense of community has become weaker - and there does seem to be correlation. A small community of people tend to feel connected to one another, but a site like Facebook is not regarded as a community and the people you are connected to are not regarded as friends - the phrase "Facebook friend" is never spoken without some level of sarcasm. Those who participate in larger sites are more like users than participants, who post and comment but do not interact with one another. There are still some communities out there, but they tend to be small and fragmented and well below the radar. It does seem that the larger a site becomes, the less intimate the connection among its users.)

Community at Work

There's an extended profile of a company called "Top Coder" that does not hire a staff of programmers, but instead organizes contests in which companies submit jobs to be done or problems to be solved and anyone on the Internet can submit a solution in exchange for a chance to win a prize.

Coders submit their entries, and also have the ability to disqualify others by finding bugs, inefficiencies, and weaknesses in their code. In this way the community participates in the judging and qualifying of submissions. The winner is the first programmer to submit a solution that accomplishes the goal and stands up against the inspection of other coders.

As the site gained popularity, some winners also benefitted from the visibility and would receive job offers from software companies - which made the site an appealing draw for young programmers who had a need for spare cash and publicity.

One thing they noticed was the need to break tasks down into the smallest possible parts. People would not enter a "contest" that required them to work long hours to build a complete program - but would invest an hour or two in solving a small puzzle. It's also mentioned that this made the software development cycle significantly shorter - with thousands of people working simultaneously, sizable software applications could be built in a very rapid manner. The example given is a program that was projected to require over a year to complete - this community completed it in five months.

(EN: I did a bit of research and this company is apparently still going strong, having many small contests and even "tournaments." It boasts nearly 800,000 members, claims to award more than $25K per day, and has a list of Fortune 500 clients.)