Suggestions for effective anti-SOPA action

Reddit is organizing “Dump GoDaddy Day” on 12/29. A likely effect of this action is that GoDaddy drops any vestige of support for SOPA and then immediately fades into the background. This will be a nice win for the Internet, but Congress won’t care. The Internet’s (as it were) great handicap in this battle is a lack of lobbying power, itself a symptom of tech’s institutionalized reluctance to play by DC’s rules. But changing how Congress works is (or should be) a task for another day. With that in mind, two alternative actions that would likely yield better results than DGD:

• Target KKR, SIlver Lake, and TCV. GoDaddy’s majority owners are a triumvirate of PE firms with deep pockets, large Rolodexes, and large dollars at risk in internet companies with significant exposure to SOPA. They know the lawmakers and the lobbyists. They can help. (They may already be helping.)
• Set up a Kickstarter project to fund anti-SOPA lobbying. Use the internet to build a single-serve, ad-hoc PAC, one whose only goal is the defeat of SOPA/PIPA. Hire lots of lobbyists and give them lots of money. Aim them at everyone and anyone on the Hill. Coordinate their lobbying efforts with large-scale internet actions.

Congressmen may not understand the internet, but they damn well pay attention to the political winds, and lobbyists are their weathermen.

The littlest details

I’ve always wondered why email verification emails reveal the underlying link. I’m sure I’m missing something, but isn’t this:

more human than this:

?

Maybe there’s a good security purpose to revealing the underlying address, but hell if I’ve ever paid attention to the random characters. When I’m resetting a password, I’ve got my mental model set: expect email, open email, find link, click link, done. Paying attention to the URL doesn’t enter into the equation. I guess that’s an argument for “why bother? no one notices it anyhow”, but I tend to think we decide how “human” an interaction is based on the smallest of details. Foursquare is trying hard to strike an authentically human tone in this interaction. Seems worth it to go the extra few inches.

On the plus side, whenever I see ugly URLs that could just as easily be masked, this pops into my head:

Good times.

[BTW, I don’t mean to pick on Foursquare. Everyone does this and password reset emails are clearly at the bottom of the priority list. It’s just something that bothers me from time to time.]

UPDATE: Chris Sutton makes a good point. One argument for showing the whole link is so that people can copy and paste if their mail client doesn’t launch the link correctly. I’ve been a Gmail user for years and haven’t experienced that issue in a long while, but that’s a very plausible explanation for why companies do things this way.

UPDATE 2: Fair point from Michelle Renee Paul: maybe it’s an anti-phishing thing. To meet that concern, though, I’d probably offer another detail, e.g., “We noticed you changed your email recently from old@oldmail.com to new@newmail.com. Was that actually you?”

Half-formed Thoughts: Thinking about Premium Publishers

The last few years have seen massive investment in the advertising side of the content equation, and our firm has been right there with the crowd. Meanwhile, the consensus seems to be that the world is moving inevitably towards the Huffington Post model, where authors publish for free in exchange for a portal-provided audience. I surely agree that a new form of journalism is emerging (and is likely here to stay), but I disagree deeply with the notion that the emergence of commodity content will ever kill premium content. In fact, I think premium publishers are due for a resurgence. Over the weekend, a colleague asked me to lay out why I believed news organizations (and some form of premium content) will survive. You can find my bulleted (and admittedly scattershot) response below.

