Wisdom of Crowds


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Paperback
336 pages
ISBN 9780385721707 Published Aug. 2005
Anchor Books
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Wisdom of Crowds
By James Surowiecki 

Related Blog Posts
Friday Links
Posted March 26, 2010 11:07 a.m. by dylan
In - 800 CEO Read Blog

➻ If you haven't read Texts Without Contexts, Michiko Kakutani's piece from last Sunday's New York Times yet, I can't recommend it highly enough. It's almost counter to the point of the story to quote an excerpt, but I am going to anyway:

Now, with the ubiquity of instant messaging and e-mail, the growing popularity of Twitter and YouTube, and even newer services like Google Wave, velocity and efficiency have become even more important. Although new media can help build big TV audiences for events like the Super Bowl, it also tends to make people treat those events as fodder for digital chatter. More people are impatient to cut to the chase, and they’re increasingly willing to take the imperfect but immediately available product over a more thoughtfully analyzed, carefully created one. Instead of reading an entire news article, watching an entire television show or listening to an entire speech, growing numbers of people are happy to jump to the summary, the video clip, the sound bite—never mind if context and nuance are lost in the process; never mind if it’s our emotions, more than our sense of reason, that are engaged; never mind if statements haven’t been properly vetted and sourced.

Now go read the entire article.

➻ Michael Mace wrote a very lengthy, veritable dissertation on the subject of The future of publishing: Why ebooks failed in 2000, and what that means for 2010. It's certainly the most in depth analysis of the situation that I've read. But, being a lover of short stories, there's one possibility he raises that really struck me:

Short fiction is a great fit for e-readers because it can be consumed in small bites, and if authors could sell directly to their readers, the revenue could eventually be good enough that people would go back to writing short fiction. Plus it would give e-reader devices a real benefit -- content that you can't get anywhere else.

What's missing is the marketplace to make that happen. We need the equivalent of an iTunes store for short stories, tied to a mass market tablet device.

➻ strategy + business has a new article up from Edward Tse, adapted from his new book, The China Strategy: Harnessing the Power of the World's Fastest-Growing Economy.

➻ In a case of one author of one of The 100 Best Business Books of All Time talking to another, The New Yorker has video of James Surowiecki (The Wisdom of Crowds) speaking with Michael Mauboussin (More Than You Know) about "common investment mistakes, how to improve decision-making, and what investors can learn from the recent stock-market woes."

➻ AN INTERESTING LETTER FROM DAVID MAMET TO THE WRITERS OF THE UNIT ON WHAT MAKES FOR GOOD DRAMATIC WRITING HAS BEEN MAKING ITS WAY AROUND THE INTERNET THIS WEEK.

➻ It quite old now, but I love Nicholas Carr's Tweet fantasy:

How cool would it have been if Twitter had been invented a couple hundred years ago so our forebears could have used it?

transcendo: RT @emerson new idea: "the making a fact the subject of thought raises it" http://bit.ly/cAhzDL (expand)<----interesting!

His book The Shallows: What the Internet Is Doing to Our Brains, coming out in June, might be my favorite of the year so far.

➻ I was hoping we could end this week talking a little bit about health care reform. (Also, if you could hit me with a hammer, that would be great.) Eschewing the hyperbole and vitriol coming over our public airwaves lately, The Christian Science Monitor's Marjorie Kehe put together a fine list of books that could provide ground for a more civil debate, writing "For those hoping to gain a wider grasp of the American healthcare reform debate, here's a (beginning) reading list. The authors below do not offer common prescriptions, but they do share some lucid analyses of the problem:"

➻ The GalleyCat reports that LeVar Burton may have Reading Rainbow 2.0 in the works, which I mention only in an cruel attempt to get the original theme song stuck in your head for the next week.

➻ The New York Times' Jeffrey Scales put together a very cool audio slide show about W. Eugene Smith and The Jazz Loft Project.

