11
A world where everybody is doing business with everybody else appears to be quite viable, if not always hugely inspired.
— Derrick de Kerckhove, The Skin of Culture
In the middle of the first year of the new millenium, the fact that more traditional businesses are making big online plays is a huge media story. Why? Because the business press seems to think it’s time for a fight – a battle between ‘bricks-and-mortar’ businesses and ‘pure-play’ dot coms. Will Sears beat Amazon? Which ecommerce site is laying staff members off today? Will ‘meatspace’ (the physical world) win? Or will the cybernauts from beyond the planet-of-the-bits be victorious? The continuing saga of old economy vs. new economy is looking more and more like a soap opera.
Pretty silly stuff. The real solution has nothing to do with either/or logic. ‘Winning’ means understanding how collectivity works and applying its principles to what you do.
Many people looking for new business ideas are realizing that commonspace doesn’t have to betheir business for it to fuel their business. They may be ravers making clothes and accessories to sell to others they know from the online party world. They may be filmmakers building excitement about their new independent film using online word-of-mouth. Or they may just be people running small businesses who see opportunity for their own growth in collective spaces like eBay. As in the open source model, companies don’t need to make their money directly from commonspace. The contributions they make to the collective are an adjunct to what makes the money and pays the bills (or vice versa).
The real action is in the sidelines, where commonspace is just a part of an existing business or an offline business idea. There’s no question that there are a lot of pure-play commonspace ideas that will make money and provide us with nifty new toys. But in the end, the market for new kinds of information, ideas and community is limited. After all, how many Bloggers and eGroups can one person use? In the meantime, we still need and want all those staid old-economy goods: food, clothing, shelter, and a decent bottle of wine. Smart businesses will take advantage of the connection between the real-world economy and commonspace to bring those goods to us. It’s a win-win situation: the consumers gets the goods they want more conveniently; the merchants gain an efficient new channel for orders, and everyone gets to feel like they’re on the vanguard of some wild new technological era… even if they’re just ordering more toothpaste.
Feed the Conversation
Companies must ask themselves where their corporate cultures end. If their cultures end before the community begins, they will have no market.
Cluetrain Theses 36 & 37
Before you do any thing else, connect your customers
- To talk about your products and services
- To enable them both to learn and to teach
- To create new synergies and new kinds of opportunities
Connect them, and then join the conversation. Spaces for many-to-many connections creates customer feedback you can use to improve your products and drive up sales. It also provides a cheap and accurate source of market research information. And finally, it creates user trust of your brand.
Take the Sun Java developer Web site as an example we mentioned earlier[1]. Sun used the site to encourage customers to talk to each other and to Sun’s engineers. As a result, Sun’s poorly documented Java development software became more usable. In addition, customers found they could get answers quickly online, answers which were then documented for future customers. In other words, Sun’s customers and engineers were creating a searchable Java knowledge base through discussion on the Web site. In addition, the feedback helped engineers fix and further develop Java. So Java became into a more usable product in the short term and a better product in the long term.
Customer-to-customer discussion sites are common in the computer industry because most software companies realize they aren’t the only experts on the use of their products. Users usually know as much about a given computer product as the people who made it – and often more. Tapping into this expertise creates happier customers and more saleable products . It may also help build the company’s credibility, especially if they are openly and actively engaged in the conversation. Both of these factors can have a significant impact on increasing sales.
Double Plus Ungood
One factor marketers overlook far too often is honesty. If you are not open, if you are disingenuous and try to control things too tightly, you’ll be stuck with a backlash. Too many companies rushing towards online discussions have missed this point – to their peril.
