Tag Archives: innovation

Real Estate as Platform: Canadian Real Estate Industry looking for developers

As some readers know, I’ve been asked from time to time by members of the real estate industry to comment on the future of their industry, how technology might impact it and how open data (both the government variety, and the trend by regulators to make the industry’s data more open) may alter it.

It is with some interest that I point readers, as well as software vendors and others, to this Request for Information (RFI) issued by the Canadian Real Estate Association yesterday. The RFI is titled: A National Shared Development Platform and App Marketplace and this line from the RFI is particularly instructive:

This Request for Information (RFI) is issued by The Canadian Real Estate Association (CREA) to qualified service providers who may be interest in creating a National Shared Development Platform where certified, independent software vendors (ISVs) and data providers could develop, extract and combine data to generate new tools and services for REALTORS® and their clients.

In other words, from my reading it looks like the industry is seeking a data sharing portal that can serve as a platform for internally and externally driven innovation. It is very aligned with what I’ve been suggesting, so will be interesting to see how it evolves.

Intrigue.

When Industries Get Disrupted: Toronto Real Estate Boards Sad Campaign

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As some of my readers know I’ve been engaged by the real estate industry at various points over the last year to share thoughts about how they might be impacted in a world where listings data might be more open.

So I was saddened to read the other day about this misleading campaign the Toronto Real Estate Board (TREB) has launched against the Competition Bureau. It’s got all the makings of a political attack ad. Ominous warnings, supportive polling and a selective use of facts. You can check it out at the Protectyourprivacy.ca website. (As an aside, those concerned with online issues like myself should be beating ourselves up for letting TREB snag that URL. There are literally dozens of more compelling uses for that domain, from Bill c-30 to advocacy around privacy setting in Facebook or Google.)

The campaign does, however, make a wonderful mini-case study in how some industries react when confronted with disruptive change. They don’t try to innovate out of the problem, they go to the lawyers (and the pollsters and marketers). To be fair, not everyone in the Real Estate industry is behaving this way. Over the past several months I’ve had the real pleasure of meeting many, many real estate agents across the country who have been finding ways to innovate.

Which is why I suspect this campaign is actually quite divisive. Indeed, since the public doesn’t really know or care who does what in the real estate industry, they’re just going lump everyone in together. Consequently, if this campaign backfires (and there is a risk that if anyone pays attention to it, it could) than the entire industry could be tarred, not just those at TREB.

So what is the big scary story? Well according to TREB the Competition Bureau has gone rogue and is going to force Canadians to disclose their every personal detail to the world! Specifically, in the words of the Protectyourprivacy.ca website:

The Competition Bureau is trying to dismantle the safeguards for consumers’ personal and private information.

If they get their way, your sensitive personal home information could be made publicly available to anyone on the internet.

Are your alarm bells going off yet? If you’re like me, the answer is probably yes. But like me it not for any of the reasons TREB wants.

To begin with, Canada has a fairly aggressive Privacy Commissioner who is very willing to speak her mind. I suspect she (and possibly her provincial counterparts) were consulted before Competition Commissioner issued her request. And like most Canadians I likely trust the Privacy Commissioner more than TREB. She’s been fairly quiet.

But of course, why speculate about issues! Let’s go straight to the source. What did the Competition Bureau actually ask for? Well you can find all the relevant documents here (funny how TREB’s campaign website does not link to any of these), but check it out yourself. Here is my breakdown of the issue:

1. This is actually about enabling new services – TREB essentially uses MLS – the online listing service where you look for homes, as a mechanism to prevent new ways of looking for homes online from emerging. I suspect that consumers are not well served by this outcome. That is certainly how the Competition Bureau feels.

2. The Competition Bureau is not asking for information like your name and street address to be posted online for all to see (although I actually think consumers should be given that choice). Indeed you can tell a lawyer was involved in drafting the protectyourprivacy.ca website. There are all these strategically inserted “could’s” as in “your sensitive personal home information could be made publicly available.” Err… that’s a fair degree less alarming.

