breed innovation. They kill it. When I came up with the idea for Entertainment Weekly magazine at Time Inc. in 1984, it was rejected out of hand because the company’s top editor did not think one magazine could possibly serve people who liked movies, TV, books, music, and video. People who watch TV, he said, do not read books. Six years later, my proposal arose again from the dead-idea ?le. After I made prototypes aplenty and we tested the idea exhaustively and made business plans galore, a task force was assembled for the express purpose of trying to kill it. You could say they were there to perform due diligence or you could say they were there to cover the bosses’ asses. In any case, the magazine ?nally started. After an astounding $200 million investment—not all of it my fault—Entertainment Weekly became a franchise that brings in a few hundred million dollars a year. Innovation happens in spite of the structure of organizations. In 2008, I joined a seminar on innovation at the World Economic Forum at Davos. It was a highly formatted hour, with the entire room sitting in a circle (making the moderator dizzy). They had us write down the technology we loved most. Then we compared notes with a neighbor and came up with some neat invention out of this mashup. We heard a few cute ideas and then, thank goodness, a scientist in the room put a stop to it. This, he said, is not how innovation is made. Scientists start with a problem and then try to ?nd a solution. I’ll show in a later chapter on the Gg foundation, “Google Power & Light,” that Google’s founders approach invention in that order: ?rst ?nd the problem, and then create the solution. Beware the cool idea. Of course, innovation and ideas do not come only from within. Remember Michael Dell saying that a company cannot be built on the ideas of a few people. “Ideas come from everywhere,” Mayer told Stanford’s students. When Google got into mapping, she said, it found engineers in Australia “who were just amazingly good at mapping interfaces” and then hired them. Google bought other products and ideas this way, leading to platforms for blogging, feeds, Google Docs, and advertising systems. Don Tapscott, author of Wikinomics, told the BBC’s Peter Day on his In Business program in 2007 that Procter & Gamble now relies on ideas and solutions not invented there but “proudly found elsewhere.” Day went on to report on the solutions platform InnoCentive, where
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scores of companies post problems with offers of rewards for solutions from independent inventors, scientists, and tinkerers, whom InnoCentive calls “solvers.” The problems range from the profound (a $1 million reward to ?nd “a biomarker for measuring disease progression in Amyotrophic Lateral Sclerosis [ALS or Lou Gehrig’s Disease]”) to the scienti?cally geeky (“near complete conversion of phenol compounds into non-volatile or insoluble products in an aqueous solution”) to the prosaic (a large company wanted “bakeable cheese technology” for snack products; another offered $5,000 for “novel approaches to gently and effectively clean a baby;” and the Rockefeller Foundation offered $20,000 for the design of solar-powered internet routers). No matter where the ideas come from, innovation is, of course, all about people, their talent, and how you nurture it. Rishad Tobaccowala, an advertising executive you’ll hear from in the chapter, “Advertising,” says the genius of Google’s 20 percent rule is that if you enable people to follow their passions, they’ll as much as work for free. Google, he said, knows how to ?nd smart people and give them what they want: “They want to work for a winner. They want to have the ability to feel special. They want to have the ability to follow their passions. They want the ability to make money. And they want to have the ability to increase their external market value—it helps me build a brand: myself.” Mayer said just working with smart people challenges other people in the company—and besides, they’re easier to manage. Google’s lesson is clear: Make innovation your business.
Simplify, simplify
Once you decide what business you’re really in, once you settle on your strategy, once you ?gure out how to execute it in the new architecture and realities of the Google age, once you cast a new relationship with your world, once you absorb new ethics of this new era into your company’s culture, once you make innovation a keystone of that culture, then there’s one more important thing to do, another vital lesson to learn from Google: simplify. In their 2005 history of Google, authors David A. Vise and Mark Malseed recounted the story of Google testing an early version of its spare and spartan home page with users:
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The testers were told to use Google to ?nd the answer to a trivia question: Which country won the most gold medals in the 1994 Olympics? They typed m, watched the homepage come up on the screen, and then they waited. Fifteen seconds went by . . . twenty seconds . . . forty-?ve. [Marissa] Mayer wondered what was going on, but didn’t want to interfere. Finally, she asked them, “What are you waiting for?” “The rest of the page to load,” they answered. The same thing kept happening all day, Mayer recalled. “The web was so full of things that moved and ?ashed and blinked and made you punch the monkey that they were waiting for the rest of it to show up.”
Mayer’s team changed the design to make the copyright notice at the bottom of the page stand out, just to let users know the page was done loading so they could get started. I had to learn the lesson of simplicity myself when I debated about the title of this book with my editor and publisher. My original title was WWGD? (What Would Google Do?). It was a joke that I knew would work only in America, inspired by bumper stickers and bracelets that ask, WWJD? (What would Jesus do?) In this equation Google was God. But the publishing company thought this double title was too complicated. They wanted to simplify. I argued with them, holding dearly to my gag. To my editor’s discomfort, I decided to take the debate to my blog readers, as is my re?ex now. A great discussion ensued with a few dozen comments, a majority disagreeing with my argument. Then a commenter named Ellen advised: “To me, it doesn’t matter what we all think. You should decide based on What Google Would Do, since that is the point of your book.” Right. What would Google do? It would simplify. I had to follow my own rules. I simpli?ed the title. Google is perhaps the most powerful single tool that can be used by anyone on earth. But it is also the simplest. Compare Google’s home page with a TV remote control, a clock radio, a tax form, an insurance policy, any legal document, many ecommerce sites, Microsoft Word’s toolbar, most companies’ org charts, and the last ?ve memos you wrote. Google is simple. Google shares its design aspirations on the web for all to see. “The Google User Experience team aims to create designs that are useful, fast, simple, engaging, innovative, universal, pro?table, beautiful, trustworthy, and personable,” the team wrote on a Google blog. “Achieving a harmonious
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balance of these 10 principles is a constant challenge. A product that gets the balance right is ‘Googley’—and will satisfy and delight people all over the world.” Their key design principle: “Simplicity is powerful. . . . Google teams think twice before sacri?cing simplicity in pursuit of a less important feature.” Or to quote another internal Google company principle: “It’s best to do one thing really, really well.” Simplicity is empowering. I don’t have to use Google the way someone else says I should, following its path of navigation. I don’t have to feel stupid looking up instructions. Google never makes me feel foolish for making mistakes (“Did you mean . . . ?” it graciously asks when I misspell or mistype). It doesn’t waste my time trying to ?nd what I want. It just gives me a blank box and puts the world behind it. Design is about more than aesthetics. Design is an ethic. Design is the path by which you interact with your public. Magazines, clothes, and cars aren’t the only things that are designed. Companies are designed. Services are designed. Rules are designed. The simpler and clearer the design, the better. To be simple is to be direct. To be direct is to be honest. To be honest is to be human. To be human is to be in a conversation. To be in a conversation is to collaborate. To collaborate is to hand over control. And we are back to where we started, to Jarvis’ First Law: Give the people control and we will use it. Don’t and you will lose us. Simple.
Get out of the way
One more law from one more leader. Craig Newmark, founder of craigslist, is a wonderful character. You’ll never meet a more unassuming revolutionary and mogul. Proudly geeky, rarely fashionable (the one time I saw him in a tie, he said he put it on just to scare people), soft-spoken, impish, and ironic, he is not what you expect, whatever that is. Newmark confounds business people, running a service mostly for free. He charges just for job ads and real-estate ads in some cities. By various accounts, he has destroyed a few billion dollars in value in the newspaper classi?ed business. But as I said earlier, Newmark isn’t at fault—the internet is. craigslist reveals no ?gures publicly, but it has been estimated that it brings in $100 million a year with just 25 employees. Still, money does not motivate Newmark and his president, Jim Buckmaster. Newmark
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could exploit his service for many times more income and equity. He could sell out for a fortune. He has no intention of doing either. That’s what business people don’t understand about him. He is like an alien to them (indeed, he is a bit like ALF). Newmark introduces himself as the founder and customer service rep for craigslist. That always gets a laugh, but he doesn’t mean it as a punch line. That’s what he does: customer service. And that is the essence of craigslist’s worth. If the community becomes overrun with spammers and scammers, it will lose value for its members. So Newmark listens to their complaints and ?xes problems. Craig is the cop. When Newmark spoke to my students at the City University of New York Graduate School of Journalism about some of the projects he was engaged in for the public good—such as investing in the future of quality journalism—one of them asked why he didn’t sell craigslist for billions of dollars, which he certainly could, and turn his assets to philanthropy. Newmark said he believes he is helping people more by keeping money in their pockets and away from middlemen. He attributes the success of craigslist to treating his community as stakeholders, and he is paying them their internet dividend. Newmark operates by many of the rules in this book. He created a platform and network for his communities. He trusts the wisdom of his crowd. He brings communities elegant organization. He understands that free is a business model. He relies on the gift economy. He dooms middlemen. He runs a disarmingly simple system. But then he adds his own unifying principle of technology, communities, and the internet. Here it is, with classic Craig brevity: “Get out of the way.” That’s it, Craig’s Law: Get out of the way. If you make a great platform that people really want to use, he argues, then the worst thing you could do is to put yourself in the middle, getting in the way of what people want to do with it. As a customer, I often feel that airlines, cable companies, phone companies, insurance companies, doctor’s offices, car dealers, banks, schools, and government agencies exist to get in my way—it’s their business model. Not Newmark. When he started craigslist as an email list, Newmark will tell you he had no idea what it would turn into. He didn’t know the impact it would have on classi?eds and news. He didn’t know that people would ?nd each
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other and go on dates and ?nd restaurants for those dates and get married and have kids and buy baby furniture and get apartments and buy cars and improve their lives thanks to his simple lines of code. But they did. He didn’t know that when Hurricane Katrina struck, the New Orleans diaspora would use craigslist to ?nd each other and jobs and homes. If he had tried to anticipate that, if he had over-researched and over-designed and set up all kinds of rules, restrictions, navigation, instructions, and fees for how to use craigslist, Katrina’s people wouldn’t have done what they did. And craigslist would be smaller than it is. Instead Newmark created something useful that people used. He stood back and let them do it. He listened to them and added the features they wanted. He kept listening and solved problems with the technology and with the community’s use of it. And, by the way, his is about the ugliest but most useful design you can ?nd this side of Google. Google, too, tries to get out of the way. It creates platforms that people use—even enabling them to build businesses atop them—in ways that Google could not predict, could not design around, does not limit (well, not much), and generally does not charge for. Google realizes that its real value is not in limiting what people can do but in helping them do what only they can imagine. That is the essence of the Google worldview. That is what I will try to apply to a host of companies, industries, and institutions in the next section of this book. We end this section with the single best bit of advice you can glean from Google and from craigslist: Make something useful. Help people use it. And then . . . Get out of the way.
If Google Ruled the World
“The search engine is going to control the planet,” declared author Paulo Coelho. But surely not everything, right? It’s not as if Google would want to run something dull like a utility (except that it is investing in the power industry) or a telephone company (well, it almost has) or enter the health industry (but it just did) or open a restaurant (then again, its cafeteria is world-famous and so is its chef, who wrote the book Food 2.0). Some people wish Google would take over a newspaper—The New York Times is often nominated—or entertainment companies or perhaps the software giant Microsoft. But no, Google knows what it is. Its ambition is not to take over the world, but to organize it. So now that we have distilled Google’s success into a series of laws and lessons, we will attempt to apply them to a number of industries and institutions. I won’t pretend that I can ?x a company in just a few pages. If only it were that easy. . . . Nor will I claim that I have found all the secrets to Google’s success. If only I could. . . . The point, instead, is to see things differently, to understand the fundamental changes of the Google age, to ask hard questions, to grasp new opportunities, to rethink, reimagine, and reinvent. That is the example to follow from Google. So the speci?cs of these cases are less important than the discipline, the attitude, the imagination, and the courage it takes to lead in this era of magni?cent upheaval. Even if you don’t work in, say, the ad industry, I hope that in the discussion of how to remake advertising, you will ?nd ideas and inspiration for your own situation. These industries and institutions provide a wide variety of examples of how to live by Google’s rules. Not all the rules will apply to your particular circumstances. But thinking and seeing in new ways is an imperative for everyone. “Google has brought massive shifts in the way different generations and people think,” said ad industry visionary Rishad Tobaccowala. He predicted that as a result, “there’s going to be a huge new business which is built around the psychology of being analog in a digital world— everything that has to do with therapy. Which I think is why spas are so big now.” That may be why Google’s offices feature pods where employees can shut off the world and easy chairs where they can just stare at an
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aquarium. It’s stressful organizing and changing the world. But before you check yourself into the sanitarium, remember that the real moral to the Google story is this: If Google can do it, so can you. Google is seeing problems, solving them, and ?nding opportunities in them by thinking in new ways. This is all about ?nding your own new worldview. There are two ways to attack the problems of these industries: to reform the incumbents or to destroy them. In some cases, we’ll take one path, in others both. But in any case, the wise course is to destroy your own models before some kid in a garage—or in a Harvard or Stanford dorm room—?gures out a way to do it for you. Think like Google, succeed like Google—before Google does.