Shell Oil, for example, has had a public ‘discussion forum’ on its Web site for a couple of years now. At first glance, it seems like a good idea – a company with a bad reputation opens itself up to the public to engage in conversation. But the rigid, hyper-controlled nature of the forums gives them a creepy, Orwellian feeling:
Date: March 18, 2000 10:35 AM
Author: Kris Ramlan
Subject: Response to questions posed
Dear Alex,
Hi, the questions I wanted to ask have already been posed by others. But the answers weren’t posted here. This forum seems like a one way-thing. Could we have a more lively Q&A or at least some response from your end? So issues could develop further.
Date: March 22, 2000 04:12 PM
Author: Webmaster, Shell International Ltd
Subject: Reply to Kris Ramlan
Dear Kris: I know this forum seems a bit one way but it is a forum, a place where people can come and air their views or ‘listen’ to the views of others or just to observe a debate without actively participating and we believe that applies equally to employees of Shell, as much as to any of the other users. We do not see this as a question and answer facility – for that we have an email system. Having said that, we do make strong attempts to reply to people’s questions – especially in recent months (I will be the first to admit that when the Forum was first up and running it was difficult to get people to change their mindset and try to participate). Also, you may have noticed that to certain people we have replied with the wording “please see our e-mail to you”. This is because we didn’t feel it was necessary to ‘debate’ their query.
Hope this helps.
Date: April 09, 2000 10:30 PM
Author: connie
Subject: Posted complaint not responded to. WHY????
I specifically requested a response to the message I posted on the forum “poor customer service and false accusations – shell doesn’t care”. It has been over two weeks now and I have still not received a response. WHY???? If I am taking the time to post a message, someone should certainly take the time to read the postings and respond to them.
Still waiting,
Connie
Date: April 10, 2000 10:45 AM
Author: Shell International Ltd
Subject: Response to Connie
Please see our e-mail to you.
Evidently, Shell has assigned a couple of P.R. flacks the thankless task of responding to questions from the public without actually saying anything. While the flacks may mean well, they’re just pissing people off. Sure, the answers come via the Web, but they’re the same old corporate doublespeak.
Using a discussion forum in this way misses the point of having such a forum in the first place, and it also misses the opportunities that forums bring. Because there is no one in the Shell forum capable of addressing issues honestly and forthrightly, the exercise isn’t making customers happier. Their insistence on private, one-to-one exchange as a method for dealing with even remotely sensitive topics doesn’t make Shell look open and honest.
Doublespeak and gerrymandering don’t work in commonspace, where every P.R. trick comes under the scrutiny of thousands of eyes. Company representatives need to speak as individuals, not the disembodied will of the company. Moreover, they have to have the latitude to admit company short-comings. This is necessary not only to engage customers in a real conversation, but to create a context that will make customers feel comfortable talking to each other in a corporate-owned space.
Making the Shift
Finding the right approach to the global conversation is a major cultural shift for most companies. The hushed tones and blizzards of memos of traditional corporate culture create an environment that encourages pat answers and brown-nosing. But people aren’t fooled by this kind of garbage any more, if they ever really were. Enough people have held meaningless jobs where they’ve had to produce pat answers that they know exactly what a disingenuous, over-edited response sounds like. They don’t believe in these responses from each other,so they’re not going to buy them from you.
The authors of The Cluetrain Manifesto argue that the path to a productive culture shift lies at least partially in the use of intranets. Intranets and e-mail open up people-to-people communication within a company and open doors to more honest communication with the outside world. Which is not to say that the shift to more open communications comes magically the instant you install an intranet. It’s all about will and the use that people make of the available tools. Just like discussion forums for customers, intranets need to be open multi-path channels where everyone involved feels free to connect with anyone else. The minute an intranet becomes a one-way broadcast stream from management, you’ve wasted your money.