What the Competition Bureau appears to want is to enable brokers’ client to browse homes on a password-protected site (called a “virtual office website”). Here they could get more details than what is currently available to the public at large on MLS. However, even these password protected site might not include things like the current occupants name. It would however (or at least hopefully) include previous sales prices, as knowing the history of the market is quite helpful. I think most consumers agree that a little more transparency around pricing in the real estate industry would be good for consumers.

3. Of course, anything that happens on such a website would still have to comply with Privacy Laws and would, ultimately, still require the sellers consent.

According to TREB however, implementing these recommendations will lead to mayhem and death. Literally. Here is a quote from their privacy officer:

“There is a real possibility of break-ins and assaults; you only have to read the headlines to imagine what might happen. You hear stories about realtors getting attacked and killed. Can you imagine if we put that information out there about consumers? You can only imagine the headlines.”

Happily the Globe confirmed that the Toronto Police department is not aware of realtors being targeted for attack.

But here is the real punchline. Everything the Competition Commissioner is asking for already exists in places like Nova Scotia or across the entire United States.

Here’s what these lucky jurisdictions have not experienced: a rash of violence resulting from burglars and others browsing homes online (mostly because if they were going to do that… they could JUST USE GOOGLE STREET VIEW.).

And here’s what they have experienced: an explosion in new and innovative ways to browse, buy and sell homes. From Trulia to Zillow to Viewpoint consumers can get a radically better online experience than what is available in Toronto.

I suspect that if consumers actually hear about this campaign many – including most under the age of 40 – are going to see it as an effort by an industry to protect itself from new competition, not as an effort to protect them. If the story does break that way, it will be evidence to many consumers that the gap between them and the Real Estate industry is growing, not shrinking.

Smarter Ways to Have School Boards Update Parents

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Earlier this month the Vancouver School Board (VSB) released an iPhone app that – helpfully – will use push notifications to inform parents about school holidays, parent interviews, and scheduling disruptions such as snow days. The app is okay, it’s a little clunky to use, and a lot of the data – such as professional days – while helpful in an app, would be even more helpful as an iCal feed parents could subscribe to in their calendars.

That said, the VSB deserves credit for having the vision of developing an app. Positively, the VSB app team hopes to add new features, such as letting parents know about after school activities like concerts, plays and sporting events.

This is a great innovation and without a doubt, other school boards will want apps of their own. The problem is, this is very likely to lead to an enormous amount of waste and duplication. The last thing citizens want is for every school board to be spending $15-50K developing iPhone apps.

Which leads to a broader opportunity for the Minister of Education.

Were I the Education Minister, I’d have my technology team recreate the specs of the VSB app and propose an RFP for it but under an open source license and using phonegap so it would work on both iPhone and Android. In addition, I’d ensure it could offer reminders – like we do at recollect.net – so that people could get email or text messages without a smart phone at all.

I would then propose the ministry cover %60 percent of the development and yearly upkeep costs. The other 40% would be covered by the school boards interested in joining the project. Thus, assuming the app had a development cost of $40K and a yearly upkeep of $5K, if only one school board signed up it would have to pay $16K for the app (a pretty good deal) and $2K a year in upkeep. But if 5 school districts signed up, each would only pay $3.2K in development costs and $400 dollars a year in upkeep costs. Better still, the more that sign up, the cheaper it gets for each of them. I’d also propose a governance model in which those who contribute money for develop would have the right to elect a sub-group to oversee the feature roadmap.

Since the code would be open source other provinces, school districts and private schools could also use the app (although not participate in the development roadmap), and any improvements they made to the code base would be shared back to the benefit of BC school districts.

Of course by signing up to the app project school boards would be committing to ensure their schools shared up to date notifications about the relevant information – probably a best practice that they should be doing anyways. This process work is where the real work lies. However, a simple webform (included in the price) would cover much of the technical side of that problem. Better still the Ministry of Education could offer its infrastructure for hosting and managing any data the school boards wish to collect and share, further reducing costs and, equally important, ensuring the data was standardized across the participating school boards.

