Virtualisation is bringing us back together


(Image by Chris Drumm)

Back in 1953, Isaac Asimov’s “The Caves of Steel” was published, depicting a world of avatars, virtual collaboration and video-conferencing. It took the real world half a century to catch up with him. Asimov was a smart guy.

But he got one thing wrong. Asimov predicted that reliance on these forms of communication would make us terrified of meeting each other in person. Instead, research has shown that social media is often used to identify new and interesting people to meet in real life (see this article from the American Public Broadcasting Service, for example). In fact, this is exactly how I met my wife. More recently, I’ve enjoyed meeting @Sanfire_IA and @NewOptimists, amongst others, firstly on Twitter (go look them up), and then in real life. (In coffee shops, to be precise).

Tim Stonor and Dan Holowack have both written very interesting blog posts recently about the important role cities play in bringing people together, face-to-face, to create and share ideas. It’s the very lifeblood of the economy. (Edward Glaeser’s “Triumph of the City” discusses this topic in great and fascinating length).

The technologies that connect us virtually have a very important role to play in that aspects of our cities. I’ve met recently with people in cities including Birmingham, London and Sunderland who are involved in stimulating innovation and entrepreneurial activity in city economies. They are all passionate about the value that is created when creative people with disparate skills are brought together.

But they were also unanimous in voicing a concern that it’s tremendously difficult to persuade such people to take time away from the businesses they’re spending 60, 80 or 100 hours a week starting and running to meet people they don’t know; on the off-chance that a valuable new business idea will somehow spring into existence.

All of us face that challenge to some degree today. With the explosive growth in the flow of information we’ve experienced over the last 20 years or so, competition for our time and attention is intense. Social media is a significant part of that explosion of course; but it’s also a significant part of the answer.

Within a few minutes, on Freecycle I can find people near me who need what I no longer want; on LandShare I can find people whose untended land can be used to grow food, and on StumbleUpon I can find moments of genius in every domain from places I’d never in a million years have thought to look, but which StumbleUpon’s fuzzy search engine has ensured are nevertheless relevant to me. And then I can get in touch, arrange to meet, and find out more.

(I have deliberately chosen some of these examples, by the way, for their relevance to the efficiency with which natural resources are used to support economic activity. The recent “People and the Planet” report written by an incredible array of international experts on behalf of the Royal Society should leave us in no doubt at all of the importance of that topic).

This morning, I’ll be attending Birmingham’s Social Media cafe following a discussion about innovation in Birmingham in a Linked-In group, to discuss ideas for social business with people who I haven’t met before, but who I will probably soon be following on Twitter. That’s a great example of the interplay between virtual and physical interactions that’s speeding up the process of collaborative innovation and value-creation in cities today.

But it doesn’t stop there. Digitisation and mass customisation are long-standing trends in manufacturing, but technologies such as 3D printing are going to transform custom-manufacturing in the same way that global-sourcing and production line automation relatively recently transformed commodity manufacturing. And as this brilliant article in The Economist argues, the result will probably be to bring manufacturing activity back to be more local to the consumers of the goods being manufactured.

I turned 40 recently; traditionally a landmark that brings a certain degree of questioning of one’s direction in life. I have no such questions. The family that I now have after meeting my wife through social media is the most important part of that; and the privilege of living through these incredibly exciting and transformational times is the icing on the cake. I can’t wait to see where we’ll go next.

This week’s reading

Some great reading this week on technology, the economy, banking and smart transport … plus a little humour …

And on a lighter note:

Social media – a reminiscence

Since June 2007 I’ve had an incredibly interesting job with IBM exploring the possibilities of social media and some of the other internet and related technologies that have emerged recently. I was first asked by Graham Spittle, who was then the Director of IBM’s Hursley Software Development Lab in the UK, to go and work with our customers to get a better understanding of what “Web 2.0” meant to them, and what it meant for how they would use our products.

One of the key things I learnt was that it’s pretty impossible to get hold of what Web 2.0 “is”. I quickly started to think of it as “everything that’s been done with internet technologies since the crash”. That tallies with O’Reilly Media’s 2003 coinage of the term as the name for a conference intended to revive business interest in the internet (see Tim O’Reilly interviewed by in 2007).

In 2007, Web 2.0 was already old hat in internet circles – and is much more so now. But for many “traditional” companies it was and remains something new, intangible, exciting, scary … but also, for its own sake, often irrelevant.

Do I really mean irrelevant? Not quite … I’ll explain with my personal conclusions and predictions for “Web 2.0” …

1. “Web 2.0” is an irrelevance to businesses …

Web 2.0 is best viewed as a banner term for the collection of internet-enabled technology, commercial and social phenomena that appeared between 2003 and the present time of writing. I don’t think that timeframe will expand much further for reasons that will become clear.