Not Just Playing Around
Certain approaches to people-to-people connection add utility to products, which in turn can directly drive new sales – big new sales. Take the gaming market, worth $7.4 billion in 1999.[2]Kids’ stuff? Only if the kid is playing alone. But more and more, MMPGs – Massively Multiplayer Games – dominate the market. People are looking for to play with each other. And they need someone to connect them.
id Software’s Wolfenstein/Doom/Quake dynasty is the best example of the online gaming trend. All of the games in this series have always had a single-player mode, where players navigated through a labyrinthine environment, dueling increasingly formidable computerized foes and racing against the clock. But on December 10, 1993, Doom introduced a second mode of play that changed everything: the deathmatch. Deathmatches took place online in a many-to-many environment (yes, that’s right – in commonspace), where for the first time people played the game with and against each other in real time in a 3D virtual environment. A lot of people. At one point, Doom was actually out-distributing Microsoft: there were 27 million official copies of Microsoft Windows in circulation, and 30 million copies of Doom.
Then in 1999, id released Quake 3: Arena, the first game in the series focused exclusively on online play. It’s possible to play Quake 3 in single-player mode against ‘bots’ (computerized enemies). But the game’s entire design pivots around its online playability. Quake 3 met with wild success. While future id titles will likely go back to including large single-player components, id’s already learned that sales depend on the game’s openness. (A quick note on the importance of legacy material: never throw away anything in commonspace. id has not only decided that its next release will be Doom III, but it has also licensed its ancient Castle Wolfenstein title to Gray Matter Studios for redevelopment on the Quake 3 engine.[3])
id software has always maintained strong ties to the open source community, releasing Quake for Linux at a time when few other commercial developers wrote Linux ports of their titles, and open-sourcing the original Quake. To this day, Quake releases 1-3 all still have large, devoted communities of players, who enjoy nothing more than arguing about the superiority of their chosen platform… except maybe writing ‘mods’ (modifications) for them. While Quake 2 and 3 haven’t been open-sourced yet, their architecture is open enough that it allows for a considerable degree of adaptation by players. It’s not only possible to write scripts that enhance the playability of individual characters within the game; it’s also possible to modify the look, feel and playability of the platform substantially.
Some of these mods have a history almost as long as the history of the game itself. Rocket Arena and Team Fortress have been ported across several versions of the Quake engine, even to games built by some of the other companies that licensed the use of the Quake engine from id (Half-Life, for example). These two mods alone represent a huge chunk of of the games being played over the Quake server network at any given time, demonstrating that users value the ability to adapt them to their individual taste. Aside from for Quake 3 version, Team Fortress has ‘forked’ into a parallel product, a fully independent commercial game called Team Fortress 2. So there you have it: giving things away results in more things to sell – and more buyers. Plus horrible alien screaming noises and messy explosions.
Mods are interesting for other reasons as well. Though they are built on top of commercial products, they follow the open source paradigm of construction. There is rarely (if ever) anyone working on a mod who gets paid directly for their labour. Everything is done by volunteers (which is astounding considering that the sophistication of a mod such as Rocket Arena 3 rivals that of Quake 3 itself). While a mod is in development, beta versions of the software are released to eager communities of players who’d crawl over two kilometres of broken glass for the opportunity to test new software. The online forums maintained by the mod’s creators are hotbeds of discussion about everything from the uniforms the game characters wear to the core programming itself . The result is the same efficient debugging that makes true open source products work so well.
Another direct result of the proliferation of gaming mods is an increasingly large pool of highly capable, self-taught programmers who’ve matriculated through an apprenticeship process similar to the medieval guild model. It’s every teenaged geek’s dream to go to work for id or Valve or Blizzard or one of the other big gaming companies. When these companies do recruit, they’re more than likely to take someone who’s worked enthusiastically on a popular mod. So think twice, parents, before you put the kibosh on little Johnny and Janie’s violent videogaming habit: by depriving them of their access to one of the most vibrant parts of commonspace, you may well be dooming them to a future of flipping burgers at the mall.
Electric Ideas
From the moment that they realized that it was there, artists of all stripes – authors, filmmakers, video artists, musicians, performance artists, even the almost universally reviled mimes – have been extremely interested in the Internet’s potential for extending their art. But with a few notable exceptions (such as Amazon.com), it’s taking longer for the people who package and distribute their art to catch on.