• The notion that premium content will be killed is simply too extreme. There has always been a balance between different forms of content, be it short- or long-form, high- or low-quality, opinion, reporting, or interpretation. The audience’s desire for certain content forms evolves, but it doesn’t die.
• Good writers are people, and people like to organize for security. The notion that newspapers will disappear ignores the motivation of their current workforce. sure, many will go freelance and enjoy it, but many more will seek the security and predictability of a larger organization. these organizations will look far different from the current organizations—smaller, more technical, and without a printing or delivery workforce—but they will exist and thrive nonetheless.
• Front pages (and the brands required to drive traffic to them) will remain the premier entry point for news long after we’re dead. Social is great for particular people, but it’s too fine-grained and overwhelming for many. Simple is just easier, and front pages are simple. They’re also the dominant segment of society. By a long shot. A long, long shot.
• It became obvious 10 years ago that the internet was the future of journalism, but it will only be in the next 5 years that the grads of that era will dominate senior roles at premium organizations. Smart young people are reaching positions of power, and they’re very interested in keeping this industry going. They also recognize that they need every tool in the bag to build a new state of affairs.
• After years of trying, the publishing industry is finally hitting on models that work, however modestly. For instance, the Times’ porous paywall is promising. Viewed in conjunction with the evolution of buying behavior in music (physical goods —> Napster —> “no one’s going to buy songs again!” —> iTunes), I figure some significant portion of society will pay legally for a product they value provided it’s delivered with less friction than theft (this goes for all products, btw, not just digital goods). By monetizing that smaller but more valuable segment of the reader base, a publisher can earn many times more revenue than they could achieve through advertising alone. Porous paywalls represent new revenue line that operates at extremely high margins that make up for the smaller population it draws on. Optimized remnant ads are great, but they’re only one revenue line to be had in a very, very large industry.
• The flip side of the over-investment in adtech is the underinvestment in publishing. Ads need content to survive. I’ve heard the arguments that content will commoditize to supply the appetite of remnant ad buyers. I don’t buy it. It reminds me of the notion that the printing press would kill good writing. Adtech hasn’t destroyed writing, it’s fractured writing (again). Adtech has made commodity writing profitable to a degree not previously seen, but that doesn’t kill quality writing, it just overwhelms it for a little while. There are lots of smart people with lots of money thrashing about for answers, and for the first time in a long time, they’re seeing daylight. I think they’re going to run toward it with wallets wide open.

Resilience. Optimism. Herding. Fear.

Unless in the last 15 years we’ve managed to outgrow our humanity, there will be a tech bubble. Of course, it will be fueled by technological and economic factors (ubiquitous connectivity, low interest rates, foundational FOSS), but it will be motivated by human instinct. We will herd. We will follow. We will discount downside risk in favor of upside potential. We will focus on the positive and ignore the negative. We will see others grabbing cash or the promise thereof and we will run that way with ever increasing glee, all while repeating to ourselves the four most dangerous words in finance: this time is different. We will do these things because that’s what we’ve always done, each time shouting that some emerging dynamic will make it work this time around. The problem isn’t the technology or the economics—they likely are better, faster and stronger than last time—the problem is us. We don’t change, not even when the bubbles burst and we run away in panic. In time, we just reach down and invoke another instinct—resilience—and we do it all over again.

Resilience, optimism, herding, fear; that’s what makes a bubble. Everything else is details.

image via parkparadigm:

(via Don’t call it the next tech bubble - yet - Big Tech - Fortune Tech)

Strangers with Data

Everyone who’s logged into a web app using Facebook Connect is familiar with this overlay:

Facebook claims that this dialog gives users “transparency and control over the data they share.” I think they’re half right. Transparency? Yes, more or less. Control? Not so much. I can of course choose “cancel” and in that way control whether any of my information is shared, but that’s like saying I control the internet because my computer has a power switch. There’s a difference between actual control and the promise of control, and it’s the difference between giving me treasure and giving me a treasure map.

And sure, I can revoke non-required permissions after the fact by digging through Facebook’s labyrinthine privacy settings, but control-after-the-fact is not the same as control-at-the-time. Indeed, saying I control my data under this schema is disingenuous at best. By the time I can fine-tune my data settings, the app’s already sucked out far more than it needs. Can you imagine how this would look in the real world?

Customer: I’d like to buy this TV

Best Buy: Sure, I’ll just need access to your entire credit card transaction history. Just click this big button right here and you’ll be all set! And don’t worry about the transaction history—you’re in control; you can call this 800 number to revoke access once you leave the store.