Media
The Google Times Googlewood GoogleCollins
The Google Times: Newspapers, post-paper
On what turned out to be an eventful week in London in 2008, Edward Roussel, digital editor for the Telegraph Media Group, told me over tea and toast that he had pondered the question I ask in this book’s title. He answered it with a striking vision for newspapers: What if papers handed over much of their work to Google? Roussel reasoned that Google already is their best distributor online. He couldn’t imagine a paper creating better technology or attracting better technical talent than Google. In advertising, Google is the clear winner. So why not outsource distribution, technology, and a good share of ad sales to Google as a platform so the paper could concentrate on its real job—journalism? Roussel was following a key rule in this book: Decide what business you’re in. The next day, I issued the same challenge to his competition, the Guardian, where I work and where I wound up a series of seminars on the future of journalism. My assignment was to pose 10 questions papers should answer now. The ?rst: Who are we? Papers must no longer think of themselves as manufacturers or distributors. Are they in the information business? That would seem obvious, but when information can be so quickly and easily commodi?ed, it is a perilous position. Are they in the community business, like Facebook? Not quite; few papers enable communities to organize themselves. Are they in the knowledge business, like Google or Amazon? Not yet; they haven’t put themselves in the position to know
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what their readers know. In the end, I urged papers to become platforms for larger networks of news—but they’re not there yet. The night before, the Guardian had invited Arianna Huffington, founder of The Huffington Post, to speak. She announced she was taking her service local and would invade Chicago, hiring one editor to build a site around the best bloggers there. A reporter at the beleaguered Chicago Tribune—which now had Huffington’s target on its back—asked me how the paper should respond. My reply: The old way would have been to treat Huffington as a competitor. The new way would be to ?nd the means to work with her: Sell local ads for her and get a piece of her revenue. Quote her bloggers in the paper, taking advantage of her recruiting and relationships and earning friendship—and links—in return. Start new blogs that Huffington’s writers would want to talk about and link to. Give Huffington headlines from the Tribune, which also link to the paper. The Tribune no longer owns the market, I told him. Its ambition should be to join and help a network. News organizations don’t yet think that way. That same week, while in London, I became embroiled online in a bloggers’ battle with the Associated Press, which had sent legal letters to a site demanding that it take down excerpts of its stories, some as short as 33 words. The AP thought the bloggers were stealing its words. Bloggers, however, believed they were doing the AP a favor every time they quoted and linked to its stories. In this confrontation, we witness the millennial clash of old and new media models: the content economy vs. the link economy. The AP, like the papers it serves, thought its content was its value and its magnet. But online, content without links is the tree that falls in the forest that nobody hears (and turns into newsprint). So the real value in this transaction was not the content that was, in the AP’s view, stolen, but the links that were, in the bloggers’ view, given. The content economy made money by controlling and selling content. In the link economy, it no longer pays to sell copies of content when the original is just a link and a click away. This link economy makes ?ve demands: First, you must produce unique content with clear value; commodity content will get you no links or Googlejuice. Second, you must open up so Google and the world can ?nd your content. (If you’re not searchable, you won’t be found.) Third, when you get links and audience, it is up to you to exploit them, usually through advertising. Fourth, you should use links to ?nd new efficiencies. (Do what
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you do best and link to the rest.) Fifth, ?nd opportunities to create value atop this link layer: curation of the best content; technology infrastructure to enable links to be found; and advertising networks to help creators monetize links and traffic. Exploiting this sort of tectonic shift—seeing how the world is disrupted and ?nding opportunity in it—is a key skill of Googlethink. For news organizations, going digital is not as simple as ?lling web pages. This transformation requires them to reinvent themselves—how they think of themselves, how they operate, how they relate to the public, how they make money—and fast. Jeffrey Cole of the University of Southern California Annenberg School’s Center for the Digital Future found in a 2007 survey that young people 12 to 25 will “never read a newspaper.” Never. Philip Meyer wrote in his 2004 book The Vanishing Newspaper that if current trends continue, the last American paper will be published in 2040—and that downward slope has only steepened its decline since he said that. This is not a drill. Google’s impact is more direct and immediate on media than on other industries—though their turns are coming. So as a demonstration of the discipline of adapting Google’s rules, I begin this chapter—unlike others to follow—by laying out relevant rules and explicitly interpreting them for newspapers. Atoms are a drag. Newspapers assumed their competitive advantage was in owning the means of mass production and distribution. In the old, scarcity-based content economy, they were right. But now print’s infrastructure carries an unbearable cost burden. So I say papers should set a date in the not-too-distant future when they will turn off the presses. Foolish, you say? Old mass media still has value, you argue. Online revenue is not meeting print revenue. As readers move to the internet, newsstand money disappears. In advertising, print dollars are replaced by mere online dimes. Don’t they still need paper? Yes, but the scale of newspapers’ businesses will never be the same now that they no longer hold local monopolies. In the shift from physical to digital and mass to niche, the best way to exploit the legacy value of a paper is to use its old-media megaphone to promote and build what comes next. First, a paper has to decide what is next. It has to design and build its post-paper products—retraining and restructuring staff and sloughing off unnecessary costs—before the presses go silent. It has to promote the new products even at the
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expense of the old: Cannibalize thyself. Convincing audience and advertisers to move to the future is better than following them there after they have discovered other sources of news. Casting off atoms will allow newspapers to brag: no more dead trees and lost oxygen (an ecological site calculated that newsprint production used up the equivalent of 453 million trees in 2001); no more gas-sucking, pollution-spewing trucks to haul them around; no more presses draining energy; no more waste to recycle; no more oil pumped to make ink. To hell with going carbon-neutral. A former paper is an ecological hero! In 2005, just after it had ?nished installing new, smaller-format presses at a cost of $150 million, the Guardian invited me to talk with its managers about what would come next—digital. Editor Alan Rusbridger stole my thunder when he conceded that those presses were likely the last they would ever buy. “The last presses.” I couldn’t imagine an American publisher saying those words except with his dying breath. Rusbridger saw it as his job to deliver the Guardian over the chasm it faced from print to online, atom to bit. His mission wasn’t to shelter the old medium but to take its values to the new world as quickly, safely, and sensibly as he could. Paper may not disappear. But if newspapers do not at least plan for the eventuality—if not inevitability—of the transition, they will be left protecting nothing but their presses. Again, protection is no strategy for the future. Think distributed. News organizations can no longer rely on the idea that the world will beat a path to their door. People are ?nding their own ways to news through no end of new routes: friends’ blogs, aggregators such as Google News and Daylife, collaborative news sites such as Digg, feeds on Facebook or Twitter, apps on mobile phones, and who knows what comes next. As a college student said in The New York Times in 2008: “If the news is that important, it will ?nd me.” Thus news organizations should stop presenting themselves as destinations and start seeing themselves as services, pushing out feeds, offering content to networks of sites, getting their news to where the people are. This is the new home delivery, the internet as paperboy. Be a platform. Join a network. You can’t do it all yourself anymore. By joining collaborative networks, you can get help. For newspapers, that may mean soliciting the public’s assistance in ?nishing stories. It may
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mean recruiting and mobilizing the public to report. It may mean setting them up in business. It certainly means welcoming their contributions and corrections (one way to follow the rule, make mistakes well). Newspapers can provide collaborators with raw material to create products—news reports to comment on, video to remix, assignments to follow. The New York Times and NPR each announced programs to make content available for mashups and remixing via APIs (application programming interfaces). Newspapers can also provide functionality—blogging tools and the means to repackage, say, Google Maps into collaborative community resources. They can educate collaborators, sharing what they know about how to get access to public information, avoid libel suits, or shoot video (as the Travel Channel and some local TV stations do). They can give good sites promotion and traffic. They can generate revenue by setting up ad networks for these collaborators, following Glam’s example. The papers, in turn, get news and information they couldn’t afford to gather on their own at lower cost and with lower risk, and they become part of something bigger than themselves. Or that’s the theory. A holy grail of online newspapers—as yet unattained—has been the idea of collaborative hyperlocal news networks: armies of blogging neighbors who gather and share news and photos from their school boards and street fairs. There have been many attempts to reach this goal and about as many failures, no shortage of them mine. I learned that it was a mistake to expect people to come to my newspaper site and contribute their work; often they want to own their own stuff in their own space. I also learned that bloggers need the means to support what they do—that is, money. In 2004, I held a Meetup to persuade people to blog on NJ.com. Good idea, said journalist Debra Galant, but it’s too good an idea to do it for your site, Jeff. She started her own blog, Bm, which covers Montclair, New Jersey, and now serves 10,000 daily readers and 100 advertisers. What should its relationship be to the site and paper I worked with, The Star-Ledger? Rather than competing, they collaborated in 2008 to print a joint guide to Montclair, sharing content and credit, with both the paper and the blog selling ads. It’s a start. Next, I’d like to see a network of scores of Baristanets covering hundreds of towns and eventually thousands of interests. Collaborate. Collaboration is co-creation. It requires giving up some
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control of assets so collaborators may remix, add to, and distribute content. The newspaper gets more content and gets talked about, which is how it will get new links, readers, attention, loyalty, and Googlejuice. In 2007, Brian Lehrer’s public-radio show on WNYC wanted to use its ability to mobilize the public for a project in collaborative journalism. Lehrer asked his listeners to go to their local stores and report the price of milk, lettuce, and beer. Hundreds did, giving the station data no single reporter could have gathered alone. WNYC plotted the data on Google Maps, showing which neighborhoods were being gouged. It also learned that some stores were charging illegally high prices for milk. The BBC opened up many of its resources in a public laboratory called Backstage, which enables anyone to build products on top of its content and data. Remixes have included a service that took BBC news feeds and searched for related material from citizens on YouTube and Flickr; a service that found out which BBC stories were the most talked-about on the web; and one that mashed up road-traffic data atop Google Maps. The BBC—like Facebook—attracted scores of developers making new products that made the BBC more useful and brought new ideas to the media giant without the cost or delays huge organizations bring. Welcome to the open-source, gift economy. Listen well. Just as Am and Google monitor search requests to see what the public wants to know, so newspapers should create the means for the public to say what it needs to know and to assign work to journalists. BusinessWeek is soliciting such requests. Dm had its users vote on questions it would ask politicians at the 2008 political conventions. In 2007, I worked with trainees at the German publisher Burda, brainstorming products. One of them asked a question so obvious I kicked myself for never having asked it myself: “Why doesn’t the public assign us?” Right. Readers know what they want to know. Journalists need a means, like MyStarbucksIdea, to gather assignments. This mechanism turns the relationship between the journalist and the public on its head. The public is now the boss. If journalists are uncomfortable with that, it means they don’t trust the public they serve. Remember: Your crowd is wise. Remember, too, Weinberger’s Corollary: There is an inverse relationship between control and trust. The internet kills inefficiency. Newspapers are inefficient enterprises— because, as once-rich monopolies, they could be. When Rupert Murdoch
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acquired The Wall Street Journal, he complained that 8.25 editors touched each story. At The New York Times, there are three editors for every writer. When Sam Zell took over Tribune Company, he had efficiency experts count how many inches of text writers produced. These may be shallow metrics, but they reveal much room to change. And that change is coming as, according to the blog Papercuts, newspapers laid off 12,299 journalists in the ?rst 10 months of 2008. Once a paper decides what it is, it’s clear that it must marshall all its forces behind one goal. For local papers, that should be local reporting. The mass market is dead. Long live the mass of niches. Papers should no longer make just one mass product, a newspaper. Some are producing new services for more targeted interests, locales, and communities: hyperlocal sites and papers; a local sports talk show; a local golf magazine; a mobile weather service; local job fairs; parents’ guides. These products need not be created and owned by the company; they can be produced by others and distributed or sold by the paper. The more communities served, the better. Small is the new big. Elegant organization. A paper should provide its community with what Facebook’s Mark Zuckerberg gave his. In a sense, papers always have. They organize a community’s knowledge so it can better organize itself. Now there are more tools to do that. Papers can create platforms where neighborhoods, towns, schools, clubs, or people with like interests can share what they know and editors can bubble up news out of that. Once the platform has been created, they should follow Craig Newmark’s advice: Get out of the way. Beware the cash cow in the coal mine. Papers sat back on their cash ?ow and assumed something would rescue them. Nothing did. Now papers will die. But the demand for news will not go away; it’s growing. New products and competitors will emerge and there’ll be enough audience and money to support them—if they are not saddled with the costs of printing. Can the papers that survive invent these new products themselves with their cultures? Jim Louderback, CEO of the internet TV company Revision3 (more from him next) has this advice for legacy companies: “Look at how Steve Jobs made the Mac. He took a core group of people and put them in a closet somewhere and they built something completely different. So take a core group of people and put them in Kentucky or St. Louis and build something entirely new.” Rethink everything: What is a news story? Is a
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topic page a better vehicle for covering local news? How should news be gathered? How should it be shared? How should it be supported? Encourage, enable, and protect innovation. What does a newspaper look like if it is no longer a newspaper? It will be more of a network with a smaller staff of reporters and editors still providing essential news and recouping value for that. Paper 2.0 will work with and support collections of bloggers, entrepreneurs, citizens, and communities that gather and share news. A newspaper is no longer a printing press that turns out money. But as a network it could be bigger than papers have been in years, reaching deeper into communities, having more of an impact, and adding more value. To get there, it has to act small but think big and see the world differently.
