Category Archives: Wisdom Of Crowds

Rebooting the association

While media budgets are squeezed still further as we trudge onward under the cloud of recession, trillionesque debt and the massive public spending cuts gathering on the horizon, the focus on social media ROI grows ever sharper, but less energy is expended looking at the benefits that focused online communities can bring to businesses.

Communities for not-for-profits and membership bodies have a slightly different flavour to those developed for commercial entities. While commercial brands answer to shareholders or private owners, NFPs and membership bodies exist for the benefit of their constituents. There is already a genuine, real-world community or shared interest in place – just as there isn’t (really) between me and say, Sainsbury’s – so a digital community is a natural fit.

But that doesn’t mean it’s any simpler, nor is the transition to deeper member or supporter engagement any less challenging for the organising bodies than a renewed focus on customer engagement is for businesses. There is a lot of overlap. An event I attended at the Law Society on 6th October, “Surviving in a Recession – What Member Organisations can Learn from the Commercial World” addressed the challenges and opportunities in this area.

One of the things I liked about it was the way it set online communities in a longer timeframe than we’re used to talking about. Many membership bodies have been around for 50-200 years. Most started out when enthusiastic and committed people come together informally – usually in a bar room, hotel or coffee house – to improve and professionalise emerging crafts and knowledge.

Fast forward to now, and these bodies occupy grand buildings, wield influence with governments and business, and provide letters after your name. But are they achieving their original aims? How close are they to their members today, and how can a geographically dispersed membership benefit from the knowledge and experience of their fellow members and the wider interested audience? In other words, can we re-boot the association?

The event was co-hosted by Sift – who are the technology and consultancy supplier for CIMAsphere, the online community I manage – and Madgex. Rather than reading a re-cap of the discussion, you can watch the presentations from two of the speakers that morning.

First up is Adam Cranfield, my former colleague, who was at the time Digital Media Manager at CIMA.

The second presentation is from Lawrence Clarke, Head of Consultancy at Sift. Sadly you can’t see his slides in the video, nor Adam’s in his. But the stand-out points for me were Lawrence’s thoughts on the tendency of subscription-based associations to rely on inertia and top-down, one-to-many communications, and how that is being undermined by the connectedness and transparency the web brings on the one hand, and recessionary pressures on the other.

That talk is a companion piece to this post Lawrence wrote a month earlier on the Sift blog. Highly recommended.

SXSW Interactive back on the radar

After a chat at work about this and next year’s SXSW Interactive, I’m feeling inspired. But guilt at not blogging all my notes from the conference/festival has also resurfaced.

Not like it’s not out there already, but every report has its peculiar skew, paraphrasing quirks, deliberate omissions and oversights (to confirm if I’ve missed anything, check out the SXSW official podcasts).

So I’ve resolved (in my spare time) to write up all the sessions I never got round to doing back in the spring-summer period when I was completely overwhelmed with planning Content 2.0, the Beers & Innovation series and NMK’s broader programme of events, in addition to my editorial and web development duties.

If you missed them, the three sessions I did write up back then were:

Beyond Folksonomies: Knitting Tag Clouds For Grandma

Book Digitisation: Revenge Of The Librarians (more exciting than it sounds, but then some librarians are very cool these days)

James Surowiecki on The Wisdom Of Crowds

The forthcoming ones are equally juicy, but they also have a more business-like slant (with garnish of social media and visionary ranting for good measure). Which is a perfect fit for the evolving logic of the Beers & Innovation series.

They also relate equally to the ‘creative industries’ start-up enterprises and SMEs (I *so* hate that acronym, but hey) that dominate the UK web industry. And the creative industries being another area B&I will soon be tackling – in fact it was going to be announced last week (sorry for the delay on that).

So, session write-ups coming soon on:

Running Your New Media Business

The Perfect Pitch – How To Attract Money To Your Digitally Convergent Business

What People Are Really Doing On the Web

Commons-Based Business Models

Danah Boyd’s Current TV SXSW Interview

Consumer Is The Producer: DIY Media

Bruce Sterling Presentation: The State Of the World

Two other great sessions I went to – the Craig Numark keynote and Jason Kottke & Heather Armstrong in interview – I didn’t take notes on, which was nice as I could just relax and take it in. No need to worry though, as 60% of delegates were blogging the conference, so you can look them up on Technorati.

