Communities Dominate Brands

Reputation: the growing importance of trust in our digital world

Rob Hof in his article Are online reputations portable? opens up the debate

For years, both sellers and buyers on eBay have bellyached about not being able to carry their reputations--the feedback ratings they get from each other on their transactions--to other sites. With some sellers garnering tens of thousands of positive feedbacks (AAAA+++++ fantastic five-star eBayer!!!!!!!!!), they clearly have value to a lot of folks.

Or do they? ...

Interesting point. whilst I have been touring the West Coast, I have been thinking quite a bit about trust, reputation and the portability of these concepts in our digital world.

If communities are dynamic and that they flow as information and content flows, if Group Forming Networks are to play a significant part of our future. Then, our reputations, our history, must be transparent.

As communities and networks are built out of trust.

Hof notes

Context matters for reputations, but it seems to me that trust earned in one place can transfer to other places, even if that transfer entails some kind of reputation discount. The bigger question is whether services such as eBay, which has jealously guarded those feedback ratings from being used by buyers and sellers on other sites, will open up their reputation systems to be used Webwide.

Interestingly there is a company that enables World of Warcraft players to fast track earning their online reputations enabling them to speedily progress deeper into the game

The Maths of Group Forming Networks

In his article Weapon of Math Destruction David P. Reed says

Conventional wisdom is that a remarkably powerful effect known as Metcalfe's Law is driving the growth of the Internet. The law says that the value of a network grows in proportion to the square of the number of users, which means that, once a network achieves a certain size, it becomes almost irresistibly attractive. But Metcalfe's Law actually understates the potential value of the Internet, and by a huge margin

Reed Explains in more depth

It helps to first understand the two laws of networks that have been around for some time. First is what might be called Sarnoff's Law , after the pioneer of the broadcast industry. This law says that the value of a network grows in proportion to the number of viewers.

Second is the law named after Metcalfe's Law , the inventor of the Ethernet computer-networking technology. He reasoned that 1,000 people on a network can have roughly one million different conversations, so he said the value of a network grows in proportion to the square of the number of users. The n² value explains the growth behavior of networks, such as phone systems or electronic-mail systems, that are mainly used for one-on-one communication. The n² effect says that, given the choice of joining a large existing network with many users or an incompatible new one with few users, new users will almost always decide that the bigger one is far more valuable. The result is often explosive, accelerating growth once a network establishes dominance. This behavior explains why there is now one global e-mail system, while just a few years ago there were thousands.

Reed sums up the challenges for businesses who are still acting/thinking in a linear fashion in a non-linear world, super-distrubured world.

As the scale increases, what's important also shifts. When Sarnoff's Law dominates, content such as TV programs is king. When Metcalfe's Law kicks in, transactions are king. When the Group-Forming Law takes hold, communities are king.

The Long Now

The Long Now Foundation says

The Long Now Foundation was established in 01996* to develop the Clock and Library projects, as well as to become the seed of a very long term cultural institution. The Long Now Foundation hopes to provide counterpoint to today's "faster/cheaper" mind set and promote "slower/better" thinking. We hope to creatively foster responsibility in the framework of the next 10,000 years.

The Name
The term was coined by one of our founding board members, Brian Eno. When Brian first moved to New York City and found that in New York here and now meant this room and this five minutes, as opposed to the larger here and longer now that he was used to in England. We have since adopted the term as the title of our foundation as we are trying to stretch out what people consider as now.

The emminent Stewart Brand says

Civilization is revving itself into a pathologically short attention span. The trend might be coming from the acceleration of technology, the short-horizon perspective of market-driven economics, the next-election perspective of democracies, or the distractions of personal multi-tasking. All are on the increase. Some sort of balancing corrective to the short-sightedness is needed-some mechanism or myth which encourages the long view and the taking of long-term responsibility, where 'long-term' is measured at least in centuries

Though the Long Now Foundation is not neccessarily about Communities, it is certainly about what our world might become through a consilience of very different minds thinking about the future.

The Foundation has been running a number of seminars and these seminars can be download as podcasts.

Previous speakers have been: Chris Anderson Jimmy Wales – Kevin Kelly – Stephen Lansing – Peter Schwartz – Sam Harris – Clay Shirky – Esther Dyson – Ray Kurzweil – Robert W. Fuller – Jared Diamond

If you are interested in seeing a wider horizon line, jump in or at least dip your big toe in, the water may not be quite as cold as you think.

Becoming biggest fixed voice operator: In only 2.5 years, Skype has taken 8% of world's fixed voice customers

Wow. Saw a really impressive number at telecoms industry reporting experts, Telegeography, today: Skype has reached 100 million subscribers. Within big numbers and really big numbers, this is a monster of a big number. Even for extremely successful new technology adoption rates, this is incredible!