So why should the Ministry of Education care?

First, creating new ways to update parents about important events – like when report cards are issued so that parents know to ask for them – helps improve education outcomes. That should probably reason enough, but there are other reasons as well.

Second, it would allow the ministry, and the school boards, to collect some new data: professional day dates, average number of snow days, frequency of emergency disruptions, number of parents in a district interested in these types of notifications. Over time, this data could reveal important information about educational outcomes and be helpful.

But the real benefit would be in both cost savings and in enabling less well resourced school districts to benefit from technological innovation wealthier school districts will likely pursue if left to their own devices. Given there are 59 english school districts in BC, if even half of them spent 30K developing their own iPhone apps, then almost $1M dollars would be collectively spent on software development. By spending $24K, the ministry ensures that this $1M dollars instead gets spent on teachers, resources and schools. Equally important, less tech savvy or well equipped school districts would be able to participate and benefit.

Of course, if the City of Vancouver school district was smart, they’d open source their app, approach the Ministry of Education and offer it as the basis of such a venture. Doing that wouldn’t just make them head of the class, it’d be helping everyone get smarter, faster.

Using Data to Make Firefox Better: A mini-case study for your organization

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I love Mozilla. Any reader of this blog knows it. I believe in its mission, I find the organization totally fascinating and its processes engrossing. So much so I spend a lot of time thinking about it – and hopefully, finding ways to contribute.

I’m also a big believer in data. I believe in the power of evidence-based public policy (hence my passion about the long-form census) and in the ability of data to help organizations develop better products, and people make smarter decisions.

Happily, a few months ago I was able to merge these two passions: analyzing data in an effort to help Mozilla understand how to improve Firefox. It was fun. But more importantly, the process says a lot about the potential for innovation open to organizations that cultivate an engaged user community.

So what happened?

In November 2010, Mozilla launched a visualization competition that asked: How do People Use Firefox? As part of the competition, they shared anonymous data collected from Test Pilot users (people who agreed to share anonymous usage data with Mozilla). Working with my friend (and quant genius) Diederik Van Liere, we analyzed the impact of add-on memory consumption on browser performance to find out which add-ons use the most memory and thus are most likely slowing down the browser (and frustrating users!). (You can read about our submission here).

But doing the analysis wasn’t enough. We wanted Mozilla engineers to know we thought that users should be shown the results – so they could make more informed choices about which add-ons they download. Our hope was to put pressure on add-on developers to make sure they weren’t ruining Firefox for their users. To do that we visualized the data by making a mock up of their website – with our data inserted.

For our efforts, we won an honourable mention. But winning a prize is far, far less cool than actually changing behaviour or encouraging an actual change. So last week, during a trip to Mozilla’s offices in Mountain View, I was thrilled when one of the engineers pointed out that the add-on site now has a page where they list add-ons that most slow down Firefox’s start up time.

(Sidebar: Anyone else find it ironic that “FastestFox: Browse Faster” is #5?)

This is awesome! Better still, in April, Mozilla launched an add-on performance improvement initiative to help reduce the negative impact add-ons can have on Firefox. I have no idea if our submission to the visualization competition helped kick-start this project; I’m sure there were many smart people at Mozilla already thinking about this. Maybe it was already underway? But I like to believe our ideas helped push their thinking – or, at least, validated some of their ideas. And of course, I hope it continues to. I still believe that the above-cited data shouldn’t be hidden on a webpage well off the beaten path, but should be located right next to every add-on. That’s the best way to create the right feedback loops, and is in line with Mozilla’s manifesto – empowering users.

Some lessons (for Mozilla, companies, non-profits and governments)

First lesson. Innovation comes from everywhere. So why aren’t you tapping into it? Diederik and I are all too happy to dedicate some cycles to thinking about ways to make Firefox better. If you run an organization that has a community of interested people larger than your employee base (I’m looking at you, governments), why aren’t you finding targeted ways to engage them, not in endless brainstorming exercises, but in innovation challenges?

