Top European politicians have suddenly realized that balancing their budgets by cutting costs is only part of the equation. They have started to sound the drums on “how can we GROW faster by value generation? Well, Nobel Prize winner Douglass North has found that in history this has always been solved by lowering micro-transaction costs (i.e. on networks!) and reforming/streamlining state institutions (law, education, infrastructures – including f.o. and ether) that apply to all.
Let me focus in this blog on the transactions. Most of you will think only of commercial transactions between buyers and sellers but there are other kinds too like for instance helping somebody, educate a child or exchanging things or services with reciprocity.
Transactions between people are at the core of succesfull services, like for instance FaceBook, on Internet. A friend of mine Peter Olsthoorn last week published a very interesting and well balanced book (in Dutch, maybe will be translated) called “De macht van Facebook- onweerstaanbaar” ( The Power of Facebook- irresistable). “Marc Zuckerberg has like no others taken into consideration human needs of attention, attraction, curiosity, and chances for sex, when he wrote the software for FaceBook”.
Sharing these motives with others translated into vanity and sometimes a bit embarrasing exhibitionism of millions of FB inhabitants. That is what fuels FB. Billions of contributions a day of the more than 900 million users. Most of the analysis of FB zoom in on the commercial possibilities of this huge database of personal data published for all to see, in order to establish the shareholder value which soon will be payed for part of the shares soon offered on the stock market.
To see the FB financial aspects, see excerpts from the FaceBook Roadshow: http://read.bi/JHE98W
Less well known is not the fuel but how the motor of FB (and most other succesful services on internet and elsewhere) is constructed. What is it that Marc must and will protect at all cost against greedy banksters? Why do users value and establish RELATIONSHIPS and exchange information voluntarily. YES, telco’s and banks should take notice.
*** feel happy that they can do it themselves (DIY) and without asking permission to anybody;
*** because they feel they have something to discuss and share, that it is attractive to “connect” with others, that they will be appreciated and valued as part of a group/community that welcomes their contributions, part of something bigger than themselves;
*** yes they have a perception of and have faith (NL: fiducie) in possible synergy (like with win-win situations) wich will lead to growth for all.
So how are these “feelings” (do not underestimate them) channeled into a machinery that grows? The answer was given long ago in internet terms in 2001 in an essay by Dan Bricklin in a book about “Peer-to-Peer”. I will lease that idea and rephrase it a bit more general as:
JAAP’S RULE of Skewed Reciprocity to build a successful P2P Commons service:
*** Construct a situation on internet where participants voluntary, wittingly or not, contribute more value into it than they take out.
This Rule might be of use for VC investors who are looking for the next Marc’s. And it may help when looking at for instance G+
Yes it is as simple as that. This is the way “triumphant P2P Commons” will grow, by attractive virtuous circles and is the exact opposite of the vicious circles of the “tragedy of the commons” in agricultural land sharing.
This is how Google Search, Twitter, iTunes APPstore, Skype, Youtube, eBay, Facebook, Instagram and their foreign counterparts grow.
* Yes skewed, commercial transactions, which are assumed to exchange exactly the same value do not fall into this rule.
Also people get more and more annoyed at having to watch propaganda, commercials, advertising, which can not be avoided even if you want. We no longer want to be forced to watch and listen to that.
* So do people “pay” more than they “get”. Are they altruistic nuts?? No. Sometimes it is unwittingly, like when downloading a piece of music they unwittingly contribute their computerstorage to the torrent network. Or if they realize they do not care but like “to take part”.
* Or the contribution and what you get out of it are completely different in quality and character. We are talking about information here, knowledge, communication, cooperation and not about consumer goods.
* For instance Instagram is superficiallly about people sharing photo’s (information) online and grading them with likes. But the real motor (as done on purpose by the developers) is that users start to discuss (communicate) about the photo and share lots of insights, humor and knowledge. And occasionaly start to collaborate (cooperate) online and IRL.
That is what makes Instagram grow FAST. The pictures are only invitations for recognizing, comments, co-creation and synergy.
* The participants also allow the skewness because they envisage long term collective benefits. This is is not pure dreaming since what they contribute might be tiny but the “more” in above Rule is created by synthesis with other contributions into synthesis of added value, like in scientific work which is very much standing on eachothers shoulders and learning quickly together.
I leave it up to you to look again at he succesfull services mentioned above and see how their respective motors are fueled by the participants. Making money from them is only a side effect.
My guess is that this Rule applies to other living systems in nature to. Nature has a constructive tendency besides a lot of destruction too. That is why things GROW in this beautiful springtime.