Customer: Well, if it’s only temporary, and I’m sure I’ll remember to revoke the access…

It’s easy to see why Facebook does it this way. They’re sitting on a wealth of data of surely massive but ultimately uncertain value, so it only makes sense to see how people will mine it. And app developers are clearly addicted to the data crackpipe—every photo-sharing app on the planet seems to think their profitability depends on knowing whether my high-school girlfriend’s brother-in-law tends to like both my pictures and back episodes of CSI. But let’s be honest, Facebook hands out data like a stranger with candy. You want to sell your data overlay? Find a graph that hasn’t been picked over by ravenous vultures.

Look, I don’t even take issue with the opt-out nature of Facebook’s data policy. You want to default people to sharing? Fine. When selling data is your business, that’s good business sense. But there’s a very real line being crossed here. I shouldn’t have to decide between trying an app and giving up all my data. And no, I don’t think this is a discussion better had with app developers. Facebook owns the platform; Facebook sets the rules. I’m not talking about anything draconian. The solution really is just this simple:

And there you have it. Control-at-the-time for users. Default opt-out for Facebook/developers. Good enough for me.

Social Proof and Information Cascades

In the venture world, there’s a lot of talk about social proof. As someone who’s spent a good chunk of his life studying cognition, I know that social proof is one of mankind’s most powerful tools in decision-making. At the same time, we at IA Ventures believe that blindly following social proof is a poor investment strategy (if you can consider it a strategy at all). But how can it be that social proof is both powerful and useless? I think it’s because there are (at least) two conflicting models of “social proof.”

“Independent” Social Proof

I tend to think that when most people see social proof, they assume independent decision-making has taken place. What I mean by “independent” is that each member of the group has reached an independent conclusion about the concept through first-order research. When four different people you respect reach the same conclusion about a concept, that rightly sends a strong validation signal. Because I love diagrams, here’s how this looks:

This is what people seem to believe has happened when they see a list of social proof. However, I think social proof more often conforms to a different model…

Information Cascades

 I believe what’s often called social proof is in fact information cascading. In this schema, one person makes an independent decision about a concept, and others make independent decisions about that first person’s decision. The result is a “cascade” of decisions, each influenced more by the previous decision-maker than by the concept at issue. Here’s the snazzy diagram:

It’s important to note that this behavior is not de facto irrational. Leveraging the judgment and experience of others is one of the most powerful cognitive tools we have. Unfortunately, as time expands and linkages grow, what begins as rational decision-making based on cascaded information can morph into irrational herd behavior.

Identifying Information Cascades

What’s especially frightening about this conflation is how difficult it is to recognize and protect against a transition from rational following to irrational herding. The major complexities I see are:

• Information asymmetry. It’s impossible to divine the basis of an investor’s decision from his or her presence on a list of social proof. Maybe they invested after taking a hard look at the company and drawing an informed decision. Maybe they invested to support another angel. And maybe they invested because they saw the herd and wanted a piece of the slaughter. Who knows?
• Temporal uncertainty. The sequential nature of cascaded information implies a time lag between the first investor’s examination of the business and the second investor’s examination of the first investor’s judgment. Seed stage businesses often evolve three times a day, and twice more at night. In other words, sequential investment decisions are almost necessarily based on the stale judgments of others. 
• Delayed feedback. The most meaningful feedback loop in venture investing (returns) is extremely delayed, often on the order of 7-10 years. In contrast, it only takes a short time to build up a reputation as someone who can be relied on for social proof. Thus, someone whose investment looks like a positive proof point now may in fact be the exact opposite.

There are, of course, many more factors at play in such a boundlessly complex system. These are but a representative sample meant only to illustrate that social proof does not exist in a vacuum.

Conclusion

This whole post of course takes place in the context of the latest AngelList kerfuffle, but I choose not to wade into that particular debate. Rather, I wanted to lay out a few models for thinking in a more nuanced way about social proof and its value as an investment criteria. First-degree social proof is often a rational and intelligent decision, but if you want to understand your risks, it’s essential to understand exactly what type of “proof” you’re relying on.