Second, get strategic about using data. A lot of people (including myself) talk about open data. Open data is good. But it can’t hurt to be strategic about it as well. I tried to argue for this in the government and healthcare space with this blog post. Data-driven decisions can be made in lots of places; what you need to ask yourself is: What data are you collecting about your product and processes? What, of that data, could you share, to empower your employees, users, suppliers, customers, whoever, to make better decisions? My sense is that the companies (and governments) of the future are going to be those that react both quickly and intelligently to emerging challenges and opportunities. One key to being competitive will be to have better data to inform decisions. (Again, this is the same reason why, over the next two decades, you can expect my country to start making worse and worse decisions about social policy and the economy – they simply won’t know what is going on).

Third, if you are going to share, get a data portal. In fact, Mozilla needs an open data portal (there is a blog post that is coming). Mozilla has always relied on volunteer contributors to help write Firefox and submit patches to bugs. The same is true for analyzing its products and processes. An open data portal would enable more people to help find ways to keep Firefox competitive. Of course, this is also true for governments and non-profits (to help find efficiencies and new services) and for companies.

Finally, reward good behaviour. If contributors submit something you end up using… let them know! Maybe the idea Diederik and I submitted never informed anything the add-on group was doing; maybe it did. But if it did… why not let us know? We are so pumped about the work they are doing, we’d love to hear more about it. Finding out by accident seems like a lost opportunity to engage interested stakeholders. Moreover, back at the time, Diederik was thinking about his next steps – now he works for the Wikimedia Foundation. But it made me realize how an innovation challenge could be a great way to spot talent.

The next Open Data battle: Advancing Policy & Innovation through Standards

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With the possible exception of weather data, the most successful open data set out there at the moment is transit data. It remains the data with which developers have experimented and innovated the most. Why is this? Because it’s been standardized. Ever since Google and the City of Portland creating the General Transit Feed Specification (GTFS) any developer that creates an application using GTFS transit data can port their application to over 100+ cities around the world with 10s and even 100s of millions of potential users. Now that’s scale!

All in all the benefits of a standard data structure are clear. A public good is more effectively used, citizens receive enjoy better service and companies (both Google and the numerous smaller companies that sell transit related applications) generate revenue, pay salaries, etc…

This is why, with a number of jurisdictions now committed to open data, I believe it is time for advocates to start focusing on the next big issue. How do we get different jurisdictions to align around standard structures so as to increase the number of people to whom an application or analysis will be relevant? Having cities publish open data sets is a great start and has led to real innovation, next generation open data and the next leaps in innovation will require some more standards.

The key, I think, is to find areas that meet three criteria:

Government Data: Is there relevant government data about the service or issue that is available?
Demand: Is this a service for which there is regular demand? (this is why transit is so good, millions of people touch the service on a daily basis)
Business Model: Is there a business that believes it can use this data to generate revenue (either directly, or indirectly)

Two comments on this.

First, I think we should look at this model because we want to find places where the incentives are right for all the key stakeholders. The wrong way to create a data structure is to get a bunch of governments together to talk about it. That process will take 5 years… if we are lucky. Remember the GTFS emerged because Google and Portland got together, after that, everybody else bandwagoned because the value proposition was so high. This remains, in my mind, not the perfect, but the fastest and more efficient model to get more common data structures. I also respect it won’t work for everything, but it can give us more successes to point to.

Which leads me to point two. Yes, at the moment, I think that target in the middle of this model is relatively small. But I think we can make it bigger. The GTFS shows cities, citizens and companies that there is value in open data. What we need are more examples so that a) more business models emerge and b) more government data is shared in a structured way across multiple jurisdictions. The bottom and and right hand circles in this diagram can, and if we are successful will, move. In short, I think we can create this dynamic:

So, what does this look like in practice?

