“Let’s say that when every one of us is born we bring with us a little ring of power. That little ring is almost immediately put to use. So every one of us is already hooked from birth and our rings of power are joined to everyone else’s. In other words, our rings of power are hooked to the doing of the world in order to make the world.”
Carlos Castaneda

Journey to Ixtlan

Dear Dalton

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Intro & Disclaimer

My journey into this post began when I read another Fred Wilson’s post on “Free”. Shortly after that I believe Fred send a twitter update that sent me to Albert Wenger’s post that touched on “attention scarcity” where I engaged and unintentionally offended Albert. Sometime during the comment dialogue I went into the link Albert provided to explore Dalton Caldwell … and have since been following the ensuing debate fairly closely. If you are looking for a doorway into the debate this post on Gigaom offers a good summary and point of origin.

Since then I’ve been tossing and turning with this post trying to weave into a coherent essay. I’ve failed to do so. Though I am very passionate about the topics in the first part of the post … the energy simple isn’t there for me to consolidate as sharp a written argument as I have inside me. I finally asked myself what this post was about … and the only answer that lead out of my entaglement was my thoughts on Dalton’s effort. That worked. I believe that publishing these distilled fragments (there were more that didn’t make it in) as they are is better then not publishing them at all.

Albert: Mathematical truths can be both correct and irrelevant

An apple tree will yield a finite amount of fruit. That is a mathematical truism.

If you are in the business of selling fruit then that mathematical fact is a defining and limiting factor. If you want to maximize your profits you may plant more trees, genetically create better yielding trees … all efforts to mitigate a perceived scarcity defined by a mathematical truism.

However if you are a small family then that tree may very likely produce more fruit then you can consume. You eat some fresh fruit and the tree is still overflowing with fruit. You make apple-juice every day and still so many apples. You make some apple compote or apple sauce for winter … and you may just barely be able to come close to consuming all the fruit. You perceive abundance (regardless of a mathematical truth that still stands).

Albert: Does Financial Valuation create a Perception of Scarcity?

Operating in a world that is dominated by financial value demands that everything be assigned monetary valued in mathematical terms. It seems to me that living in a financially defined world pushes you towards a mathematical perspective where everything has to be measure-able and value-able. How can you trade without comparable measures and values? How can you prioritize?

If nothing else then you end up practicing applying mathematical valuation … to everything … including things to which it simply does not apply. It seems to me that this kind of practice inevitably leads you to a perception of scarcity. It doesnI ‘t matter if you are rich or poor … if everything is measurable then no matter how much of it you have it is a finite amount.

Perception is a practice … anything you practice often enough is likely to become form a habit or a pattern. Habits and patterns tend to taint and limit perception.

Albert: Perception IS the ever-so-precious human condition

My understanding of human nature comes from my studies and life alongside Yoga and it’s contextual philosophical system of Samkhya. My understanding of applied morality is inspired by Robert Pirsig’s Metaphysics of Quality as described in his books “Zen and the Art of Motorcycle Maintenance” and “Lila: An Inquiry into Morals”.

Since Albert took the liberty to express his assumptions about “The Human Condition” I feel free to do the same. I subscribe to Albert’s assertion that the human condition is best expressed in terms of attention. However I understand attention to be not a quantative but rather a qualitative dimension that sits on a scale between present/clear/focused and distracted/confused.

When attention is clear it is an abundant capacity that reveal amazing depth and vast scope – this is a meditative quality – it’s where creativity, happiness, fullfilment and magic reside. This kind of attention brings a sense of empowerment and energy is associated with a qualitative movement of energy inwards. This kind of attention leads towards clear perception.

When attention is distracted is very limited and finite. Understanding is limited to superficial and obvious features. This kind of attention feels demanding and tiring and is associated with a outwards diffusion of energy. This kind of attention leads toward misperception.

Distracted attention is indeed a limited and finite resource … clear perception is … infinite immeasurable.

Creating and capitalizing on distraced attention (=advertising) is, in my opinion, degenerative to “the human condition”. Creating clear perception is bettering “the human condition”.

Ironically we seem to be living in times where there is an abundnace of distracted attention and shortage of quality attention. It also seems that technology may be a key contributor to this situation.

Fred: Why is attention valued when you sell it but “free” when you acquire it?

When Facebook or Twitter or Google sell advertising they are really selling attention (the cheap distracted kind). In doing so attention is assiged monetary values. Yet within the exchange in which these companies acquire attention they call it “free”. It’s free when they take it from you but its valuable when they resell it.

That is the same paradigm that is destorying natural resources … only this time the natural resource is especially precious (to me) … it is human nature … or as Albert likes to call it “The Human Condition”. Once again it seems that “free” is an illusion … and as time goes by is revealing itself to be an unsustainable illusion destructive force.