The main reason for the distributor hesitation is that they rely on copyright to make their money. And Internet users haven’t exactly kept secret their resistance to traditional notions of intellectual property. Many Net users frame the question with what’s become known as the ‘free speech/free beer’ debate. When a user claims that a given piece of online content should be free as in ‘speech,’ they mean that they believe that restricting it by legislation or other means is fundamentally and morally wrong. When someone says that content should be free as in ‘beer’, it means that they like to get good stuff for free. Most long-term Net users believe that online content should be free as in speech and beer. The advent of peer-to-peer networks shows that that belief is spreading, whether the gatekeepers of copyright like it or not.
There is also a large, vocal community of artists who believe that their art should circulate freely online. But most of the big entertainment conglomerates haven’t done more than flirt with the thorny question of putting their vast archives of content on the Internet. And they probably won’t until delivery systems complete with reasonably solid encryption and near-transparent methods for conducting small financial transactions start to appear. (AOL’s purchase of Time Warner will resort in a flood of new content online at some point, but probably only for AOL users.) In the meantime, the adventurous artists aren’t waiting.
Network games provide some compelling examples of collaborative creative projects. Professional writers and musicians are contributing to the collaboratively-authored of world of online games. Cyberpunk SF writer Mark Laidlaw helped shape the narrative behind the incredibly popular video game Half-Life; Trent Reznor of Nine Inch Nails composed the soundtrack for Quake, and will likely be involved with the Doom III project; gloomy industrial musicians Front Line Assembly did the soundtrack for Quake 3.
This is not to say that traditional media companies don’t use the Web. They do. But almost none of them understand how commonspace can work for them. Big film companies especially tend to treat the Web like traditional broadcast media and Web sites like a kind of value-added commercial. The Web is littered with expensive ghost sites that were built to promote Hollywoodfeature films, then immediately abandoned. Most studios probably don’t even realize that they’re still paying to maintain the damn things.
Book publishers have done even less online than the film companies. Sure, they have Web sites, and there have been a few hesitant forays into digital publishing on first-generation hand-held platforms like the Rocket e-Book or in downloadable PDF files. Stephen King began the serialization of a new novel online, but says he’ll only finish it if enough people buy each installment – which is kind of like blackmailing your readers for every cent you can squeeze out of them. And even the plethora of online vanity publishers are living on borrowed time, because their existence relies on their authors failing to realize that they can do just as well (or better) on their own Web sites.
6300 Book Stores Under One No Roof
The people who’ve managed to make money online in the meantime are the little guys – small businesses and independents. Many small businesses caught on to the concept of commonspace early. They realized that the Web presented good opportunities not only for promotion and for extending their direct sales over the net, but also for networking with each other to compete with their larger competitors.
One of the main reasons for this competitive edge is brand formation. Online, it’s possible for a diverse collection of businesses to merge under a single umbrella site and become one brand to the end user. Umbrella sites aggregate both inventory and marketing. To the end user, everyone’s inventory becomes a part of the seamless whole, because there is only one marketing voice, one brand, and one process of driving traffic.
Abebooks , or ‘Abe’ to just about everyone, is a sterling example. Founded in Victoria, British Columbia in 1995, Abe is the world’s largest network of independent booksellers, with more than 6300 member store and over 20 million books listed online. By linking themselves together, used bookstores have not only created a significant resource for shoppers but also drastically reduced their own overhead by cutting down on catalogues and mailouts, activities which take up a significant chink of a used booksellers’ time. There’s also the advantage of Abe’s secure server, which reduces the hassle of financial transactions for the bookseller. (In fact, it’s not even necessary to maintain a storefront any longer, which, believe it or not, can be the undoing of a used bookseller.)