I’ve been trying to think of services that fall in various parts of the diagram. A while back I wrote a post about using open restaurant inspection data to drive down health costs. Specifically around finding a government to work with a Yelp!, Bing or Google Maps, Urban Spoon or other company to integrate the inspection data into the application. That for me is an example of something that I think fits in the middle. Government’s have the data, its a service citizens could touch on a regular base if the data appeared in their workflow (e.g. Yelp! or Bing Maps) and for those businesses it either helps drive search revenue or gives their product a competitive advantage. The Open311 standard (sadly missing from my diagram), and the emergence of SeeClickFix strike me as another excellent example that is right on the inside edge of the sweet spot).

Here’s a list of what else I’ve come up with at the moment:

You can also now see why I’ve been working on Recollect.net – our garbage pick up reminder service – and helping develop a standard around garbage scheduling data – the Trash & Recycling Object Notation. I think it is a service around which we can help explain the value of common standards to cities.

You’ll notice that I’ve put “democracy data” (e.g. agendas, minutes, legislation, hansards, budgets, etc…) in the area where I don’t think there is a business plan. I’m not fully convinced of this – I could see a business model in the media space for this – but I’m trying to be conservative in my estimate. In either case, that is the type of data the good people at the Sunlight Foundation are trying to get liberated, so there is at least, non-profit efforts concentrated there in America.

I also put real estate in a category where I don’t think there is real consumer demand. What I mean by this isn’t that people don’t want it, they do, but they are only really interested in it maybe 2-4 times in their life. It doesn’t have the high touch point of transit or garbage schedules, or of traffic and parking. I understand that there are businesses to be built around this data, I love Viewpoint.ca – a site that takes mashes opendata up with real estate data to create a compelling real estate website – but I don’t think it is a service people will get attached to because they will only use it infrequently.

Ultimately I’d love to hear from people on ideas they on why might fit in this sweet spot. (if you are comfortable sharing the idea, of course). Part of this is because I’d love to test the model more. The other reason is because I’m engaged with some governments interested in getting more strategic about their open data use and so these types of opportunities could become reality.

Finally, I just hope you find this model compelling and helpful.

If the Prime Minister Wants Accountable Healthcare, let's make it Transparent too

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Over at the Beyond the Commons blog Aaron Wherry has a series of quotes from recent speeches on healthcare by Canadian Prime Minister Stephen Harper in which the one constant keyword is… accountability.

Who can blame him?

Take everyone promising to limit growth to a still unsustainable 6% (gulp) and throw in some dubiously costly projects ($1 billion spent on e-health records in Ontario when an open source solution – VistA – could likely have been implemented at a fraction of the cost) and the obvious question is… what is the country going to do about healthcare costs?

I don’t want to claim that open data can solve the problem. It can’t. There isn’t going to be a single solution. But I think it could help spread best practices, improve customer choice and service as well as possibly yield other potential benefits.

Anyone who’s been around me for the last month knows about my restaurant inspection open data example (which could also yield healthcare savings) but I think we can go bigger. A Federal Government that is serious about accountability in Healthcare needs to build a system where that accountability isn’t just between the provinces and the feds, it needs to be between the Healthcare system and its users; us.

Since the feds usually attach several provisions to their healthcare dollars, the one I’d like to see is an open data provision. One where provinces, and hospitals are required to track and make open a whole set of performance data, in machine readable formats, in a common national standard, that anyone in Canada (or around the world) can download and access.

Some of the data I’d love to see mandated to be tracked and shared, includes:

Emergency Room wait times – in real time.
Wait times, by hospital, for a variety of operations
All budget data, down to the hospital or even unit level, let’s allow the public to do a cost/patient analysis for every unit in the country
Survival rates for various surgeries (obviously controversial since some hospitals that have the lowest rates are actually the best since they get the hardest cases – but let’s trust the public with the data)
Inspection data – especially if we launched something akin to the Institute for Health Management’s Protecting 5 Millions Lives Campaign
I’m confident there is much, much more…

I can imagine a slew of services and analysis that emerge from these, if nothing than a citizenry that is better informed about the true state of its healthcare system. Even something as simple as being able to check ER wait times at all the hospitals near you, so you can drive to the one where the wait times are shortest. That would be nice.