Googlewood: Entertainment, opened up
Entertainment is built on a blockbuster economy: Hits are huge and everything else is merely the price you pay to play the odds. This system has long been fed by scarcity: only so many movie screens, so many hours of TV seen by only so many viewers, and so many shelves in the record store (when there still were records and stores to sell them). The audience was herded together to consume a limited ?eld of choice, and the winners were the products that appealed to the most people. There will always be blockbusters just because some things are that good (great movies) or because we enjoy talking about shared experiences (silly reality shows) or because the hype is too huge to ignore (the Oscars). Hollywood is eternal. The economics of abundance—the mass of niches, the long tail—has opened up entertainment’s business models in ways we have not seen since the last waves of new media technologies: sound recording, ?lm, broadcast. Today we can watch whatever we want. Hell, we can make whatever we want. It will become harder and harder to turn out blockbusters because there is so much more competition for our attention. But it also will be possible to produce more entertainment more people like—that is our new abundance. Hollywood was built on a system of control. You could break in only if you made it through a gauntlet of agents, executives, and distributors who controlled the money and access to the audience. The internet is busting
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that system apart. But we didn’t need to wait for the web to break free. It was possible to be a rebel before. It’s just easier now. I return to Howard Stern, who is not only the self-crowned king of all media but who was, I argue, Googley before there was a Google. He saw a radio industry built around the local broadcast tower and broke its rules, starting in 1986, when he built a syndicate of stations that made him famous (and infamous) across the country. He didn’t rely on an existing network. He built his own network. Then he used radio as a platform to create a presence on TV. He used radio to become a best-selling author, and he turned his book into a hit movie. He later became huge on the internet, and put satellite radio in orbit. Stern’s relationship with his audience is what set him apart. He created a collaborative product—not just because he took phone calls from listeners but because those listeners made their own entertainment, which they generously gave to the show: phony phone calls, brilliant song parodies, theme songs for hapless producer Gary “Baba Booey” Dell’Abate, games, even movies. They gave him their creativity and loyalty. He gave them airtime and attention. This was their mutual gift economy. Stern decided long ago that he would not push a self-serving charity as rival Don Imus had or sell tacky schwag like the Rush Limbaugh Excellence in Broadcasting mouse pad. I wouldn’t mind buying a Stern hat or jacket—I’d wear my taste proudly—but Stern won’t sell them to me. He refuses to cash in on our relationship. He knows that his value rests with his fans. Stern took a gamble on that relationship in 2006 when he moved from broadcast—chased off by the Federal Communications Commission’s harassment—to Sirius Satellite Radio. He received a reported $500 million for the move—motive enough, of course—but there was no way to be sure that the millions of fans needed to make him worth his price would follow. They did. At Sirius, Stern has handed over control to his audience; when they told him to change programming on his two 24-hour satellite channels, he obeyed. I use Stern as a case study in Googlethink to demonstrate that you don’t need to be Google—or be on the internet or rely on technology or even be inspired by Google—to think in these new and open ways. Stern broke the control system and rules that the entertainment business holds dear and built his empire on his relationships. It’s still about relationships.
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The internet just makes it easier to break rules and break in. Anybody who’s any good can aspire to be a monarch of any or many media. They may not be as big as Stern, Jon Stewart, or Steven Spielberg. But in a postblockbuster, small-is-the-new-big economy, they don’t have to be. Now fast-forward to 2005, when geek-show host Kevin Rose left TechTV after his network merged with G4, a game channel. Instead of getting another job at another network, Rose started his own networks, because he could. First he created Digg, a collaborative news service where users suggest stories and then vote on them to create the community’s front page. It attracts more than 25 million users a month. The service was revolutionary, giving the public—rather than editors—the power to make news judgments. Of course, the public always had made its own judgments; Rose just recognized that and enabled them to do it together. Then Rose started his video network, Revision3, and the ?rst show on it, Diggnation, in which he and his former TechTV colleague Alex Albrecht sit on a grungy couch with a different beer in hand each week talking about some of Digg’s favorite stories for more than 30 minutes straight. If one of them has to do what one must do after drinking beer, they don’t stop the tape; Alex just gets up and goes to the bathroom. The show could not be more casual and less like TV, but that is precisely its authority. My son, Jake, is a fan—he introduced me to it—and I tried to repay the favor by sharing professional podcasts about technology from NPR and the BBC. As soon as I played them, I realized they didn’t hold the same authority as Digg because they were too packaged and plastic. Diggnation draws an audience of 250,000 each week (a nighttime cable news show on some networks is satis?ed with 150,000 viewers). Just because it’s on the internet doesn’t mean it’s small. But its costs are. Non?ction TV—news shows, not scripted dramas—on broadcast networks costs about $300,000 an hour to produce. An hour of Revision3 programming costs a tenth of that. Internet TV can get even cheaper. In 2007, I visited 18 Doughty Street, a ?ve-hour-a-night Tory talk-show network in London that broadcast on the internet from a townhouse living-room set with all the trappings of TV: couches, seven cameras, a control studio, and potted palms. I asked Iain Dale, the founder, to calculate his per-hour cost for talk. It came out to $140. Sure, the comparisons are unfair. News networks have journalists, bureaus, producers, executives, expensive anchors, writers, makeup people, hair people, camera people, sound people, direc-
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tors, and free muffins. But do they need all that? In 2007, I wrote and recorded an opinion piece for a short-lived segment on the CBS Evening News (it never aired—my mention of dethroned anchor Dan Rather may have had something to do with that). Up to the taping, I saw 12 people involved, which didn’t include countless more editors and unseen executive producers and technicians. That day at home I used the same script to record the same opinions on my Mac. Cost: zip. Movies are worse. Not long ago, I happened on a studio shoot in Manhattan. Even though I’d covered the industry for years, I was amazed anew at the cost of it, at the stuff they drag around. On one truck, a huge container was ?lled with nothing but blocks of wood with Paramount’s logo burned onto them. Of course, studios do need much of this stuff to make movies that will look great on a big screen. But do they need it all? Diggnation has just a camera pointed at its couch. It entertains, too. In the text web, the delta—the difference—in cost between the old and new way is enormous; that is what has led no end of bloggers and newcomers to create content sites. In ?lm and video, that delta is many times larger, which I believe will lead to even more investment in online shows, as the opportunities are even greater. Revision3 started on a shoestring but received a reported $9 million investment to create more shows, build a studio, and hire its CEO. It’s still run on a shoestring, CEO Jim Louderback told me. “The story of the internet,” he said, “is ruthlessly ef?cient business models and blowing away barriers to entry and access.” Revision3 saved money on equipment, which Louderback credited to Moore’s Law. Intel’s Gordon Moore decreed in 1965 that the number of transistors and thus the computing power on a chip would double every two years (this law enabled Google and the internet to exist and led to every law in this book). The cost of digital cameras has thus plummeted. Revision3 goes Cadillac with an $8,500 model but I’ve seen newspapers and even TV stations recording high-de?nition segments with $1,000 handhelds. Instead of a fancy TelePrompTer (and expensive writing team to ?ll it with words), Revision3 uses a cheap LCD screen and mirror. Instead of editing suites that once cost tens, even hundreds of thousands of dollars, they edit on Macs. The only equipment that doesn’t bene?t from Moore’s Law, Louderback said, is the handmade Italian pedestal for moving cameras while shooting. It has no electronics but relies on precision ball bearings. Damned atoms.
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Staff costs are low, too. Instead of hiring pretty faces with good hair to read the words writers put on TelePrompTers, Revision3 hires hosts with knowledge and passion about their topics and the ability to attract a community. Distribution costs little because there are so many partners, including Google’s YouTube, that can spread video around. Marketing? No need for that when you have a loyal audience. I stood in that audience when Diggnation came to New York and 2,000 people showed up (I was the oldest geek there and sympathized with my son, who was standing next to the only head of gray hair in the place; it was like having your mom take you to a Stones concert). To market itself, Revision3 cuts up its shows and puts the best bits on YouTube so fans can pass them around—a demonstration that your product can be your ad and your customers are your ad agency. What about revenue? Louderback said that by the middle of 2008, a show the size of Diggnation was selling three sponsorships per episode at a cost of $80–$100 per thousand viewers (the standard measurement for advertising). By contrast, banner ads on web sites can sell for as little as a few dollars or even cents per thousand. How can Diggnation command that premium? Once more: relationships. The hosts deliver the commercials and viewers remember them. Louderback said 100 percent of audience members could recall the name of one sponsor without help and 93 percent could name two. That is unheard of on television, where commercials are ignored or skipped. So do the math: With an audience of 250,000 per week, that could work out to as much as $4 million a year and growing. Not bad for two guys on a couch. Revision3 moved past tech to shows on magic and comic books. Louderback ?nds talent not on TV but online inviting viewers to submit their own pilots. The internet is an amazing source of new voices if you know how to listen for them. Talent may not be everywhere, but it’s not as scarce as once thought. The key, Louderback said, is to realize that the internet “is a new medium. It’s completely different. Think how Ted Turner created CNN. He didn’t just think about plopping a broadcast network on cable. He thought about creating an entirely new medium.” So did Kevin Rose. His shows are communities. He is the new Turner, Murdoch, Hearst—or Oprah. He is the next-generation media mogul because he thinks differently. This new relationship we have with—in the words of New York Uni-
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versity journalism professor Jay Rosen—“the people formerly known as the audience” is collaborative. I don’t mean we’ll each end up picking our own endings to a movie. I don’t want that. Writing the ending is the job of the author. Still, entertainment is becoming collaborative. When LonelyGirl15—the saga of a pretty teen girl talking about her odd life via a webcam in her bedroom—became an entertainment phenom on YouTube, what was most fascinating was not the LonelyGirl videos but the videos viewers made around them, responding to her, asking questions, affecting the course of the narrative. When it turned out that LonelyGirl was not real but an act of ?ction, the audience’s videos—many exhibiting anger and disappointment—were captivating. The art was the collection of everyone’s work, creators and audience. The art was interactive. Something similar happens on discussion forums such as Television Without Pity, where producers take advice about plotlines and characters in series that threaten to jump the shark. These producers realize that the audience owns a show as much as its creators. Entertainment can now break out of its old forms. Comedy doesn’t need to be 22 minutes long (plus eight minutes of ads). Movies can become serials. Shows can be collaborative. Talent can come from anywhere. Audiences are distributors. We can watch entertainment anywhere. Hollywood—particularly TV—has not been blind to this change and learned from the music industry as it imploded trying to maintain control in an uncontrollable world. TV networks might just save themselves because they broke their own rules. ABC was willing to hurt its distributors— local stations—when it streamed shows on the internet and sold them on iTunes. NBC and Fox created an impressive player called Hulu; in the U.K., the BBC started its equivalent in the popular iPlayer. Like Google, they learned to think distributed. What will Hollywood studios and TV networks look like in the Google age? At one level, they won’t change: They will still pray for blockbusters and the stars that make them. At the top, the celebrity economy is largely immutable because there can be only so many big stars at once. But from the bottom, we will see more, if smaller, celebrities in many variations on Warhol’s Law: Everyone is famous for 15 clicks, links, tweets, or YouTubes. Fame, like talent and audience, is no longer scarce. Managing this abundance presents many opportunities. More than ever we need guides. Too bad TV Guide is choking in the coal mine.
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One-size-?ts-all criticism won’t work anymore. But a system that helps us help each other ?nd the best entertainment would be valuable. If I were to start Entertainment Weekly today, it would be that: a way to ?nd just what I like, a collaborative Google of taste. Entertainment will be more of a social experience. Though I still want authors to do their duty and polish stories, that doesn’t mean I wouldn’t like to see other people remix shows and movies. In the old, controlled way of thinking, remixing was a violation of copyright. In the new, open, distributed model, it is how you join the conversation. Comedy Central’s Stephen Colbert has—Stern-like—challenged his audience to remake videos of him and of John McCain. Some were great, some were nowhere near that, but in the process, they spread his challenge all over YouTube, MySpace, and blogs. It’s a gift economy and it’s an ego economy: Everybody who made a video wanted attention and could get it from Colbert and his community. The content was the advertisement, viewers were the creators and distributors, and Colbert was the catalyst. Maybe that’s what entertainment becomes: the spark that inspires more creativity and attracts not just audiences but communities of creation in a million Hollywoods.