That definition covers such an incredibly broad area that in total it never has and never will be of interest to anyone other than technologists of one variety or another. “Web 2.0” is not relevant to any individual business (with the possible exception of Web 2.0 consultancies) – but elements within it are highly relevant in wildly different ways to (arguably) all individuals, businesses, communities and other organisations.

For those reasons, most organisations I talk to are not interested in “Web 2.0”, and many are frankly bored by the number of people who want to talk to them about it. However, they are very engaged by the way specific developments in internet technology are affecting their businesses and their industries.

2. … but does describe a period in history during which individuals, businesses, governments and social organisations harnessed an incredible variety of new technologies …

Depending on the client I’m working with and the area of their business we’re discussing, I’ll talk specifically with them about communicating intimately with their clients through social media, using Enterprise Mashup technology to create rapid, content-driven applications,  using community effects to create and commercialise new interactions in their ecosystem, using “Web-Oriented Architecture” to deliver scalable online content and services in an easy-to-consume form … etcetera. Our clients are exploring all of those possibilities – sometimes under the banner of Web 2.0, sometimes not.

For example, mobile telephone service providers maintain enormously expensive communications infrastructures that enable us to use our increasingly capable handsets to access a multitude of third-party applications and content in ways that do not necessarily deliver significant extra revenue to them. Conversely, they have a set of capabilities not easily replicable in an integrated manner elsewhere in the online world: they identify us through our SIM card; they bill us through our accounts with them, and the financial information we trust them with; they locate us through the cell network; and they can identify our friends, family and contacts through the entries in our address books. As a result, these organisations are investing huge energy exploring the potential of multi-platform social applications and gadgets that use these capabilities to create revenue-generating traffic through network subscriptions, data bandwidth usage, application licenses or transaction fees.

3. … and represents an ongoing fundamental change in the social and economic organisation of the world …

I really believe that the world is changing through this process. Web 2.0 didn’t start this – the Grameen bank, for example, have been harnessing (and creating) these ideas to enable microfinance to benefit the developing world since 1997. But the wave of activity and technology development driven by the evolution of the internet and represented by Web 2.0 has in many cases demolished the cost and difficulty involved in connecting people around the world with complimentary interests, and enabling them to interact with each other. Some examples:

  • Microfinance (e.g. Grameen, Kiva) – greatly increasing the ability of millions of people with not much to give to chose exactly how their donations are used to directly benefit those in need.
  • Online marketplaces (e.g. eBay, Amazon) – greatly increasingly the fluidity with which resources such as second hand goods are exchanged for cash, bartered, or given freely.
  • Collaborative business models (e.g. Threadless, Zopa, Zuda Comics) – directly connecting anyone with the ability to create clothing, music, video entertainment, comic art, handmade goods and many other products, with the people interested in consuming them, wherever they are, and no matter how few or many they be.

I’m passionate about this aspect of Web 2.0. I blogged recently about the combined impact of the current economic crisis and the environmental challenges we face, inspired by an excellent special issue of the New Scientist magazine. The implication is that we are in great need of these new models of economic interaction and resource optimisation to support a growing population with rising expectations on a finite planet.

4 … enabling individuals to interact without the aid of traditional organisations …

Consider peer-to-peer lending. Zopa in the UK have shown tremendous growth in recent months (see my previous blogpost). Zopa provide introduction, vetting and bad-debt recovery services to individuals wishing to enter into agreements to borrow from or lend money to each other. Internet technologies make the introduction part incredibly cheap.

That simple model replaces part of business of traditional Retail Banks or Building Societies, wherebv product design, sales & marketing, branches, call centres and a huge number of other operations are used to persuade and enable savers to deposit funds and lenders to request them on a sufficient scale that a regular operating margin and sustainable business model can be created.

Is it a huge business? Not yet. But is it interesting and growing fast? Definitely. Read this great post from the Financial Services Club’s blog for a balanced picture.

Online marketplaces enable a similar model: small traders using them can leverage a global infrastructure to reach markets they couldn’t dream of a few years ago; and by using the brand and reach of the parent marketplace, they don’t need to be experts in online marketing to do so.

5 … creating challenges and opportunities “traditional” organisations to reinvent themselves – or just evolve.

Newspapers. Record companies. Book sellers. Filmmakers. Software companies. Electronics retailers. Banks. Mobile telephone service providers. It’s easy to find news and opinion pieces every day citing the struggle these organisations are facing as the internet evolves – and the opportunities they are presented with.

And for sure, some of this is serious. In Tribes, Seth Godin wrote a great description of the way cheap music recording, production and distribution technology has undermined every aspect of the traditional business model of a music company. As a result, many traditional companies are struggling to get to grips with the new world, whilst newcomers such as iTunes flourish.

