Thursday, February 21, 2013
Wednesday, May 2, 2012
A couple of weeks ago, the Encyclopedia Brittanica announced that it would stop publishing its print edition, after 244 years. That is a long time. It feels like the end of an era. “This has nothing to do with Wikipedia or Google” said its President. Maybe. Maybe it is just part of the diminished demand for print. Or maybe that it is really hard to compete with the 145,000 people who actively worked on wikipedia last month. I went and looked up their stats -- at the source of course -- 4m articles in English; 270 different-language wikipedias. How can you compete with that? The encylopaedia brittanica’s announcement is just another part in a trend I’ve been observing and thinking about. It is another sign that we are moving from Industrial Capitalism to a Collaborative Economy.
Over the last couple hundred years, industrialization honed a specific kind of capitalism. Companies were centralied and hierarchical. With Encyclpiedia Brittanica, I’m sure there is a small number of article writers and editors; each with their own area of expertise -- no doubt rightly deserved. But they would never ever imagine letting unvetted people -- lots of them, and unknown! -- write or edit articles. Wikipedia turned this idea on its head. It is distributed -- meaning that the writers are everywhere, and they are self selecting. They participate because they feel like it.
The result is an enormous diversity of editors and expertise. A collaborative economy thrives on this diversity. It is endlessly experimenting, learning, adapting, and evolving. Industrial capitalism is the opposite. Standardization within a company -- a form of monoculture -- is how it saves money, reduces costs, and becomes the dominant producer. And once it is dominant, it hates change. Changes costs money and is uncertain, so it will do everything to defend the status quo.
I have to add in here a quick caveat. I don’t really think there are two opposing economies at work, or that things are so cut and dried. There is lots and lots of grey. I do think that we have pretty much maxed out on the benefits to be gleaned from the Industrial Capitalism approach. The worldwide Occupy movement attests to that. Pre-industrial revolution the vast majority of us lived in hovels, but hey! we were self employed! Today, 50 percent of the private sector workforce works for BIG companies, and those big companies control vastly more than 50% of the wealth, and political power. The signature of the collaborative economy is an increasing role for individuals. There is LOTS to be gained from this approach, and we will see more and more of it that thanks to the internet. OK, so now back to painting things in black and white, so that the contrasts are nice and clear.
Bell Telephone, founded in 1877, and then bought by AT&T in 1899. It was built on its huge trove of patents and grew bigger and bigger. At one point, it had over 1 million people working for it. It was broken up in 1984. It was broken up into 7 baby bells. But now, one of these babies, ATT, is itself the 7th largest company in the US. Think of all the money and infrastructure and effort and people it took to build that company over the last 150 years!
Contrast that with Skype. Skype is 9 years old, and have 663m registered users. They built a huge telco without paying for or building out the physical infrastructure! Instead, we individuals all happily contributed. It is our internet connections, our personal computers, and our video cameras of individuals. Stuff we’ve already paid for. so what do we learn?
That Industrial capitalism seeks monopoly status and control -- the more the companies have, the more they control, using their closed proprietary systems and way of doing things, the better. Which is in contrast to the collaborative economy. These companies get bigger by maximizing participation -- usually through openness.
In fact, a big piece of the collaborative economy is built on the economics of free. By that I mean assets that have been already bought and paid for (like Skype), or excess capacity (like Wikipedia). If you as a company want to take advantage of these great resources, you have to be open, and willing to cooperate. Industrial capitalism makes its money on either scale -- getting so incredibly big that it can manufacture things very cheaply -- or by keeping its expertise very close through trade secrets and patents that it lets others use at great expense.
Because Flickr is such a Peers Incorporated company, I had to put them in here. the industrial capitalism way of doing things would be Getty images, with 80m images. The collaborative economy way of doing it gives us Flickr, which has amassed 6 billion images in just 7 years. And you have to say that the Flickr images more accurately portray the world as it really is.
There is Network TV as opposed to YouTube. YouTube has more video uploaded each month, than the 3 major networks created in 60 years. Is a lot of this stuff junk? Yes, absolutely, but so is the “Bachelorette”.
We see the collaborative economy in every sector. Even banking. Prosper is a company in which individuals lend money to other individuals. It is 7 years old and already has 1.3 million members. It has made $314m of loans. If one of those lending individuals goes bankrupt -- it isn’t the end of the world.
The collaborative Economy is delightfully resilient. Industrial Capitalism, with its huge behemoths, produces companies that are “too big to fail.” Yet we know they will one day. While both systems could share value better with individuals, it seems that the collaborative economy is the one that will do it -- because remember, it seeks to maximize the participation of others, and if its going to succeed in the long run, it has to share more equitably. We will see more and more web-based companies that partner with individuals to help them make money.
I heard this great anecdote: my father had one job in his lifetime; I’ll have 7 jobs in mine, and my child will have 7 at the same time. The value sharing partnership between a web-based company and individuals will form a significant part of our economy future.