GoogleCollins: Killing the book to save it
I confess: I’m a hypocrite. If I had followed my own rules—if I had eaten my own dog food—you wouldn’t be reading this book right now, at least not as a book. You’d be reading it online, for free, having discovered it via links and search. You’d be able to correct me, and I’d be able to update the book with the latest amazing stats about Google. We could join in conversations around the ideas here. This project would be even more collaborative than it already is, thanks to the help of readers on my blog. We might form a group of Googlethinkers on Facebook and you’d be able to offer more experience, better advice, and newer ways to look at the world than I alone can here. I wouldn’t have a publisher’s advance but I might make money from speaking and consulting. But I did make money from a publisher’s advance. That is why you are reading this as a book. Sorry. Dog’s gotta eat. I already do most everything I describe above, not in this book but on my blog, where ideas are searchable and collaborative and can be updated
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and corrected—and where I hope conversations sparked by this book will continue. I believe the two forms will come together—that’s part of what this chapter is about. In the meantime, I’m no fool; I couldn’t pass up a nice check from my publisher, Collins, and many services, including editing, design, publicity, sales, relationships with bookstores, a speaker’s bureau, and online help. There’s a reason publishing is still publishing: It still pays. How long can it stay that way? How long should it stay that way? As I suggested that papers should turn off their presses, I have a suggestion for book publishing: We have to kill books to save them. The problem with books is that we love them too much. We put books on a pedestal, treating them as the highest form of culture: objects of worship, sacrosanct and untouchable. A book is like a British accent—anything said in it sounds smarter, even if it’s not. But, of course, there are bad books. Any episode of The Office, The Wire, and Weeds, to name just a recent few, is better than too many books on the shelf. Yet we dismiss TV as our lowest cultural denominator, and we allow government to censor TV shows whereas we would not permit it to ban books. Books are holy. We need to get over books. Only then can we reinvent them. Books aren’t perfect. They are frozen in time without the means to be updated and corrected, except via new editions. They aren’t searchable in print. They create a one-way relationship: Books teach readers, yes, but once written they tend not to teach authors. They cannot link to related knowledge, debate, and sources as the internet can. David Weinberger taught me in Everything’s Miscellaneous that when knowledge is frozen on a page it can sit in only one place on a shelf under one address so there is only one way to get to it. In the internet age, with its many paths to knowledge, this, too, is a failing of books. Books are expensive to produce. They depend on scarce shelf space. They kill trees. They rely on the blockbuster economy, which is to say that only a few are winners and most are losers. They are subject to gatekeepers’ taste and whims. Books aren’t read enough, I think we’d agree. Don Poynter at BookSm compiles sobering stats about the industry and reading. Citing BookPm, he reports that 80 percent of U.S. families do not buy or read a book in a year; 70 percent of U.S. adults had not been in a bookstore in ?ve years; 58 percent of U.S. adults don’t read a book after high school (though this con?icts with National Endowment for the Arts stats saying that in 2004, 56.5 percent of U.S. adults said—said—they
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had read a book in a year). Books are thrown out when there’s no space for them and end up as trash or pulp. Forty percent of books that are printed are never sold. Books are where words go to die. When books are digital, all kinds of bene?ts accrue. Books can become multimedia, like Harry Potter newspapers, with moving pictures, sound, and interaction. They can be searched, linked, and updated. They can live forever and ?nd new audiences anywhere. Conversations can grow around ideas in books, exposing them to new readers. Writing in Library Journal, Ben Vershbow of the Institute for the Future of the Book envisioned a digital ecology in which “parts of books will reference parts of other books. Books will be woven together out of components in remote databases and servers.” Kevin Kelly wrote in The New York Times Magazine: “In the new world of books, every bit informs another; every page reads all the other pages.” When an idea is spread among people, it can grow and adapt and live on past the page. Before a convention of booksellers in 2006, author John Updike called Kelly’s vision of “relationships, links, connection and sharing” Marxist and “a pretty grisly scenario.” There’s just one problem with these visions of digital publishing paradise (including mine): money. How will authors be paid for going to the trouble of reporting, imagining, and writing when so much of that is free on the internet? The internet is unsympathetic. Robert Miller, former publisher of Disney’s Hyperion, came to HarperCollins—parent of my publisher—as I was writing this book. His mission was to update the business of book publishing and its two dogging problems: advances and returns. The difficulty, he explained to me, is in the middle. At the top, best sellers make money and at the bottom, we now have the means for no end of niches to create small books (six huge publishing conglomerates control the high-end of the market but Publishers Weekly reports that the total number of publishers grew from 357 in 1947 to 85,000 in 2004; that’s a lot of niches). In the middle, however, advances to authors (like me) have been rising, increasing risk and losses. It’s a problem of the blockbuster economy: Publishers throw a lot at the wall, hoping something will stick but never knowing what will. Though ownership of publishing houses has consolidated, Miller said that hasn’t much affected competitive bidding among them. All it takes to pump up the price is for two houses to want the same book. That has been the case
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since 1952, when literary agent Scott Meredith started auctions among publishers rather than sending a book to one house at a time, as the gentlemen of the trade used to do. Today most books don’t earn enough to pay for the advance publishers give authors. Miller said a house is doing well if 20 percent of books earn back their advances. Imagine any other industry in which 80 percent of the products you produce lose money. It’s a growing insanity. Miller’s proposed solution: He is offering smaller advances—maximum about $100,000—and in return, authors split a book’s pro?t, 50-50, with the publisher (for comparison, I receive a 10–15 percent commission of the retail price in hardcover and 7.5 percent in paperback and we split fees from international sales). The idea is that author and publisher share the risk and the reward. Then there is the problem of returns. Publishing is a consignment business. Bookstores can send unsold books back to publishers—a practice for which Simon & Schuster gets the blame—so it’s the publishers who bear the risk, not to mention the huge cost of printing, shipping, storing, and pulping all those unwanted books. Books are atoms of perishable value. Miller wants to offer booksellers, too, a higher cut of pro?ts if they will take the risk of owning the books they order. The resultant risk to publisher and author could be that bookstores won’t order enough to meet demand, but Miller said publishers are increasingly good at printing more copies quickly. Miller’s goal is to make the existing print business more pro?table. That’s ?ne as far as it goes. He acknowledges that there are other models that need to be tried. Perhaps you could buy a book chapter by chapter as a Dickensian subscription: Buy enough chapters and you’ve bought the book (if it’s bad, stop and you’ve spent less; BookPm says 57 percent of new books are not read to completion). Or buy the book in print and get access to it as an audio book and on an e-reader such as Amazon’s Kindle. Some hold high hopes for print-on-demand, which would enable a store to sell you any book quickly, beating Amazon’s delivery delays. But that’s still expensive and it produces only paperbacks. Still, we know that readers will pay a premium for immediate grati?cation; that’s why they still go to stores. Perhaps publishers could offer their own discounts if you’re willing to wait a week or two, enabling them to collect orders until there are enough to print. They could charge less, still, if the
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reader is willing to take a book in the clumsy PDF format, which enables publishers to sell books to readers with no manufacturing cost. Or perhaps readers could subscribe to an author or series, guaranteeing the publisher and writer cash ?ow and a reason to publish the next book. Maybe authors could even tell readers that they’ll write a book only if so many readers buy it in advance. Peter Osnos, another publishing visionary on a mission to save the business, founded the Caravan Project to enable publishers to sell books in any form: in their traditional format, via print-on-demand, digitally in full or by chapter, and in audio. “When a reader asks for a book, the seller’s answer should always be, ‘how do you want it?’ ” he wrote at The Century Foundation. Osnos told me that the fundamental problems for publishing are availability and inventory management. If he can drive 20 percent of book selling to on-demand and digital, he believes he will save so much in printing unsold copies that he will be able to afford the marketing needed to make the business model work. He read a quote from The New York Times on the day that Google introduced its new Chrome browser arguing that Google needed to control its own destiny. That is the sense in which publishers should do what Google does, he said: control their own destiny. Rick Smolan—best known for producing America 24/7, which chronicled one week in the life of the United States with 1,000 top photojournalists—has found another way to support his gorgeous and expensive photography books: sponsorship. “Why?” Smolan asked and then explained: “Because no publisher would publish our ?rst book, A Day in the Life of Australia, we went to the business community in Australia and self-published the book—it went on to become the No. 1 book in Australia and sold 200,000 copies (in a market where 10,000 was a best seller).” More recently, he produced America at Home and a U.K. counterpart, each underwritten by an obvious sponsor—Ikea, which took little credit. (Smolan had another innovative idea: Readers can pay to get either book with their own photo on the cover.) Why shouldn’t books have ads to support them as TV, newspapers, magazines, radio, and web sites do? Ads in books would be less irritating than commercials interrupting shows or banners blinking at you on a web page. Would it be any more corrupting to have ads in this book than next to a story I write in BusinessWeek? You’d have to tell me. If I had a spon-
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sor or two for this book, what would you think of my work as a result? If Dell bought an ad—because, after all, I do say nice things about them now—would you wonder whether I’d sold out to them? I’d fear you’d think that. What about a Google ad? Obviously, that wouldn’t work. Yahoo? Ha! Who might want to talk to you and associate themselves with the thinking in this book while also helping to support it? Would it affect your thinking if the sponsorship lowered the price of the book? From the publisher’s perspective, that could lower risk and increase pro?ts. From mine, it could mean the book costs less and so it sells more and its ideas get wider distribution. (Come to my blog and let’s debate ads in the paperback. Maybe we’ll auction off a few pages on eBay.) All these models still ignore the internet’s greatest challenge: free. Free is going to kill publishing the way it killed music, right? Maybe not. Maybe free can save publishing. The Googliest author I know, who also happens to be one of the most monumentally successful authors alive, Paulo Coelho, has nothing against selling books. He has sold an astounding 100 million copies of his novels and he estimates that another 20 million have been printed without authorization in countries that ?out copyright. Even so, Coelho believes in giving away his books online for free. He’s a pirate. Coelho learned the value of free in Russia, where a pirated translation of one of his books went online. His sales there jumped from 3,000 to 100,000 to 1 million in less than three years. “So I said this is probably because of the pirate edition,” he told me in a conversation in his Paris apartment. “This happened in English, Norwegian, Japanese, and Serbian. Now when the book is released in hard copy, the sales are spectacular. There’s con?rmation that I was right.” He believes this piracy has helped make him the most translated author alive. The pirated versions helped him so much that Coelho started linking to them from his own web site. After bragging about his openness at the Burda DLD conference in Munich in 2008—where I met him—he got a call from Jane Friedman, who was then head of his publisher, HarperCollins (parent of my publisher). “I was scared to death to talk to her because I knew what was coming: a tempest. She said, ‘I have a problem with you.’ ” Friedman had caught him in the act of self-piracy when she discovered that one of the supposedly unauthorized pirate versions to which he’d linked still had Coelho’s own notes and corrections in it. “She said,
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‘Paulo, come on, don’t shit me.’ ” He sheepishly confessed to pirating himself. But he also said that neither of them could afford to lose face by taking the editions down; there’d already been publicity about them. They compromised: Each month, one of his books could be read for free, in full, in a special online reader that doesn’t allow a user to copy (or search for or link into) the text. It’s a start. As this book goes to press, HarperCollins and I have discussed many digital options, including using that reader to put the book online in full for a few weeks before it is published, serializing pieces of the book online for a limited time, putting up free PowerPoint and video versions of the book, and more. I’ll report on what worked on my blog. In Coelho’s view, the free web has given him more than book sales. He loves writing in a different voice in his blog. “I think your language for your blog is totally different from your language in the Guardian, right?” he said to me as I interviewed him for a column there. “We have to adapt ourselves. I have a lot of fun doing this.” When I ?rst met him, he said his blog would not in?uence his books. But six months later, just as he ?nished his latest novel, The Winner Stands Alone, he said his readers had been helpful explaining fashion and the attraction of brands to him. Coelho Twitters. He uses a small Flip Video camcorder to record video questions for his audience via Sm, a video conversation platform. Inspired by his wired and eager assistant, Paula Bracconot, Coelho asked his fans to take pictures of themselves reading his books for a virtual exhibition at the Frankfurt Book Fair in celebration of his 100 million mark. Hundreds posted their photos on Flickr. Coelho also began inviting readers to his parties. The ?rst time, he said on his blog that he would ask the ?rst few readers who expressed an interest to a party he was holding in a remote Spanish town. Responses came in from all over the world and he feared that they expected him to pay their airfare. But they paid their own way, ?ying from as far as Japan. He webcast a later event and 10,000 people showed up online for it. Coelho asked his readers to make a movie of one of his novels, The Witch of Portobello. With The Experimental Witch, he invited fans to ?lm the stories of each of the book’s characters. If there were enough good submissions, he promised to hire an editor to make the ?nal cut. He also found sponsors—HP and MySpace—to pay for the project. As entries
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came in, he sent me links to them. Some showed remarkable effort and talent. Note the common thread—from collaborative news gathering to news remixes for the BBC to Howard Stern’s listeners’ song parodies to LonelyGirl15 videos to Coelho’s open-source movie: Creation itself is a community. BookPm says 81 percent of Americans believe they have a book in them. None of them will ever be Coelho and Coelho’s books will always be his. But creativity inspires creativity and the internet enables us to turn that into a conversation. The moral of Coelho’s story, like that of so many here: It’s about relationships. What has the internet given him? “It gives me a lot of joy,” he said. “Because you are alone when you are writing.” But no more. His goal online is to ?nd relationships with more readers and sell more books. Coelho still believes in print. He lovingly patted a 3-D book—a thick biography of his rich life—and talked about the form’s perfection. Publishers treat Google as an enemy for scanning books and making them searchable (though you can’t read them all cover-to-cover at Google .com). Instead, publishers should embrace Google and the internet, for now via search and links more readers can discover authors and what they say and develop relationships and perhaps buy their books. Authors can reach the huge audience that never goes into a bookstore. Publishers and authors can ?nd new ways to bring books into the conversation. Books can live longer and spread their messages wider. I don’t have the answers to books’ challenges. But I know we must be willing to reinvent the form. The internet won’t destroy books. It will improve them. Take Coelho’s advice to publishers and authors: “Don’t be afraid.” Just as I was dotting the ?nal i on this manuscript, Google announced that it would create the means for publishers and authors of out-of-print books to receive payment from readers who want access to the full text online (Google will keep 37 percent of the fees as commission). Google also may sell ads on pages with book content and share that revenue with publishers and authors. Sergey Brin told a Wall Street Journal blog that the payment system could be extended to video, music, and other media. This offer came in the settlement of a suit brought by publishers and authors ?ghting Google’s scanning of books—seven million to date—to
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make them searchable online. But it is far more than a sop to angry book people. In one fell swoop, Google altered the life cycle and economics of books and potentially answered some of their most pressing digital needs. Now books will be able to live past the remainder table and pulper. They’ll be searchable. They’ll ?nd new audiences over greater time and distance. They’ll make more money. Google is not the enemy of books. It is becoming their platform for the future.
