Tag Archive for 'link'

The changing dynamics of news

Published on September 7, 2011 in Media and Trends, with 0 Comments. Tags: , , , .

In the recent controversy that has erupted due to the firing of Michael Arrington from TechCrunch, I believe it represents an era in innovation led by TechCrunch that we’re only starting to appreciate.

To start on this thought experiment, consider how four years ago (meaning, things haven’t changed) I wrote about the two kinds of content that exist: data like breaking news or archived news; and culture which includes analysis like editorials and entertainment such as satire.

UnderstandingI argue that each content form has unique characteristics that needs to be exploited in different ways. Think about that before digesting this blog post, because understanding the product (such as news) impacts the way the market will operate.

Some trends of the past
Over the last two decades, we’ve seen the form (and costs) of news be disrupted dramatically.

It started with hypertext systems that helped humans share knowledge (with the most successful hyperterxt implementation, the world wide web 20 years ago forever changing the world); search engines helping us find information easier (with Google transforming the world 10 years ago), and content management systems helping people reduce the costs of publishing to practically zero (with Moveable Type and especially WordPress driving this).

While the sourcing of news still requires unique relationships that journalists can extract to the world, even that’s changed due to social media that’s created a distributed ‘citizen journalism’ world. Related to this is a movement Julian Assange calls “scientific journalism” where the sourcing of news is now democratised and exposed in its raw form.

Some observations of the present
With that, I’ve noticed two interesting things about the tech news ecosystem, who are are helping shape the trends in news more broadly: tech bloggers kill themselves to break stories, to the point where blogs like TechCrunch have become cults for those that work there; separately, the rise of the news aggregators like TechMeme and HackerNews (or Slashdot and Digg before them) have built the audiences who have been overwhelmed by information overload and crave a filter from a quality editorial voice (the latter being why news personalisation technologies cannot work on their own).

The big secret (that’s not particularly secret due to the abundance of ‘share this’ buttons on webpages) about the news ecosystem is that it’s the aggregators who drive traffic to news outlets that report the news. When you understand that point, a lot of other things become clearer.

Content Aggregation infographic

On the other hand, tech entrepreneurs break their backs for the hope of getting written about on the Tech blogs. The reasons vary from getting credibility so they can recruit talent; exposure so they raise money; and a belief that they can acquire customers (the whole point of building a startup).

Which leads me to think despite all these random observations I’ve listed above, there is a fundamental efficiency evolving in news reporting that may give an insight into the future.

Let’s keep thinking. Other things to consider include:

  • The audience starts with the aggregators for news and the articles whereby the better headlines tend to perform better
  • News in its barest form is making awareness of an event (data); anything additional is analysis (cultural) which is to shape understanding around the event
  • The rise of ‘scientific journalism’ and social media allows society to discover and share information without a third party (due to technology tools).
  • Press releases are an invention to communicate a message so reporters can base their writing on, who often just copy and paste the words.

Some thinking about the future
News should be stripped to its barest form: a description of the event. It should be what we consider currently a “headline”, with preferably a link to the source material. Therefore professional journalists, bloggers, and the rest of the world should be competing to break news not on who can write the best prose but who can share a one line summary based on their ability to extract that information (either by being accidentally at the event or having exclusive relationships with the event maker). The cost of breaking the news should be simply a matter of who can share a link the quickest.

News Article - Wichita Falls Record News

Editorial, which is effectively analysis (or entertainment in some cases) and what blogging has become, should be left to what we now consider as “comments”. Readers get to have the “news” coloured, based on a managed curation of the top commentators.

Tying this together: Imagine a world where anyone could submit “news” and anyone could provide “editorial”? A rolling river of news of submitted headlines and links, and discussions roaring underneath the item reflecting the interpretation of the masses.

You could argue Twitter has become the first true example of that where most content is in full public view but with a restricted output (140 characters); people can share links with their comments; and the top stories tend to get retweeted which further gains exposure. Things could be similarly said about Digg, Reddit and Hacker News. But these services, along with Twitter (and Facebook) are simply an insight into a future that’s already begun. I think they are just early pioneers before the real solution comes, similar to how Tim Berners-Lee created a hypertext system in a saturated market that then became the standard; Google created a search engine in a saturated market that then became the standard; and WordPress created a blogging platform in a saturated market that then become the standard. Lots of people have tried to innovate in the news ecosystem, but I still don’t think the nut’s been cracked.

News has a lot of value, but there is different value based on who breaks it and who interprets it. For example, when I fire up some of my favourite aggregators, I tend to not click on the original headline but on brands I like so as to read their take on the event (though when I’m deeply looking into something, I dig for the source material). But the problem with news now, is there is a fundamental disruption on the cost structures supporting it: the economics favour those who break the news, with those that interpret news suffering as traditionally both these roles were considered the one function. Something’s going on and the answer is cheaper production, faster distribution and more of a decentralised effort across society and not the self-appointed curators.