Are you saving-up for your airfare to Austin in March 2007? No chance of affording it or getting the boss to shell out? Get your mates or family to group together and buy you a ticket for Crimbo (£225 for 4 days of round-the-clock goodness – bargainous). Then take a loan out to cover your hotel and airfare, or sell something / anything. That’s my thought for today  😉

Aggregators and upsetters and what it’s all about

Okay, i feel pretty guilty and inadequate for not having posted about the Beers & Innovation Aggregators & Upsetters event last Tuesday until now.

Oh man, has it really been a week already?! Well, three nights out at events in a row (I also attended Swedish Beers later that same night and then the Paid Content Mixer – they’ve now launched a redesign via which I currently can’t see the comments, but hey – on Wed and and the TechCrunch UK launch party last Thurs) and having to change jobs while trying to sort two future events and a pile of other urgent stuff simultaneously will do that to a person!

So, as per usual, nada time to reflect, but a (very) quick scan of my Bloglines, Technorati and Google has turned up the following really interesting coverage and follow-up discussion of the evening’s topics.

http://www.bubblegeneration.com/2006/10/beers-innovation.cfm

http://www.bubblegeneration.com/2006/10/research-note-peer-value-of-money.cfm

http://prof.rogerkondrat.com/2006/10/19/beers-innovation-aggregators-and-upsetters/

http://www.asymmetry.co.uk/wordpress/2006/10/18/nmk-new-media-knowledge-beers-and-innovation/

http://www.broadstuff.com/archives/29-The-Disaggregation-of-Aggregators.html

http://www.theequitykicker.com/2006/10/18/vc-model-changing-but-not-broken/

(if I’ve missed anything please feel free to add it in the comments, thanks!)

If there’s one thing I have to respond to criticism-wise, it’s the view from Roger Kondrat that it’s largely the same people coming every time to B&I. First off – I’m so glad Roger was there but he’s only been to the last two B&I’s – we’ve had five and the first three varied widely in who attended depending on the subject matter.

Big brands and agencies in attendance…

Also, I would ask – did Roger talk to any of the brands, or large advertising agencies who were in attendance? If so, that’s great, but they haven’t been coming to every event, and also, a lot of the mainstream /big media types (but not all) don’t hang around afterwards because they’re not yet acculturated to the idea of a social scene around digital innovation. But I’ve had great feedback from them and more keep coming each time.

Another thing to factor in is the fact that it needs to be a relatively small “1st world” event because if we had more than 60 or 70 in the room the intimacy would be lost and you just wouldn’t have such a good discussion.

What’s more, NMK is a small, publicly-funded organisation that doesn’t have a lot of people or resources to promote its events, however much it might want to. This is currently accentuated by a staff exodus. But we are trying our hardest (across multiple channels including 2.0 channels like the fab wiki Jigsaw UK and Upcoming) in the circumstances. And I don’t even work there anymore, since last Friday…

More than your average geek…

In the event’s defense I would also note that it has a much wider audience than many geek / web 2.0 events, and also many more women in attendance.

The former is explained by NMK‘s broad audience, the latter – I don’t know why, but probably something to do with the former and (perhaps) the fact that it’s organised by a woman. Surely neither can be a bad thing? Events need to reflect the users more, and I think we all sorta know the web has a diverse audience!  😉

Finally, I’m not going to complain if a community of regular attendees is growing up around this event. It just makes it more essential that you should keep tabs on it and book early for forthcoming ones – only if you think the discussion is relevant and important to you of course.

The people formerly known as the audience

Thanks to everyone for coming along, speakers and the people formerly known as the audience alike. You are what make it worthwhile  🙂 

The point of it all is to highlight and trigger debates after all, and to try to move things forward, like Tom Coates did in his original post ‘Where are all the UK start-ups?‘ that inspired this whole Beers & Innovation series.

On a connected note, it might be of interest to you that B&I 5 speaker Paul Pod’s TIOTI (Tape It Off The Internet) got covered in the business section of The Guardian yesterday, Monday 23rd October. Was their reporter Katie Allen scanning Technorati, lurking on Upcoming or in disguise in the audience; or is it just a coincidence, who knows..?