➻ One of the very best 8cr excursions in company history was in NYC two years ago (we were there for our first awards event), when three separate groups of us all converged on the very hard-to-find, practically unmarked Issue Project Room in Brooklyn to see Jonathan Kane.



Matthew May's Five Books That Defined the Decade
Posted Jan. 14, 2010 3:49 a.m. by dylan
In - 800 CEO Read Blog

In Pursuit of Elegance author Matthew May reads around 200 books a year. That means he's read approximately 2000 books since the year 2000. Of those, he has picked five that he feels defined the last decade, writing "these 'big idea' books stand out because not only did they help us better understand the world, they gave us a new lens through which to view it."

Though you're picks may look slightly different, it's a difficult list to argue with, and one I like all the more due to the fact that—as Jack and Todd did in the 100 Best Business Books of All Time—he eschewed Friedman's more popular The World is Flat for The Lexus and the Olive Tree.

To read more about why May chose these books, head over to the original post: Five Books That Defined the Decade.



In the Books - Off to the Printers VIII
Posted Jan. 8, 2010 5:36 a.m. by dylan
In - 800 CEO Read Blog

I wrote the following article for our first issue of In the Books, released two short years ago, but it seems unbelievably quaint now. Though it has mostly died down, the rise of Web 2.0 and the effects it would have on our culture and the creative economy was a huge debate two years ago. I tried to capture some of those discussions by looking at the books published on the issue in 2007.

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We the Internet BY DYLAN SCHLEICHER

It has been quite a few years since Al Gore invented the Internet in the hope of creating a more involved, engaged, and responsive democracy. And while his political dreams for the world wide web have yet to be realized, I think we can agree it has changed how we interact and do business.

The advent of what tech-guru Tim O’Reilly has dubbed Web 2.0 is now changing the rules and very nature of the Web itself. Web 2.0 is the new Internet of web blogs, open source technology and “wikis,” social networking and user-generated content. It is something other than the “publish and browse” Internet where people act as passive spectators of company brochures and magazine articles. It is something we interact with, a community that anyone who has access to a computer can be a part of. One thing this new Internet can’t yet capture and contain, however, is an extended and nuanced conversation about its own existence, and so in an ironic twist, books—a six hundred-year-old technology—are being written about it.

Web 2.0 is many things to many people. It has been described most famously in business literature as The Wisdom of Crowds by James Surowieki, and by Chris Anderson as The Long Tail of commerce. This year, David Weinberger has written that it is where Everything is Miscellaneous, and Andrew Keen has called it The Cult of the Amateur.

In Everything is Miscellaneous, David Weinberger discusses how this new incarnation of the Internet is scattering information into miscellaneous networks, where items are “jumbled digitally and sorted out only when and how a user wants to look for them.” He sees the rise of this digital (dis)organization as the liberation of information from its confinement in the physical space of books and libraries. This web of information is as scattered as it is in the natural world, and we must gather and interpret it for ourselves, and with each other, accordingly:

Deciding what to believe is now our burden. It always was, but in the paper-order world where publishing was so expensive that we needed people to be filterers, it was easier to think our passivity was an inevitable part of learning; we thought knowledge just worked that way (143).

For 2,500 years, we’ve been told that knowledge is our species’ destiny and calling. Now we can see for ourselves that knowledge isn’t in our heads: It is between us. It emerges from public and social thought and it stays there, because social knowing, like the global conversations that give rise to it, is never finished (147).

