Greatest Hits Blog

The one-sentence summary

If you want a truly interesting creative idea, try asking the audience that cares about it most.

WHAT THE BOOK SAYS

• For the first time we have the tools to make group action a reality, and they’re going to change the world. The book has a number of main tenets:
• Sharing anchors communities
• Everyone is now a media outlet – they can publish, then filter
• Personal motivation leads to collaborative production
• Collective action creates institutional challenges
• Everything is getting faster and faster
• Failure now costs nothing (most ideas are bad, but it is now cheaper to try something)
• Management challenges grow faster than organisational size, so more is different.
• Sending an email is now a kind of publishing, which has the power to bring down companies.
• In answer to those who claim that much on the Internet is unedited rubbish, much of what gets posted is in public, but not for the public.
• We used to do little things for love, and big things for money – now we can do big things for love.

WHAT’S GOOD ABOUT IT

• The Birthday Paradox shows that we have a poor grasp of probability. What are the chances of 2 people in a group of 36 sharing a birthday? You’d think it would be 36 divided by 365 days, yielding 1 in 10, but there are actually 600 possible pairs of birthdays in a group of 36 (80% chance).
• Most of the barriers to group action have now collapsed. So have transaction costs, which throws the original work of Ronald Coase (see Wikinomics) into confusion.
• The Tragedy of the Commons is where each shepherd can see that all would benefit from restraint (not overgrazing), the odds are against it because the whole arrangement falls apart if just one person is selfish.
• Social awareness has three levels:

When everybody knows something

When everybody knows that everybody knows

When everybody knows that everybody knows that everybody knows

• The fitness landscape is a metaphorical area in which, for any problem or goal, there is a vast array of possibilities to explore but only a few valuable spots to discover. Companies tend to stick with the early, obvious ones.

WHAT YOU HAVE TO WATCH

• It is fairly long and detailed so you have to dig hard for the nuggets.
• Much of the material echoes the contents of Wikinomics.

The one-sentence summary

The Internet has turned traditional economics upside down by making many things free, so look carefully at your reputation and the time you demand from your customers.

WHAT THE BOOK SAYS

• Old economic certainties are being undermined by a growing flood of free goods. This has become possible because production and distribution costs in many sectors have plummeted to unthinkable levels.
• The flexibility of the online world allows producers to trade ever more creatively, offering items for free to make real or perceived gains elsewhere.
• As an increasing number of things become freely available, our decisions to make use of them are determined by the popular reputation of what’s on offer and the time we have available for it.
• In the future when we talk of the money economy, we will really be talking about the reputation and time economy.
• The loss leader concept is giving away one thing to get another: the internet has taken this to a new level.
• The economics of atoms is based on tangible items. The economics of bits is based on storage space and is intangible, leading to ‘freeconomics’.
• There are three prices: something, nothing (free) and less than nothing – this is negative price, where you get paid to use a product. There is a gym in Denmark where you pay nothing as long as you go at least once a week.

WHAT’S GOOD ABOUT IT

• Compare with Seth Godin’s Unleashing the Ideavirus: 20 years ago the top 100 companies either dug something out of the ground or turned a natural resource into something you could hold. This is now only 32 – the others sell ideas.
• The demand you get at a price of zero is many times higher than at a very low price – the ‘penny gap’ identified by Kopelman.
• Modern business models should: 1. Build a community around free information. 2. Use it to design something that people want. 3. Let those with more money buy more polished versions of the product. 4. Keep repeating the process.
• Learning curve was invented by Ebbinghaus in c.19 to describe improvements when people memorised tasks over many repetitions.
• Information wants to be free: 1. Access to computers should be unlimited. 2. All information should be free. 3. Mistrust authority. 4. Computers can change your life for the better.

• Ten principles of Abundance Thinking:

1. If it’s digital, sooner or later it’s going to be free.
2. Atoms would like to be free too.
3. You can’t stop Free.
4. You can make money from Free.
5. Redefine your market.
6. Round down.
7. Sooner or later you will compete with Free.
8. Embrace waste.
9. Free makes other things more valuable.
10. Manage for abundance, not scarcity.

WHAT YOU HAVE TO WATCH

• Not much. There is much to ponder here about modern markets.