The Blog of Burgher Jon

Over the last week, I’ve made a couple posts about how the digital age has impacted our ability to solve real world problems.  Last week I spoke about Virginia Montanez (the artist formerly known as PittGirl) and her efforts to bring home a couple Burghers and the orphans they’ve been looking after from Haiti.    On Saturday, I wondered aloud (or into this forum) whether Twitter could have saved Kitty Genovese (my conclusions were that it was as likely to hurt the situation as help it).

Before I get to my recommendations, a few updates:

• The plane that will pick up the orphans in Haiti has arrived according to the Post-Gazette.  Completely unmentioned in the article are; Bram R (the author of The Comet) who spent at least one day working the phones with Mary Beth Buchanan to get the clearances for the orphans and Virginia Montanez who at the least worked pro bono as publicist for the McCultries and at most is responsible for getting the word out there that got them home.
• A girl in Haiti was pulled from the rubble after it was noticed that there were text messages coming from a particular pile.  The details are unclear, but this seems relevant.  It’s not apparent whether she texted an SOS or the radio waves were what led them to the spot.
• In Pittsburgh a dog was lost in the Shadyside area and was reported on twitter by Jen (of a fabulous mess fame).  The dog’s owner was found, but not through twitter.  In fact, it was through a simple call to the humane society.

Ok, with those updates in mind.  My idea for twitter, experts, would work something like this.  If I read a tweat that I think someone else should do something about I should be able to flag it for them.  If enough people flag a particular item, then it would rise to the experts attention.  For example, I follow several members of city council.  If someone tweeted that the police station in the south side was in disrepair.  I could flag it for the members of council.  If enough people flagged the message, say 10% of your followers, it rises to the top of your screen.

This would work for EMS (though certainly not to the point of replacing 911).  On the other hand, if Pittsburgh 311 had a twitter account…  Imagine if I saw that a family of monkeys had moved in to one of the pot holes on McCardle Roadway (yes, they’re that big).  My followers would then flag the message for Pittsburgh 311 (and maybe the humane society or zoo).  A couple retweets and a few more flags and 311 would know about a situation without me picking up the phone to wait on hold.

It works for companies too.  If a blogger I know posts a rumor about Google and I (and several others) flag it for @ericshmidt (a founder of Google), we may get an official response quickly.

Think about the 4 situations discussed above.  I think it had the potential to help in all four cases.

As I go through the week, I use twitter to send out little updates and links.  I realize that I do this quite a bit and that not all of you have Twitter, so with that in mind I’d like to take Sunday to do sort of a week in review.  I’ve selected the most useful of my tweets from the last week and placed them in to the categories that I use in this blog.  Please let me know if you find this useful or if you don’t like it.

Local Politics

• Good to hear from a coucil member RT @nataliarudiak Progress does not come from those who are content.

Me

• You know where you don’t want to be this morning? On my to-do list. Everything on that list is getting its ass kicked.

National Politics

• Pat Robertson says Haiti paying for “pact to the devil”. Gabriel forced to hide God’s lightning bolts.http://tinyurl.com/yjtavxs

Pittsburgh

• BitArmor now Trustwave Pittsburgh… Without terms, hard to tell if this is a good thing. http://tinyurl.com/yhzbets

Startups

• Specialized FourSquare Page for Harvard. Great potential ramifications: City tours, bar tours, shopping trips… http://tinyurl.com/yguwot2

Personal Technology

• It’s like the G Drive, but Google Allows It! http://tinyurl.com/ybkd6qp
• RT @cdixon privacy is dead when people open up their email inboxes to the public. Until then people are just managing their online persona.

Tech News

• Box.net CEO Levie speculates where on the cloud adoption curve enterprise IT is… completely forgets IaaS http://tinyurl.com/yfvldd8
• My post ( http://tinyurl.com/yljbago ) left out a way to monetize gaming, set up a cross-game marketplace. http://tinyurl.com/yang6b3
• The partnership between Microsoft and HP goes beyond the tablet. http://tinyurl.com/yamkztz

Sports

• Pete Carroll is a worse investment for Paul Allen then Windows ME was.
• I’m not a huge fan of one year contracts for guys without any years of control, but welcome Ryan Church. http://tinyurl.com/yklxxdf
• RT @Dejan_Kovacevic: First real baseball of 2010: Pitchers stretching on fields at Pirate City for opening of minicamp.

