What does it matter for investments? We invest in companies, so we have to think about every aspect of business, including R&D/ new product development and production processes. In the sense that the evolution in these and other business factors may lead to more efficient uses of capital in the companies that take advantage of these trends, the question becomes: how does it NOT matter?

Very interesting story in the NYT this Sunday: how the Web is making it easier to fund/ develop companies that aren’t web-based at all, and actually make tangible products. It reminded us of a conversation we had internally last Tuesday about “open-source chips” and other electronic hardware available for a fraction of the cost of a few years ago, and how much easier it is nowadays to build prototypes. All that was needed was a way to organize like-minded people and help their ideas find interested investors, however tiny the capital needs. No longer. In the words of an MIT professor, “The situation resembles the way that anyone with a laptop and an Internet connection can now start a Web-based company” – and we all know what innovation and wealth creation can come out of that “mold”.

TED Talk by Marcin Jakubowski on “Open-sourced blueprints for civilization” – Feb 2011 (4:11)

(Note: we don’t provide the link to the interview because it won’t be available until April 15th for non-subscribers. When we do link to it, it will be in Portuguese…)

The alternatives are:

1) You keep that hammer but seek out only the problems that actually are nails – by the way, the wrong way to look at it is to equate this proposition to Buffett and Munger’s “circle of competence”. What we wrote in 1) is limiting and invites obsolescence, while Buffett and Munger do numbers 2) and 3) below;

2) You dedicate yourself to actively and relentlessly seek out new tools, frameworks, mental models, skills, experiences – whatever it takes – to improve your “toolkit”;

3) You seek to associate with people whose “toolkit” complements yours.

The best option is, of course, 2 and 3 together – even better if you can make it so the efforts behind 2) and 3) are aligned with a bigger-picture strategic plan/ vision, and that the team interaction is healthy and productive.

Yes, it’s hard to find an environment like this. If you don’t have it, try to make it happen – and if it does happen, make sure you do everything you can to nurture it. If it’s not possible, the effort you put into 2) will still be worth it.

In today’s piece we’re posting two updates about different subjects: crowdsourcing and e-publishing/ the “Web is dead” debate.

Crowdsourcing: This article regards cash-strapped academia enlisting volunteers via the web to help in different projects – leveraging, “if not the wisdom of the crowd, then at least its fingers, inviting anyone – yes, that means you – to help transcribe some of the 40,000 manuscripts (…)” – manuscripts by philosopher Jeremy Bentham in this case. This type of crowdsourcing is more in line with Wikipedia and perhaps even SETI@home. Makes us wonder what sort of opportunities we’re missing in Brazil.

The other article regards e-publishing and the whole “Web is Dead” debate. The latest entry is written by Steven Johnson, of “Where Good Ideas Come From” fame (we’ve posted about it here), and he argues in favor of “web mirroring” of digital content – to allow for searching and cross-linking that really helps spread ideas and (just as importantly) connect from one idea to the next. In his words, “Writing articles in unlinkable environments in 2010 is like publishing a scholarly book in 1800 and refusing to allow it to appear in any library or bibliography anywhere in the world.”

The good: The idea that groups of people can be better suited than individuals to take on some tasks has been around for a while, and we’ve discussed crowdsourcing on Buysiders.com rather extensively. The idea that you should foster diversity in the team building effort isn’t new either. That said, this very interesting article looks at “Group I.Q.” and tries to determine the collective intelligence of teams and when/ why it varies. It’s still preliminary research and it raises almost as many questions as it addresses, but it’s a great field to explore.

The bad: The behavior number 3 in this article (via Farnam Street blog) is another entry in the large collection of highlights of the dumb things we can do when we’re in groups. In this case, dumb shopping behavior. The 5 tricks come from Robin Lewis’ (of The Robin Report newsletter) new book, “The New Rules of Retail”.

The other posts at Buysiders.com regarding crowdsourcing/ groupthink:

Where do good ideas come from? – Sept. 30th, 2010

The end of management – Sept. 9th, 2010

Multidisciplinary approach and communication – Feb. 17th, 2010

Follow the red balloon – Dec. 6th, 2009

Crowdsourcing revisited – Nov. 18th, 2009

Netflix’s smart crouwdsourcing initiative – Sept. 22nd, 2009

Easy! There are basically three ways to do it:

1) Browse by category: We assign posts to one or more categories, which can be searched in the middle column (as in the 1st picture below) or by clicking the desired category in the post itself (as in the 2nd picture).

