Tail Economics Meets Political Activism

Several of the ozplogistan heavyweights have weighed in on the Getup email campaign on Senate accountability. The mass media is also a-buzz with Liberal and National Senators having trouble dealing with the volume of mail from Getup in a meaningful manner. In particular Senator Robb having a whinge to the mass media. I have called these groups flash-mobs in the past. These mobs gather around a single popular issue - in this case keeping Coalition Senators accountable - harnessing the sheer numbers of the long tail into a fervent and meaningful group. Getup will be just the first of these kinds of activist groups in Australia. Senators and Members of Parliament should get used to it.

The Long Tail

Chris Anderson wrote an exceptionally insightful article in December 2004 titled; The Long Tail . The article has spawned a blog and a soon to be released book. The effect is real, the business unit I am with in the US is predominantly service-based. We recently recognized the potential of tail effects in our business.

The decentralised network of the internet has made information transferral and storage cheap. Modern companies leverage this to maintain super-large inventories so that all potential markets are catered to. A brick-and-mortar store, such as Walmart, cannot maintain economies of scale in their inventory and business unless a product sells large numbers. In music this would mean Walmart needs to sell 10,000 Britney Spears albums to make money. They cannot afford to stock bands like You Am I, or Mudhoney as they are quite simply not profitable.

People's tastes are much larger than the tyranny of the mass-market. But how much wider? Anderson uses the example of Ecast, a digital dukebox company.

meet Robbie Vann-Adibé, the CEO of Ecast, a digital jukebox company whose barroom players offer more than 150,000 tracks - and some surprising usage statistics. He hints at them with a question that visitors invariably get wrong: "What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?"

Most people guess 20 percent, and for good reason: We've been trained to think that way. The 80-20 rule, also known as Pareto's principle (after Vilfredo Pareto, an Italian economist who devised the concept in 1906), is all around us. Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market books - 20 percent all. The odds are even worse for major-label CDs, where fewer than 10 percent are profitable, according to the Recording Industry Association of America.

But the right answer, says Vann-Adibé, is 99 percent. There is demand for nearly every one of those top 10,000 tracks. He sees it in his own jukebox statistics; each month, thousands of people put in their dollars for songs that no traditional jukebox anywhere has ever carried.

One of the reasons iTunes is wiping the floor of the likes of Walmart in certain markets, and managing to capture such a wide and diverse clientele is through meeting the long tail market. It is cheap to store a 3Mb mp3. It is cheap to download a 3Mb mp3. Where Walmart is stuck limiting their musical inventory to sure-fire mass market hits, iTunes can store all kinds of songs, because a song downloaded once is just as profitable a song downloaded one thousand times.

American Political Fund-Raising

In the 2003 primaries for the Democratic Party in the United States, it was expected that the front runners would be Kerry, Lieberman and Gephardt. Those candidates knew the lay of the land, and had a large book of wealthy donors who would come through for them despite the restrictions of the McCain-Feingold laws. Instead an upstart, Howard Dean and his campaign manager, Joe Trippi started raising money from an innovative use of the internet. If people buy books through Amazon, and items from ebay, why not donate through it too.

Previously long tail donations had come through the expensive process of direct mail. It costs a lot to print the paper, send the letters, and then process the cheques that come in. Direct mail often chews up eighty percent of the money that comes in through fixed cost. Donations from the internet, carry little infrastructure behind them, certainly little that the candidate has to provide, and as a result is a lot more cost effective than direct mail.

The Kerry campaign quickly noticed and by the time voters went to the booths in 2004, Kerry had out-raised Bush for money. Previously Democrats had problems matching the fund-raising capability of the Republican party. The Democrats had business and Unions as their main financiers, but not the big ticket donors of the Republicans. The McCain-Feingold laws limited the amount on person could donate, but even so, the Democrats appealed directly to the long tail, and were successful.

The lesson from the Dean campaign was that many small contributions are worth more than large contributions from a wealthy few. This also gace Dean greater latitude in the issues he could pursue. Not beholden to big money, he became a voice for his constituents and donors - all several million of them.

527s

The McCain-Feingold laws also limited where the soft-money was flowing from. it left loop-holes however, and these were quickly filled by the organisations known from their place in the taxcode - 527s. These groups appealed to the long tail as well, the Democratic allied 527s raising over fifty-seven million in the first quarter of 2004. The largest of these was moveon.org . In particular, moveon has raised enough money that it can challenge the established lobby organization and parties who are funded by focused business groups. A good example of this is their advertising page which contains TV adverts. During the 2004 election cycle, possible adverts were voted on by members, to determine which was the most popular and represented the group's members the closest.