Andrew Keen has a different take on the subject. In The Cult of the Amateur, he counters what he sees as the irrational exuberance of Web 2.0 utopians with a warning about the economic viability of the new Web and the destructive effect it may have on our culture as a whole. He has seen the Web’s decimation of the traditional music industry, and doesn’t foresee much better for other traditional media outlets. Despite his possibly overly disparaging view of bloggers as “infinite monkeys with infinite typewriters,” he does raise valid concerns about the Internet as it presently exists. He laments the poor quality of most amateur-created content currently available on

the Internet, and wonders how and where credentialed, vetted and substantiated reporting has a place in the brave new world of Web 2.0:

Before Web 2.0, our collective intellectual history has been one driven by the careful aggregation of truth—through professionally edited books and reference materials, newspapers, in radio and television. But as all information becomes digitalized and democratized, and is made universally and permanently available, the media of record becomes the Internet on which misinformation never goes away. As a result, our bank of collected information becomes infected by mistakes and fraud (74).

Wikipedia exemplifies these layers of debate inherent in Web 2.0 products. Now the largest encyclopedia in the world, Wikipedia is, as most proponents of Web 2.0 technology say all information wants to be, free. Andrew Keen has many criticisms of the site—and even

its inventor—in his book, but the crux of his argument is as follows:

By empowering the amateur, we are undermining the authority of the experts who contribute to a traditional resource like the Encyclopedia Britannica—experts who over the years have included the likes of Albert Einstein, Marie Curie, and George Bernard Shaw. Indeed, what defines “the very best minds” available, whether they are cultural critics or scientific experts, is their ability to go beyond the “wisdom” of the crowd and mainstream public opinion and bestow us with the benefits of their hard-earned knowledge

(The Cult of the Amateur, 43).

Weinberger would counter by saying, “At Wikipedia, credibility isn’t about an author’s credentials; it’s about an author’s contributions.” In Wikinomics, authors Don Tapscott and Anthony Williams speak to the issue of accuracy and credibility:

Nature magazine’s comparative analysis of forty-two science entries in both showed a surprisingly small difference [in accuracy]: Wikipedia contained four inaccuracies per entry to Britannica’s three.

Britannica has disputed the finding, saying that the errors in Wikipedia were more serious than Britannica errors, and that the source documents for the study include the junior version of the encyclopedia as well as the Britannica yearbooks.

Unfortunately for Britannica, its complaints really miss the point—errors cited on Wikipedia have long since been fixed, while the Britannica errors remain. In the same way that open source programmers swarm together to identify and fix bugs, Wikipedians can easily catch errors and set the record straight. According to an MIT study, an obscenity randomly inserted on Wikipedia is removed in an average of 1.7 minutes (75).

Don Tapscott and Anthony Williams approach the issues of Web 2.0 from a perspective different from Weinberger and Keen’s. The culmination of five years and $9 million of research, Wikinomics looks at the Web through an economic lens. They see a world and economy constantly connected in mass collaboration. They share Keen’s belief that Web 2.0 is changing the very nature of how we do business, but they see this as a step in the right direction. They focus on how peer-to-peer networks and mass collaboration are opening companies to the world and advancing not only their bottom line, but human development as well. They point to examples of companies sharing what used to be closely guarded intellectual property in open source communities. It’s collaborative capitalism, and there are many examples of it working effectively in the real world. One of the best examples is IBM and its collaboration with the open source community of Linux developers.

Open source has enabled IBM to speed innovation and off-load tremendous costs. From a strategic perspective, this approach to peer production is a form of collaborative outsourcing [...] IBM provides a surprising example of how a large, mature company with an ingrained propriety culture can embrace openness and self-organization as strategic weapons. (Wikinomics, 83)

IBM, out of competitive necessity, turned to the open source community and in return contributed its own expertise to improve hardware that had previously been developed by individuals. “Linux-related hardware and services produce billions of dollars of revenue annually, and now IBM, Motorola, Nokia, Philips, Sony, and dozens of other companies are dedicating serious resources to its development” (Wikinomics, 65). But what do the unpaid contributors to the hardware get for doing this work, and why do they do it?