Blackberry has been around for five years. They have under 5 million users. iPods have been around for over four years. They have some 50 million users. But Skype has been around for only two and a half years, and already have 100 million users. Wow.

Our congratulations to Niklas Zennstrom and Janus Friis who founded Skype! They may be approaching some world record with this speed of adoption.

Now, lets put this in context. Worldwide there are about 1.25 billion fixed landline phone users (oh, and about 2.1 billion mobile phone users reminds your resident mobile telecoms consulant). The Skype users are practically all on fixed landline internet connections. The cannibalization is of fixed landline telecoms voice business.

In most cases a holder of a Skype account will also own a PC - and thus tend to be of above average wealth within the industrialized world, and very likely also have a fixed landline phone (or perhaps had, and recently gave it up if they put all of their fixed voice calls onto Skype - and perhaps mobile). As we don't have an actual measure yet of how many are total cannibalizations so far - Skype being so new, it will take time for anyone considering abandoning the fixed landline in favour of Skype to actually do it - we can take the big numbers and make an estimate of how much is now being cannibalized. Simple math. 100 million out of 1.25 billion is exactly 8%. That is also ENORMOUS. In this short period of time.

Another observation. Skype is already one of the world's largest fixed landline voice telecoms operators. I don't remember the traditional fixed landline operator subscriber numbers off the top of my head, but at 100 million, they are obviously bigger than any of the European fixed telecoms incumbents. I need to check on the stats for American landline carriers, but I believe none of them have 100 million landline customers (honestly, I don't remember). My gut feeling is that only China would have this many subscribers with one of their fixed telecoms carriers. Skype is heading to become the world's biggest voice telecoms operator. Wow.

Lets revisit the earlier Skype posting on this blogsite.

We had a very long series of discussions around that erroneous the Economist cover story from September which proclaimed the death of telecoms - I blogged about it in very strong terms in this posting - Economist falls for Skype-Hype: wrongly predicts end of mobile voice calls - that while the article was totally accurate to my opionion on the threat of Skype and other VoIP services to the fixed landline business, the Economist made a massive mistake in then jumping to a conclusion that somehow mobile telecoms was more threatened than fixed.

Now the numbers are starting to prove me right. And much more rapidly than I had expected, ha-ha. According to the Telegeography article, the total number of Skype accounts has almost doubled since September 2005. If the Economist had been right in September, that mobile was MORE threatened than fixed - and if the whole industry (fixed and mobile) was to be cannibalized in only five years - then certainly at least a large part of those new 50 million Skype users since September should be from mobile !

Yet today only a couple of mobile operators have even bothererd to launch Skype. The mobile Skype users are nowhere near one million. With the prices they charge for Skype on mobile (as I explained in my earlier posting) - it is not a compelling threat to mobile.

Now back to the 8% penetration level. If we take a standard S-curve, we now have enough data to make rather solid projections to when half of all fixed landline phone users will be (also) using Skype or other VoIP services. How quickly? Skype should have 600 million users and thus about half of all fixed landline telecoms users around (drumroll) September 2009 !

WOW ! If I was in the traditional fixed landline business today, I would "so" be selling my shares and polishing up my CV...

PS - remember the posting on Vodafone's errors in contemplating the lunacy of joining this death-spiral. If you missed it (or want to read it again) it is here: Catastrophic Strategic Loss of Focus at Vodafone.

How to refuse profitable business, part X: Truly Bad Telecoms Marketing

I wrote a column in the3GPortal about an extremely bad marketing example from the UK, with one of my mobile phone accounts with one of the UK mobile operators. I didn't mention the operator, that would be unfair, as these kinds of mistakes are commonplace all throughout the mobile operator community. But the story is illustrative of how bad telecoms marketing is still today in 2006 in even such a modern and competitive market as the UK.

WIthout getting to the specifics of the telecoms profits, customer care info, etc details that are in the column written obviously for telecoms professionals, let me keep it on a more general level here to summarize the story:

Mobile telecoms has some remarkably profitable services (SMS text messaging, and voicemail for example). It makes sense to try to migrate service usage from the average (or below-average) services to the more profitable ones. I have some particular communication needs that stem from my constant travel. Mostly I am in bad time zones, unable to take calls, and don't want voicemail alerts etc when it is night for me. What is worse, if someone leaves me a voicemail for example when I am in an airplane and out of reach, the alert of the voicemail call might not arrive until hours or even days after I have landed. Worst of all, while if I was in the UK and someone tried to call me, I would usually see the caller's phone number, but in many cases when travelling I cannot see the number.

