MyGengo and the Power of Markets, Networks, and Communities
Maybe, just maybe - the future of business isn't about selling the same old stuff using the tried, tested - and tired - industrial age toolkit: saturation-bombing ads to cram more "product" down the gullets of "consumers". People aren't "consumers", after all - nor can the developed world go on with it's frenzy of overleveraged hyperconsumption that makes us materially full, but leaves us empty.
So maybe, then, 21st century companies don't just market stuff. Maybe they make markets - as well as networks, and communities - where better stuff can emerge in virtuous, interdependent circles. So check out a tiny but resonant example: MyGengo, the brainchild of Matt Romaine and Robert Laing (obligatory disclosure: I’ve know Matt for many years. In fact, he used to blog with me here). The most interesting webby startup I’ve seen for quite a while: MyGengo’s making an open, real-time market for translators. Translation: anyone can apply to be a translator; anyone can submit documents tiny or huge to be translated; MyGengo plays the role of market-maker, setting prices, and matching buyers and sellers.
Ta-da! It’s a textbook example of institutional innovation: as I’ve argued for the last several years, if you want to be disruptive, here’s the single strategy that will take you the furthest. Pick a zombified, moribund industry, and use a market, network, or community to disrupt it, by altering the structure and intensity of search, monitoring, and transaction costs. MyGengo is doing exactly that, with precision and grace.
There’s a lot to like about MyGengo. It promises to unlock significant gains in efficiency, by making translation more liquid, less costly, and more timely. It parcels up “jobs” into microchunks of work, unbundling the job as we know it, unlocking greater effectiveness. It promises to unlock productivity gains, by letting people do a job that Google Translate often imperfectly does. And, of course, it has a simple, proven revenue model: the market-maker’s model so beloved of Steve Jobs, where a cut of each transaction is taken. That’s probably why MyGengo’s already seen a raft of angel investment.
Now, there are many ways MyGengo could improve. Why are prices fixed, not dynamic, in flux with supply and demand? Why are exchanges anonymous, instead of mediated by reputations? How can MyGengo spark demand for translation, instead of just grabbing market share? Why can’t I buy translation derivatives, and hedge tomorrow’s risk?
What’s common to both MyGengo and Hyperakt? I’ll let Matt and Robert clue you in: “we’re planning a revolution”. By now, you might be inclined to agree: it’s not a humdrum recession: You might even be willing to grumblingly concede: it’s looking a lot more like a Great Stagnation. Sometimes, you’ve got to be a follower. But when the rules are broken – you’ve got to break the rules. So my question is – where’s your revolution?
Why are exchanges anonymous, instead of mediated by reputations?
1. As a buyer of translation services, I like the anonymity. I don't want to deal with all the friction that dealing with a real person involves. "hey, how are you... are you free?... etc..."
2. MyGengo does have a reputation system. I've only placed one job there but you are asked to rate the quality of the translation once the job is completed. So I assume there's some sauce in the company that takes that into account.
3. It's a nifty service but from an end user's perspective - the revolution isn't so much in the pricing strategy - I think you overstate the case here. At the end of the day, as a buyer of translation services, I see a price (5-15 cents in the case of MyGengo's pricing structure) that I can compare against other providers who may or may not match those rates. (Note: there are cheaper alternatives). The revolution is really in the simplicity of the interface. It feels convenient.
Ah, re-reading your post, I'd like to retract Point 3.
"by altering the structure and intensity of search, monitoring, and transaction costs."
Going to Proz.com, for example, and having to search/filter for translators; write to them; negotiate; etc... A real pain! MyGengo solves all that.
The price-discovery mechanism is less interesting, or is only interesting insofar if it allows them to quickly locate a translator for a project.