People who work on Linux during their spare time are usually employed in some other facet of the industry. Participating in Linux gets them experience, exposure, and connections, and if they’re good, they can earn status within the community that could prove to be highly valuable to their careers. What’s more, a growing number of people are paid to participate in Linux by the companies they work for. In fact, IBM and Intel are two of the largest contributors to Linux in terms of manpower. (Wikinomics, 70)

Tapscott and Williams believe that if companies open up some of their propriety information and share it, it can be a major benefit to both themselves and others, creating innovation where there had been privacy. They also see economic possibilities in open source technology for new and smaller companies that haven’t been able to afford sophisticated software.

Open source application vendors could be the force that brings affordable enterprise solutions to the masses of business that could never afford an Oracle database or an enterprise resource planning (ERP) system from SAP. And who knows, they just might empower a whole new revolution in business productivity, and perhaps even kick-start a renaissance for the small and medium sized business. (Wikinomics, 84)

Because it is miscellaneous, sometimes misleading, and mired in anonymity, the new Internet is one where personal responsibility and individual discernment are paramount. We cannot accept every word published as fact or every line of code as precise. We have to find sources we trust, whether it’s the Wall Street Journal, a programmer from Long Island or a blog about business books from a small company in Milwaukee. If we search intelligently, we may even begin to get at some truths. (We might learn that Al Gore didn’t really invent the Internet.) What we have gained is the ability to interact and join the conversation—however banal it may become—whether it’s on Wikipedia or in a Linux chat room. More than ever, the Internet does reflect who we are as a society, with all our blights and blemishes, all our wit and wisdom. As Wikinomics shows, it can also reflect the innovative, entrepreneurial spirit our economy was built upon.



Friday Links
Posted Dec. 4, 2009 11:02 a.m. by dylan
In General Business - 800 CEO Read Blog

◊ Clay Shirky, author of Here Comes Everybody, wrote a compelling post on the future of bookstores called Local Bookstores, Social Hubs, and Mutualization on the 17th that we missed. Here is an important paragraph to whet your appetite:

Online bookselling improves on many of the core functions of a bookstore, not just price and breadth of available books, but ways of searching for books, and of getting recommendations and context. On the other hand, the functions least readily replicated on the internet—providing real space in a physical location occupied by living, breathing people—have always been treated as side effects, value created by the stores and captured by the community, but not priced directly into the transactions.

His conclusion is that book sellers should be looking at the nonprofit model to stay in business. (I can assure you, many book sellers I know would say they're already functioning as a "nonprofit" of sorts already—and have been for years. We're not exactly the most affluent segment of society.)

◊ Cory Doctorow weighed in on the topic on Wednesday with some half-formed thoughts on one future for bookselling (his words, not mine), pointing to the "ends of the market [that] are ripe for heavy localization." Mr. Doctorow is an especially interesting addition to the conversation, as he has been at the forefront of authors getting their books to readers online. If you're a book seller, or just love bookstores, I would highly recommend both authors' takes on the situation. (And thanks to Vroman's Bookstore for the heads up on both.)

◊ If you're looking for a success story from the book selling arena, pick up the December issue of Inc. Magazine and turn to page 86. (I know, I know... so analogue, but I'll post the link when the story is online.) There you'll find the inspiring saga of Portland's Broadway Books by John Brant.

◊ If bookstores do go extinct, Jacket Copy's Carolyn Kellogg may have found the answer—phone booth libraries.

◊ NPR's Morning Edition reminds us that You Can't Put A Bow On An E-Book.

◊ Speaking of NPR and bookstores, here are NPR's bestsellers of the week, compiled "from weekly surveys of close to 500 independent bookstores nationwide in collaboration with the American Booksellers Association:" Hardcovers | Paperbacks

◊ The New York Times Book Review has chosen their 10 Best Books of 2009. Liaquat Ahamed's Lords of Finance: The Bankers Who Broke the World was the sole book that would fit in the business category on the list.

◊ The Onion's A.V. Club has posted its best books and its best films of the decade. The business books that made their list are:

  • Freakonomics by Steven D. Levitt & Steven J. Dubner, published originally by William Morrow & Company in 2005.