So anyone who might leave me voicemail would think they have reached me. In reality it might take me days to receive the message and it might be impossible for me to return the call. That is why I would prefer to have a service that transcribes voicemail messages to SMS text messages. I could receive the SMS the moment I landed, or it could arrive at night in the wrong time zone, etc. Note that I don't want to receive alerts that "you have voicemail". I want to actually have the voicemail message written into a text message and delivered. This is a premium service that would greatly help me stay connected with my heavy travel.

As it happens, this service does exist. My mobile operator never told me of it. While I had asked for this service for years, they never told me about it. While I have looked for such a service in the various literature of the service options I have with messaging and voicemail, I was never told of it.

That is typical of telecoms. What MobileOne Singapore's Chief Technical Officer Patric Scodeller calls "secret services." Those services that are wonderful, they work fine, but the operators just forget to tell us about them. There are hundreds if not thousands of them on every network.

So, in February when I met with OgilvyOne's Creative Director, Rory Sutherland, in Barcelona, I happened to mention this particular need of mine, as something typical of us heavily travelling road warriers. Rory surprised me by saying this service exists. I asked him what network he was on here in the UK, and sure enough, it is the same network that I use !

So while I've been looking for this service and asking for it, it has actually existed.

Well, I call up the operator. I go through the interactive voice response (IVR) system to turn this feature on in my voicemail. I go through all the options in voicemail, and cannot find the service.

So I call up the calling centre and talk to a rep. I am told the service does not exist. I even ask the rep to check with his supervisors and tech support. After a long hold, I am assured such a service does not exist.

I talk to Rory again, find out it definitely exists. I call my operator again. I talk to another rep. This one tells me the service does not exist.

I tell the rep that my colleague is on the same network and has the service. Only after this, the rep puts me on hold and finally the service is discovered.

Now, this service rep is on that part of the calling centre where new services are turned on. I ask to have this premium voicemail service turned on. I am told that she cannot do that from her location. I have to call ANOTHER NUMBER.

No wonder people are frustrated with telecoms.

So I call this new number. I go through literally every option in the IVR system. It does deal with my service, and helps me understand how it will work. And I want to have the service turned on.

On the option for turning this service on, I am instructed that it cannot be done through the IVR system but I am to call YET ANOTHER NUMBER.

Only after calling that third number do I finally get this service turned on.

What is wrong with our industry? I can understand if this was some extreme discount offer, that the operator is severely trying to discourage users. But for a premium service, which would get premium voicemail - a premium version of one of the most profitable services - turned on; and includes a premium text messaging part - another top profit service - this is totally unacceptable.

Mobile operators are much too good at this: placing obstacles to their customers from using those services that would bring greatest profits.

For the full column at the3GPortal, follow this link:

http://www.the3gportal.com/cgi-bin/framer/framer.cgi?http://www.the3gportal.com/3gpnews/archives/007655.html

We welcome Wireless Watch: Real time updates on your fave mobile blogs

Alan Moore and I are proud to be involved with the launch of Wireless Watch, the real-time summary site for all of your favourite blogs about mobile telecoms and related topics. It is at

www.wireless-watch.com

The Wireless Watch was conceived by our friends Lawrence Cosh-Ishii and Daniel Scuka (best probably known for their excellent video and news site on Japanese mobile and tech, at Wireless Watch Japan - which has also kindly interviewed me several times). The Advisor Board has another of our friends, Walter Adamson probably best known for his long involvement with i-Mode and now acting as the vice president of the i-Mode Forum. Among the contributors to the Wireless Watch we really do have many others of the "must read" authors and again, many friends of Alan's and mine, such as "3G Steve" ie Steve Jones of the 3G Portal, fellow author Ajit Jaokar (Open Gardens the book and website), and many excellent mobile-related blogsites such as the Mobile Weblog, Mobile Opportunity, etc.

So first, Alan and I congratulate Wireless Watch for an excellent initiative in the digital community space (our main themes of this blogsite) and separately both of us are very honoured to be invited to participate in it. We wish it the best of success.

Which may introduce some questions. How do the Carnival of the Mobilists, Forum Oxford, Wireless Watch, etc relate to each other. Let me put it like this.

If you are interested in mobile telecoms, but don't have time to track the industry on a daily, or near-daily basis. If you only want the "top level" or "big" news, then you need only read the Carnival of the Mobilists every week. As it is a migrating Carnival, I cannot give you a permanent link to it, but the current Carnival be at

http://feetup.org/blog/2006/Apr/21#Carnival-of-the-Mobilists-24

and you can then always link onto the next carnival (eg Carnival 25, Carnival 26, etc). Or you can always search for Carnival of the Mobilists and should find it easily. The Carnival is the brainchild of our friend, fellow author and prolific blogger Russell Buckley. Needless to say, both Alan's and my contributions have from time to time been selected for the Carnival.

