0300 What principle drives Google’s strategy, calling attention to their $4 billion-plus in acquisitions?

So what’s the strategic value social media? The research tells us that about 100 or 110 million people belong to at least one social networking site such as Facebook, MySpace, Linked, and Second Life in the United States–as of September of last year.

The research also shows that the large growth in membership lies outside the United States. So, what’s the big, humongous idea here?

To really open up the idea of social media, I’d like to share something that I hear in an interview with Charlie Rose about two years ago with Eric Schmidt.

Charlie said, “Eric. Google! My God! What’s next?” Eric kind of chuckles and said, “You know, Charlie, in order to answer what’s the next — what’s the next wave of innovation, massive IPOs and wealth creation — I kind of have to talk a little bit about what’s already been.”

Eric Schmidt went on to say, “The 1980s were all about hardware. Innovation. IPOs. Wealth creation. It was all about hardware. The 1980s gave us Compaq, Connor, Dell, EMC, HP, Maxtor, Seagate - great hardware companies. By the time we exited the ’80s, we did not see any more big hardware companies.”

Because Schmidt was a Silicon Valley hardware guy, he kind of missed the whole mobile communications thing. But then so did most US firms.

“Then the ’90s,” He said, “It was all about software that gave us Adobe, Autodesk, IBM, Microsoft, Oracle, Peoplesoft, Siebold, and SAP. By the time it got to the year 2000, the software innovation space had been used up. No more big ideas. No more big IPOs.

“In the first six years of the 2000s, it was all about internet infrastructure: Amazon, eBay, Google and Yahoo. As of Spring 2006, there’s never going to be another eBay or a Yahoo. That innovation space has all been used up.

“Okay, now what’s next? Well, we don’t know exactly with the same clarity of 20/20 hindsight what’s next. But we’re pretty sure of two facets of what’s next.

Let me add, that as of May 2008, Google has written $4 billion in checks on one big idea - what really gets to the essence of the long tail.

He said, “The next wave of wealth and IPO and innovation is going to involve small groups of people that produce and consume small chunks of information, data and content.

“After so many production-consumption cycles” (what I call “information-knowledge turns”) “this small community [of producer-consumers] achieves critical mass and suddenly you get Skype, Flickr, FaceBook, and YouTube. It’s just a matter of distribution … and, you know, we have that covered!”

Then Charlie says, “Well, what’s the secret of getting small groups of people to produce and consume small chunks of information?” Eric laughed and he said, “That’s the $64 billion question!”

Fundamentally, we know that that achieving a critical mass of information-knowledge turns within a small community of producer-consumers takes us in the right direction. But need a more powerful way to understand this phenomenon.

This graphic depicts a knowledge-maturity cycle. I borrowed this from well-established learning theory, added a bit from a professor of mine from USSC, Gregory Bateson, and created a more powerful way of explaining the knowledge-maturity cycle.

All basic learning starts with trial-and-error: action-result, action-result, and so on.

As the pain of inferior results mount and the joy of better results inspires us, we learn something: we observe our action-results and take note of what induces or influences better or worse results.

As we apply what we observed in producing better results, we engage in learning how to learn. A number of these cycles reveal what we call a governing principle.

Now we begin applying these governing principles to subsequent action, not only achieving more consistent higher quality results; we find that we can discuss HOW we got better, more consistent results with others - especially those engaged in trial-and-error learning and discovery of their governing principles.

Finally, we not only get great results; we also help others get great results, learning how others learn and how they learn from us. This leads to what in this model I call “knowledge maturity.”

We won’t spend a lot of time providing an in-depth explanation of the stages of knowledge maturity; but here’s just a quick summary. According to academics and theorists most new knowledge first emerges as “tacit knowledge” of practitioners; with effort to document tactic knowledge, it becomes “articulated knowledge; when apply articulated knowledge to a social context and the intent to train others in it, articulated knowledge becomes “procedural knowledge” - which we see in training manuals, curricula, and certification programs. Finally, as procedural knowledge diffuses into a culture and social networks, procedural knowledge becomes “networked knowledge.” Hoo boy. That’s a lot to take in

So this knowledge-maturity cycle helps us understand how a small community of producer-consumers of social assets might achieve a critical mass of information-knowledge turns — what Eric Schmidt believes is the next Big Thing.

So what’s the ultimate asset in Google’s world? To borrow a term from Dennis Pannuto, the ultimate asset of the networked economy is “Social Asset.” Small chucks of information and content with which you and I have so identified, those chunks have become an extension of our social identities - who we are.

As I suggested, everything begins as tacit knowledge: informal, spoken, and coded in short-hand cribbed notes. The former CTO of Xerox, John Seely Brown wrote a stunningly good book about the utility of tactic knowledge — titled, “The Social Life of Information.”

John Seely Brown asks the question, “How come our Xerox DocuCenter techs don’t read the manuals? Are the manuals poorly written. Did we employ illiterate techs? We spend tens of millions — hundreds of millions of dollars — on documentation, and our techs don’t read them. What’s the problem with our manuals?”

He spent a couple of years hanging out with technicians. He found that the techs got together in the morning before work, mid-morning coffee breaks, lunch time, and after work coffee or drinks to talk shop, swap notes, brainstorm, and coach each other on how to solve never-before-solved problem.

It stunned John Seely Brown that the field techs approach each machine like it was a person, actually a new and important woman. Every machine had its own personality. You had to learn to finesse things; brute force always created a big mess.

John Seely Brown found a small dedicated groups of individuals using a lot of communication, interaction and collaboration among peer practitioners to produce new knowledge and insights. He discovered that most of the useful knowledge lived as tacit knowledge as informal, spoken and cribbed notes using strange code words only known to the peer practitioners of a particular pod.

That really starts to answer Charlie Rose’s $64 billion question, “What’s the secret of getting small groups of people to produce and consume small chunks of information?”

You could say that the next 5 or 10 years and the next round of innovation, massive IPOs, and wealth creation emphasizes one thing: speeding the transformation of tacit knowledge into networked knowledge.

Ultimately, it’s all about creating a community of practitioners within a social media network.

Recently we have used model to launch a new company, using principles of DAM and social media, to support English language learning with mobile phones and Skype?

TITLE:
Long Tails Wag Big Dogs

SUBTITLE:
How the synthesis of professional and user-generated content will continue transforming media, entertainment, publishing, and marketing

KEY TOPIC:
How digital asset management speed convergence of professional and user-generated content

PRESENTATION DATE:
12 May 2008

VENUE:
Henry Stewart’s DAM and MOM Symposium, New York, NY USA