  • Nickel And Dimed by Barbara Ehrenreich, published originally in 2001 by Metropolitan Books

  • The Tipping Point by Malcolm Gladwell, originally published in 2000 by Little Brown & Company

  • The Wisdom of Crowds by James Surowiecki, originally published by Doubleday Books in 2004

◊ I'm really interested in Anna Jane Grossman's Obsolete: An Encyclopedia of Once-Common Things Passing Us By, illustrated by James Gulliver Hancock, but since we've not received a copy here (ahem, Hachette, ahem), I guess I'll have to go out and buy one. Until then, the Washington Post's Jacket Copy has provided us with a little fix of Ms. Grossman discussing executive chairs, laughtracks and payphones.

◊ Niall Ferguson, author of The Ascent of Money: An Economic History of the World wonders if "economic weakness is endangering our global power." Read his recent article in Newsweek to learn more.

◊ And, finally, in celebration of the second anniversary of their online store, Nonesuch Records is having a sale. In a nod to vinyl, everything is now 33 1/3% off the list price. They have an eclectic mix of musicians, from the Americana of Wilco and Emmylou Harris to the wonderful Oumou Sangare and wonderfully bizarre Alarm Will Sound. They also have Bobby McFerrin’s first album in their catalog, giving me an excuse to post the video below, which we first came across on tiny gigantic some months ago.

World Science Festival 2009: Bobby McFerrin Demonstrates the Power of the Pentatonic Scale from World Science Festival on Vimeo.



Jack Covert Selects - Rules of Thumb
Posted June 15, 2009 3:33 a.m. by 800-ceo-read

Rules of Thumb: 52 Truths For Winning At Business Without Losing Your Self by Alan M. Webber, HarperBusiness, 270 pages, $24.99, Hardcover, April 2009, ISBN 9780061721830

Books like The Wisdom of Crowds and Super Crunchers show that groups and algorithms beat gurus and experts consistently in the decision-making department. It seems the usefulness of the sage is waning, but maybe something is being lost. Logic trees and collective aggregations may be more accurate, but they lack the compelling richness of a person's life experience. In the case of Rules of Thumb, missing out on Alan Webber's insights would be a terrible loss.

Webber spent his initial years out of college in Portland city politics. From there, he landed at the Harvard Business Review, where he worked under the legendary Ted Levitt and met his future business partner, Bill Taylor. Alan and Bill left HBR, and in 1994, founded Fast Company magazine. The duo sold the magazine in 2003 for $350 million to the magazine division of German media giant Bertlesman.

In Webber, you have someone who has sailed in the sea of business ideas for thirty years, as both discerning editor and successful entrepreneur. His new book, Rules of Thumb, is a compilation of the wisdom he collected over the years on 3"X5" index cards. He says he learned this technique of note-taking from Levitt, who used it as a way to organize all of the ideas he was exposed to each day.

Fifty-two rules fill the 270-page book and the stories Webber tells to illustrate each insight are personal. Webber's Rule #19 is "Focus on the Signal to Noise Ratio." He quotes Stanford professor Jeffrey Pfeffer to help explain: "Too much measurement is no different than no measurement all. Pick a few metrics and stick to them." The same rule applies for purpose and values: identify two or three that represent what you do, and live by them. But, in contrast to the problem of too many metrics, it's often the lack of values or the absence of purpose that causes confusion.

Here is a sample of a few of the other rules:

Rule #15 - Every change needs four things: change, connections, conversation, and community.

Rule #16 - Facts are facts; stories are how we learn.

Rule #34 - Simplicity is the new currency.

Rule #43 - Don't confuse credentials with talent.

Read Rules of Thumb slowly, in increments of ten or twelve pages. Spend some time contemplating a few of Webber's rules in those following days, as these truths need some time to sink. Then go do something. Do something different with the knowledge you've gained. As Webber says, "It's the best chance of creating the future we all want."






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