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Self Interest – Adam Smith says GO!

Does a celebrity get behind a cause without being first impacted?
Maybe, but probably not. Therefore their actions are selfish in nature first, then self less.

As you read this, you may think I’m insensitive to others, but I’m really just thinking about my own lack of action related to causes I’m not impacted by personally.

It relates to this blog how? Web 2.0 basics.

Web 2.0 is misunderstood by investors and entrepreneurs alike. As I often do, I’ll attempt to connect, through some way off metaphor, how entrepreneurs can pay attention. Know the difference, think better and waste less of your precious resource, time and money.

Adam Smith (click here if you said who?) first defined Web 2.0 in his often controversial book, the Wealth of Nations.

The concept of the ‘invisible hand’ is one where there are unintentional benefits from the selfish pursuits of individuals. For example, the attention our country has from Michael J. Fox’s pursuit of Parkinson’s reasearch.

The Web 2.0 entrepreneur is after the ‘intentional’, albeit maybe invisible to the user, benefits of selfish pursuit.

So much talk (yap yap) about community and user reviews to build value. Ok, agree, there is value there. But it’s not the unintentional benefit, those things are intentional. Ever see the first review of a book? is it every not GLOWING? It still fools some people though, but most of us know the writer or publisher, or manager, or someone with self interest wrote that. There is an entire industry of consultants that pursue ‘social marketing’. Those are intentional mechanisms.

Really want to see the impact? sort the reviews by ‘negative first’ and you’ll have a different view. Even THOSE are full of intentional sabotage, although maybe not as much, most people are good.

It is a very elusive model. It is dependent upon passive collection of data and then using it for the benefit of the ‘next’ customer and so on. Buzz word = collective intelligence.

Even ebay, the ‘often used example’ of feedback system. It is still active, not passive. People must feel compelled, which has little selfish purpose other than the ‘ass kissing’ you leave me good feedback and I’ll leave you good feedback. Adam Smith would passively roll in his grave.

Here is a very simple serivce, but one I feel describes best the concept of selfish purpose with unintentional positive consequesnces. ISNSFW (is not suitable for work)

Simply, you use this service to ‘put a rating’ on links you share with friends. It provides them a ‘caution’ when they click the link. You at work? It is a selfish use to say ‘hey friend, don’t click if you are not in a place that is private enough for viewing’. This private place might be physical location to avoid the over the sholuder coworkers, or over the shoulder IT departments, tracking your every move.

Example “dude…check this out..hahaha”’s not really offensive, just a test of the ‘in case it was offensive broadcasting system’.

As the service is used, the company could anonomysly collect links by ‘rating’. This provides future value to other customers who may want to see, top 10 offensive links, etc.

They are providing a service that is used selfishly and provides unintended value, but the developers intended it to work that way…web 2.0. Understanding the very subtle difference can be the difference between success and repeated failure.

This test still holds water…. Try asking yourself these questions, answer yes or no…scale 1-5, whatever, just be honest with yourself.

Does my idea …

Q1: have services, not packaged software, with cost-effective scalability?
Q2: have control over unique, hard-to-recreate data sources that get richer as more people use them?
Q3: trust users as co-developers?
Q4: harness collective intelligence?
Q5: leverage the long tail through customer self-service?
Q6: deliver software above the level of a single device?
Q7: have lightweight user interfaces, development models, AND business models?

This video says it so clear in :51 seconds

These questions are derived from an old article by Tim O’Reilly.
you should read it.