Fred: How does VC ROI fit into the Viability/Sustainbility Equation?

Fred Wilson recently replied to a question by Dave Winer regarding the sustainability of user content:

“I am eager to see all of our companies that build successful services go on to be sustainable independent companies … My view is that we need to create sustainable models for these companies, which means a revenue model that can cover the costs and allow the service to remain viable. and we need to create models that allow these companies to remain independent.”

Fred is so right on … except for a gigantic-disingenuous-one-word-gap … “viable”. What does that mean? If viable means that these companies need to generate enough revenues to cover operating costs then we may be talking about non-profits. If on the other hand we are talking about companies that need to generate enough revenues to cover operating costs AND generate a handsome return for VC invesotrs … then that is a whole different ball park.

I have a feeling that the non-profit is a much more sustainable “viability target” then the VC-backed “viability target”. I also have a feeling that the two are separated by a huge gap measured in orders-of-magnitude. That also means there is a huge space in between to explore.

Dalton: Some thoughts to share with you

Context: I am with you (though I haven’t supported you … more on that below). The rhythm of your fundraising page tells me something is not quite right … even if you meet your target. The momentum that got you started should have shot you past your mark instead of slowly crawling towards it.

Geekiness

I think its safe to say you got the geeks … both in media and probably in funding. They understand your motivation, aspiration and challenges. Most non-geeks won’t … this is not to imply you should try reaching them … I doubt you can.

At this point, you are doing something geeky. It needs to mature beyond that but isn’t quite there yet.  I would offer as a past reference for failure RSS – it had a head start on most existing social networks and could have trumped much of their functionality … but it never got past geeky technology. I hope you don’t become another RSS.

Platform

Though you and others may be taking it for granted that your business will be as a service provider … to me it isn’t obvious what that service can be. I am fairly convinced that the platform itself SHOULD MAY NOT BE your primary revenuge-generating business.

Don’t become another central point of control or potential failure. The only way to insure the platform is aligned with the challenges you are trying to solve is that there be endless instances of it and not one that you control and charge people to use (and take blame for when it fails).

You may be able to become a viable business based on the platform … but that is another matter altogether. Any business interests you may have should not be tied into the platform – that is not sustainable.

When I say “platform” examples that come to mind are DNS and WordPress. Where those two world meet is approximately where I believe your platform should exist. I believe that I should be able to run “your platform” as a plugin in my WordPress installation … that has many repercussions.

Finally … your platform should not be yours. It should be open source. What can and probably should be yours and be run as a business regardless of the platform and in competition with many others is (a) an instance (or numerous instances) of the platform and (b) your products.

To become a good platform you should focus on users who are other developers who will create products for the platform. Do not confuse them with end-users who send status-updates – that is a fatal mistake to make. In product thinking these are two separate products-paths – one for developers and the other for THEIR end-users. If you yourself want to become such a developer that is fine but I would urge you to insulate the platform from your ambitions.

I believe that a separation of platform and product should reframe the topic of revenue sharing with other developers.

I take comfort that you chose as a point of origin publishing (in open-source style) core protocol specification that relate to the platform itself.

Product

You don’t have a product … yet … and my feeling is that you don’t even know what your product may be. That is OK … but I think you need to explore that further and separately from the platform.

I do believe you can run an instance of the platform as a business. It makes me think of StackOverflow … maybe multiple instances can be a business altogether … maybe products (clients) can provide access to multiple instances … there seems to be a lot of potential to explore.

For an interesting (I believe) product direction you may want to check out Mozilla’s failed attempt called Raindrop.

Money

It isn’t clear to me what you are asking money for. It is even less clear when I (and I assume others) look at app.net page and can’t figure out what it has to do with anything.

$50 is a lousy price structure. I wouldn’t pay you $50 dollars … that’s what I would (and will) pay for a new cellular phone. Because I live in a different culture then you. Please don’t let yourself fall into the mentality that most startups fall into thinking that USA or the western (1st?) world is the entire world. Your pricing model is culturally biased. That’s not a good point of origin.

I would invite you to explore values before exploring pricing. Find what are the things that are most valuable in the ecosystem. Then, try to tie monetary value to those values. I would definitely explore “attention” as a core idea in this ecosystem. I see it as an abundant resource and not a limited one … so there is much potential in it.

I would not discount Freemium … though of course not with advertising as a complementary business model. I do agree with Fred Wilson that to scale you need to let people have access … so what that access is … is an open issue. I want to believe that if you are not burdened with “VC ROI” that you can run a viable freemium service that is sustained by some paying members (again I am thinking of WordPress as a kind of proof of concept).

Be Proactive

Be smart and indulge in being in uknown territory …. Twitter had that going for it and lost it very early in the game.

Go where you want to go, not where others failed to go before you.

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