As Abe has grown in size and sophistication, the company is also starting to offer online tools to keep their user base attentive and loyal. The site automatically generates rudimentary home pages for its users, which are customizable to a certain degree. But Abe’s MyBookPal reader’s diary (built through partnership with MyWebPal ) is the real centerpiece of their online tool offerings. Part of the function of the book diary is to act as a straightforward content publisher to feature author biographies, articles on book collecting, and reading. However, it also allows readers to build the bulk of the site’s contents. Readers can use MyBookPal to view lists of all titles by a particular author, to check titles off as they read them, to review titles and read reviews written by others, and to maintain their own databases of books they own or would like to buy. Voilà: a huge swath of content that’s useful to everyone.
There’s no financial jiggery-pokery here either. Abe is a straight, fee-based service, without ads and markups on books sold. Abe was simply in the right place at the right time with the right idea. Over the years, it’s managed to net some major deals with larger players, too. Abe supplies a large chunk of information on out-of-print books to Barnes and Noble. They also match Amazon.com users’ ‘wants’ nightly and, like many small businesses, they sell some of their high-end items through eBay’s Great Collections site.
There are some inevitable downsides to the umbrella approach, however. If the inventory database is not up to date, or the response from individual stores isn’t prompt, customers will leave angry and not come back. For participating booksellers, there is the fear of losing business to other members of the collective. The answer to the first problem is administrative responsibility. The answer to the second is the bottom line for all insecurities about commonspace: get over your fear, or others who can get over it will beat you.
Busking With Books
Another example from the world of online publishing that’s closer to home (because one of us, Darren, is currently the Editor-in-Chief) is Coach House Books , the only literary publisher in the world with the contents of its entire frontlist available online. Coach House, which has existed since the late 1960s, is a Canadian literary institution known for the quality of its fine print editions, and for the fact that they helped first bring authors such as Michael Ondaatje, bpNichol, Margaret Atwood and many others to the reading public.
What many people don’t know about Coach House is that it’s also been a haven for computer geeks for as long as there have been computers. At one time, the Linotype machine was fed instructions through a paper tape generated by early desktop computers. Furthermore, Coach House was one of the first private companies in Toronto to have its own Unix system (the old Sun minicomputer still holds up one corner of Darren’s desk). SoftQuad, the software firm that authored the HotMetal HTML coding software, also began at Coach House.
The current incarnation of the press, Coach House Books, launched in 1997 with the ambition of being a publisher that existed primarily online, offering ‘just in time’ print editions based on the Web version of the text. The revenue stream was to be based on the shareware try-before-you-buy model, with customers contributing voluntary electronic ‘tips’ for books that they had enjoyed reading.
Even for the time, it was an optimistic, even naïve approach. The number of people who buy small-press poetry and literary fiction is limited, and the number of those people who are also willing to brave the Internet to find their reading material is even smaller. The post-1995 flood of new Internet hasn’t been that much help, because the new users had relatively little notion of netiquette and failed to understand that they were to pay something for their shareware.
In late 1998, Coach House decided to reconfigure operations so that the press played from its strength: the production of fine print editions. Their situation mirrored the quandary faced by large Internet pure-play companies now: without a bricks-and-mortar base, it’s difficult to make a profit on bits alone. With the reintroduction of paper books and the securing of distribution, the finances of the press immediately began to improve. The online editions still exist, and authors are given the option of having their work online as well as in print. To this date, none of the new authors has refused to put their work online, and many of the press’s famous alumni have returned with requests for their work to be placed online as well. As a publicity-generating machine, the Web site has been unparalleled in its usefulness, drawing orders for print titles from all over the world, and maintaining a high degree of journalistic interest in the press’s activities. And, of course, it’s still possible to tip the authors online using your credit card.