2) Browse by tags: We also assign tags to each post, and there are usually more tags than categories because we want to make it easier for the reader to find related articles. The connection between articles with a given common tag can appear “soft”, but it reflects the way we like to navigate articles ourselves: many apparently unrelated subjects serve as useful building blocks/ models/ framings for another subject. You can find a tag cloud in the right column (1st picture below) or you can just click a tag in a given post to see other articles tagged with the same reference (2nd picture).

3) Search! There’s a search box in the top of the right column, as seen below.

Good searching! As always, if you’d like to comment on our categorization and tagging, or if you’d like to suggest changes and hopefully interesting articles, please send us an email!

Keep those ideas coming! E-mail us with your suggested links, texts and so on.

Doesn’t mean that the tool doesn’t work, it just means that you have to be careful using it. Talk about hitting your finger with a hammer!

In this debate, one aspect appears overlooked: communication. If you don’t have the adequate communication policies/ environment, how does one reap the rewards from all this multidisciplinary goodness?

Again, the article stands out in its own but it made us think of the multidisciplinary approach “debate”. We’ve always tried to build our teams with this in mind, looking for complementary skill sets/ experiences/ backgrounds. Nothing new there. But please bear with us as we follow the “links” this article made us follow.

The diversity prediction theorem by Scott Page states that:

“Collective error = average individual error – prediction diversity” (as stated in Michael Mauboussin’s Think Twice, Chapter 3, page 46)

Some types of problems are better suited for experts and some for “crowdsourcing”. Either way, the theorem above applies. For instance, when diversity doesn’t improve the odds of solving a problem, you can focus on decreasing the first part, i.e. decreasing average individual error or, if you prefer to see it this way, increasing “ability”, as Mauboussin calls it.

But if you think proactively and seek counter-evidences and multidisciplinary approaches yourself, it’s as if you’re increasing the “diversity” part of your own expertise/ skill set/ tool set. At the very least, you could become less prone to fall into the traps of biases and etc.

In the book, Mauboussin recommends reading Scott Page’s book (“The Difference”) and his own text on the subject.

A review of “The Difference” at the Crooked Timber blog mentions in the 8th paragraph the problem with one of the assumptions of the diversity prediction theory (just to be clear, Mauboussin deals with it in his book): it assumes that the diverse crowd interacts/ communicates in a way that the diversity “bonanza” can take place. As we at IP know, that is often far from reality.

Another approach to the same problem was discussed by Julia Kristeva: “One cannot be an amateur, or decide one day ‘Let’s be interdisciplinary’. A university may decide to develop in that direction, but what matters is that each researcher finds and establishes some complicities with other researchers so that interdisciplinarity comes from the base of the pyramid and works its way up. One can only benefit from interdisciplinary practices if researchers meet other researchers whilst learning how to discuss both their competencies and the outcome of their interaction; therefore contributing to the exposure of the risks inherent in an interdisciplinary practice… the first obstacle is often linked to individual competencies coupled with a tendency to jealously protect one’s own domain. Specialists are often too protective of their own prerogative, do not actually work with other colleagues, and therefore do not teach their students to construct a diagonal axis in their methodology.”

At IP, we’ve always taken steps to address this and this blog is part of these efforts. For instance, our team’s interaction in our Intranet today is the source for most of our posts here – this specific one was “built” from the contributions of 4 different members.

The way MIT built its incentive system to recruit people to its “team” is part of the story, of course. They were clever enough to mix both “ego-boost” and “cold, hard cash” incentives (since they would donate some of the proceeds to charity). Other teams apparently had either just the feel-good or just the greedy incentives. Of course, the losing teams complain that they had been working for a while when the MIT Team came out of nowhere and, given the famous backers, got a lot of traditional press attention, giving them a leg up on recruiting “balloon spotters”. Well, it seems good media contacts do play a major role in this part of the challenge, so DARPA probably got a lesson from that as well.

Speculations abound on what DARPA could have learned from this, but whether this will help the US capture the “terrorist that can’t be named” is beyond our scope. What we’re interested in is the wealth of data on crowd-sourcing and information dissemination generated by this contest. We’ve posted before on the subject of Crowdsourcing and the implications on Media, Online Services, Search, Hyper-local advertising, Retailing, Services in general (links below). Here’s hoping the MIT Media Lab team will write a comprehensive paper on this challenge and shed some light on this trend.

LINKS:

With lure of cash, MIT wins Pentagon prize – NY Times (free registration required) on the contest winners – Dec. 6th ’09

“Crowdsourcing” revisited – Our own take on crowdsourcing and its potential shortcomings – Nov. 19th ’09

Netflix’s smart crowdsourcing initiative – Our take on the Netflix contest – Sept. 22nd ’09

MIT’s 2-day course on crowdsourcing – Classes in 2010 for this $2,600, 2-day course called Intelligent Organizations: Collaboration and the Future of Work.