Advertising
And now, a word from Google’s sponsors
And now, a word from Google’s sponsors
Earlier, I argued that marketers’ ultimate goal should be to eliminate advertising by improving their products and relationships instead. Consumers should be so lucky. Media companies supported by advertising should pray this never happens. Media’s prayers will be answered. We’ll always have advertising and ad agencies because companies will never reach the nirvana of creating perfect products that every customer loves and sells for them. Marketers will still want to introduce new products and to envelop what they sell in the smoke-and-mirrors of premium brands. In a sense, Google has changed advertising more than any industry I cover here. Google is in the ad business. It revolutionized the ad economy, enabling marketers to pay for performance rather than space, time, and eyeballs. It invented new means of targeting ads, making them newly ef?cient. It opened up millions more places to put ads, ending media scarcity. It attracted countless new advertisers. It dominates not only search ads but now web banner ads, and it has started selling ads in print and broadcast. Yet for all the upheaval Google has brought to the advertising economy, ad agencies remain largely unchanged. That’s because agencies still control the money, and nobody wants to mess with the guy who has the credit card. But their Google immunity will expire. Rishad Tobaccowala, chief innovation officer of Publicis Groupe Media, started Denuo, a think-tank and laboratory inside his company, in an
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effort to create the next-generation agency. Asked what Google teaches him for this task, he counted ?ve lessons. First: Focus on talent. “Google feels like it was invented yesterday and it’s a 10-year-old company already,” he said. “AOL’s a grandfather.” Agencies are supposed to be fresh and young but Tobaccowala said they act old thanks to the “death grip” of years-long relationships among executives and clients. “Google would have talent running the place versus tenure.” Second: Newness. “In the service business,” Tobaccowala said, “you take the form of the people you work for. If you really want to change, you need to get a new breed of clients.” Google did that by creating a marketplace to serve the long-tail advertiser before the behemoths, “people who didn’t think about advertising, who had no agency.” They brought no rules, so they played by Google’s rules. Third: Data. Advertisers love data almost as much as Google does. They think it tells them where to spend their money and the return on investment they get. For decades, advertisers accepted dubious measurements of magazine readership (which assume that every allegedly well-worn copy is passed around to large groups) and broadcast audiences (surely they can’t believe the Nielsen ratings). Then along came the most measurable medium in history, the internet, where advertisers can learn more about customers than ever before. Fourth: Make money through the side door. “Google—and Apple— make money by giving a key part of their business away for free and then making money on something else.” Too often, companies think that everything they do has value they must capture, charge for, monetize, preserve, restrict, and protect. Instead, the real value may come from the side. Fifth: To quote Google’s own No. 1 rule, “Focus on the user and all else will follow.” Australian ad executive Peter Biggs spoke for much of his industry when he told ABC Radio National’s The Media Report: “It’s a consumer-driven business, but they are not our most important audience. Our most important audience is our clients, and their brands.” Tobaccowala says the opposite. “Our ?xation should not be on our clients. It should be on the people our clients want to engage, sell, and interact with. We should be the champions of those people. That is where we are missing the boat.” I wonder whether focusing on the consumer instead of the client ends
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up usurping much of the job of the agency as we know it. Fixating on customers should be the job of everyone—everyone—in a company. In business, we’ve long said we’re customer focused. But today you have to mean it or your customers will call your bluff. Focusing on customers can’t be outsourced to agencies. Agencies will resist change until the economics of the industry change. Because agencies make a cut of what they spend, they are motivated to spend more on ads rather than to replace ad dollars with more valuable relationships between brands and customers. So clients may be the ?rst to evolve. Just as I tell newspapers to imagine a day when they stop the presses and book publishers to think past the book, so I advise marketers to imagine as an exercise ?ring the agency, canceling the ad budget, throwing out the ads, and starting over. What is your relationship with your customers then? Where should you put your money? Where should you spend your ?rst ad dollar and why? Start, of course, by investing in your product or service. Tobaccowala said no amount of advertising will make up for a bad product. “Stop this yelling and screaming about what’s your Facebook strategy,” he tells clients. “Make absolutely certain that you have a great product or service. Make absolutely certain you have great customer service. Those are the ?rst two rules of so-called advertising in this world. If you don’t have those, don’t pay any money to anyone to do anything.” Then turn the relationship with the customer upside-down. First, invest in customer service, making it a goal to satisfy every single customer. Remember that your worst customer is your best friend. Second, invest effort in social tools that enable customers to tell you what you should be producing; hand over as much control to them as you can (I examine this idea from another perspective in the chapter on manufacturing). The goal must be to produce a product people love. All companies claim that customers love their brands. But I mean customers love your product so much they want to tell the world—that kind of love, Apple love. Third, hand over your brand to your customers—recognizing that they have always owned it. Don’t tell them what your brand means. Ask them what it means. Every product is great; every relationship is satisfying—shoot for nothing less. So now you are spending quality dollars and relationship dollars over advertising dollars. You have handed over control of the product and
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the brand and gotten out of the way. If you haven’t gone out of business by now and convinced every boss, board member, analyst, reporter, and stockbroker that you’ve gone mad, then it probably worked. Won’t you still advertise? Ask yourself why. To interrupt and irritate random people? No. To convince customers that a bad product is good? No. To inch ahead of your competitor with the brute force of media spending? No. To get people watching Sunday morning shows to buy your stock? Please, no. Do you advertise to tell customers something they didn’t know and need to know about your product, such as an improvement or a better deal? Well, OK. Tobaccowala de?nes advertising as “the economics of information” (the title of a 1961 essay by Nobel laureate and University of Chicago professor George J. Stigler). Advertising is supposed to tell us about a product or its price so we can save effort, time, and money in our search for it. The internet has made that much more efficient. If the customers’ goal is to reduce their transaction cost—the effort to ?nd the right product at the right price—then doesn’t the internet itself replace advertising? Often, yes. A 2007 economics honors thesis by Daniel A. Epstein compared the pricing of similar cars listed in expensive newspaper ads with cars listed for free in craigslist. His hypothesis was that sellers who pay to advertise would want to price cars lower to sell more quickly so they would spend less on advertising. His research proved his theory wrong. Newspaper advertisers marked up their cars over Kelly Blue Book by 0.423 percent whereas craigslisters marked up theirs by 0.042 percent—a fraction. You might see this differential alone as motive to buy ads: Advertise and you can charge more. But I chalk this case up to a temporarily imperfect market, assuming that sellers who advertised were cagey and knew to ask for more, whereas craigslisters may have been bad negotiators who didn’t know they could get more. As Google and craigslist push the market toward openness and transparency with more information and greater pricing competition, that alone will push prices down. Epstein’s hypothesis may one day come true: Advertisers won’t be able to afford to advertise and stay competitive. Of course, there are still people who don’t know about your product, who won’t know to search for it because it is new or they are uninformed. In the classic case for advertising, they also may not know they have the
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problem you solve. In 1919, the ad agency for the deodorant Odo-Ro-No invented the term “B.O.” and the insecurity around it. “Advertising,” said the trade journal Printers Ink, “helps to keep the masses dissatis?ed with their mode of life, discontented with ugly things around them.” For good or bad, there will still be a role for advertising. But mass marketing will no longer be the most efficient means of spreading a message. Competitors who learn to target customers—by relevance, not by content or demographics—will increase effectiveness and efficiency and lower their cost. Who has the leading relevance engine? It’s not mass-market TV (with its skippable ads). It’s not one-size-?ts-all, shrinking newspapers. It’s not billboards on the road or on web sites. It’s Google. Another reason to still advertise may be to burnish a brand, to help make it cooler because the ad is cool or it appears in a cool place. There is an ongoing debate in media whether brand advertising works online. Advertisers say they do not get the rub-off of branding on the web. They argue that online is a direct-response medium where countable clicks are king and mood can’t be conveyed in a banner people ignore. Media people try to convince advertisers that brand advertising does work online— because they charge more for branding and because they don’t want to be paid just on clicks. They’re both looking at the wrong issue. As The Cluetrain Manifesto observed, the internet is ?lled with human voices of friends and peers, so the arti?cial, institutional, huckster voice of brand advertising and sloganeering will increasingly be revealed as thin and false. Google’s simple, informative, relevant text ads ring truer. The marketing that is left must evolve. Advertisers are starting to mouth the right words—it’s about relationships, not messages, I hear them say. In his 2001 book, Gonzo Marketing, Christopher Locke—another coauthor of Cluetrain—argued that “the fundamental message of marketing must change from ‘we want your money’ to ‘we share your interests.’ In this respect, corporate underwriting is a way—perhaps the only viable way at present—for companies to put their own money where their mouth is.” He urged companies to buy ads on relevant blogs—not as a way to distribute messages in banners, but as a way to underwrite blogs, as they would a PBS show. Sponsors say by their support that they share the interests and affections of the blog’s readers. Does that co-opt the blogger?
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It need not so long as the line between content and ad is clear. Locke also pushed companies to allow employees to blog so they could develop direct, helpful, and human relationships with customers. Robert Scoble, now head of FastCompany.TV, was the poster child for Locke’s argument when he blogged from inside Microsoft, in his own voice rather than that of the corporate Borg. He almost single-handedly turned around the reputation of even this company online. Your products and your customers are your ads, and so are your employees. The best way to burnish a brand is no longer to rub up against media properties like Vogue or the Super Bowl. The best way today is to rub up against people: Sally the blogger or Joe the Facebook friend. The medium is the message and the customer is the medium. Sally is the new Vogue. Separate the functions of an ad agency today—media buying, research and data, and creative. What happens to each? Media buying, under Locke’s theory, now becomes more important than messaging. When your customer is your ad, media doesn’t mean content, it means people. Networks of people will become a force in advertising. Already, media companies, including Forbes and Reuters, are running blog ad networks for marketers. A group of fans on Facebook discussing a product is worth a thousand ads. Each company must take responsibility for its own research and data. It must know everything it can about its customers and how its products are bought, seen, and used. This knowledge is more than raw numbers derived from snooping on behaviors, commissioning surveys, or quizzing random customers behind focus-group mirrors. We’re not data. We’re people. So understanding will come from relationships. Ask your customers. Listen. Remember it’s a gift economy, and they will be generous if you deserve their generosity. Creative? Messaging? The more you hand that over to your customers, the better. Apple produces great and entertaining commercials. But in 2004 a teacher named George Masters made a now-legendary commercial for the iPod Mini, ?lled with psychedelic hearts, that was in some ways more powerful than professional ads because it was made with personal passion. What becomes of advertising? For the ?rst time, the ad economy may contract. In the past as new media emerged, dollars shifted from old to new—newspapers to TV, TV to internet—but didn’t leave the market,
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according to Bob Gar?eld, cohost of public radio’s On the Media and critic for Advertising Age. Gar?eld observed that while old media shrink, new media are not ready for big advertisers, and big advertisers are not ready for new media. As a result, dollars will disappear into the chasm between. Gar?eld called this advertising’s “chaos scenario.” In addition, as relationships replace advertising, spending will decrease. The new abundance of media online will drive prices down as supply increases and demand decreases. Google’s systems will target advertising more efficiently, reducing cost. Opening the market with Google auctions also lowers cost. These savings will not be plowed back into marketing but will need to go toward lowering prices because the internet gives customers unprecedented ability to comparison shop and price will matter more. Some of those savings must be devoted to both improving the product, which now acts as the ad, and improving relationships with customers, who are the new ad agency. The agency and advertising need to get out of the way in the relationship between companies and customers. Agencies may help solve problems—teaching companies how to build networks with customers, assisting them with product launches—but once the consultation is done, the good consultant leaves town. Tobaccowala suggested agencies remake themselves as networks. He quoted University of Chicago economist Ronald Coase in his seminal 1937 essay, “The Nature of the Firm”—which is also quoted in Wikinomics, Here Comes Everybody, and, it would seem, half the business books published lately. Coase reasoned that ?rms exist and grow when internal friction is less than external friction, when it is easier and cheaper to deal with insiders than with outsiders. “In a networked world, it’s easier for us to work with outside people than inside people,” Tobaccowala said. “Google, even in its grandiosity, still is a company that believes in forms of partnering.” Agencies and other companies, he said, will look more like Hollywood studios, where 80 percent of what goes into a movie comes from outsiders. Google even provides technology to make such collaboration possible. So Google doesn’t change just the essence of advertising. It changes the essence of the company. The network is becoming more efficient than the corporation. Google is an avalanche and it has only just begun to tumble down the mountain. Media was closest to what Google does and so Google’s impact
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on media has been profound and permanent—and it’s not over yet. Next in Google’s path is advertising. Even though it, too, is close to Google—they are in the same industry—the rumble is only beginning to be heard. Agencies are about to be buried, and they still don’t see it coming. The industries we examine next may think they are safe, far away in the valley, under a bright sun. But the Googlanche will hit them, too.