As Coach House learned more about the tricky business of integrating traditional publishing into online culture, its goals for online activities shifted from short-term sales to long-term payoffs. The press is working hard at the Canadian national level now, lobbying for the institution of a rights and licensing system for the control of royalties on electronic literature. We have already convinced the National Library of Canada to institute electronic ISBNs for online editions, a notable accomplishment. Hopefully, these measures will convince other small presses that the time to get involved with online publishing is now, which should give all parties concerned greater leverage with both business and government.
Coach House’s other, more localized long-term goal is to establish a significant archive of electronic literature that can be used to assemble customized electronic reading kits for colleges and universities. In the meantime, the Coach House Web site itself is evolving to take better advantage of the kinds of tools that we’ve been discussing in this book, such as dynamically generated news pages, publishing forums, and automated newsletters. It’s a slow process for small, cash-poor businesses. But at least we get to make the rules from the ground up, which is more interesting and ultimately more rewarding than waiting for someone else to solve the problem for you.
Open-Source Art
One step further down the scale to real DIY publishing is Jim Munroe’s No Media Kings site . Munroe, a former editor of Adbusters and the author of several novels, decided to dump his contract with Rupert Murdoch (the eponymous ‘media king’) and HarperCollins to go the route of the stone-cold indie publisher for his new opus, Angry Young Spaceman. His Web site offers the rationale for his decision, advice about how to become an indie publisher — you can use his ‘No Media Kings’ logo and imprint, if you like — some chunks of his other writing, thoughts on ‘applying the spirit of open source to fiction distribution,’ and the entire text of Angry Young Spaceman in plain text, RTF or PalmPilot versions. While the No Media Kings Web site isn’t really a commonspace itself (or an open source project), it’s certainly a road sign pointing potential author-publishers in the right direction.
And then there’s the music industry. The frenzy of lawsuits around Napster speaks volumes for those who want to enforce the status quo. But are there artists who actually want their music circulating online, artists who understand what commonspace is all about? Of course there are.
Chuck D, the leader of Public Enemy, arguably the most politically significant hip-hop group of all time, is the Morpheus of online music. His Web sites, RapStation (whose motto is ‘The Revolution will not be Televised, it will be Digitized, Break free from the Matrix, The New music Industry is Here!’) and Bring the Noise , advocate circulating music on the Internet, whether on the Web or on file-sharing networks.
Rapstation is commonspace done in a hip-hop stylee. And many musicians believe direct interaction with fans is the most revolutionary aspect of music on the Web. ‘Instead of being just consumers, the new audience is composed of participants,’ says Chuck D[4]. His site features extensive essays and reviews on file-sharing technologies, video clips of pertinent news events, and streaming, downloadable hip-hop audio and video content. Chuck himself is an eloquent spokesman, who has publicly debated record industry representatives and anti-Napster artists. But he also puts his money where his mouth is: Public Enemy was the first multi-platinum act to release an album online before it was in the stores.
While it’s not clear how Chuck D. plans to cash in, Rapstation clearly has commercial intent. Its partners include House of Blues, RealNetworks, Napster and Tucows, among many others – an impressive, commercially-driven roster. And there are significant numbers of banner ads on the site. All the same, it seems as if Rapstation is an open source business model waiting to happen. Something around the edges of the site will likely emerge to draw in the revenue. Whatever Chuck and his cohorts plan to sell in the future, the site’s infamy will no doubt give them the P.R. they need to drive their business.
As an interesting footnote, it remains to be seen what will happen with Fairtunes . This brand-new, tiny startup, launched by two students from Winnipeg, is betting its livelihood on the collective conscience of the file-sharing community. The premise of the site is that digital music users will use Fairtunes to voluntarily remit tips for artists after obtaining their MP3s elsewhere. Response is small but measurable (a banner at the top of the page lists total current contributions) – about what we’d expect after the response to the tip model experiment at Coach House. Our feeling is that Fairtunes could work if there was something to drive P2P network users through the site, such as a search engine or forum. But without the connections, without the people, without even the acknowledgement of anyone in the recording industry, chances of success are slim.
