The Coming World of Collaboration - Follow up

Howard Rheingold, author of Street Mobs and invited lecturer at California’s renowned TED conference explains the phenomena of collaboration and its evolutionary effect on creating new forms of wealth and perhaps reforms to traditional economic theory. He initially notes that traditional success in both business and politics was fueled by the notion of Darwin’s biological theory of evolution; that the strongest and fiercest survive. But while this ideology has held true throughout the life of capitalism – he’s sure to emphasize that capitalism will continue to rule – the birth and growth of technology has vastly spread cooperation, collective action, and complex interdependencies. This, he notes, has forced competition to make a little room.

What Howard is really trying to get across to us is that through the cooperation, collective action, and interdependencies new forms of wealth can and are being created. In an example he gives early in his lecture he compares this collaboration to prehistoric times when small family units survived by hunting small game like rabbits and other animals. At some point however, hunters gathered together and collaborated to hunt the massive mastodon. His point being that today we can collaborate to conquer bigger “game.”

While the ideas presented could be criticized as rudimentary, it’s no farce that this level of collaboration is occurring today and is being led by some of the world’s biggest corporations. IBM, Sun Microsystems, and other leading IT firms are open-sourcing much of their software and encouraging other developers, be it graduate students or high school kids, to work and advance the available research. Toyota gives extensive training to its suppliers to help them increase their production efficiency even though many suppliers also work with their direct competitors. Even within these fierce markets, companies are opening up and welcoming collaboration. Why? Rheingold argues this is happening because it is a certain kind of sharing in self-interest.

For example, by allowing bloggers to earn money through its Adsense program, Google enriched itself by creating a new market for advertisers. Amazon.com opened its application interface to over 60,000 designers which in turn has grown the number of Amazon stores significantly while making money for virtual store owners. EBay, the auction giant, created an enormous market by creating a feedback mechanism that allows users to trust each other. All these examples reinforce how collaboration can turn a Prisoners Dilemma into an Insurance Game.

The Prisoners Dilemma, as in all game theory, states that “the only concern of each individual player is maximizing his/her own payoff, without any concern for the other player's payoff. The unique equilibrium for this game is a Pareto-suboptimal solution—that is, rational choice leads the two players to both play defect even though each player's individual reward would be greater if they both played cooperate.” The distrust players have for each other in this model is what dictates their rationale. If both could trust each other, they would be apt to work together and obtain larger rewards. This model in which trust is present between actors is known as the insurance game. This is what is beginning to happen. The most evident example of this is EBay. By establishing trust between buyers and sellers a huge new market was established where lower prices are often found for buyers and many new markets for goods that normally can’t be sold are now a click away for sellers.

These actions are all about self-interest to grow and add more to the already existent. Rene Descartes, the famous philosopher explained that we need a new way of thinking to understand absolute truth. While absolute truth would be nice, we can start by understanding the sociological and economic evolution that is the future of commerce and innovation. Globalization is shaking the foundation of traditional thought. To finish, I will leave you with the question Rheingold poses in his book Street Mobs. Are the populations of tomorrow going to be users, like the PC owners and website creators who turned technology to widespread innovation? Or will they be consumers, constrained from innovation and locked into the technology and business models of the most powerful entrenched interests? The answer seems to be getting clearer.

Sources:

TED Lecture – http://www.ted.com/talks/view/id/216

Wikipedia: Game Theory & the Prisoners Dilemma –

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Domain Holders Take Advantage of You and Me

Source: http://news.findlaw.com/ap/high_tech/1700//02-27-2008/20080227100502_25.html

As if it's not difficult enough to find a marketable and appealing domain name these days, some companies are now suspect of manipulating buyers by analyzing recent domain searches and using the data to inflate domain prices. This has been a growing issue as the number of domain purchases over years has skyrocketed and along with that so have the number of companies facilitating domain purchases.

To combat this issue a law suit was filed with a Los Angeles court Monday against Network Solutions, LLC, one of the many domain facilitation sites (networksolutions.com). The importance of this lawsuit is extremely prominent in protecting businesses and consumers involved in online business development. As someone who owns more than ten domains and has experienced the aforementioned problem, let me tell you, this is huge.

Here's how it works:

For the purpose of this argument, let's say I am a apparel designer in Florida who realizes the potential to grow my business through the outlet of e-commerce. I put together my online business strategy, hire a couple of designers, and begin to create what will soon be my online presence. Using a domain facilitator I search and scour through thirty possible domain names but decide to come back and purchase after I speak with a marketing consultant to get some ideas on which domains have the most marketability. During this gap of time the domain facilitator has accessed its search analytics and notices that I, as well as others, have been searching for possible domains. In turn they purchase the domains, making them unavailable to me upon my eager arrival to get up and running online. At this point I am either forced to search for another, likely less appealing domain, or purchase my first choice at a much higher price. The domain facilitator has just manipulated me to increase its profit margins.

Many companies who do this defend their actions by stating that they are helping the consumer by ensuring domains are available when their customers return to purchase. Don't be fooled. This is a cover for their blatant misuse of search data. I commend them for developing a strategy that allows for higher profits, but they've gone about it the wrong manner. There is a better solution, which I will outline below, to both increase company profits AND provide value and honest service to consumers. Now Network Solutions and others will likely deflate their profits in a vigorous class action law suit that in my opinion could have easily been avoided.

My Solution:

Surely it would be nice to have some more insurance that my domains would be available upon my return to purchase, but as the buyer I should have the option to obtain that insurance. What Network Solutions and other companies should do is develop an option to purchase domain insurance for a nominal fee that reserves the domain for a period of time. This both opens a new stream of revenue for Network Solutions and the like while also preserving the rights of the consumers.

As the competition for domains increases and more and more businesses establish themselves online it will be more and more important to have ethical standard for businesses and consumers to follow and understand. Especially when it comes to private data.

Tips for buying domains:

1. Use a reputable site - I use GoDaddy (godaddy.com) because they not only have a great reputation, but also offer a full suite of domain and hosting services.
2. Be alert of suspicious behavior - If you're domains keep disappearing before you can purchase them, consider investigation the company you're working with.
3. Report suspicious behavior - Visit RNS Domain Fraud and know how to handle potential misuse.