Start-ups and blogging in stealth mode

As a start-up in stealth mode, to blog or not to blog?

Over on Technological Winter Roger Kondrat, who also runs the London Web 2.0 / Bloggers meet-up, has put together an interesting post on the matter.

Worth checking. His arguments are pretty pursuasive, but it’s certainly not a black and white issue…

My two cents is: if you want to keep the cat in the bag, why not just run a topic-based blog (under a psuedonym if necessary), related to the area you’re working in? In this scenario, what’s the worst thing that can happen?

SXSW: Surowiecki on The Wisdom Of Crowds

James Surowiecki spoke at the SXSW Interactive conference in Austin, Texas on Saturday 11th March 2006 about the ideas in his bestselling book The Wisdom Of Crowds. Its relevance to Web 2.0 loomed large…

[WARNING. This is a motherlode post. If that bothers you, go read it on a traditional website 😉 ]

For anyone familiar with Suroweicki’s book, this session can’t have been much of an eye opener. But I only knew of it anecdotally. So I was perfect fodder for a recap of the book’s central ideas which the author duly provided.

A lot of people blogged their dissatisfaction with this session, but they should remember that his book hasn’t been out that long, and even then, plenty of us who would like to have read it already somehow haven’t found the time. On balance, I think he could have done two sessions – this one as the primer, and a second one looking at debates around or syntheses of his ideas. I would have gone to both!

James explained that he is a business columnist for the New Yorker and took the story of Francis Galton as a starting point for illustrating his thesis. Galton (1822-1911) was a British exponent of [the roundly discredited theory of] eugenics. One day at a country fair in England, as Galton tells it, people were lined up to guess the weight of an ox after it had been slaughtered and dressed.

It was a big and diverse crowd – some there were experts on cattle and many weren’t. Galton looked at the statistics and then took the average of the groups guesses – he thought it was erroneous, but the crowd’s judgement was perfect to within a pound.

A young lady’s primer…

Under the right circumstances, Surowiecki extrapolated, groups of people can be very intelligent, and can be smarter than the smartest persons within them. His interest lies in what intelligent crowds look like and what problems they can solve. He cited the latterday example of the gameshow Who Wants To Be A Millionaire? and the reliability of nominating your expert in the show when you’re unsure or bereft of an answer. Experts get it right on average two thirds of the time, but the crowd is right on 90% of occasions!

Google is a great example of the wisdom of crowds in action, he said, in terms of its page rank algorithm [although this has been challenged by some search experts], adding the caveat that it taps into the collective intelligence of webmasters. Google’s founders realised that underneath the seeming chaos of the web, is a lot of order.

The collective forecast is good

A lot of problems that we’re concerned with are about events that will or might occur in the future, he noted.

The odds in horse races almost perfectly predict the wins and placings of the horses, providing an almost perfect forecast of the future. The stock market over a period of time is almost impossible for an individual money manager to beat (ie. the individual experts against the collective intelligence of money managers).

Tradesports.com tracked the US elections and they forecast 50 out of 50 states correctly and 32 out of 34 senate seat results.

Hewlett Packard in 1998 set up an internal stock market on what printers, etc would sell, and it out-performed the internal predictions team. Eli Lilly used the same system to track which drug candidates were most likely to make it through the drug trials. They also opened up their markets to the public / the non-expert audience.

When you aggregate the wisdom, the errors tend to fall away and the intelligence remains. But there has to be genuine, bottom-up decision making. The two most important characteristics of wise groups are diversity and independence, he argued.

Better by diversity

Diverse crowds are far more likely to be intelligent than non-diverse ones, because of the diversity of cognition. This expands the range of information we have access to – which allows us to surmount barriers when we come up against them. He cited the investment club phenomenon. Groups made up of men and women outperformed the single sex groups.

But this perspective on crowds runs counter to deep-set views of expertise. The Wisdom of Crowds puts forward the case that it’s a mistake to search out one or two experts and rely on them for the answers, because experts aren’t aware of what they don’t know.

Almost across the board expert judgements are poorly calibrated, the only exceptions being those of bridge players and weathermen! One of the reasons why the internet is such a powerful tool is that it allows a diversity of knowledge and expertise.