Write a Book — Together
Another way to connect commonspace to the old-fashioned paper book is to find people online to help you write one.
This is exactly what the editors at Edmunds.com have done. Edmunds is the Web site run by the authors of Edmund’s New Car Prices and Reviews, Edmund’s New Truck Prices and Reviews, and Edmund’s Used Car Prices and Reviews. The site contains virtually the entire text of these publications. But it also contains a number of incredibly active discussion forums, where over 450,000 users debate the relative merits of and provide opinions on all aspects of purchasing and maintaining automobiles and other motor vehicles. These discussion forums are what make the site so useful. As with other ‘community knowledge bases,’ any one posting is unikely to change the world. But when considered as an archive, the total postings from all of Edmunds’ users are an incredibly valuable resource.
With their Web site, Edmunds has extended the usefulness of their car-buying know-how by putting most of it online. They have also created a thriving online community of people who want to talk about cars. By pulling user-generated content into editorial content, the observations of community members feed back into content for the both the site and the printed books Information from the site’s forums is fed into updated versions of the books (after fact-checking by Edmunds’ editors). In the stores, the books continue to sell and go stale, sell and go stale, sell and go stale. The community on the site makes it easier to keep up with the cycle. It’s an almost perfect example of commonspace fuelling a non-commonspace business model.
But think for a second about the value cycle. It all started with the printed car guides, which existed well before most of us had ever heard of the Internet. From a publishing industry perspective, car guides are an agreeable business proposition. The books are easy to produce, because only a part of the initial research that goes into the book changes every year, and readers writing letters to Edmunds flag many of the changes. In addition, the books are easy to sell, because insider advice on the ins and outs of a $30,000 purchase is well worth the $8.99 cover price. Finally, because the dusty old copies of the car guides on your bookshelf are woefully dated by the time you are ready to buy your next car, you’ll probably buy another one. This formula has worked so well that Edmunds has built a car-buying advice empire with a small handful of titles.
And then along comes the Internet. Depending on your perspective, the Internet could be seen as a threat to a business like Edmunds. Fact-based reference information is available for free on the Internet and has the potential to undercut books such as the ones that Edmunds produces. Luckily, Edmunds didn’t see it that way. Instead, it saw the opportunity to create a little bit of commonspace that would both generate its own revenue and feedback into continued book sales.
To their credit, a few of the old-style consumer opinion sources have already grasped the value of opinion aggregation and have incorporated it into their operations. The best example of such farsightedness is Edmunds. A business like Edmunds giving away its most valuable intellectual assets might at first seem insane, but the result is a genuine win-win situation. Users of the site not only have access to the text of a well-researched book, but they also gain access to the living knowledge source that they themselves help to create. In return for providing its readers with a platform to connect, Edmunds obtains free research for the next edition of its print books. Commonspace makes it all possible.
eBay: Home of the Little Guy
Businesses can take advantage of the collective infrastructure of the Internet to reach out to new markets in new ways. eBay is king of this type of venture. eBay offers a platform that allows small businesses to take advantage of commonspace, and for buyers and sellers to connect to each other. But what does this look like from the other side? What does commonspace mean to the people who are actually doing the selling?
Despite the big-box store trend, most people don’t turn their noses up at small-time retailers. Corner vegetable shops, liquidators and surplus stores, even people hawking used junk by the side of the road, are attractive because we enjoy the experience of buying from them. They know their chosen fields. They have interesting stuff. They are willing to make deals. In many ways, they are our last connection to the traditions of the bazaar and the open marketplace.
For better of for worse, this kind of business doesn’t scale well. The quirky neighborhood antique shop doesn’t work as a chain. The decor and layout lose their charm when you try to reproduce them on a large scale (and inventory becomes a nightmare). The expertise of the owner and intimate staff is impossible to replicate. There are, of course, people who try to overcome this by creating chains of quaint housewares stores and the like, but you might as well shop at IKEA where you can revel in the size and impersonal service.