In other areas, the picture is less clear. Traditional media organisations such as broadcasters and newspaper publishers have seen advertising revenues plummet in their traditional channels as advertising spend shifts online – these revenues are the basis of their business models.  But they are – faster or slower, for better or worse – evolving their business models to embrace and commercialise the online world. The Daily Telegraph, for example, made great use of Twitter in covering the G20 summit.

Am I predicting imminent collapse for vast numbers of businesses? Not driven by the internet, no (current economic conditions are a different matter). But do I expect that in 5 and 10 years time we’ll see not just a different set of companies dominating the industries we recognise today, but in some cases a completely different set of industries themselves? Absolutely. Are Google today a dominant technology company, or a dominant media company? How do you breakdown a world in which the same digital content is accessible on your TV, PC and mobile and embedded in your MySpace page? We’re about to find out.

Moving On

As I’m moving on from my current role, I have a sense that the world is (finally) moving on from Web 2.0. Unlike Service-Oriented Architecture, the last sweeping trend to affect the technology world, I don’t think Web 2.0 will stick around – unlike SOA, it doesn’t have a cohesive, innate structure. And I don’t think it will be replaced by “Web 3.0” either – the internet was only created once, it will only ever cause one fundamental economic crash caused by the hype following that creation, and it will only ever emerge from that crash to be called “Web 2.0” once.

From here, a whole plethora of internet-enabled technologies, ideas, applications and models of commercial or social interaction will evolve along their own separate paths. The generation of people who grew up with a globally connected internet as a completely normal part of the everyday world are already inventing new forms of communication at a faster rate that ever seen before on this planet, and all of them, and those who seek to exploit them, will suffer their own individual trials and tribulations.

What I’ve learnt is that what’s interesting to me is not so much the technology, but the individual and organisational behaviours that affect its adoption and usage. It’s those thoughts that I’ll take into my new role, which whilst it won’t be focussed around Web 2.0 or any of its elements, will doubtless involve them – and many other new and exciting developments – in some way. More about that later.

For sale: one economy, slightly used

In a couple of previous posts (here and here), I’ve written about the effects I expect to see social media have on the financial services industry – particularly retail banking and insurance – this year. The reason I expect to see companies in the industry explore social media is the need to re-establish themselves as being trustworthy by interacting with their customers in an open and trustworthy way – something social media can be perfect for (See Christophe Langlois’ discussion of VanCity’s “Change Everything”, for example).

However, there is a deeper question to ask concerning not just how financial organisations regain trust, or even how to regulate their behaviour to avoid a similar crisis in future:  the question is whether our current economic system is set up to achieve the right objectives at all. My previous posts contained links to some articles exploring this theme, but Umair Haque at the Harvard Business School has just posted a much more direct call for a “Smart Growth Manifesto” on his blog.

Umair’s post echoes a special issue New Scientist magazine ran back in October on the theme “the Folly of Growth”. Articles in the magazine argued that current expectations of continuous economic growth (a trend that, until now, has withstood periodic recessions) cannot reasonably continue, on the following basis:

  • Each dollar of GDP value can be associated with an estimate of the resource consumed in its creation.
  • Even assuming a relatively modest rate of future growth, at the current level of resource usage / $ of GDP, and at the current level of reduction in that figure, we will rapidly run out of resources.
  • If the expected rate of growth is increased to reflect one of the benefits of growth often cited by free-market economists – i.e. an improvement in living standards in emerging and developing economies driven eventually by growth in developed economies), then we run of resources incredibly fast.

One of the New Scientist articles went on to calculate an answer to the following question: if we want to drive economic growth at that level, how much more efficient do we need to become at utilising natural resources to achieve it?

The answer (based on their assumptions) was frightening: 5 times better to achieve modest growth; 50-100 times better or more if our goal is to lift the entire world to an equivalent standard of living to that enjoyed in today’s United States.

There are, of course, a huge number of assumptions behind those figures, not to mention questioning the basis on which “standard of living” is measure (i.e. to what degree is the quality of life of someone in the U.S. or anywhere else determined by their consumption of economic or environmental resources?).

However, to me the message is clear, we must be driven by goals that are not entirely based on monetary growth. As individuals, of course, that’s true already (Mr. Madoff and his like excepted); what we need to see now – as Umair has pointed out – are economic systems that reflect that.

This week’s reading: the future of banking

I’ve been spending time recently speaking with clients and colleagues about the ways in which some of our banking and finance customers might seek to exploit technology this year in the wake of the credit crunch. The Finanical Services blog, FSA and others are predicting a string of measures to reduce costs and implement compliance to new regulatory requirements – all of which will involve expenditure on technology. Some of the same sources are also predicting a simultaneous exploration of social media or other innovations exploiting new technology aimed at re-building trust with consumers and increasing business in new channels.