While the newspaper industry is collapsing, something more fundamental is happening with news and we’re simply in the eye of the storm. Stay tuned.

The new magazine

Published on December 22, 2010 in social computing and Trends, with 0 Comments. Tags: , , , .

The Facebook homescreen is a remarkable thing. I just saw a video of a friend throwing food at birds; relatives taking pictures of themselves in a hot tub; a link to a mind-expanding article; and a status message that made me laugh. It made me think: the homescreen is the new magazine.

Sure, we can be simplistic with this and say lots of pictures and content makes thee a magazine. But what strikes me as fascinating is how much personal content is shared. People’s thoughts, insight into their lives, and the real-time autobiographical dictation by our “friends”. It makes me think of the fascination people have with celebrities, and how gossip magazines are some of the highest grossing of their kind. The same phenomenon is being exploited here — which is people want to know more about people they know. While with celebrities you could potentially say people do it due to a fixation on celebrity status and looks, I would argue the reason gossip magazines are so popular is due to the curiousity into the lives of people who are familiar. People would be equally fascinated with a magazine about celebrities as a magazine of their neighbours, if it was practical.

It’s almost like Facebook’s homescreen is the new media version of a publication. But of your friends. And like a glossy magazine. Of original content from otherwise hard-to-obtain situations.

Or more practically speaking, like a gossip magazine of your neighbours.

Why the angel bubble is not a bubble but actually the missing link

Published on December 1, 2010 in Internet and venture, with 3 Comments. Tags: , , , .

Naval Ravikant has written a thought-provoking post on the growing “angel bubble”. His thesis is that there is no bubble because the total money amount of money being invested in venture hasn’t increased. What’s changed he claims, is simply that instead of bigger Venture Capital (VC) rounds that are fewer in number, we’re seeing smaller but many more Angel investments occurring. In other words, the VC industry — not the Federal Reserve — are the ones that should be worried about this “bubble”.

I actually think what’s happening is that the market is now more resistent to bubbles. Contrary to a previous post of mine where I hypothesised the seed investment bubble (which I’ve since reconsidered and I’ll explain later in this post), the Angel “bubble” is a externality of one simple fact: it’s now a lot cheaper to build a startup. To understand this, watch the presentation Naval gave a few month’s ago which is the best I’ve seen to date in this trend.

So as a consequence, angel investment has now becoming (and rightfully so) the dominant way for a company to fund a startup company, with the existing VC model being relegated to more of a latter stage role.

Why is this a good thing? Well first of all, a lot more startups are being funded — but with the same amount of money in the economy. Statistical theory will claim that this alone will be good thing for the economy, as there is a higher probability of home runs. By spreading risk among more bases, there’s a better opportunity to generate returns.

But something more important is happening. VC’s now have a better qualification of a business to invest in. The huge amounts of capital they can invest into a business, are now going to be done after having seen a more advanced startup’s potential future, pushed to that stage by the seed accelerators or angels that cover their startup cost.

What I mean, is that by the time a company gets to VC, they will no longer be a startup — which is a business searching for a business model — but instead a high-growth business that’s now executing on their newly discovered and high potential business model. The VC firms are no longer needed in the business of starting something in information technology; they are instead now purely in the business of growing a business (where already some of the larger funds exclusively focus on). And the capital they are putting at risk on behalf of the endowments and pension funds that gave them that money, now have a lower risk of achieving higher returns.

Better still, the VC’s funds can focus on the future of technology like clean energy, biotechnology, and nano  technology — industries that were what information technology was in the 1970s: high startup cost, low chance of return.

And while that’s all well and good for the VC’s, this new funding lifecyle actually opens up opportunities for returns for everyone (which is why this isn’t a bubble). The seed accelerators and angels have the ability to pass the baton and exit their investments to better capitalised groups like the VC’s, allowing them to focus on the earlier stage of the market. With the IPO market dead since the introduction of the Sarbanes-Oxley legislation, tech has relied on acquisitions as the sole form of return. But with earlier stage investors like the Angels getting exits to VC’s, and the VC’s having better qualified businesses that they can grow to a large IPO, this is actually going to see the IPO market reopen due to this focus.

All in all, that’s not a bubble: that’s called efficiency and a rejuvenation. The Angel bubble isn’t a bubble but a maturity and evolution of the technology ecosystem. This is actually the missing link in efficient information technology being built — the link which now connects the super-highways of the economy to sustainable growth and value, not bubble.