If you need more of a daily fix on mobile, or at least need to track the industry regularly, more than once per week. Then you should put the Wireless Watch onto your reading list. As it constantly updates on all the new postings by all the signed-up contributors, and it includes such "news sources" as the3Gportal who do many daily news stories, you will catch everything that is happening in mobile. It is obviously at  www.wireless-watch.com 

If you are actively working in mobile, then you will almost definitely want to get involved in the DEVELOPING aspects of our industry. To read emerging thoughts before they become blogs or news, and to be in a discussion environment amongs professionals who tend to undestand the lingo, jargon, abbreviations etc. Then you NEED to join what is becoming the most active discussion board about mobile, at Forum Oxford. We set it up with fellow author Ajit Jaokar, and Peter Holland of Oxford University, and in just over 7 months we have over 730 active members at Forum Oxford. At your first-time sign-up you will need an "enrollment key" and for that, please use the single word "forumoxford". The site is at:

www.forumoxford.com

NOW, if you are NOT that interested in mobile. But you read our blogsite more for the digital convergence, or the customer-communities, or the issues with new media, or multiplayer gaming, or blogging and user-generated content, or the evolution of advertising, marketing and branding - ie topics more central to our book Communities Dominate Brands, then just keep returning here to this blogsite. But you might be interested in also visiting the Engagement Alliance blogsite at

www.engagementalliance.com

Obviously if you are very specifically interested in Alan Moore's company SMLXL and Engagement Marketing, then visit also his blogsite/website at  www.smlxtralarge.com

Or if you want to see more what my 3G mobile telecoms consultancy can do for you, visit my official website at  www.tomiahonen.com

Economist has excellent primer on new media, written for old media

This week's The Economist (April 22,  2006 issue date) has an excellent 16 page special report on New Media, called "Among the Audience." It covers much similar ground as we did in our book, Communities Dominate Brands, such as having two pages on blogging (we did a chapter) or including the Ohmy News case like we did as a case study, etc.

The story is a particularly good read for anyone involved in the "content side" of old media. It helps explain the roles of blogging, wikis, user-generated content etc. I think for covering new media, it does leave the real innovations - user sharing, engagement, and the role of advertising/marketing in that space - at too little coverage, but it perhaps was not the purpose. Certainly the Economist article is well researched and covers many of the new media phenomena such as pointing out that podcasting is not quite the same to radio, as blogging is to print media; for one thing podcasts cannot be delivered in real time (you cannot cover breaking stories efficiently with podcasts) - so podcasts are more time-shifting media; and unlike blogs, you can't link from one podcast to another.

For anyone who reads our blog, I urge buying this week's Economist and reading that special report. It is definitely worth reading!

More on MySpace

Via Therepublic.com

These activities are exploring the nature of identity, establishing peer networks and making a public sphere of influence

Welcoming visitors from Carnival of Mobilists

For those visitors who come from the Carnival of the Mobilists, please note that this blogsite is not a mobile-dedicated blogsite. Alan Moore and I cover here a more broad range of topics around digital communities, thus the internet, online gaming, digital TV and of course mobile telecoms. You may find some postings here relevant to mobile such as [what happens when internet access is via mobile] but others that may be interesting such as how a multiplayer online gamer was hung, virtually, inside the game. Alan blogged about it here [Online Gamer Punished]

For the posting you wanted to read - about Vodafone, ie Catastrophic Strategic Loss of Focus: Vodafone into Fixed that was referred to at this week's Carnival of the Mobilists, that is here:

http://communities-dominate.blogs.com/brands/2006/04/catastrophic_st.html

And for all who are regular readers of our blog, please remember that the Carnival of the Mobilists is a weekly celebration of the best blogs around mobile telecoms topics. If you are at all interested in mobile, please do visit the Carnival to get your weekly fix of what is happening in that space. This week's Carnival is hosted by Jim Hughes at his Feet Up blogsite. Please visit it at:

http://feetup.org/blog

What happens when majority access web via mobile phone

UPDATE JANUARY 2007 - I have written a follow-up on this, about how content migratest from lecacy PC web to mobile internet

Spotted a telling statistic by Ipsos Research, who reported that at the end of 2005 a total of 28% of all mobile phone users access the internet with their phones. Across the 2.1 billion mobile phone users, that works out to 588 million users. And obviously across the 1 billion internet users at the end of 2005, that means that almost 59% of internet users access the web via cellphone.