I’m expecting to see both those things happen, and hope to help some of my customers along the way. Here are some of the articles I’ve found interesting in that area this week:

How to Tweet

I recently encouraged a family member to join Twitter; she gave it a try but couldn’t really figure out why I’d been so enthusiastic about it. That’s a feeling I remember having when I first joined Twitter something over a year ago – it took me a while to get used to a new way of communicating. So I started to tell her about some of the ways I’d eventually started using Twitter that resulted in me finding it such a useful tool.

For what they’re worth, here they are – if you’ve never tried Twitter or are new to it, I hope you’ll find them interesting.

0. Why tweet?

Like any good techie, I’m starting at 0, not 1 … and with something important: why Tweet? There must be a good reason, or so many of us wouldn’t be doing it so much. I think of Twitter as a global “over the partition” conversation. Years ago I worked in an office with partitions with a group of people who did roughly the same thing I did. Several times a day, someone would find something interesting on the web, fancy a coffee or just plain lose their rag with a malfunctioning piece of code … and say something about it. There’d be a brief conversation – sometimes informative, sometimes not – and then we’d all go back to what we were doing.

Nowadays? I can’t remember the last week I was in the same office two days in a row – except my home office of course. Often I’m in different cities or even countries on consecutive days. I work – and socialise – with an identifiable network of people, but they’re busy doing their own thing wherever they happen to be.

So I tweet them. Because by tweeting them I can reach them wherever they are; because they can decide whether to pay attention or not; and because there’s the potential for people I don’t know to overhear the conversation. I’ll explain what I mean by “overhearing” in points 2 and 3 further on.

So that’s the why of it, for me anyway, now here’s the how …

1. Say what you do

Twitter is blogging on a small scale – so fundamentally, just like blogging, it’s about letting people know what you’re doing – or what you’re reading, or what you’re thinking. So get started – whenever you pause for thought in your day, consider tweeting what’s on your mind. Someone, somewhere, might find it interesting.

2. Follow Twitterers in your network

You have to start somewhere, so start with who you know. Use the registration tools to find your e-mail contacts, or use the “Find People” search to look for people by name. More than likely, you were introduced to Twitter by a colleague, friend or contact so look them up and look at the people they follow. You’re likely to find people you know, or people who might be interesting to you.

3. Search

Most tweets on Twitter are public, so in theory you can listen to whatever anyone is saying … so how do you find the people you don’t know that are saying interesting things? One way is to use Twitter’s search facility to search for key words or phrases that describe what you’re interested in – for example, “Social Media”, “Environment”, “USA”, “Kylie”. That’s one way to see who’s tweeting about the things you’re interested in. Several companies are taking this approach, and will respond to a tweet containing their name either directly or by following you – they’re doing this because they’re exploring how they can use Twitter to interact with their customers and employees, and with the marketplace at large.

4. Use connection services

To be honest, Twitter search is a fairly blunt tool for making connections. More interesting are services such as “Mr. Tweet” ( that analyse your Twitter connections and activity, and suggest people to follow. Alternatively, look at the replies your followers send to people you don’t know (i.e. messages containing @someones_name) and their re-tweets (i.e. a message they send starting RT @someones_name that indicates they’re forwarding a tweet from someone else). They’ll give you another link to people with whom you might share a common interest. Go look at their profiles and their tweets and perhaps start following them.

This should just about get you started. There’s a lot more advice out there, particularly if your interest in Twitter is concerned with it’s potential as a tool for personal and corporate promotion. I’ll leave that to others. But if you just want a few tips to get started, I hope this has been some help.

Happy tweeting,



The person of the year is you … again

My first week as a public blogger, and there’s plenty to get excited about as the convergence of Web 2.0 and banking continues. I find ING’s “We the Savers” site interesting, it’s a similar idea to the Cluetrain Manifesto, but as the name suggests concerned with responsible personal finances. Whilst I applaud the sentiment, as someone who has behaved responsibly in this area for some considerable time but has watched the value of their investments plummet in recent months, I can’t help but think individual consumers shouldn’t have been the only targets of this endeavour. I also think it’s a shame the site is US-centric – this is a global issue.

Elsewhere, the UK peer-to-peer lending site Zopa appears to be going from strength to strength according to finextra and others. Whilst the competitive investment and borrowing rates are obviously part of the appeal, the directness and transparency of the model is in my mind equally appealing as we all suffer from the effects of a failure to manage the risk of increasingly complicated financial instruments.

We’ve been seeing the effects of social computing and user-generated content spread out from the internet community and drive huge changes in media, telecommunications and marketing particularly for some time now. Recently those changes have been starting to tell on more traditional organisations in other sectors. In the current economic climate, and despite the financial pressure those organisations are seeing because of it, my sense is that that trend will only accelerate.

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