Retail
Google Eats Google Shops
Google Eats: A business built on openness
What would a restaurant run according to Googlethink look like—other than being decorated in garish primary colors with a neon sign, big balls for seats, and Fruit Loops and M&Ms on every table? Imagine instead a restaurant—any restaurant—run on openness and data. Say we pick up the menu and see exactly how many people had ordered each dish. Would that in?uence our choice? It would help us discover the restaurant’s true specialties (the reason people come here must be the crab cakes) and perhaps make new discoveries (the 400 people who ordered the Hawaiian pizza last month can’t all be wrong . . . can they?). If a restaurateur were true to Googlethink, she would hunger for more data. Why not survey diners at the end of the meal? That sounds frightening—what if they hate the calamari?—but there’s little to fear. If the squid is bad and the chef can hear her customers say so, she’ll 86 it off the menu and make something better. Everybody wins. She’ll also impress customers with her eagerness to hear their opinions. This beats wandering around the tables, randomly asking how things are (as a diner, I ?nd it awkward and ungracious to complain; it’s like carping about Grandmother’s cranberry sauce on Thanksgiving). Why not just ask the question and give everyone the means to answer? Your worst diner could be your best friend. The more layers of data you have, the more you learn, the more useful your advice can be: People who like this also like that. Or here are the
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popular dishes among runners (a proxy for the health-minded) or people who order expensive wines (a proxy for good taste, perhaps). If you know about your crowd’s taste in wine, why not crowdsource the job of sommelier? Have customers rate and describe every bottle. Show which wines were ordered with which dishes and what made diners happy. If this collection of data were valuable in one restaurant, it would be exponentially more valuable across many. Thinking openly, why not compile and link information from many establishments so diners can learn which wines go best with many kinds of spicy dishes? If you want to be courageous, why not reveal that people who like this restaurant also like that one? Sure, that sends the other guys business—it’s linking to them—but in an open pool of information, they will also send business back. Nobody eats at the same place every night (well, there was the time when I went to McDonald’s entirely too often). Even a restaurant can think as a member of a network in a linked information economy. Networks force specialization. In a linked world, you don’t want to be all things to all people. You want to stand out for what you do best. That’s why chef Gordon Ramsey focuses the menus of the restaurants he ?xes on his show, Kitchen Nightmares, so they know the business they’re in. Serve your niche instead of the mass. Do what you do best. Now, as Emeril would say, let’s kick it up a notch: Open-source the restaurant. Put recipes online and invite the public to make suggestions and even to edit them on a wiki. Maybe they’ll suggest more salt. Maybe they’ll go to the trouble of cooking the dish at home, trying variations, and reporting back. In the early days of the web, I worked on the launch of Em, the online site for Gourmet and Bon Appétit magazines, where I was amazed to see people share their own recipes—there’s the gift economy—and also share their comments and variations on the magazines’ recipes. For example, a Gourmet adaptation of a bakery’s recipe for Mexican chocolate cake brought suggestions to replace the water with espresso (many commenting cooks liked that idea, tried it, and shared their endorsements); double the cinnamon; add Kahlua or rum to the glaze; use cream-cheese frosting instead of the glaze; use neither topping but serve it with whipped cream and berries; toast the nuts; substitute milk and orange juice for buttermilk; coat the cake pan with cocoa powder (helps with the sticking, you see); and even add cayenne pepper
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(pepper?). With these adaptations, you could argue the dish is no longer the same; could be better, could be worse. I’m not suggesting that recipes or menus become ballots; see the preGoogle rule about too many chefs spoiling the broth. It’s the chef, not the public, who will be held to account if the cake is too peppery. So I’ll violate Jarvis’ First Law—I won’t hand over complete control. But why not gather and use the wisdom of the dining room? A good restaurant has people who appreciate and know good food. It should respect their taste and knowledge, the Google way. People want to create, remix, share, and make their mark. Perhaps a restaurant could be their platform. Maybe it could stage bakeoffs: Try the chef ’s version of the cake and Jane’s—the winner gets on the menu. The public could suggest dishes they would like the chef to cook: “I had a delicious tart at a café in Vienna and I’d kill to have it again here in Boise.” A cook worth her salt would take that as a compliment. Of course, the best advertisement is a happy customer; this rule is truer with restaurants than with most other businesses. Local restaurants—or national networks of heart-healthy restaurants—can join in relevant conversations and groups online, not to spam them with advertising but to hear ideas and desires and make them come true. Plenty of food fans are already talking online. The FoodBlogBlog counts 2,000 blogs and that’s just a start; the U.K. has a Food Bloggers Association; Cm has outposts all across America. See Chowhound’s What’s My Craving? forum in New York, in which diners ask fellow diners where to ?nd papusa (thick, stuffed tortillas), a proper Indian biriyani, or Korean jajangmyun (noodles with a black soybean paste). If you think of food as the basis of communities—and it is—then you’ll think like Facebook’s Mark Zuckerberg and help them organize. Perhaps diners would like to gather parties and you can provide the forum to help. Your restaurant could become the venue for blind dates made on craigslist: get dinner, get drunk, get lucky, get married. A vibrant online community buzzing around a restaurant will help market it. A social restaurant will soar in search-engine results as diners/ users discuss it and link to its recipes. A transparent restaurant that puts much of itself online—recipes, wine reviews, taste data—will also rise in Google search, especially now that Google is making search more local (tell Google where you live and the next time you search for “pizza” it will
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give you joints in the neighborhood). If people search for where to have a killer sou?é in the area, the name of a restaurant where diners are discussing said sou?é and its recipe should rise as high as the dish. A Google-driven restaurant won’t become a computer-run bistro with the algorithmic menu: roborestaurant. That’s not what Googlethink is about. Instead, these tools enable any business to build a new relationship with customers. Not every customer will want a personal relationship; most will eat and run. Following Wikipedia’s 1 percent rule, it takes only a small proportion of customers to get involved and contribute great value. Restaurants are even being crowdsourced. Trend-tracker Springwise reported that a restaurant called Instructables, where customers will make all decisions, is launching in Amsterdam. The Washington Post reported on the creation of an eatery called Elements, whose owners claim it is America’s ?rst crowdsourced restaurant. Its volunteers collaborate on concept, design, and logo. The crowd will share 10 percent of the restaurant’s pro?ts based on the depth of their involvement. As a fan of sizzling burgers and steaming burritos, I am less than enthralled with Elements’ concept: a “sustainable vegetarian/raw foods restaurant” (in the online discussion, there was talk of adding kosher and gluten-free to the mission with round-the-clock breakfast featuring salads and green smoothies). The owner, says The Post, is “creating raw food treats such as oat-hemp balls.” I might ?nd a different crowd. So far, I’ve suggested that restaurants use the internet to turn the spotlight on diners. Googley restaurateurs can also use the web to become stars. Judging by the popularity of kitchen-based reality shows, I think it’s time for chefs to come out from behind the stove. Restaurants have stories, dramas, comedies, and knowledge to share. If I were a chef, I’d blog about my restaurant; my taste, travels, and inspirations; and the trends I see. I’d be blunt and honest. Howard Stern has succeeded on radio and chef Ramsey has succeeded on TV with that formula. So, too, could neighborhood chefs become local stars. I’d make videos teaching people how to cook—remember that the gift economy works both ways. I’d start a cooking club with my most loyal fans—my best customers, my partners—and let them in on discussions if not decisions on the menu and recipes. I might even hand the place over to my community for a night, playing Ramsey in real life and making the restaurant a show. Restaurants don’t just sell food—cooked atoms. They are a platform for the
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enjoyment and discussion of taste. A community and its creativity can grow around that.
