Thursday, September 27, 2012

Death of a Gamechanger: Dr. Evangelia "Litsa" Micheli-Tzanakou, Professor of Biomedical Engineering

Dr. Evangelia Micheli-Tzanakou, a dear educator, mentor & friend.
She will be missed by those who knew her and the world that benefited from her research & innovations.

Friday, April 13, 2012

Community & Hyperinflation: Online Marketplaces & Digital Currencies

A few thoughts ran through my mind as I dropped a package off at the post office last evening. I mailed the first dress sold from my 99dresses account.  I received 24 buttons in return.  I am also awaiting the shipment of the dress I bought last week for 19 buttons.  Who knew that an entertaining little website and a $40 beaded frock I've never worn could provoke deep thoughts about community and monetary policy?
1. Apparently, Nikki Durkin, 20, the founder of 99dresses and I have something in common--- we both started Ebay businesses in our early teens. I started mine [deep swallow] 9 years [ouch] prior to Nikki.  [Please wait while I slow my breathing and compose myself].  What was great about Ebay at that time was that it was so new, there was a tremendous sense of community and neighborly, main street decorum.  I remember regularly writing long winded emails back and forth with my customers from around the world, learning their stories.  I would hand write a personal note, and tell the person, by name, to keep in touch and would accept nearly 80% of my payments by money order or check via snail mail.

For a girl who never traveled across an ocean until adulthood, this was my Grand Bazaar, where an interesting, rich, colorful story was only a transaction away.  As Ebay grew over the years, they began to become more of a global powerhouse where less honest transactions took place. Understandably, Ebay became intent on protecting customers from fraud while maximizing their own profit.

So they began restricting contact between buyer and seller, implementing stricter feedback standards, pushing paypal transactions more and more, increasing commissions, sanitizing the handshakes.  By the time they were done, the hand written notes were forgotten, and most of the time, not only were emails never exchanged, but you wouldn't even pick up a first name in the transaction (other than from the shipping label).  My vibrant marketplace became a flourescent-lit supermarket. To me, this was the single greatest blow to Ebay--- the depersonalizing of  the "world's online marketplace" "connecting buyers and sellers globally".  To put it briefly, they took away our community.

My experience with 99dresses thus far has been more of the Ebay Nikki experienced than the one I initially did.  I am still patiently awaiting the dress I bartered last week, but have no real way of contacting the seller other than to email Nikki.  But, I really have no right to complain, as with the holiday weekend and the hassle of getting to a post office, it took me a bit longer than expected to ship out my dress. Nostalgic for the ebay of old, I doodled a dress on the package I sent out with a 'knock 'em dead', but I felt as if I was sending it into the ether rather than to a another girl who would enjoy it.

With eBay in its infancy, you wanted to ship things out quickly to do right by your customer (& pen pal) on a personal level.  If that wasn't enough, you knew you were bound by a contractual obligation. And later in the process, you feared that one negative feedback that would torpedo your business.  In this case, at least as it stands, there are none of those repercussions because communication is so centralized and contractual obligations become fuzzy when digital currencies replace actual ones. 
Don't get me wrong, it's a nifty site to use. And creating what I would call a 'barter capacitor' that allows one to not only trade items with one other person, but to defer that trade for another item is a brilliant concept--- and I would say is  the fundamental basis of our currency systems and credit markets.  I'm sure the economists have a much better name for it though.  However, as David Graeber explains in 'Debt: The First 5000 Years', the act of trade amongst humans is at it's core driven by relationships. 
The 'infinite closet' concept is fresh and appealing to young women. However, I think empowering women to build relationships within this space could have far greater impact than an outfit. My suggestion for Nikki is, as Arianna Huffington recently said, "make community an integral part of everything you do, not an afterthought."  99dresses has the opportunity to do that now.

2.  Digital currencies are a troublesome, if not perplexing, if not intriguing concept for me.  Heck, whole countries have a hard time with monetary policy.  

99dresses provided me with 5 buttons for each dress I put up, 4 dresses later, I had enough in my account to purchase the dress I eyed when I first browsed the page. As mentioned on a back page of the site, the 5 buttons were, supposedly, a limited promotional concept.  However, given the fact that buttons were effectively 'printed', in order to get me started, I see issues with inflation, hyperinflation even. 
And this is where this is not just about 99dresses 'buttons' but most current forms of digital currency.  By purchasing buttons with real fiat you are effectively printing money in a closed economy.  I can't cash out my buttons.  99dresses doesn't 'tax' me in buttons, since they'll need to pay their staff in actual USD.  So now we have a problem.  More and more buttons enter the system and never leave, while I can resell a dress I purchased on the site for still more buttons. 

That might have been an ancillary benefit for the creator and investors.  Say I sell 3 dresses at 50 buttons each, I now have 150 buttons in my account that are useless in any other context but purchasing another garment.  What would have cost me 100 buttons to purchase initially, may now cost me 200 with the ever rising number of buttons in the system.  So rather than having 50 buttons to spare, I have no choice but to ante up the extra 50 in cash, or wait to sell more dresses.  Buying buttons, at least to start, is good for business.