Of course, if the Prime Minister wants to go beyond accountability and think about how data could directly reduce costs, he might take a look at one initiative launched south of the border.

If he did, he might be persuaded to demand that the provinces share a set of anonymized patient records to see if academics or others in the country might be able to build better models for how we should manage healthcare costs. In January of this year I witnessed the launch of the $3 million dollar Heritage Health Prize at the O’Reilly Strata Conference in San Diego. It is a stunningly ambitious, but realistic effort. As the press release notes:

Contestants in the challenge will be provided with a data set consisting of the de-identified medical records of 100,000 patients from the 2008 calendar year. Contestants will then be required to create a predictive algorithm to predict who was hospitalized during the 2009 calendar year. HPN will award the $3 million prize(more than twice what is paid for the Nobel Prize in medicine) to the first participant or team that passes the required level of predictive accuracy. In addition, there will be milestone prizes along the way, which will be awarded to teams leading the competition at various points in time.

In essence Heritage Health is doing to patient management what Netflix (through the $1M Netflix prize) did to movie selections. It’s crowdsourcing the problem to get better results.

The problem is, any algorithm developed by the winners of the Heritage Health Prize will belong to… Heritage Health. This means the benefits of this innovation cannot benefit Canadians (nor anyone else). So why not launch a prize of our own. We have more data, I suspect our data is better (not limited to a single state) and we could place the winning algorithm in the public domain so that it can benefit all of humanity. If Canadian data helped find efficiencies that lowered healthcare costs and improved healthcare outcomes for everyone in the world… it could be the biggest contribution to global healthcare by Canada since Federick Banting discovered insulin and rescued diabetics everywhere.

Of course, open data, and sharing (even anonymized) patient data would be a radical experiment for government, something new, bold and different. But 6% growth is itself unsustainable and Canadians need to see that their government can do something bold, new and innovative. These initiatives would fit the bill.

Some theories on why Canadians are the #1 user of YouTube (it's not all good)

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In theory I’m on break – trying to recharge my batteries, summit mount inbox zero and finish off a couple of papers I owe various good people – but a few people have sent me links to this story (same content here at the CBC), about how Canadians are embrace the web like few others citizens of the world.

Naturally I’m thrilled and unsurprised. Canadians live in a large country and connectivity has always been something that has driven us. Indeed the country as we know it only exists because of a deal on connectivity – my own province of British Columbia agreed to enter the Dominion only if a transcontinental railway was built to connect it with the rest of the emerging country. Connectivity is in our blood.

There is, however, I suspect another reason why Canadians have taken to the web and it has to do with our monopolies and content regulation.

The article notes that Canada is the number one viewer of YouTube videos:

“In Canada, YouTube per capita consumption of video is No. 1 in the world, it’s just absolutely crazy in terms of how passionate Canadians are about YouTube,” said Chris O’Neill, Canada’s country director for Google.

I wonder, however, if this is because of Canada’s proximity to and familiarity with American created content, but our limited access to seeing said content. The CRTC restricts Canadians access to US channels (and as a result, TV shows). Consequently, much like I argued that the continued success of Blockbuster in Canada is not a sign of effective corporate management but poor innovation strategy and telecommunication regulation Canadians may be flooding to YouTube because they can’t access the content they want through more traditional channels.

If true (and I concede I don’t know what Canadians are watching on YouTube) then on the brightside, this is good news for Canadian consumers are able to get what they want access to, regardless of how the government tries to shape their tastes. Indeed, I suspect that American content isn’t the only thing driving YouTube traffic, as a country of immigrants I’m sure that new (and longstanding) Canadians of a range of backgrounds use YouTube to stay on top of culture, shows and other content from their countries of origin. If all this is helping Canadians become more web savvy and appreciative of the benefits of an open web – then all the better!