Google Shops: A company built on people
Let’s visit a retailer who has learned and acted on many of these lessons and is eager to try more. Gary Vaynerchuk, a wine merchant in Spring?eld, New Jersey, burst onto the internet in 2006 with a daily video blog. Put down this book for a minute—just a minute—go to WineLibrary .TV, and watch one of his shows. Be prepared to be blown back by a jet-engine blast of personality and enthusiasm. Vaynerchuk is hardly the image of a wine snoot. He could just as easily be touting a horse or shouting about his favorite football team (the New York Jets). He’s a guy’s guy, a man of the people, and that’s his point. He’s democratizing wine. Before starting his video blog, Vaynerchuk had already run a successful store with his Russian-immigrant father and family. They rebuilt the place into an impressive, two-story retail space—a library of bottles—and grew revenue from $4 million to $60 million annually over a few years. The Wall Street Journal pro?led him in 2006. I’d shopped in his store for years but met him ?rst online. His video blog made him a star. The show is seen by 80,000 people a day—no small feat for watching a guy holler about wine for 20 minutes and spit his sips into a Jets bucket. His passion is infectious and so his fans spread it around. One day, deep into a show, he mentioned that he was planning an event in his store for his online community. Three-hundred “Vayniacs,” as he calls his followers, showed up, ?ying from California and Florida. Vaynerchuk got onto big TV thanks to the internet, appearing on Late Night with Conan O’Brien, The Ellen Degeneres Show, and CNBC’s Mad Money with its equally forceful host, Jim Cramer. He got speaking engagements. Earlier, I told of his using Twitter to gather a ?ash party at the South by Southwest conference in Austin. At the conference, he spoke on a panel alongside his Hollywood agent. Then he published a book, 101 Wines Guaranteed to Inspire, Delight, and Bring Thunder to Your World. The moment it became available to order, Vaynerchuk’s fans raised it to 36th place on Amazon’s best-seller list. Vaynerchuk started a project to create a collaborative wine—Vayniac Cabernet 2007—concocted with input
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from his community, who even helped to crush the grapes. (I ordered some. It will arrive after this book is out, so I’ll let you know how it is on my blog.) Vaynerchuk understood that he had to provide his community with a platform—a baseball ?eld he called it—so they could play alongside him. Vaynerchuk told me he wasn’t becoming an internet star just to sell wine. He was building something bigger. He was investing in “brand Gary Vaynerchuk.” That is why he chose to make his wine shows daily: “Content, baby, indexing in search.” Everybody needs vin de Googlejus. The more of him there is online, the more he will be found. He is his own ad. The most important factors in retail success used to be location, location, location. Now they are links, Google, Googlejuice. I searched Google for “wine” and Vaynerchuk’s store came up on the ?rst page behind only one other retailer, Wm, which spent countless millions to build its brand and online positioning. I searched for “wine TV” and Vaynerchuk’s show came up ?rst, dominating the listings (where is the Food Network?). In this giant industry, that is nothing short of incredible. He built his brand and market position not with marketing dollars (though his is the only video blog I’ve ever seen advertised on a highway billboard in New Jersey). He built it with personality, enthusiasm, and relationships in the internet connection machine. Vaynerchuk is on a mission. “I want to change the way people think about wine and change the way people do business,” he told me. On Cramer’s Mad Money, Vaynerchuk mocked wine and liquor conglomerates for doing nothing socially, acting like monolithic Coke and not like viral brands such as Vitamin Water and Red Bull, which grew by turning customers into advertisers. Vaynerchuk’s message: “Social business is the future of our society.” I told Vaynerchuk there were more things I wanted from his store to make it truly Googley. As I shop, I’d love to draw on the wisdom of his enthusiastic crowd and have them recommend wines to me. Wine, as Vaynerchuk says, is always about trying something new. On my latest visit, I came across a Gavi di Gavi. I couldn’t recall what Vaynerchuk had said about the variety on his show. I asked a clerk, who told me it was fruity but dry and recommended it. That was helpful. But I don’t know this guy and his palate. I’d prefer to have taken out my iPhone and punched in stock numbers to get Vaynerchuk’s and his Vayniaks’ reviews. Judging their taste by seeing the other wines they like, I would have been
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in a better position to decide whether to spend that $18. If I’m in a competitor’s store that doesn’t have a wine the Vayniaks like, I’m now motivated to buy it through Vaynerchuk’s growing mail-order business. His customers are his clerks. A store creates value in the knowledge of its customers; that is an unseen asset. It needs to ?nd ways to capture, share, and exploit that value. After I check out, I’d like a printout of the wines I bought with notes on each so I could choose an appropriate bottle for dinner and share the information with my guests. I’d like a record of my purchases to go online under my account at the wine community Vaynerchuk bought, Cork’d (at Cm) so I could read others’ tasting notes and add my own. Vaynerchuk agreed but said that when he ?rst tried giving people cards that tracked their purchases, they assumed they’d be used only to give deeper discounts, not to build content and community. It didn’t work then, but might now. Online, I’ve learned that sometimes an idea doesn’t work just because it’s tried too soon. I would love it if the customers could tell Vaynerchuk what to buy. As with the chef in the kitchen, he’s still the boss in the cellar. But I’d like to see whether there’s a critical mass of Vayniacs who’d say, “Enough with the shiraz already” or “merlot is the new pinot.” Perhaps we’d ask him to hunt for a wine: a good Austrian dessert wine for less than $20. He could turn around and ask whether enough of us would be willing to buy that wine to make it worth his effort. Purchasing should become collaborative. Most of what Vaynerchuk does—or what our dream restaurant would do—could be done in any establishment. Why not expose a store’s sales data so I could use that information when I shop? Why not expose my own sales data to me and make suggestions on that basis? Why not gather and share reviews of products so I can make the best selection for my needs and leave happy? Why haven’t local stores followed Amazon’s lead with these services? In his book The Numerati, Stephen Baker says that retailers are only just beginning to think of ways to exploit the data they have about us—like having our shopping carts make personal recommendations. My wife and I sometimes ask our supermarket to stock a product, but that’s a rare encounter with spotty results. Shouldn’t the store have forums where customers could ask for products and managers could see when those requests reach critical mass? I know, this suggestion ignores one
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fundamental economic factor in grocery and other retail businesses—that brands pay fees for shelf space that contribute to stores’ bottom lines. But I have to believe that a store that sells me what I want to buy will be better off than a store that sells me what someone pays it to sell. No local store or chain can compete with the just-in-time, inventory-light efficiency and limitless selection of an internet retailer. So I wonder how the role of the local store changes. Perhaps it becomes more of a showroom run by or for manufacturers. Rather than selling the merchandise right there, it might offer easy ordering and earn a commission. In the chapter on publishing, I looked at printing books on demand. In the chapter on manufacturing, I ask how cars should be sold post-Google. If I were a merchant—a department store, a chain, a local retailer—I’d hope to ?nd a way to curate unique merchandise for my customers as eBay and Em do for theirs. Maybe a store, like a newspaper, needs to become less a one-for-all clearinghouse of commodity goods and more a pathway to what I really want. Perhaps a store, like a restaurant, can become a community built around particular needs, tastes, or passions. Look at the data that is created and shared at Net?ix and Amazon through sales rankings, automated recommendations, and customers’ reviews. Now imagine starting direct conversations among these people. What could be unleashed when Vaynerchuk’s customers and fans talk with each other, asking and answering questions, sharing opinions, ?nding new value in their association with and around him? It’s hard to imagine such a community forming around a tire store, of course. But it’s not hard to imagine many others where communities could grow: athletic stores (my local store promotes running clubs’ events and Nike is holding its own races around the world to encourage such communities to form); food stores (where an instant community of olive-oil fans can gather around choosing which brands to order); electronics stores (if I can read ratings of TVs at Amazon, why can’t I see them when I’m in Best Buy?); garden stores (anybody know how to keep the deer at bay?); hardware stores (let’s share open-source plans for playhouses); toy stores (any advice for a grandparent buying an eight-year-old boy a video game?); and clothing stores (H&M should have a dating service: “Size 4 petite seeks 34-inch waist, 34-inch inseam, 42-long—no khakis, please”). Community members (aka customers) can become sales agents. Ama-
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zon’s and BarnesAndNm’s affiliate programs enable bloggers to share recommendations. If readers buy, the blogger gets a commission. The online shoe store Zappos has automated recommendation widgets for products. I’d bet Vaynerchuk’s community would publish widgets selling their favorite wines. This could become irritating—I don’t want my communities to become Tupperware parties. It could be corrupting if bloggers recommend products only to sell them. But the bloggers’ brands and reputations are at stake. If I buy a wine you push and it’s bad, I won’t trust your judgment again. But if I ?nd a new wine I like, I’ll give credit to you and to the store that made it possible. The internet has caused me to go to stores less often. I can’t remember my last time in a department store. The mall, where I once browsed, now bores me. Wal-Mart’s size scares me. I still enjoy Apple stores but that’s often for the education and the free wi-? and sometimes for the opportunity to ask a fellow cult member for advice. Stores have become dull. Their merchandise is the same and they have less selection than I ?nd online. They are stocking fewer items and running out more often. They charge higher prices than I can ?nd searching the internet. Sales clerks give me less information about products than I can get from Google and fellow customers. And I have to drive to stores, using ever-more-expensive gas and time. The store’s salvation is its customers. Rather than treating the internet as a competitor, retailers should follow Vaynerchuk and use it as a platform. Enable your customers to help you stand out from the crowd. Why should I go to your sneaker store, car dealership, or wine store to buy the exact same merchandise I can ?nd in a thousand stores and sites just like yours? Price will no longer get me there; I can ?nd the best prices by Googling, not driving. Good service? That should be assumed. Information? I’ll trust it more if it comes from the community of shoppers. How can you connect with that community? How—to follow Zuckerberg’s law— can you help them organize? How—to follow Vaynerchuk’s law—can you build a ball ?eld where they want to play? Turn the store inside out and build it around people more than products. Your customers are your brand. Your company is the company it keeps.
Utilities
Google Power & Light GT&T
Google Power & Light: What Google would do
Here is our one example of an industry being remade in Google’s image that is not hypothetical. Gg, the company’s philanthropic wing— supported with 1 percent of Google’s equity and pro?ts—is trying to reinvent the energy industry and with it, our energy economy. It is funding companies and research looking for ways to make power that will cost less than that generated with coal. Their geeky name for the initiative: REJeff Jarvis
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helping to save the planet. “Our primary goal is not to ?x the world,” Larry Page has said. But wouldn’t that be a nice fringe bene?t? At the World Economic Forum meeting at Davos in 2008, I attended a forum at which Google’s founders presented their energy vision and I came away with a sense of how they would manage other industries and even how they would run the government (more on that later). It gave me a window into the engineers’ worldview. Just before this Gg forum, I had attended a session with Bono and former Vice President Al Gore. They presented their core causes: extreme poverty, debt forgiveness, and disease for Bono; the planet for Gore. The two men tried to insist to the powerful in the great hall that their causes were complementary—can’t solve one without addressing the other, they agreed—but in truth, they were competing for the political and economic attention of the governments and corporations there. Gore spoke with passion, even anger, as he insisted that the way to attack global warming is carbon taxes, regulations, prohibitions, sacri?ces. He delivered the environmental agenda we’ve often heard, and did so with authority and determination. Then I went up the mountain to hear the Google team—founders Page and Brin with Gg executive director Larry Brilliant. The contrast was stark. To summarize if not oversimplify their vantage points: Where Gore demands taxes and regulation, the Google team proposes invention and investment. Gore and company want to raise the cost of carbon—the cost of polluting—whereas the Google team wants to lower the cost of energy. I’m a bit unfair to Gore, for he would argue that the proceeds of his taxes would fund technology development. But Google doesn’t need tax dollars. If it were a country, its $20 billion revenue would rank it about 80th in gross domestic product. It can invest in energy research on its own. Still, we see different worldviews at work. “You can’t succeed just out of conservation because then you won’t have economic development,” Brilliant said. “Find a way to make electricity—not to cut back on it but to have more of it than you ever dreamed of.” More power than you ever dreamed of. Create and manage abundance rather than control scarcity—as ever, that is the Google worldview. Whereas Gore talks about what we shouldn’t do, Google talks about what we can do. There we see the contrast between the politician’s brain and the engineer’s. Google people start with a problem and look for a solution. They identify a need,
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?nd an opportunity, and then systemically, logically, and aggressively attack it with innovation. Page explained that there is a market now for green energy at 10 cents per kilowatt-hour. Some people and companies want to buy it, though it is expensive, because they want to do good or need good PR. But the true market cost of energy is still far below that. Gg wants to ?nd a way to produce renewable power at three cents per kilowatt-hour, cheaper than coal, which not only gives them a good deal but also shuts down dirty coal plants. If it succeeds, the foundation would change Google’s business and other entire industries, starting with autos. With energy that cheap, Gg envisions cars plugged into the power grid, solving the problem of pollution from burning gasoline and changing the political balance of oil power (though they point out that the power grid is in woeful need of an upgrade). Google is also supporting an electric-car initiative called RechargeIT, which is trying to accelerate the adoption of plug-in hybrid cars. As a demonstration, Google is converting its own ?eet of cars to modi?ed, plug-in Toyota Prius hybrids. Google set up web pages for every car to display data about its energy efficiency—we know how Google loves data. Those cars are plugged into solar-powered charging stations on Google’s campus, where the company was producing 1.6 megawatts in solar power by 2008. “It’s been great,” Brin said. “It produced shade. It reduced cost.” Google created a platform for electric-car devotees to make YouTube videos and place them on a Google map, demonstrating popular support and demand for the cars. Google clearly believes it can help create a market for plug-in cars—and why not? It has created new markets for technology and advertising. Brin said at Davos that Google has an advantage over incumbent oil companies because it does not have a legacy energy business to protect from cannibalization. Still, he was asked, aren’t his shareholders going to have a problem with this quixotic investment? The investment is moderate, Page replied, and the payoff is great. Brin said the foundation’s research is concentrating on three energy sources—solar-thermal, deep geothermal, and high-altitude wind—in addition to photovoltaic power. Wind is already as cheap as coal, he explained, but it’s intermittent and unreliable on the ground. Th at’s why they’re experimenting with high-altitude kites, which operate in constant
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wind and are cheaper to make than windmills. Deep geothermal requires fundamental research to become viable, but Gg is making that investment for the long-term. Though Google has hired experts to work on energy in its own R&D labs, it isn’t doing the work alone. As of mid-2008, it had invested $36 million in outside R&D on power in addition to more than $4 million in RechargeIT. Google is not alone in seeing investment opportunities. At Davos, venture capitalist John Doerr of Kleiner Perkins—who invested in Google and sits on its board—held a reception for Bono and Gore (who advises both Google and Kleiner Perkins). Doerr talked about urgent needs and opportunities in energy; by 2008, his ?rm had raised $1 billion to invest in clean technology. If Google did run a power company, what would it look like? It would give us all the power we could use at the best price possible, and then it would ?nd ways to take advantage of that. Google could use the power grid itself to distribute the internet and that, too, would help Google, creating more advertising revenue, which could be used to subsidize the cost of our power and access. Google would give us data about our use of power— especially as more appliances become internet-connected. Imagine if every house were to have a web page detailing power usage by every device, as Google has done for its cars. That data would tell us how to conserve (if we even needed to anymore) and it would tell Google how we live (which, in aggregate, will make Google smarter). In his book Hot, Flat, and Crowded, Thomas Friedman proposed a similar future with connected devices that manage their own power. If we can generate our own homemade solar, wind, or geothermal power, I have no doubt Google Power & Light would create a marketplace for us to sell power to the grid or donate it to charities. Power could become not only a new market but a new currency. It’s too bad there never will be a Google Power & Light. It’s just not what they do for a living. But Google, being Google, may well remake the industry anyway.
GT&T: What Google should do
If only Google ran our cable and phone companies, how much better our lives would be and how much less time we’d spend on hold and at home waiting for the cable guy.