Moveon.org has managed to survive beyond a single issue, but others such as the Swift Boat Veterans For Truth , have not. The SBVT are a classic flash-advocacy group. Their target and message was extremely focused, and had no life beyond Kerry's defeat in the presidential election. This is how most flash-mobs start-out, it is a rare one that manages to continue on past the initial issue which defines their relevance.

Getup

Getup is probably the first Australia flash-advocacy group that uses the economies of scale of the internet to raise money and lobby members of parliament. The Getup folks were wise to give themselves a wide enough issue that it has relevance beyond the next election. From their about page;

After nearly a decade of conservative government, our country has changed. Millions of Australians don't like the direction we've been heading. On August 9 the Coalition government takes control of the Senate. It will have more power than any government in a generation.

The other political parties aren't providing a strong opposition, and the media is dominated by a handful of right-wing voices. People need to take politics into their own hands. GetUp provides them with a way to do this. GetUp members are building a ground-up movement of Australians who want to act, not just complain.

It is interesting to note that the links in the top right hand side of the page on Getup, mirror those of Moveon's. For instance Getup has the Australianised language of; Home, About, Get Updates, Chip In and Media. While Moveon has Campaigns, Success Stories, Donate, Sign Up and About. They both follow the same process which is probably the defining nature of a flash-advocacy group;

Flash-advocacy groups cannot survive without a cause, members or money. The SBVT have died because the reason for their cause is gone. Moveon has survived because they have reinvented their cause several times to keep themselves relevant. Getup, and other Australian flash-advocacy groups which follow it, will face the same challenges to remain relevant.

Value Adding For Voters

Getup contains on its page a form which makes it simple for voters to choose their Senators, and then send them either a canned message or a customised message. This is value adding for the electorate. It can be cumbersome, annoying and often guesswork to collect all the relevant emails of MPs from the Australian Parliament House website. Getup makes the process simple and easy .

It has been effective enough that Andrew Robb saw fit to paint it as a politically motivated group with an alternate agenda on the 7.30 Report . Robb said;

There are hundreds of emails arriving in Senator's officers. They're beside themselves, just to clear the screen. They get back to their office from meetings looking for important communications from whoever, and they're confronted with screen after screen of these emails, in some cases over 200 emails. This is highly irresponsible, this is spam, this is spam.

Robb has attempted to paint the Getup group as spammers and Howard haters, thus showing their irrational agenda, and repugnant methods. It is not spam, the form contains a button which requires the user to "send the message".Secondly, volume of email is easily dealt with. Email filters are a commodity technology now, these emails are easily filtered into a folder to determine the volume of canned emails, and those that are customised. If the Senators cannot do it, then I am certain IT staff of Parliament House are more than capable. I would have been more impressed with Robb if he had of said something about how many were canned in comparison to how many were custom. Instead he spouted typical hysterical and shrill political nonsense.

Here To Stay

Last election we had www.johnhowardlies.com which the Liberal Party has since tried to use the Electoral Act to silence in an act of political retribution. Senator Abetz has been leading the charge there. We also have the Committee on Electoral Matters which is looking at these issues and potentially may make judgements which require regulation of the internet. This is short-sighted and typical of the self-interested political nature of decisions for the purpose of political outcomes.

Getup is a more organized, efficient and internet aware permutation of the flash-advocacy group that taken its cues from the American netroots and flash-advocacy movements. I have no doubt, it is just the first of this kind, there will be conservative, liberal, labor, green, democrat, religious etc etc etc etc. Any advocacy group that can rally individuals around a single issue, and get them to donate money to that issue, will have a place in the political process. Getup should not be punished because it is new, many others will also adopt this model. Politicians had better get used to it.

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avocadia: Spam:

Wasn\'t John Howard\'s son involved in a spam campaign on behalf of the Liberal Party last election? What about the television, newspaper, and letterbox advertising in election season? What about the unsolicited calls from telemarketing operators? Spam? Political discourse is now a two way street and they had better get used to it now.

The Economic Rise of Many-to-Many Systems and Their Political Ramifications

The internet boom of the late nineties saw many winners and losers. Some of the big winners were companies such as Amazon, Yahoo, Ebay and Google. These exemplified the changing technology and the new ways it allowed those businesses to not only reach customers, but to allow other customers, to reach their customers. This is the many-to-many economic model. It would not be possible without the rise of the decentralised data network, the http protocol, and the internet web browser. The market success of this economic model has ramifications for representative democracy.