On the flip side, this could be a sign that a whole series of Canadian companies (and the jobs they create) are imperiled because they refuse to innovate as quickly as Canadians would like. This isn’t a reason to preserve them, but it is a reason for us to start demanding more from the executives of these companies.

Is Government Funding the Kiss of Death?

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Over the past few years/months talking to various people in the charitable and non-profit sector a recurring theme has emerged: More and more of them are either eschewing government funding or trying to find ways to do so.

Given that governments are the largest source of funding… why would they do this?

The reason is simple. The overhead of administering, overseeing and reporting back on (particularly federal and provincial) government grants or awards has become so onerous that the costs of oversight are increasingly greater than the value of the grant itself. This is particularly true of smaller grants (in the 5 digit range) but still true of even 6 figure awards. In addition to oversight, many people in the sector inform me that governments are not only looking more closely at how recipients spend the money they receive but are increasingly assertive in specifying how they should spend it.

So, in sum, it’s not hard to see why organizations want to walk away. The costs of the money is increasingly too great. On the one hand, compliance means more and more money is diverted to administration – rather than the core mission of the group – and increasing oversight means a loss of autonomy. Consequently, less money can go towards innovative, but riskier, new approaches that might yield better outcomes, or greater efficiencies.

The outcome, I fear, is a non-profit and charitable sector that starts to cleave in two.

On the one side will be non-profits (like those of some colleagues I know) that see eschewing government money as the only way to stay nimble, innovative and independent. These groups will either find progressive granting organizations, wealthy individuals or alternative ways create revenues. Freed to spend their funds as they see best, the most effective will achieve escape velocity and be able to operate for long periods of time without needing to consider government funding.

On the other side, there risks being those locked into government dependency. Unable to fund new projects and innovative approaches that might attract new external funding, they will be trapped in a government deathgrip, forced to adopt traditional approaches and take on excessive overhead, all in order to meet their funding obligations. In short, they will need to mirror the very bureaucracy that not being independent from was what was supposed to give them a competitive advantage.

On the one hand, this is the kind of situation that makes me jealous of the United States with its large pool of private foundations and granting organizations that ensure innovation thrives in the non-profit/charitable sector. But that is a structural difference smaller countries like Canada will not be able to overcome. We need our government’s to be smarter since we can’t replicate the American model.

This is made all the more difficult since those who’ve achieved escape velocity want little to do with government, while those dependent on government funding are probably the least likely (or empowered) to speak up. Sadly, no one wants to upset the government… (why bite the hand that feeds, even if the fruit is poisoned?) so we live in a world of silence on this issue.

I’ll confess, I’m somewhat stumped by the issue but I am worried about it. This country depends on non-profits more than people realize… anything that hampers their effectiveness is a collective drain on productivity, efficiency and competitiveness, to say nothing of social justice.

The Social Network and the real villains of the old/new economy

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The other week I finally got around to watching The Social Network. It’s great fun and I recommend going out and watching it whether you’re a self-professed social media expert or don’t even have a Facebook account.

Here are some of my thoughts about the movie (don’t worry, no spoilers here).

1. Remember this is a Hollywood movie: Before (or after) you watch it, read Lawrence Lessig’s fantastic critique of the movie. This review is so soundly brilliant and devastating I’m basically willing to say, if you only have 5 minutes to read, leave my blog right now and go check it out. If you are a government employee working on innovation, copyright or the digital economy, I doubly urge you to read it. Treble that if you happen to be (or work for) the CIO of a major corporation or organization who (still) believes that social media is a passing phase and can’t see its disruptive implications.