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Well, Google has almost had cable and phone companies. The company gives away free wireless internet access in Mountain View, California, its headquarters’ town. It has been rumored to be thinking of offering public wi-? in other cities but denies such plans. It also had been rumored to be working on making its own Google phone. Instead, it created an open mobile operating system, which any phone manufacturer may use (T-Mobile released the ?rst). In an effort to push the Federal Communications Commission and the mobile phone industry toward openness, Google bid in an auction of wireless spectrum in 2008, making a bargain with the government: Google would guarantee a minimum price of $4.6 billion if the FCC required openness—that is, that any device (such as those powered by Google’s operating system) could operate on much of the spectrum bought and run by the phone companies. Google didn’t win the auction— it won the point. For a few hours, though, it had the highest bid on the table and could have ended up with spectrum and a phone company. In a forum in Washington, D.C., Larry Page looked a bit dreamy and wistful as he recalled that for a day, his company was in the phone business. Imagine what he could have done with that. At this moment in the show, we should see Page scratching his chin and looking upward as a cloud ?oats over his head and he ponders an alternative future, a vision based on openness and ubiquitous connectivity. That’s the real dream: Google everywhere. Google is constantly nudging to get more internet access for more people at better prices. This campaign is in its self-interest. “If we have 10 percent better connectivity in the U.S.,” Page told Reuters, “we get 10 percent more revenue in the U.S., and those are big numbers for us.” Page was in the capital to lobby the government to take the so-called white spaces between TV channels—which become available as the U.S. switches to digital television—and make them freely accessible, like frequencies used for wi-?. The move would enable the creation of “wi-? on steroids,” which proponents say could give us speeds in the billions of bits a second versus the millions we get now. We could watch, make, and transmit video anywhere. It would goose America’s shameful broadband penetration, which in 2007 stood 15th in the world, according to the Organization for Economic Cooperation and Development. U.S. users pay roughly twice what the Japanese do for access that is, on average, 10 times slower, OECD says.
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Others don’t like Google’s idea for the white spaces. The National Association of Broadcasters fought it, saying the plan could interfere with their signals. I’d say they also don’t want to make it easy for yet more competitors to grab more of our attention. Cable companies don’t like Google’s idea; they’re making margins as high as 40 percent on internet access and don’t want more competition and disruption. Phone companies don’t like it as they’re just getting into the cable business. Mobile phone companies don’t like it, for once we get broadband on any device, we can use it to do anything, even make phone calls from the web without paying for minutes. With open devices—the ones Google insisted on with the FCC and the ones Google is enabling with its mobile operating system—on open networks we can kiss our two-year contracts and early-cancellation fees good-bye. Telecommunications is a perfect arena for Google because it’s ripe for disruption in business models enabled by technology—Google’s specialty. Google doesn’t want to be in the wires-and-pipes business, but if our connectivity were freed from its constraints, Google would bene?t. We’d spend more time online. We’d create and consume more. Google would have more to search and organize. Google would serve more ads. It would make more money. We would spend less money. It’s a magni?cent conspiracy of Google and everyone who opposes telecommunications oligopolies. Who wouldn’t like to stick it to the cable guy? The American Customer Satisfaction Index from the University of Michigan said in 2007 that cable and satellite TV suffered “the lowest level of customer satisfaction among all industries covered.” The survey attributes some of the problem to the monopolies these companies held and the pricing control that allowed: “Comcast is one of the lowest scoring companies in ACSI. As its customer satisfaction eroded by 7 percent over the past year, revenue increased by 12 percent. Net income went up by 175 percent and Comcast’s stock price climbed nearly 50 percent.” Let’s replay those numbers: Even as we hated the cable company more, its revenue, pro?t, and stock price all climbed. That might work today. But Wall Street must someday learn that angering customers is not a sustainable business model. Advertising Age’s Bob Gar?eld got angry at Comcast over his simple effort to get service at home. Gar?eld—who has confessed to envy of my Dell hell—launched a crusade against Comcast in a screed in Ad Age, in
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a podcast, and on a blog called Comcast Must Die, where he urged customers to share their nightmares. “Congratulations,” he told them. “You are no longer just an angry, mistreated customer. Nor, I hope, are you just part of an e-mob. But you are a revolutionary, wresting control from the oligarchs, and claiming it for the consumer. Your power is enormous. Use it wisely.” Comcast responded by assigning a vice president to read blogs and Twitter and deal with complaints and problems there. That helps, but it doesn’t solve the essential problem: Cable companies exist to frustrate us. I responded to Gar?eld on my blog, suggesting that a more constructive approach might be to help Comcast reinvent itself. What would an ideal cable and telecom company—Google Telephone & Telegraph—look like? First and foremost, it would be a platform that exists to help us do what we want to do. More than making calls and consuming content, it would turn the pipes around and help us create, share, and sell. It would be the home and host of our ambitions. Just as Google bought Blogger, allowing us to publish, and YouTube, allowing us to broadcast, its cable company would be our personal technology platform with tools to create content, products, and even companies. If we succeed, it succeeds. Even if we did not have such creative ambitions, Google would still provide no end of services in our personal computing clouds. It does that already with Gmail—the best webmail and best spam-?ghter out there; Google Docs—free and collaborative word-processing and spreadsheets; Google Calendar; Google Maps; Google Apps. If Google were my local cable and phone company, I’d expect it to provide the means for me and my neighbors to join groups and share information (which is what local newspapers should be doing as well). My neighborhood and town should be searchable. Google has started playing in the local arena with maps, news, and ads, but imagine when Google becomes truly local and I get a version of it and its services tailored to my area, my office, even my family and house. GT&T would be open. Gone soon will be the days when a company can make its money by telling customers what they cannot do, as cable companies long have done (you can’t upload that much; you can’t watch the shows you’ve already bought without paying extra for our on-demand service; you can’t put as many TVs in your home as you want without paying more; you can’t watch a TV without adding our cable box; you
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can’t buy just the channels you want but instead have to buy overpriced bundles; you can’t get a time when our technician will actually show up . . . ). Google knows that the more we use the internet, the better off it—and its hypothetical cable and phone company—would be. I think GT&T would give us portability: Just as I can get my email anywhere on any device thanks to Gmail, I should be able to get the video programming I paid for in any room of the house or even in a hotel room across the country—without the need for cable boxes, TiVos, or Slingboxes. My inability to do this today isn’t fully the fault of the cable company; it’s the result of archaic notions of copyright protection designed for outmoded technology. Studios and networks have argued that it would be a copyright violation if the cable company kept a copy of a movie I’d bought on its server so I could get it from anywhere. But there’s hope this practice will change after an appeals court decided in 2008 that remote storage is not a violation. The other barrier to portability is hardware. Cable companies are in the business of renting cable boxes to us, thus amortizing their cost and giving them control. Cable companies don’t see how renting boxes limits them, adding to their capital outlay, delaying technical improvements, and reducing our use of their service. GT&T would put forward open standards for everyone who makes TVs or video recorders, eliminating boxes and enabling anything to plug into the network, as on the internet. Google followed that model of openness— increasing use and utility—when it released its open-source browser, Chrome. There is hope on the hardware front as consumer-electronics and cable companies have at long last agreed to allow some integration of devices. Google would understand that in a larger network of content and information, its opportunity would be to help us ?nd what we want. It would provide a guide to cable as it provides a guide to the world’s information. GT&T would become the new TV Guide and the new TiVo mixed in with a search engine and a social network. Where would it get that guide information? Where Google gets it now: from us, from the crowd. We’d all be networks, recommending shows to each other, no longer caged by the taste and schedules of a few networks. We’d act as a mass of niches, not a mass. No doubt Google would analyze data about our actions and taste and feed that back to us as recommendations, as it does today in search. Why wouldn’t GT&T become the great personalized
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search engine of entertainment, the Google of culture? If somebody else doesn’t do it ?rst, they probably will. One doesn’t think of Google as a customer-service company. Its stuff just works. I rarely hear people complain about them as we do about phone and cable companies. After I told Doc Searls, another coauthor of The Cluetrain Manifesto, about my book, he blogged about his customerservice experience with Google. He needed to register a domain and if you’ve ever done that—at Network Solutions, GoDaddy, or other sites— you know that it can be a cluttered maze of attempts to get you to forget to click on boxes so you get charged for extra services. (It’s a variation on an old sales trick: When I worked at Ponderosa Steak House as a teen, we were taught to raise a ladle of canned mushroom gravy over a diner’s steak and ask, as if “no” were not an option, “Mushroom sauce?”) “Without exception, my experience with domain name registrars has been an upstream slog against a torrent of promotional distractions,” Searls wrote. “Nobody hates white space more than a domain-name registrar.” But when he discovered that Google offered this service for $10, he used it and in minutes, was done. “I used Google because I trust them not to treat me like cattle—or worse, as a potential sucker. . . . I bought this domain name from Google because I have a mutually respectful relationship with them. That relationship does not require human involvement, but it does require human values. Especially respect.” GT&T would make a compact with customers to provide reliable service. When it fails, we could use Google’s own tools against it. We could put up a Google map that we all ?ll in when we have trouble with our cable. We could record our conversations with customer-service people and put that and our complaints on YouTube, searchable via Google. We could share how fast our bandwidth is at every address and publish it all in a Google Docs spreadsheet. Google would know that it couldn’t ?ght us or win trying. Google is a platform for watching Google. Would we ever have to wait all day for the Google cable guy to show up? No. If “cable” were wireless and worked with any device that met open standards, there’d be nothing to string to our homes, nothing to install, nothing to come ?x. We could choose to use our bandwidth just as we wanted, as we use our power and water at will. I want a cable company that follows Jarvis’ First Law. Wouldn’t that be novel: control in customers’ hands?
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How would GT&T pro?t? How else? Advertising. It might still have to charge us for bandwidth and services. But Google would be smart enough to create new means to target local and national ads to us, using that revenue to subsidize the service so it would cost us less and we would use it more. Thus GT&T would make yet more money: a virtuous economic circle. Bandwidth could be free if what we do with it has enough value. I wish Google would change its mind and get into the cable and phone business. But if it doesn’t, there’s no reason our cable torturers should not operate as I’ve outlined. You don’t need to be Google to act like Google.
Manufacturing
The Googlemobile Google Cola
The Googlemobile: From secrecy to sharing
I sat with carmakers some time ago and suggested what I feared was blasphemy: I urged them to open up their design process and make it both transparent and collaborative. Car companies have no good way to listen to customers’ ideas. If they had, years before, I would have been among the legions who’d have gladly told them they should invest 39 cents in a plug for car radios so we could connect our iPods. Every time I try to listen to podcasts in the car via various kludges—FM transmitters that couldn’t transmit an inch away and cassette-tape gizmos (if you still have a cassette deck) that are loud and unreliable—I curse car companies and their suppliers. At least let us help design the radios you install, I urged. My plea was sacrilegious because automakers have long been secretive about design. Design and surprise, they think, are their special sauce. That’s why they cloak new models like classi?ed weapons, setting off games of cat-and-car with photographers who try to scoop the secrets. Apart from the most fanatical car fan, do the rest of us still care? The anticipation I remember about a new year’s cars—like a new season’s TV shows—is gone. Cars have lost their season. They stay the same year upon year. They all start to look alike. They rarely engender excitement. How could a car company reinject affection into its products and brands—how could it get a little love? By involving customers, I argue—by turning out cars customers want because they had a chance to say what they want. Internet analyst Jeremiah Owyang compiled a list of auto industry social-media efforts on his blog: Some automakers let customers make
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their own ads for cars, make their own emblems, or color pictures of cars. GM’s vice chairman, Bob Lutz, blogs. Chrysler has solicited customers’ ideas—but in a closed form that prevents them from commenting on each others’ suggestions. Chrysler also created a customer advisory board of 5,000 selected drivers. The Mini has its active community of owners. The problem with these efforts is that they do not allow customers to openly affect the product. Perhaps one of the ideas presented to Chrysler in emails or discussed in the Mini’s community might in?uence a decision that will come off the line in a few years. But we’d never know it. Indeed, the companies’ efforts at interactivity work hard to keep the customer from doing harm. This is interactivity as de?ned by a children’s museum: Here are the buttons you may push without breaking anything; knock yourself out, kids. But just as companies should hand over their brands to customers so should they hand over their products. What if just one model from one brand were opened up to collaborative design? Once more, I don’t suggest that design should be a democracy. But shouldn’t design at least be a conversation? Designers can put their ideas on the web. Customers can make suggestions and discuss them. Designers can take the best ideas and adapt them, giving credit where it is due. I don’t imagine customers would collaborate on transmission or fuel-pump design—though a few might have great suggestions if given a chance. But they would have a lot to contribute on the passenger compartment, the look of the car, the features, and the options. They could even get involved in economic decisions: Would you be willing to give up power windows if it got you a less-expensive car or a nicer radio? This collaboration would invest customers in the product. It would build excitement. It would get the product talked about on the web and linked to and that would earn it Googlejuice. It could change the relationship of customers to the brand and that would change the brand itself. Imagine that: the collaborative community car—our car. A car company could take any existing brand and model and work with the community that already exists around it. Go to Facebook and you’ll ?nd communities of greater or lesser involvement and affection around many car brands. I lost count of the Facebook groups for BMW when I hit 500. They included, with more than 800 members, the “If the BMW M5 was a woman I would marry it” group in addition to the “I hate BMW drivers, they are all c—ts” group with 510 members and, with

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