Tuesday, October 25, 2005
Memeorandum - Miniprofile & Edge Competences Case Study
Like many of you, I find myself using the new Memeorandum more and more. It's killer - an evolution of blogdex using simple threading algorithms whose time is long overdue.
Why do we all use it so much? Because it is one of the most efficient attention allocators on the market - it is one of the first true media reconstructors. It can rapidly allocate your attention to relevant mass and micromedia almost frictionlessly.
But the real insight I would like to drive is that Memeorandum is a near perfect case study in leveraging edge competences. Media 2.0 is edge competences; they are the building blocks for dominant 2.0 strategies. Two edge competences I talk about frequently to media heads are plasticity and liquidity.
Let me explain intuitively what they mean, using Memeorandum to help. Memeorandum leverages liquidity to allocate attention to plastic microchunks of media.
That is, because we can trade info about the media we're consuming - in this case, links and blog posts - Memeorandum can rank it. It's liquid and tradable, and Memeorandum exploits this to make a market out of it.
At the same time, because the media we're consuming is plastic - it can be unbundled from distribution into chunks into microchunks (http into blogs into posts, etc) - it can be rebundled, into, essentially, Memeorandum Page A1.
Together, plasticity and liquidity let Memeorandum offer you a hugely superior value proposition - a hugely greater return on attention than almost anywhere else on the www, if what you need is a high-level view of what's happening now.
Now, the question I'd like to ask is simple: why are so many incumbents failing to see this simple picture? OK, sure, since I've worked with a few, I have some answers. But it's the question that's important.
For example, the cost of building a reconstructor like Memeorandum is trivial if you are an incumbent. So why did the NYT choose to close off it's content with NYTSelect rather than internalize gains from allocating attention to the rest of the market by building a reconstructor? In which case is the return greater, even in a first-order situation (ie, with no consequences)?
I think pretty clearly, the return is far greater in the latter case, leveraging edge competences to build a reconstructor - the costs are trivial, and the potential benefits huge; you immediately begin to internalize your competitors' returns on attention. Clearly, NYTSelect can't match these economics.
Why do even erstwhile 2.0 incumbents like Yahoo choose to ignore attention allocation as the source of Media 2.0 value? I mean, it's not exactly a big deal for Yahoo to try and build a reconstructor like Memeorandum. Or is it?
I think it's difficult because, truth be told, Yahoo has not really understood how to play this game - they have no edge competences, and are not busy building any. They're more interested in, for some reason, building scope and scale economies (ie, expanding 'services' and building 'inventory'). But these economies fail in a 2.0 world, unless you can allocate attention efficiently to them.
Why didn't Technorati build a Memeorandum? After all, they were first out of the gate by a looong way. They intuitively understood the huge market gap for efficient attention allocation long before almost anyone else in the world. Or did they?
I think they chose to forgo building edge competences, which require a long term investment, in favor of shorter term gains (viz, the enterprise strategy, etc).
The point I'm trying to make is twofold.
First, there is still despite all the interest and excitement my and others' work on attention economics has raised, a huuuuge market gap for reconstructors to efficently allocate attention.
Second, to do so - really do so - requires that you leverage edge competences to provide a superior return on attenton. Not close your goods (NYT), derive 1.0 style scale/scope economies (Yahoo), or lose the focus of this intent (Technorati). I can cite other examples - choosing technology over attention economics (del.icio.us), etc, but I think that's enough for now :)
"choosing technology over attention economics" - please do cite this example :)
Umair: my thoughts EXACTLY! Well, not exactly. :) Glad you like memeorandum!
"the cost of building a reconstructor like Memeorandum is trivial if you are an incumbent."
Um, no. Not true. Not even close.
I have more than a second now, so I can be less rude. However, I got PO'd on Gabe's behalf. His efforts on Memeorandum are not trivial and can only be replicated by a reasonably small number of very smart people, and ones who also happen to have sector knowledge in this area.
His success is certainly inspiring any number of similar efforts, but in the startup world. The incumbents can't afford to put his level of talent on such low-return projects. What you are ignoring is that low eCPM that one can derive off a Memeorandum-style aggregator.
If Gabe or a clone can get a $2 eCPM, they they are superstars. The real net revenue number is likely a lot lower. Technorati (or Feedster
) shouldn't do it, because their core businesses are worth a lot more money. The problem is that Memeorandum is (with current ad technology) constrained to using contextual advertising (e.g. Adsense for Content) rather than keyword search ads (e.g. Adsense for Search). The latter pays a LOT better. That's so many of us greedy types are chasing business plans that let us send keywords over to Google to get ads.
Whereas I look at memeorandum, cringe at the design, and then realise I don't care at all about the self-mastubatory wank that is "tech" and "politics". I realise why these categories were chosen, as they're the two most popular topics of blogs - blogs are on the internet, therefore there is an inherent bias to tech, and (US) politics has adapted very well to blogs - but this inherently leads to the crapness as everyone talks about what everyone else is talking about. To make an awful maths analogy, the real value is not in the lowest common denominator. (I spent a few minutes trying to add a ", but" clause to that sentence, but couldn't - although if I could, there would've been a startup in my future).
the real value is not in the lowest common denominator. I spent a few minutes trying to add a ", but" clause to that sentence, but couldn't
Here's the "but": the real value is not in the lowest common denominator but in the ability to scale a memeorandum-type of attention-allocation product to anyone who wants to use one.