I recently founded a company called Buzzcar. We operate in France, and will be opening here in New York shortly. With Buzzcar, car owners can rent out their cars to their friends and neighbors in a safe, secure, and standardized way. I think of the car owners as Auto-preneurs, and they get 65% of the revenue generated, in contrast to the business model of traditional car sharing and car rental companies. Buzzcar builds the technology, operational, communications, and contractual support, sets a minimum standard for good drivers and safe cars, insures each car and person during the rental and with 24-hour roadside assistance, and does the payment collections. The owner is in charge of his car, and inviting his friends and neighbors to share his car. And he can make about $1000/month. You can see that we have all types of owners and cars, and all types of drivers too.
I have a goal of getting everyone to share their cars, dramatically reducing the numbers of cars needed to satisfy a given population, dramatically reducing the numbers of parked cars that clog our city streets and make our homes expensive, and dramatically reducing the enormous bite car transportation takes out of personal budgets.
And I know that the collaborative economy approach can work, even in a sector that seems so suited to big huge projects, because of my colleagues at carpooling.com. They are a 10 year old German company that provides ridesharing services throughout Europe, and shortly the US. Every single day, they transport as many people as would fill 130 Amtrak trains. Every month, they have more than 1 million people sharing trips. In fact, Carpooling.com, and the car drivers and the riding passengers, move more people than travel the length of Amtraks’ NE corridor.
Something that I haven’t yet mentioned, but that is really dear to my heart, is the fact that in the collaborative economy, one dollar is not like another dollar. The social intangibles are visible and valued. One of Buzzcar’s borrowers had mentioned to the car owner, that they were using the car to get to an Island ferry. The owner sent her an email with a list of the island highlights -- where to go and what to see. You won’t find that level of personalization and customization in the Industrial capitalism model. It costs too much money.
Some more examples: -- the mainstream media vs the blogosphere -- here is a short list of companies, many of which you’ll recognize, that are bringing us this new economic model. (airbnb, etsy, eBay, fiverr, topcoder, zilok, rentallic)
And to close with a final lovely example: we can contrast Google Maps with Open street maps. Google maps, which I know, use, and love, was created with a car driving on every single road in the world and mapping them all. that is a big job! We can contrast that with Open Street maps, that created the same with local hobbyists build out the open street map platform. Today, Open street maps offers maps that are as good -- and they think better -- than Google’s. Why? Because, just like wikipedia, they have thousands of people updating them each and every day.
When the Haiti Earthquake struck and the emergency responders flooded in, it was impossible for them to find their way through the city that had been poorly mapped, and those existing maps were clearly completely out-of-date for what was needed. With the help of a group called Crisis Mappers Net and released satellite photos, this group of people drew in the map of Port-au-Prince over the subsequent week, you can see them working.
To sum it all up, Industrial Capitalism is built and evolved to put the corporation’s survival a the center. I hope you enjoy those empty, headless suits I found. And now, thanks to the Internet, we see the rise of a collaborative economy, that puts people at the center.
Sunday, February 5, 2012
Last summer Velib made some helpful changes to their service! Amphibious bicycles for crossing the Seine?
No, not yet, but almost as good. They made it much easier to get an annual, weekly, and daily membership. I thought I'd say, "Thank you," and post a quick summary. They updated their website adding an English version and made it possible to purchase all of their subscriptions online with a credit card. So, for anyone without a European debit card with a chip in it, you can now pay for Velib online with your credit card.
The prices charged for the service went up a little bit, but still a bargain at €1.70 for access to Velib for 24 hours (30 minutes at a time), or €8.00 for a week (30 minutes at a time). Remember, if your trip is longer than 30 minutes you will still pay additional usage charges.
English telephone support will make it easier for tourists, should you ever encounter problems at the stations. And, best of all, for anyone planning a long visit to Paris, you can buy an annual subscription for €29 and pick up a "Velib' Express" card at any of the 20 city halls in Paris. The card makes using Velib' even more convenient, no more entering your long ID number and PIN at the kiosk, just hold it over the scanner for the bike you want, wait a few seconds for the light to turn green (why does it take so long?) and go! Read more!
Posted by Roy Russell at 2:14 AM
Sunday, December 11, 2011
I have been reading War and Peace by Tolstoy. He is just amazing. He sees through every human action and exposes each frailty, ego, fear, irrationality, hubris. No one escapes. The action of the novel takes place between 1805 and 1820 – the Napoleonic wars. Wikipedia cites the death toll at 1.8 million people. You should look at the big version of a very famous map of the army, which shows how many people set out (beige) and how many dribbled back (black).
As I've been reading, I keep thinking about current wars, and non-wars (climate change and Durban), and returning to Tolstoy’s key question that we – entrepreneurs, marketers, politicians – seek to understand:
What force moves peoples?
In Chapter 1 of the Epilogue Tolstoy goes on a rant. There were so many delicious bits, I had to pick them out for you. But read the whole book. Absolutely wonderful.
….the goal of the good of all human civilization, usually understood as the people occupying the small northwest corner of a large continent….
..the historian knows the goal towards which mankind is being led (for one this goal is the greatness of the Roman, Spanish, or French state; for another it is freedom, equality, a certain kind of civilization in a small corner of the world known as Europe.)
