Thursday, September 21, 2006

Web 2.0 with Dion Hinchcliffe

First, I would like to thank Moskal Electric for sponsoring my student attendance at this month's Winnipeg CIPS meeting. I had the opportunity to sit and ask a tonne of questions from Ms. Moskal at a CIPS meeting last spring, and she was gracious enough to insist that I sit with another table to give me more networking opportunities.

On that note, I had a very interesting conversation with members of the Technologies for Learning Group, an exciting e-Learning company here in Winnipeg. It was interesting hearing about the world of web-enabled education.

They came out for this month's speaker, who was talking about Web 2.0 and the "Social Web". Dion Hinchcliffe is a "Big City" speaker who drops lots of famous names while adjusting his much-more-expensive-than-mine tie. He causally mentions his recent breakfast conversation with Tim O'Reilly, and what the IBM V.P. of Emerging Technologies confiding in him after his recent presentation , etc. etc.

OK, we're impressed. This guy has juice in the US market.

The talk started with some pretty pie-in-the-sky proselytizing about the coming nirvana of the internet. Mr. Hinchcliffe was making a pretty hard sell about "Web 2.0", trying to convince the room that this was large, growing, and inevitable. He spoke a lot about the community-based and distributed nature of the new Web.

Something he never spoke about was the commercial nature of this phenomenon. The truth is that the amazing distributed communities he talks about all start with 3 guys sitting in a room trying to hack together an advertising delivery channel. Sure, they figure the best way to deliver eyeballs is to build a social computing platform like YouTube or MySpace. But at its core, this is the same business model: a couple of guys hiring a few programmers to build something that attracts a lot of eyeballs, than sell those eyeballs to advertisers. Nothing revolutionary there, just the thing they're building is changing.

( To read about how MySpace is NOT an example of organic, community-centered social computing, read the expose. )

But, after the utopia talk, he got down to some serious discussion about the lessons that Web 2.0 can give the enterprise.

The key here, despite a long progression of examples and $10 words, comes back to a commonly-held law: the group, if large enough, is more intelligent than any individual. The corollary of that is the "law of networks", which Mr. Hinchcliffe talked quite a bit about. Specifically, networks become more valuable the more people are connected to them.

When you combine network effects with the intelligence of crowds, you get a powerful exponential relationship between the number of people using a system, and the quality of data/information/analysis/conclusions it can produce.

In the "Web 2.0" utopia, that means that users can author, review, choose, and disseminate the most important information. In a business context, it means the quality, applicability, utility, and value of our solutions can become exponential better as we open them up to input from larger and larger groups.

And it only gets better: the further you go down the social computing road, the cheaper and cheaper the unit costs of this intelligence becomes.

To hire 10 guys to sit in a room and analyze stocks is expensive. And it's an expense that never goes away. The second you stop paying them, the selfish jerks will probably choose to not continue analyzing stocks for you.

Social computing says: We have 100,000 users who know a lot about stocks. Let's take their knowledge and aggregate it, leverage it, and ultimately re-sell it to other new users. The knowledge of those 100,000 people would be astronomically expensive to flat-out purchase on the labour market. But the smart company can make use of it for free. And, if you do it right, the users will even thank you for the opportunity to give you their knowledge for free.

I have a whole set of other notes and thoughts about the enterprises internal processes, which Mr. Hinchcliffe raised. Because this post is becoming really long, I'll hold off until next week.

I'll just close by thanking CIPS for an interesting dinner topic, and thanking Mr. Hinchcliffe for his insight.

See you at the next CIPS dinner!