Netscape Navigator

The web browser has quite a bizarre economic history, it commoditised the desktop, but managed to commoditise itself in the process. Nowadays it is taken for granted that an operating system will come with a free web browser bundled in. Only eight years ago, browsers and winsocks were on separate CDROMs.

The capacity of the web browser to commoditise the desktop, and make it irrelevant was realised by Microsoft after they watched the internet take off under their oblivious feet. Microsoft was slow to the market, but used their monopoly on in operating system to try and commoditise the browser itself. They developed their Internet Explorer and gave it away for free with the Microsoft Windows operating system.

It took Microsoft several version of Internet Explorer to compete with Netscape Navigator. Netscape itself was flush with cash from an IPO, its founders and backers were inordinately wealthy through starting the Silicon Valley software boom. They entered new markets, but were unable to compete against more professional engineering products. Their 4.x Navigator software was released in alphas and betas to the world. Which gave Netscape a name for bugginess.

Finally Netscape released their code as opensource, unable to compete against Microsoft's monopoly, its strong arming of OEMs to exclude Netscape, and Internet Explorer price point of free. The world got to look at poorly written software. It was bad enough that it was junked, and the opensource Mozilla project, started again, rewriting a browser from scratch. This meant that Internet Explorer had the run of the market for several years.

Commodity markets are never static, they soon innovate at a rapid pace. This has left Microsoft languishing behind. Their browser is now the most inferior of all the browsers in the market. Soon Internet Explorer was competing with the Mozilla Suite and its spinoff of Firefox. The KDE project developed khtml which is the basis for the opensource Konquerer, and underpins Apple's Safari browser. Another perky company from Norway released the innovative Opera browser, which is managing to make money in a commodity market with a price point of zero.

Innovating To Capture Customers

The freeing of software from the platform, and as a result business and consumer interaction, has allowed many-to-many companies like Yahoo, Google, Amazon etc to innovate for their customers, rather than waste energy, time and money on building to a platform. Compare the game software industry to the internet companies. Much money, time and contractual exclusivity is wasted in meeting the competing platforms. A game company must decide to write for the PC, for the Playstation, for the Nintendo, for the XBox.

Yahoo writes for the internet, and whatever medium data will travel across. I can read Yahoo on my browser, or with my blackberry. If I want to play Zelda I have to buy a Nintendo, but if I want to play Final Fantasy I have to buy a Playstation. With big titles like Grand Theft Auto I have a choice of PC or Playstation. But the game companies are limited by the platforms they meet, just as the consumer is limited in titles by the platform they own. With Amazon, or Ebay, the platform does not matter, it is the interaction with the customer that is all important, and where their development time and money is spent.

Google's recent Talk software is interesting, as this moves them from platform independence into meeting platforms. It is a step backwards. At the moment you can only download it for PC. Their google bar is the same, it splits between Internet Explorer and Firefox. In other words those two software products are platform dependent and place them at the mercy of the platform developers. Mozilla is probably not so bad, but Microsoft has a history of avoiding competition through unethical and illegal methods.

Welcome to 1997 Joel

Joel Spolsky is well known and popular technology commentator, who sees the world through a Microsofties eyes. last year he had a widely commented on epiphany, in where he got that the browser made the desktop, and its APIs irrelevant for many products . That he is coming to this realisation in 2004 is quite remarkable. Considering that Amazon and Ebay had built amazing businesses, revenue and fortunes around the commoditisation of the desktop and browser.

Back in 1997, several web framework started to mature, Sun's Java Servlets were released, mod_perl was maturing, as were several other methodologies like CGI. There was nothing stopping developers from making rich applications through a central server and a client's web browser. Using HTML collapsed the learning curve individuals had to go through to use the website, forms remain a very limited subset of functionality. As a result they differ little from website to website, unlike desktop system which can vary in an abnormally volatile manner from system to system.

I have worked on several many-to-many software systems that started out as being desktop based, or incorporated some minor web functionality to interact with client, and then did most of the heavy lifting on the desktop. Without exception, all of these have now been migrated entirely to the web browser. One system I developed in 1998 contained approximately 25% of functionality through the web at initial deployment. Within twelve months the desktop component was decommissioned. The users and clients demanded that it all be on the web. It is a richer, more consistent interface, that can be used from anywhere. The desktop, quite literally, cannot compete.

That being said, there are horses for courses, I would not do image editing, or video recording through a website. That remains the domain of the desktop. But the many-to-many business models are unachievable through the desktop, they can only be done through the internet, and the web browser. This raises possibilities for representative democracy which is itself a many-to-many model. Companies have refined the process, which gives potential for representative democracy to incorporate these technologies.