...During this twenty-year period of time an enormous number of fields go unplowed; houses are burned; trade changes direction; millions of people become poor, become rich, migrate; and millions of Christians, who profess the law of love of their neighbor, kill each other.
…At the end of the eighteenth century, some two dozen men got together in Paris and started talking about all men being equal and free. That led people all over France to start slaughtering and drowning each other.”
….At the same time there was in France a man of genius – Napolean. He defeated everybody everywhere – that is, he killed a lot of people – because he was a great genius. And he went off for some reason to kill Africans, and he killed them so well, and was so cunning and clever, that, on coming back to France, he ordered everybody to obey him. And everbody obeyed him. Having become emperor, he again went to kill people in Italy, Austria, And Prussia. And there he killed a lot….
Thursday, October 6, 2011
The funny thing about sharing, is that there are usually a whole bunch of unexpected and unanticipated benefits that people don’t expect and don’t anticipate.
For Zipcar, sharing rather than owning your own car meant that:
-- You can choose the car that fits the needs of each specific trip.
-- You have instant access to a “personal fleet” of 6000 cars parked across North America and England.
-- You never have to maintain or repair it
Try doing that with your car!
So what will AutoLib bring that is a surprise? By writing this down, I’m anticipating, which kinds of ruins my argument. But, here goes:Unanticipated Benefits of AutoLib
-- Electric cars will be demystified. Everyone will have seen them going around everywhere, experienced their commonness, and lots and lots of people will have driven them. Today, the arguments and fears about electric cars are by people who have no first-hand experience. Now, this discussion around electric cars will stem from a first-hand experience. Much better!
-- We’ll automatically choose our mode of travel based on the trip, rather than mindlessly and routinely getting into our own cars. This will be a sea change for many people. What an idea! Should I walk, bike, metro, taxi, Buzzcar or AutoLib to get where I need to go in the city? And this new way of thinking will just be second nature, like checking the weather when you wake up in the morning before you choosing your clothes for the day.
-- We will travel comfortably and routinely between different modes of transport. The whole frightening and ugly-named concept -- “multi-modal”-- will be a natural reality that includes the car in those mode choices. Very few people will be mono-modal: only public transit or only by car. It should bring these two groups together, less divisiveness between the camps. It will make negotiating for rights of way between alocation of public space have more consensus.
Sunday, October 2, 2011
After years of discussion and planning, and less than one year since the contract was awarded, Autolib went live today, October 2. It will have about 38 cars are the road, being driven by an invited set of users, and then go live to the public on December 1 with 250 cars. Over the next year, it is supposed to build out to 3000 cars.
Autolib: 3000 electric cars, paid for in 1/2 hour increments, on demand, for use in greater Paris. Comes with parking! I think of them as taxis you drive yourself, with taxi-like prices: 5-7 euros the first half hour (after you've paid a gating fee) and even more the second and third half hours.
My first kneejerk reaction is the shock at the branding. I was thinking that at those prices, it was going to be heavily used by businessmen and well-to-do women to get around Paris. Now that I see them, I think they've lost this primary market.
Here is a picture of the station, which comes at a cost to each city town of 50,000€. For Paris, this will add up to 25 million euros.
The point of the station? It is a video camera connection with customer service who will help you scan your license and then see your face, and thus decide to sell you a membership to AutoLib.
Here is what I find really shocking: this enormous cost is all because the French do not have electronic driving records that can be checked in real time. This is a pain that I've been feeling with Buzzcar. We get around it by also asking for a photo of the individual's identity card as well as a proof of residence at an address (a bill less than 3 months old). I've advised the French government that they really need to bring their driving records into the computer age. It hadn't occurred to me the size of this cost, in Paris alone, until I did the math on the Autolib stations.
So I don't sound crotchedy. Here is a picture of me being given a test drive in an Autolib by a smart, bright, well informed young man who is an "Autolib Ambassador."
Oh, to give you the link to Autolib:
not .COM (library management software, whatever that is)
not .FR (taken by a carsharing service in Lyon)
not .ORG (Lyon group has that as well)
Monday, July 18, 2011
Translating from a City of Paris press release:
In Paris, where we celebrated the 100 millionth Velib trip since July 2007, the popularity of the service hasn't diminished. There are 170 thousand subscribers and almost 100 thousand rentals a day at the 1700 stations that cover the capital. According to JC Decaux, the service has seen "a massive increase in recent months" thanks to a cloudless spring.
The city and its concessionaire share other satisfactions: a net reduction in vandalism. Shortly after the launch of the service, stupified users deplored the impressive number of bikes with flats, twitsted, stolen or broken. According to JC Decaux, the vandalism was reduced by 2/3 between 2009 and 2010. Is the anti-Velib violence no longer in fashion? "Shared bikes have arrived as part of the urban landscape" says M. Asseraf. Mme Lepetit prefers to see the change as the result of "public ad campaigns emphasizing civic spirit and responsibility."
All the stations haven't benefited from this enlightenment, as the residents of Barbes (18th arrondissement) or in proximity of the beltway can attest, but the city refuses to release the vandalism statistics by neighborhood "because this will stigmatize" explains the mayor.