First very significant point to keep in mind, is that a large portion of those users have also a PC (desktop or laptop) and access the web also with their PC. Earlier numbers had revealed that of paid subscribers to the internet, 25% was by mobile phone or in other words, 250 million people use the mobile phone as their primary (or only) method to access the web.

So to explain - 250 million access only by mobile phone. 412 million access only by PC (desktop or laptop). And thus 338 million use both PC and mobile phone for web access.

So far so good. Now lets observe the trends. PC based internet access is a little over 12 years old as a mass market proposition and in 2005 PC based internet access growth was dramatically slowing down. Mobile phone based internet access is only six years old and showing remarkable growth. With new smartphones, colour screens, faster access speeds of 2.5G and 3G, and web services customized for the fourth screen, mobile phone based internet is becoming a very compelling offering.

Growth of the PC based internet is slowing down. Growth of the mobile phone based internet is accelerating. Only 41% of all internet access is by people who only access by PC. Already 25% of all internet access is only by mobile phone. Soon more people will access by mobile than PC. How soon? By 2008.

What will this mean to the internet industry? The mobile phone can replicate all services that the traditional PC based internet can do. Yes, the screen is smaller, but that is no absolute obstacle. But everything else we had on the web, including its interactivity, is also available on the mobile phone.

But an internet on the mobile phone delivers four elements that don't exist on the fixed internet. First of all, a mobile phone based internet is totally personalized. Our PC is often shared - such as a university campus computer, or a family computer, or the PC owned by the employer with its limitations and at times access by the IT department etc. But our mobile phone is totally personal.

Secondly the mobile phone is always on. It means that any alerts, urgent news etc can be delivered. With laptops we need to find our access, connect to a WiFi etc network, but mobile phones are always connected and can for example be reached via SMS text messaging for alerts at any time.

Thirdly the mobile phone is always within hand's reach of its users. No other technology is so close to us physically at all times. We don't take our computers to bed with us (well, most don't do that), but over 60% of all mobile phone users take their cellphone physically to bed with them at night. We notice we've lost our wallet in 26 hours. But we notice we're missing our mobile phone in 68 minutes.

Finally - and most importantly - the mobile phone offers a built-in payment mechanism. The PC based internet does not have that. On the traditional internet we need to set up a payment system like Paypal, or we need to submit credit card info etc. But on the mobile phone we can (if our carrier/operator has enabled it) handle any payments at the click of a button.

And for anyone who thinks the lower cost new PCs might reverse the trend. No that won't happen. PCs are paid full price. But in most markets mobile phones are subsidised. While PCs are replaced every 3.5 years, mobile phones are replaced every 21 months. In markets where people have two phones - 20% of Europeans have two phones already - that results in an effective replacement rate of 11.5 months for mobile phones. A new phone every year but a new PC once every four years. The mobile phone is subsidised and nearly "free" while the new laptop still costs something near 1000 dollars. How many times will we bother to replace the laptop, especially when our mobile phone suddenly can do all the internet stuff that we previously needed a PC for?

So returning to my question. What happens when the majority of internet access is done with a mobile phone? It will not take long for the Amazons, Ebays, Googles, AOLs and Yahoos to discover that their users are more accessing via mobile phone than via PC. They will adjust their content to work on the phone and optimize for the small screen rather than for the PC screen.

Sound implausible? Think again. Only 14 years ago the majority of internet access devices were mainframe computers. At that time the web content standard was something called "Gopher". Today nobody formats for Gopher because the internet PC browsers (first was Mosaic, then Netscape, now Microsoft's Internet Explorer) became the predominant access devices.

That is bound to change. The trends are irreversible. The sooner you understand this coming change, the more you can capitalize on this transition both personally, and professionally. Spot the trends now, and be one of the early visionaries to this inevitable future.

Oh, and if you work for a content provider, consider these facts: There are three times as many mobile phones as PCs. Twice as many people use SMS text messaging as use e-mail. Users on the traditional PC based internet expect content to be free, but mobile phone users expect mobile content to be paid-for. Collecting money on the traditional fixed wireline internet is very cumbersome. Collecting money on the mobile internet is built-in. The world's biggest internet company by revenues is not one of the internet darlings - Google, Yahoo, eBay, Amazon or AOL. It is Japanese mobile operator NTT DoCoMo's domestic mobile internet arm, i-Mode. And i-Mode alone makes bigger profits than the five internet darlings combined. Where will you put your best content? On the mobile internet of course.

Then consider the premise of my posting. If the majority of the users are on the mobile internet. And the best content is on the mobile internet. Shouldn't YOU be on the mobile internet?