Tough task, to open a high-profile conference like Aula2006 (see this previous post for background) with a speech on "failure". But social software expert Clay Shirky dissected it carefully and out came an interesting insight: organizations that want to encourage innovation should focus on reducing the cost of failure rather than focusing on minimizing its likelihood, as most companies do today.
Shirky (picture right) started out asking what are the implications of the open-source software movement for businesses and society. Open-source is software that any owner can look at, modify, transform. A central repository of this software is SourceForge, which carries over 122'000 open-source projects. Shirky analized some of their numbers, and discovered that the most popular products (activity score on SourceForge: 100%) are downloaded millions of times, such as the multi-protocol instant-messaging software Gaim. As the score gets lower, however, the number of downloads decreases dramatically. At 99%, we are already in the thousands of downloads, "and we are still in the top one-percent of the most active projects!". By the time we get down to 90%, products are downloaded only dozens of times, and from 75% to the end of the tail there are tens of thousands pieces of software that are never downloaded. "We have been concentrating on the successes - Linux, Firefox - but the normal case of an open-source software is actually failure", Shirky said. Does this mean that the whole open-source thing has been overblown? No: "open-source is not important despite the failures, but because of them".
Shirky's argument goes like this: when you explore really new ideas, it's pretty much impossible to tell in advances the successes from the failures. The business world today is geared towards "optimizing" the innovation processes in order to reduce the likelihood of failure. That's a significant disadvantage when compared with the open-source ecosystem, which "doesn't have to care" and "can try out everything" because "the cost of failure is carried by the individuals at the edges of the network, while the value of the successes magnifies and adds value to the whole network". "Ecosystems such as open-source get failure for free, and that produces some inevitable unexpected big successes - the Linux operating system - that nobody could have predicted but end up changing the world" (when Linus Torvalds sent out his first e-mail on 25 August 1991 calling for help in developing what would eventually become Linux, he imagined it as "just a hobby"). "No business in the world can eat that much failure".
Can this approach to testing good ideas work outside of software development? Shirky believes it can, and mentions Meetup, an Internet tool for organizing groups, which grew by letting users decide what groups they wanted to create and "launching" them freely - and possibly failing to meet an audience - at near-zero cost to the organization (the costs of failure cannot be reduced to zero, though).
After the speech I had a discussion with Clay about the social costs of failure. For example, in the debate about entrepreneurship in Europe the argument is constantly put forth that the social cost of failing as an entrepreneur in Europe is significantly higher than in the US. Following Clay's argument, European governments would achieve better results fighting this ingrained social stigma (reducing the cost of failure) rather than encouraging entrepreneurship through other means. And we both started wondering whether there may be some correlation between the social costs of failure in a given country and the level of open-source activism there. For example, Germany is very active in open-source, more than almost any other place in the world: could it be that many innovative/entrepreneurial Germans have found in open-source an outlet to invest their energy and try out their ideas (any idea) at a much lower failure cost?
Nokia's new chief designer, Alastair Curtis, followed with a short speech on the responsibility of designers in a company that puts some 300+ million cell phones a year in the hands of people. Design, he said, is about "creating beautiful products, experiences and solutions that people can fall in love with", so that "they start sharing them with others".
After performances by saxophonist Juka Perko and dancer Nina Hyvärinen (the conference's main theme is "Movement"), we heard from Martin Varsavsky (blog), the Spanish entrepreneur who founded one of the current hot things: FON, an attempt to build a global WiFi network by coordinating people willing to share their WiFi connection with others. I've already described in details how FON works in a BusinessWeek column, but here is how Martin, in his customary upbeat tone, tells the story, verbatim: "FON is a piece of software that turns your WiFi router into a member of a global family of routers that share WiFi. WiFi is a solitary thing: you and your WiFi. At home you can do whatever you want, download, upload. Then you leave your home and you're begging for connectivity. With FON you're not a beggar anymore: you share a little and you gain a lot, you donate some access at home and you roam the world for free". He added some updated information: FON has currently some 50'000 members; Google and Skype invested in the company; and "we will need a million FONeros [FON members] in the world to really have a pervasive network".
The closing speaker was Joichi Ito, a Japanese-American VC, über-blogger, serious online gamer, and much more. He's one of those guys that seem to be always a step ahead, and that's probably why he's moved past blogs and past Web2.0 and is immersing himself in massive multiplayers online games such as World of Warcraft, which has 6 million active users. Games such as WoW have gone from a subculture into the mainstream, as Ito writes in an article for this month's Wired magazine, and are becoming powerful testing grounds for collaboration, leadership, interface development, and more. Ito has a conflictual relationship with the concept of "cyberspace", which is still defined in a binary mode: "you're at your computer - in cyberspace - and then you turn it off and go away from it. But this idea of delimiting cyberspace and real space and splitting time is so old school", many people are now moving - after Ed Hall - from monochronic time, where a meeting follows another unrelated meeting, to polychronic time, which is highly fluid and contextual and people-rich (Ito has 490 people in his "buddy list") "although certainly less scalable".
That's exemplified in World of Warcraft, which Ito defined as "a kind of rainforest of really interesting user interfaces and social interaction tools". The game's interface is very crowded and multilayered and diverse indeed: the screen is occupied by the actual game environment, plus the status of other players, plus chatter, plus timers, plus alerts, plus tools, plus plus plus. A non-gamer has a hard time figuring it out. But it's more than a game. "This is one of the most sophisticated real-time management tools I've ever seen. It's a game but lots of it is about coordination, relationships, communication: the managers of tomorrow will have the skills of today's gamers".
And it is about community, he said: "You get addicted to WoW after five minutes because of the game, but after you've spent your first 1000 hours there you no longer care about the game: all you care about is the community".