Thursday, January 26, 2006
Building Edge Competencies - Understanding the Edge Edition
Understanding the edge is tricky. It's a place where most traditional assumptions about management and strategy have to be left behind, if not upended - otherwise, it's difficult even to ask the right questions.
Here's a good example - Lloyd Shepherd, who's a publishing 2.0 guy at the Guardian, asks:
"...According to PaidContent.org, it takes 50 votes from 140,000 or so digg users to get a story onto the digg front page...
...But let�s break those concepts down a little. The PaidContent stat seems to imply that, actually, the community doesn�t decide what goes on the front of digg. Actually, a very small, statistically almost insignificant number of individuals decide (some 0.035%) that a particular story goes on there. Of course, it�s not the same 0.035% for each story...
...On GU, the editor decides what goes on the front. But actually, it�s not one editor, it�s a team of editors, sharing stories, discussing them, making a case for them.
...All of which is a long-winded introduction to the core question: are 50 digg users more �representative� of the 140,000 digg users? Or is a group of GU editors more representative of the GU community? In my more militant moments I�ve often wondered how GU would look if we handed over the front page to the 12 million unique monthly users - would it be more reflective of the community, or less?"
Bolding's mine. It's a good question - but it's the wrong question, unfortunately.
Let me back up for a sec to explain. What is Digg (Reddit, Tailrank, Memeorandum, etc...)?
They are all basically markets for attention. Attention is allocated efficiently because info about news (music, movies, books) is liquid when enough people trade it (theoretically, anyways - the problems arise because they're pseudo-markets, not real markets, and that's why all the information contagion/crap epidemics happen...but we'll get into that later).
Those 50 votes are the price of attention to the front page now - they are like the current ask price for front page space. To make this intuitive, think about the price of space on the second page. It's likely to be (exponentially) less than 50 votes. To make it even more intuitive, note the fact that what really makes Digg (etc) work is that not voting sets the price too, just like not bidding at an auction.
Like in other markets, the price - 50 votes - is a reflection of supply and demand - the number of Digg users, the amount of time they spend on Digg, how often they vote, and the amount of news they each read, on average.
The point I'm trying to make is that the absolute price itself isn't so important - the only immediate thing it reflects is friction, aka transaction costs. What's much more important are the deeper variables - supply and demand, and their elasticity and volatility. These are the factors that Publishing 2.0 guys should be focusing on - but they're not (except Scott).
I've had a lot of discussions lately where people ask this question.
To really build edge competencies - to be able to leverage attention markets like Digg, IMHO, it's really important to move beyond first-order thinking, and focus on the real strategic variables.
I like your notion of edge competencies, but I think you might be starting to fetishize the edge a bit--all roads lead to the Edge.
The point about an economy of attention on collaboratively filtered sites like Digg is taken, but I think the Guardian's point went beyond the democratic dynamics of different kinds of content generation to the question of expertise in editorship.
Two days ago, the blogoshere was on fire with knee-jerk cries about Yahoo giving up on the search business, based on a single sentence uttered by the CFO. That is a problem with edge content. Even if 50 people, or 10,000 people, on Digg think that's really hot news, it's still crap journalism. And, even if the Guardian's editorial board isn't as representative as the Digg users, they're probably not going to put that story on the front page. (I am going to look really stupid here if that story was on the front page of the Guardian, but it did make CNet, so I will offer the generic excuse that traditional media outlets are scared enough that they are starting to give us bread, despite their better judgment.)
The point I'm trying to make here is this: I get the edge. I like the edge. But I think we need to get beyond the-edge-in-a-theoretical-vacuum. We're certainly in the midst of overthrowing old-fashioned, control-based media, but there's a long continuum between autocracy and anarchy.