In some ways, the dichotomy between small-quirky and big-boxy is a good thing. People like small, quirky stores enough to keep them alive and provide a fertile ground for new businesses. In turn, the shops make neighbourhoods neighbourly and cities interesting. But for the small business owners who make up the urban bazaar, the limitations of being a neighbourhood operator can be frustrating. Just think: you have all this cool stuff filling the basement of your shop and only a few people to sell it to.
This is where eBay and other kinds of commonspace selling come into the picture. With a collective market, you don’t have to become a box store or a sterile franchise to reach more customers. Rather, you just take a slice of what you are selling in your store and put it up for auction. This route isn’t just a way to sell at a distance; it’s a way to extend your participation in the bazaar. There are discussion forums and rating systems that enable the conversation of the market. Some people say complimentary things, others say nasty things. New buyers make their judgements. The marketplace whizzes on.
At a practical level, collective selling provides a kind of marketing that is better than anything a small business could afford. Small businesses using eBay extend their sales while spending nothing on marketing. The people, infrastructure and trust systems are already in place. When you consider that marketing makes up 25% of the budget of a company like Amazon[5], the benefits are self-evident.
None of this is to say that surfing around eBay is as pleasant as wandering about the local antique store. However, it is important to realize that these small businesses are finding away to grow their revenues through collective online markets. This is interesting because the kinds of businesses that we love to wander around in often have a hard time sustaining themselves. If online auctions and similar tools help these people stay in business, that’s good for both the business owners and their customers.
Collective markets also have an impact on the actual make up of places like eBay. While the bulk of people selling in online auctions are still individuals, the bulk of the goods sold come from some kind of small business. Of the 4 million items on eBay in any given day, the top 20 sellers are responsible for 72,000 items and the top 38,000 sellers are responsible for 2.7 million items[6]. In other words, small businesses are driving much of what happens in online auctions.
However, the bulk of the small businesses online are not quirky shopkeepers, but liquidators and collectors who rely mainly on online auctions as their sales channel. These are the people who buy truckloads of old Atari cartridges with the sole intent of selling them on eBay. There is nothing wrong with this, of course. It’s actually another example of commonspace-enabled small business. Scouring garage sales for Star Wars figures and hawking them online may seem bit banal, but it’s probably a hell of a lot more fun and lucrative than slinging coffee at Starbucks.
Commonspace = eCommerce for the Rest of Us
Someone should market a T-shirt that reads ‘I survived the dot-com revolution and all I got was this lousy Web site.’ They’d make a fortune, because the heady early days of startups that showered with VC money because of a website are gone forever. And good riddance. There’s nothing more annoying than watching some group of clueless assholes blow millions of dollars on an idea that was doomed from the start. (Well, okay, sometimes it’s a little entertaining to watch them crash and burn – witness Fucked Company.)
From now on, success will come by and large from smart expansions into commonspace by existing businesses – or from new businesses that understand how the fuel of commonspace can drive their success, no matter what they are selling. Sure, there will still be killer apps and instant millionaires. But the window for such opportunities is becoming narrower. And, as the big corporate conglomerates get their acts together online, the opportunities for a small company to dominate a niche will also become scarce.
Don’t despair: Luke had the Force, and you’ve got commonspace. If your business can’t dominate its online niche alone, then join forces with your customers, your allies, maybe even your same-sized competitors . You’ll all save money, expand markets, find new revenue streams, and get rivers of cheap PR. Form the Megazord, and kick some rubbery monster-suited ass.
[1] Locke, Christopher and Rick Levine, Doc Searls, David Weinberger. The Cluetrain Manifesto: The End of Business As Usual. New York: Persues, 2000. p.69.
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[5] Lisa Guernsey, “The Powers Behind the Auctions”, The New York Times, August 20, 2000, bu1.
[6] Ibid.