2. It isn’t just the legal system that is broken: What struck me about the movie wasn’t just the problems with the legal system, it was how badly the venture capitalists come off even worse. Here is supposed to be a group of people who are supposed to help support and enable entrepreneurs and yet they’re directing lawyers to draft up contracts that screw some of the original founders. If the story is even remotely true it’s a damning and cautionary tale for anyone starting (or looking to expand) a company. Indeed, in the movie the whole success of Facebook and the ability of (some) of the owners to retain control over it rests on the fact that graduates of the first internet bubble who were screwed over by VCs are able to swoop in and protect this second generation of internet entrepreneurs. Of course they – played by Sean Parker (inventor of Napster) – are parodied as irresponsible and paranoid.

One thought I walked away with was: if, say as a result of the rise of cloud computing, the costs of setting up an online business continue to drop, at a certain point the benefits of VC capital will significantly erode or their value proposition will need to significantly change. More importantly, if you are looking to build a robust innovation cluster, having it built on the model that all the companies generated in it have the ultimate goal of being acquired by a large (American) multinational doesn’t seem like a route to economic development.

Interesting questions for policy makers, especially those outside Silicon Valley, who obsess about how to get venture capital money into their economies.

3. Beyond lawyers and VCs, the final thing that struck me about the movie was the lack of women doing anything interesting. I tweeted this right away and, of course, a quick Google search reveals I’m not the only one who noticed it. Indeed, Aaron Sorkin (the film’s screenwriter) wrote a response to questions regarding this issue on Emmy winner Ken Levine’s blog. What I noticed in The Social Network is there isn’t a single innovating or particularly positive female character. Indeed, in both the new and old economy worlds shown in the film, women are largely objects to be enjoyed, whether it is in the elite house parties of Harvard or the makeshift start-up home offices in Palo Alto. Yes, I’m sure the situation is more complicated, but essentially women aren’t thinkers – or drivers – in the movie. It’s a type of sexism that is real, and in case you think it isn’t just consider a TechCrunch article from the summer titled “Too Few Women In Tech? Stop Blaming The Men” in which the author, Michael Arrington, makes the gobsmacking statement:

The problem isn’t that Silicon Valley is keeping women down, or not doing enough to encourage female entrepreneurs. The opposite is true. No, the problem is that not enough women want to become entrepreneurs.

Really? This is a country (the United States) where women start businesses at twice the rate of men and where 42% of all businesses are women owned? To say that women don’t want to be entrepreneurs is so profoundly stupid and incorrect it perfectly reflects the roles women are shoveled into in The Social Network. And that is something the new economy needs to grapple with.

Why Blockbuster’s success in Canada is a bad news story

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I noticed today in the Globe that while Blockbuster (the movie rental company) has declared bankruptcy in the United States, here in Canada the branch of the company is doing fine, indeed it is still profitable:

Blockbuster Canada vice-president and general manager Barry Guest said in a statement early Thursday that its operations are still profitable. “Blockbuster Canada operates independently of the U.S. and is financially stable,” he said.

So how can this be a bad news story?

Clues to the answer lie deeper in the article, in this paragraph:

Once a home entertainment powerhouse in the United States, Blockbuster has been losing market share and money for years as more Americans rent DVDs from subscription service Netflix Inc. and popularity surged for streaming video over the Internet.

Let’s be clear, Blockbuster in Canada is profitable not because it has been innovative. Not because it has reinvented itself in a digital era. Not because it has been visionary. Blockbuster is okay because the innovations and services that have devastated its southern partner basically aren’t available in Canada. In short, when it comes to rolling out cutting edge services (or even kind-of cutting edge services) in the digital media/infrastructure space Canada falls short.

This, of course, is well documented (hello cellphone contracts!) and it is the real story here! How can Canada – and Canadian companies – expect to be leaders in the digital space (I’m looking at you, forthcoming Digital Economy Strategy) if even the most mainstream services available in the US (mainstream enough to destroy an incumbent) haven’t even made it north of the border? Domestically, who are we competing with, competitors from an analog era? This is not a marketplace that is likely to produce the next Tivo, Netflix or whatever.

This story feels like a metaphor for pretty much everything that is wrong with innovation and competitiveness in this space in Canada, right down to the fact that we appear to celebrating the ongoing success of blockbuster. Sigh.

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