But I would counter, autarkies don't work---  I'm no economist, but I could expound on my recent trip to Burma as a case study. Runaway inflation is a real possibility if you can't 'cash out' your chips and the system never 'taxes' you.  So my second suggestion for Nikki would be to find some way to remove buttons from the system and restrict the growth of said buttons or else we might just end up paying the 'button' equivalent of 6 trillion Zimbabwean Dollars for a cocktail dress.
To sum up, build an infinite slumber party with finite buttons and I think you have a winner.  And I would venture to guess that that advice could be applied to a whole lot more startups than just 99dresses.

Monday, February 13, 2012

Game Changer: Nancy Koehn, Leadership

A friend (and former student of the speaker at HBS) shared this video with me this morning and I thought her points to be so salient and piercing, I had to post Nancy Koehn's video without (much) comment.  Ethos, anchors, listening more than you speak--- her study of human leadership and living a fundamentally principle driven life, are so incredibly in-line with things I've said and thought, I am in awe. 

Thanks, Elena... and Nancy

Tuesday, February 7, 2012

An Amateur Anthropologist's View: Tag-Along vs. Contrarian Social Graphs

As I walked out of yet another tech event last night, a young man asked a few questions about me and proceeded to tell me about his start-up.  We strolled down the block, and a sense of deja vu ran through me as he explained the same business model I feel like I've heard a thousand times in the past six months.  Anyone in start-up environs has undoubtedly heard the same thing and it almost always includes omniscient words like "purchasing" and  "social graph".   At it's core, the business model uses Facebook, most often, to help people engage with 'friends' and gets them to purchase or join something because of the 'friendship'--- I call it 'tag-along theory'.  I smiled and nodded as we talked about the marketplace and his competitors on a superficial level.  And then we parted ways. 

This brief exchange has been running through my mind over the course of the day, not because it was unique, but more because it was anything but, after all I've coined a phrase for it.  I sometimes worry if I have somehow become a little too cynical and dismissive.  No doubt many of these ideas I'm sure will take off, raise a round or two and garner some level of PR and success.  But I find myself frustrated with these doe-eyed founders who don't analyze beyond the buzz words of the moment.  These are the entrepreneurial equivalent of 'the empty suit', with no individual sniff test for reasonableness.  They believe in 'tag-along theory' because they actually live it. 
'Monsters are due on Maple Street', Twilight Zone

Fortunately, or unfortunately, I would consider myself an amateur anthropologist.  Sit in a Starbucks for an hour or survey some comments at the top of your Facebook feed as if you are an alien, objectively reporting back to your mothership about this life form called "human" and you will be too.  And if there is only one thing I have learned it is that words carry weight and influence behavior.  For instance, the word 'friend' is defined as someone with whom you have a "mutual bond of affection". 

Think about most people in your facebook social graph and I'm sure that definition would not apply, say, the ex-girlfriend who cheated on you, a random person you met at a social function, your high school bully.  A friend is someone with whom you would share intimate details of your life, good or bad.  A friend is the person who actually cares to see travel pictures and the baby's first crawl.  A friend will know about the steps and missteps you're taking to improve your life, not just the milestones posted on a wall. Yet, every "Facebook friend", gets private snapshots, not because var facebookFriend == var realFriend, but because we've all confused the definitions.
Friend = "a pal && a confidante"
Friends make referrals, that is, realFriends.  These referrals are often solicited, trusted, and followed--- the same can't be said for relative acquaintances or strangers, as studies have now shown.  Hence, Facebook and facebookFriends are not about 'social' behaviors where 'monkey see, monkey do', but rather it is fed, almost entirely, by competitive and more aggressive instincts where 'monkey see, monkey out-do'. 

Facebook has had so much success because they realized this early on.  Their business model is based upon status competition, not social connectivity. These unspoken more primitive behaviors are what encourage people to keep adding content and allowing more and more people to see it.  As we all saw with the Isabel Behncke Izqueirdo's TED video last year, Bonobo apes share and play with their inner circle. But stranger Bonobos have been found to become aggressive when competing for resources, particularly when being observed.  Facebook is competition masquarading as play.

Since the very nature of the social network environment and the Millenial generation is fundamentally individualistic, particularly as it relates to people for whom you have no real bonds of affection, everyone is looking to show how they are special. And special does not mean that you purchase what everyone else in your online social graph is purchasing---  it probably means you will go out of your way to purchase something different in order to compete.  This is what I like to call 'contrarian theory'.  Whether I like it or not, capitalizing on these competitive instincts, in my humble opinion, is the only way to harness the influence of the social network. Just look at Zynga.

Contrarian behaviors can be positive.  Imagine the competition is not harnessed for sheer consumption but instead for social good--- less consumption even.  It could become a 'race to the top', so to speak.  Competitive drive could become an extraordinarily powerful force for good and Facebook could be at the center of it. Facebook--- good--- never thought I'd use those two words in the same sentence.

But back to my doe-eyed 'tag along' founder.  I whole-heartedly wish him much success, he seemed like a nice enough kid, smart, hard-working--- maybe a bit of a braggadacio--- but I guess we have our social network to thank for that, in more ways than one.

Full Disclosure: I've just worked on CleanGPA, a CleanWeb app started at a hackathon.  CleanGPA, in part, uses competition with your social graph to conquer energy apathy and reduce energy usage.  Additionally, I have worked in the past and will work in the future on other social ventures potentially harnessing contrarian behaviors within the social graph for good.