Infovark

Nick Carr was nice enough to send us a copy of his new book “The Big Switch”. In turn, I was more than happy to read it. Here are my impressions.

When I was first invited to open my Gmail account in 2004, I did so mainly out of curiosity. At the time, Web-based software was an emerging trend. Most were unsure as to its actual usefulness. It was like the repeated predictions for the internet fridge — certainly possible, but why would you need it? Nowadays, Gmail is my primary email client. I will never install a client side application to handle my email again.

See how I said “Never” as in “Not Ever”?

That’s the Big Switch.

The central premise of Nick’s book is that what happened to the business of power generation at the beginning of the last century will happen to software publishers at the beginning of this one. Just as in-house power generation was supplanted by large, scalable, remote, centralized power plants, user installed and maintained computer systems will be supplanted by large, scalable, remote computers, hosted over the internet.

Because computer software can be deployed remotely, just like power generation, the infrastructure of the World Wide Web allows companies that specialize in software to offer us their services without users having to understand how these services operate — and certainly without being responsible for their maintenance and upgrade. The days of people who want to write a letter also having to be amateur computer technicians will fade into obscurity. After all, you don’t need to know Ohm’s Law to plug in Mr. Coffee, right?

It’s an attractive proposition. To me, storing your personal photos on a local machine seems risky — why not store them at flickr, or Picasa? They have far better data security than you do, unless you have armed guards patrolling your house. Online file storage services, like box.net and the Windows Live services are also spearheading this drive of consumer applications into “the cloud”

The historical parallels between electricity and software wear thin at times. Electricity is not like software in many ways. Electricity doesn’t have bugs. It has a binary success/fail metric: Either my lights are on or they are off. Software has a wide array of places were things can go wrong. In the case of cloud computing, the artifacts sent over the wire are not as replaceable as a few watts — as anyone who’s ever lost a perfectly composed blog post knows. The computer engineers working on this information shift have vastly more difficult problems to solve than the electrical engineers of the 1900’s.

At the same time, the similarities are striking. Of particular relevance to the growing Enterprise 2.0 crowd is the frame of mind of the early electricity pioneers like Thomas Edison. Edison expected to sell systems for generating electricity to millions of companies and governments all over the world. He didn’t grasp the notion of centralized power plants until it was too late. (General Electric, his company, had to re-invent itself on the consumer side of electricity.) Now there is a new wave of innovation being born right now in the field of enterprise software, largely spurred by what Nick calls “The World Wide Computer”. It’s an exciting time to be working on this problem.

The Big Switch is a book about change, and how entrepreneurship and innovation lead people to deal with it. It thoroughly investigates the impending shift from a historical, economic and ethical perspective. It uses clear, concise language that steers clear of technical jargon and clearly delineates between past, present and future. Reading it provoked much head-nodding and agreement. It’s a well written, well researched, and very timely book.

If you have a manager or colleague who is still clinging to the notion that “The Internet is a passing fad” or dragging their feet on your latest web project, this is an excellent book to give them in order to spur them along.

(If they adamantly refuse to read it, this one might be a better choice..)

Prior to starting infovark, I read everything I could get my hands on regarding the Web 2.0 phenomenon. Even though I felt immersed in the trend already, I wanted to make sure I understood what other people were reading about it. I also wanted to make sure that I was hearing directly from the primary sources, rather than indirectly through blogs or reviews.

I recently loaned our principal investor several of those books. After putting together the reading list, it occurred to me that I ought to post it to our blog as well. I plan for this to be the first part of an irregular series. To start us off, we have two essential books: The Tipping Point by Malcolm Gladwell and Chris Anderson’s The Long Tail.

Feeling a Bit Tipsy

The Tipping Point describes a contagious situation where a system rapidly changes to a new state. The tipping point can be a “didn’t see that coming” moment, when something finally achieves critical mass and explodes onto the scene. Whether it’s a sleeper movie that suddenly becomes the film of the year, or a previously obscure product that’s now a household name, the Tipping Point describes how that dynamic transition occurs. It’s the classic snowball effect: Each flake, on its own, adds an insignificant amount of mass to the rolling ball. Over time however, those changes can compound into an unstoppable avalanche.

Figure 1: The Tipping Point

The Tipping Point is relevant to Enterprise 2.0 in two ways. First, obviously, is that software companies like infovark want to create a tipping point situation in the adoption of our products. But Gladwell’s book is a description of the phenomenon, not an instruction manual.

The second, more important reason, is that systems that gather, store and search data often experience network effects. Most Enterprise 2.0 systems fit this category, and ours is no exception. Our products need to scale rapidly so that we can harness these effects to return meaningful, relevant results. The crucial trick for getting the adoption rates we want is our ability to employ statistical tricks (and a few smart guesses) to bring that tipping point moment — the moment when someone says, “Wow, this thing is reading my mind!” — as close as possible to the out-of-the-box experience.