The problem with ‘group think’ – on the other hand – is that it reflects the knowledge of a group that is homogenous. Diversity allows the group as a whole to think more keenly. The Catholic Church created the role of the Devil’s Advocate precisely with this in mind, in order to sharpen its arguments.

Diversity also allows us to get around succombing to peer pressure.

State of independence

We want people to be making judgements based on their own knowledge and wisdom. But our general experience of groups comes in one of two kinds:

On the one hand, volatile & extreme groups: stockmarkets, lynchmobs, the madness of crowds. On the other: watered down mediocrity. Why the latter? Because we often put too much of a premium on consensus. Too much emphasis is put on one judgement that we can agree on.

Paradoxically, the wisdom of crowds is created when everyone has their independence. This is difficult to come by because, firstly, human beings are by nature imitative, and in its favour, this is a remarkably functional way to achieve decision-making. The reality is that we have learned, in an evolutionary and social sense, to be aware of what others are doing. Malcolm Gladwell’s book ‘The Tipping Point’ is about imitative behaviour – which is fine for promoting brands and fan clubs, but not good for predicting important future events.

Surowiecki cited economist John Maynard Keynes’s assertion that it’s better to fail conventionally than to fail unconventionally.

Net benefits and pitfalls

The net is a classic double-edged sword when it comes to the collective intelligence, Surowiecki explained.

On the one hand, the net makes it easier to satisfy the conditions under which intelligence pertains; with its lack of filters all you need is the willingness to participate. What's more, the knowledge we are looking for isn’t always in the places that we think it should be. In turn, we often over-estimate our abilities, and it’s hard to know who the right experts are. The net can help us surmount these barriers.

The problem lies in the fact that the internet is also a great tool for breaking down independence. It’s really easy for people to only pay attention to a small set of websites [or blogs!] and links and get locked into small worlds. You end up with "circular mills", which describes the scenario where, when ants get lost, they just follow the one in front and end up walking in circles until they die.

It’s better, Surowiecki commented, for people to keep their ties weak rather than strong, and he cited ‘Bayes Theorem’ which is a way of quantifying the effect of new information on previous calculations.

Q&A and debate with the audience

Does the WOC apply to artistic or creative endeavours, where the subjectivity of the artist/creator is traditionally viewed as paramount, someone asked. Surowiecki replied that for the WOC to apply, there needs to be a right answer, and there needs to be agreement on the problem and that is needs to be solved. But there is affinity between the WOC and the benefits that artists can accrue by working collaboratively.

Can groups come up with innovations? They can be good at sorting potential innovations, Surowiecki said, but it will probably be one person who creates or invents it.

How big is a group, another asked.  Even in small groups of 6-8 people, the results are more accurate than that of the expert member, he replied. Leaders have to be careful not to influence discussion in advance in this regard, and we have to be careful that the talkative people do not dominate as they tend to then become the hub of the discussion, but there’s no evidence that talkative people are more intelligent than quieter people.

There’s something of a black box element to the wisdom of crowds, he continued, because you can’t go to one person and ask them ‘why did you do this?’, so it makes us fundamentally uneasy about the Wisdom of Crowds when it comes to very large crowds [due to the complexity of group accountability – I guess…], as with Wikipedia.

Malcolm Gladwell and Surowiecki agree that intuition is very valuable. Where James disagrees with Malcolm is that he doesn’t think that experts have a good evaluation of their own biases and blind-spots.

Web 2.0 – WOC tool or WOC manifest?

Someone raised the issue of the vast sources of collective intelligence that remain untapped in terms of the education system, and Surowiecki concurred that bureaucracies in general do a very poor job of tapping into their members' intelligence.

Brain Juicer was mentioned as a good example of a WOC application that that taps into people’s views in order to judge the likely success of new products.

James left us hanging with this tantalising paradox: we live in a moment where on the one hand we see the possibilities of collective, bottom-up emergent systems, and Web 2.0 is – in a way – a way to make that work. But countering that is the trend and desire for charismatic leadership and easy answers.

What do you think of Surowiecki’s perspective?

[NB. Cross-posted on the NMK website]

More coverage of SXSW Interactive coming soon!