Political Ramifications

Representative Government is a political method and deliberative process that was developed during a time when education was scarce, and communications were exceptionally slow. We now live in a time where the average citizen is nearly as well educated as the Prime Minister, or any other representative. Wisdom is no longer the exclusive domain of the politicians, or the elite. The stock market is a good example of this, the wisdom of the crowd out-performs fund managers, who are supposedly specially educated in choosing winners.

Communications have gone through a revolution. Citizens have access to the same level of communications, and speed of communications as government does. In addition encryption, and processing power have commoditised so that citizens can compete with the wealth and resources of government in these areas as well. The pyramid nature of representative government is getting chewed away at, through the development of humanity and the commoditisation of technology.

The expectation is the non-specialist roles of government will be consumed by the citizens, chosen through sortition and acting as juries in parliament for either a single issue, or for an extended period across many issues. The many-to-many nature of representative democracy need no longer be the exclusive domain of individuals representing a district and party. Those districts can, for many issues, represent themselves.

Government has a history of ignoring innovation, preferring to collapse more power to itself and make more and more of its input and output private. Shielding it from the public. It is ironic that the people, markets and technology have gone the opposite way, making more of our lives public, and leaving our interactions, almost permanently in plain view. There is a tension here that will need to be resolved.

The many-to-many business model has been developed in the last ten years is not only viable, but the pillar of strength in many markets. Technology has enabled this happen in an efficient, and global manner. it is for the health of government, and the people, that these innovations start entering the political system.

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cam: Follow on: Ratification, Sortition and Crowd Wisdom ...

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avocadia: To be fair to Joel Spolsky: He was right all the way up until last year. And he is more or less still right. There yet remains painful incompatabilities between DOM implementations that make trying to do apps on teh web a litany of hoop jumping. The UI for gmail is fantastic - for the web. You could probably do it in an afternoon in something like Delphi or VB.
cam: But only if you want to be cutting edge: If you do it on the server side, and only use javascript for some client enabling validation (which you have commented on in the past on your blog), then the web is fine for most things.

Spolsky now gets it because the web is starting to cut into the applications that MS used to dominate, like email. For many to many interactions, the desktop never stood a chance. I have worked on numerous NOC/SOC applications that are only viable business models because of the web.

What I have done is nothing special, developers are only as innovative as the market that wants to employ them. I have been working on many to many apps only because that is what the market is demanding.

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avocadia: My point in that post:

…which I may possibly have failed to get across - like that could ever happen - was that picking validation as an example for Why AJAX Is Bad was a poor choice since AJAX is the square peg for the round validation hole.

I need my DHTML is the post we are talking about, by the way.

I think you have picked a poor example as well. Web-based email has been around for years, and it has never even looked liked taking dominance from desktop mail applications. Not in corporate for more reasons than I care to think about (content confidentiality and domain namespacing are the two big ones though). And not in the home; even GMail have implemented POP, not something you\'d waste time on if desktop mail apps were dead.

I kind of also beg to differ on the idea that web offers a richer, more consistent interface. I wish I had a dollar for every time a client asked me for a combo box.
cam: Web email had a transience to it: I used to have prontomail accounts, not even sure if they are around anymore. With Yahoo establishing themselves as a permanent part of the corporate landscape, Microsoft getting involved and now Google, there is now more permanence to the \"free\" email accounts. Even when I had a prontomail account, it was my first filter or first contact. I only used POP with the mail I got from the ISP, it is easier to hit a web based email solution from everywhere than it is to share a free POP account across three different computers.Browsers now have embedded spell checking, which previously was a reason to use a desktop client before. Technology is catching up to make the desktop no longer the dominant interface.

I kind of also beg to differ on the idea that web offers a richer, more consistent interface. I wish I had a dollar for every time a client asked me for a combo box.

The web\'s training costs are lower. People are used to buying books through Amazon, or entering directions into mapquest. The limited subset of form inputs is a good thing IMO. It means you dont need much training to actually use a website. The majority of training becomes getting used to the business concepts and the geography of the interface.

The other aspect is colour. Other than icons, the desktop is drained of colour. It is an ugly grey morass of clumped rectangles, borders and black arrows. I recently worked on an application that was converted to a web interface. The desktop was pretty ugly even by desktop GUI standards - new dailogs popping up all over the place etc. The design for the web though incorporated blues and purples. It is quite a pleasant environment to work in.

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