…And Pussycats

The second graph-based book, the Long Tail, describes a major shift in the way retailers think about selling their goods. For the last 50 years, product manufacturers have focused on the hits — those few products that achieve mass-market success. In today’s Internet economy, the cost of sales and inventory are dramatically lower. Retailers don’t need to be as choosy about their stock, opening up a large space for niche products to flourish. Taken as a whole, there can be as much money in niche products — in the long tail — as in selling mass market goods. Companies that have figured this out can derived tremendous value from serving these previously under-served consumers.

Figure 2: The Long Tail

The catch is in the phrase “taken as a whole.” To get the benefits of The Long Tail, you have to have a meaningful and interesting way of aggregating the preferences of many, many niche markets. And in this case, the market for information is little different than the market for products. Wikipedia succeeds as an aggregator of information by trading authoritativeness (scholarly writing and professional editing) for an unmatched breadth of articles contributed by the general public. You won’t find many articles related to animated television series in a typical encyclopedia, but you can find details about Josie and the Pussycats on Wikipedia, including their signature lyric: “Long Tails… and Ears for Hats!”

The Long Tail also holds lessons for us. Creating enterprise portals, automated workflow systems, and other broad-brush systems is an Enterprise 1.0 approach. Enterprise 2.0 systems must recognize that organizations are composed of teams of specialists. Each team and each individual will have a different view of the organization, and each is responsible for making different contributions to the collective effort. An Enterprise 2.0 approach must tap the Long Tail of corporate knowledge and expertise and deliver custom-tailored results.

(P.S. Thanks to Brian Shaler, whose CrappyGraphs.com helped illustrate this review.)

Over at KMWorld, you can read a great interview with David Weinberger, author of the new book, Everything Is Miscellaneous.

I haven’t read his book yet, but some of the insights contained in the interview are very dear to my own heart:

“…if your business depends upon information, as all businesses do, then by using tools that allow that information to be broken out of its assigned categories, you will discover relationships you didn’t know were there. You’re going to spur innovation, you’re going to discover efficiencies and you’re going to enable people across your organization to find other people who share their passions…”

Within the enterprise, Our traditional approach to information management (if you like, the “Enterprise 1.0 thinking”) is that “Whoever owned the information organized the information.”

Why? The answer comes from paper, perhaps still the primary information medium for the worlds information. Paper could only exist in one place, at one time. It wasn’t possible for the consumer of the information to determine how they wanted to consume, classify, or present it. And so, a whole discipline of information management sprung up around the way that we classified physically finite things. That Dewey bloke has a lot to answer for…

But digital information is different. It can be re-purposed, redesigned, and integrated into all kinds of different contexts. It can exist in multiple (or infinite) places at once. As an example, I’m pretty sure my elementary school librarian wouldn’t have let me rip all the pages out of my choose your own adventure novel so that I could lay them all down and make a story map of the path I chose - but I could easily do that with digital information, and in real time, without affecting the thirty other people who were also reading the novel. Surely then I could figure out how to avoid being eaten by that pesky snowman…

This one crucial difference - the ability for digital information to be stored once, and then represented in many user definable, varied contexts is perhaps the most exciting notion amidst the Enterprise 2.0 hooplah.

(Turn to page 4. )

Yesterday was an administration day at infovark. I spent the whole day not writing code.

When you start your own software company, you suddenly discover the amount of time you can spend on things other than making software. Before Gordon and I made the leap, we created a high-level schedule to take us to our first release. If you count effort expended against the plan, we’re tracking well. If you measure by milestone dates, we’re far behind. And it’s all due to things other than writing code.

We drastically underestimated the amount of time taken up by finance, legal, marketing, administration and human resources. It’s an understandable mistake. At our previous jobs, we had people to look after these things for us. Now we’re in charge of them as well as heading up our R&D efforts.

For other software entrepreneurs, here’s a short list of things that aren’t code:

• Incorporating your company
• Setting up a bank account
• Conducting shareholder meetings
• Researching your competition
• Setting up your website
• Figuring out health insurance
• Building your brand: logos, colors, style, etc.
• Purchasing hardware and software
• Setting up your phone system
• Setting up email
• Buying business insurance
• Determining product pricing
• Explaining to all your friends why you’re doing something crazy like starting your own business

All of these things are important, of course. You wouldn’t have a company without them. Yet the developer in you desperately wants to be left alone to “get some work done.” It requires an attitude adjustment. As an ISV, it’s all part of your work now.

Before we officially launched infovark, Gordon and I read Eric Sink on the Business of Software. It’s required reading for all developers working in an ISV or thinking about starting one. You can also check out his blog. It’s a great place to start learning about all those important things that aren’t code.

And now back to the fun stuff.