Uncategorized/Other

• RT @badbanana I hope Bette Midler sings to Conan on his last show.
• RT @bobmayo: Jay Leno Criticizes NBC On ‘Tonight’ Cliffhanger – ..in1992 http://bit.ly/6qNA88
• Twitter for Dummies? 266 pages? How can that be current? Helpful? Old media can’t teach new. http://twitgoo.com/bvbbt

Warning:  This post is a bit more technical then many of mine and deals with my job (IT Infrastructure Architecture).  If that makes you want to run, that’s fine, no offense taken.  Tomorrow I will have a post on wooing technology companies to Pittsburgh.  If you’re up for expanding your brain a little you might graze the following Wikipedia articles before continuing:

• Coordination Game
• De Facto Standard
• Virtual Machine
• Microsoft Exchange Server
• Platform as a Service (PaaS)

VMWare today announced that they are purchasing Zimbra.  This, with some luck and other purchases like SpringSource, gives them a chance to move up from the infrastructure.  They can start offering services at the platform level.  For VMWare, the way to do this has to be through opensource development (Spring Source) and cheap office productivity (Zimbra).  They will never be able to compete with Windows/.NET/Office/Exchange at the platform level unless their solutions are MUCH cheaper.

We all accept this as a fact.  Even if Zimbra/SpringSource was a functionally better solution then Exchange/Visual Studio, we know they would get ZERO market penetration unless their price was several times cheaper.  The question I got to thinking about today was, why?  The answer comes from economics.  The technology industry has a coordination problem.   Because of this coordination problem we feel compelled to set up de facto standards.  Lucky Microsoft.  I spoke briefly about how an information bias in technology has lead to great inefficiencies (including the coordination problem) in a previous post.

Let’s think of a more common example of how a coordination problem has lead to a de facto standard, social networking.  The potential for a coordination problem is there because everyone benfits from a standard emerging.  How would you feel if half of your friends were on facebook and half on myspace?  This is part of the reason Myspace got crushed by Facebook.  Facebook may only have been a little better, but once a critical mass had moved to it, it became a de facto standard.  Then myspace withered and died survived on as purely a music site.

VMWare can avoid being trampled by a Microsoft monopoly here.  They will have to do something now, while they hold a position of power and Microsoft is still working to put together its virtualization and PaaS services (Microsoft announced today that it is partnering with HP to improve its PaaS).  The options that VMWare has are not too different than those that any company competing against a tech giant has:

1. Beat the Giant.  It’s not impossible; they have a huge head start.  Companies with a huge head start have done it to Microsoft before.  Apple failed once with PCs, but has succeeded with MP3 players.  Google still owns most of the search world in spite of Bing.  The risk here is that it’s all or nothing.  If they can keep the giant at bay then they get to be a monopoly player.  If they can’t, they end up like MySpace.
2. Become a niche player.  VMWare can, while Microsoft is still getting its feet on the ground, find a niche to occupy.  The most obvious would be the Linux/Java niche.  They can build high-powered software that focuses on enabling open office or Zimbra solutions and nimble, cheap development environments around Java.  They would target small and medium technologically savvy companies.  Of course, this would mean conceding most of their enterprise customers and focusing on a typically low-margin market.
3. While in a position of power, create a standard that allows both you and the giant to exist.  Instead of letting Microsoft become the de facto standard, create a mutually agreeable standard.  VMWare’s profits would suffer because it would make the service a commodity, but in the long-run it would keep either company from becoming a monopoly.

On Saturday, I spoke briefly about a philosophical realization that comes from how much people get involved in the virtual worlds of Massively Multiplayer Online Games.  However, that was Saturday and I was feeling philosophical.  Today’s Monday and I’m back to being a businessman.  I noticed last week that someone bought a space station in an online game for a whopping $330,000 in ACTUAL MONEY.  I figure if there’s that much virtual money out there, there has to be a way to profit on it.  So today’s post is on the virtual economies created in these virtual worlds and how to monetize them.

At the root of it, there are two options for how you set up your virtual world:

• Create an “in-world” currency that is based on accomplishments.  To be honest, I’ve never played any of these games, but I am told World of Warcraft is one.  As players compete missions they win currency which they can spend on items in the game.

  How it’s Monetized:  The currency itself does not afford the company an opportunity to profit on the game.  Game’s that operate on this kind of an economy have to make their profit from monthly fees and the selling of extras.  For example, to look a certain way or carry a certain shield you might have to pay an extra $5 or $10.

  The “Gotcha”: The extras that people buy and the “premium” subscriptions cannot afford too much of an advantage in in-game play.   If the “true” gamers start to suspect this they will migrate away from the game.

  Another “Gotcha”:  Inflation.  As more people play the game and get more stuff, the value will shift.  In response the administrators will have to “cheapen” the currency which will upset the users and further the inflation problem.  I’m actually not sure how this is controlled in games like World of Warcraft.

• Create an “in-world” currency that functions much as the currency of a foreign country. The currency is pegged to a dollar value and can be freely exchanged.  You can use real money to buy virtual currency and virtual currency to buy real money.  This solves the inflation problem and creates the opportunity for people to dump a lot of money in to the game.

  How It’s Monetized: The initial revenue stream is easy.  People buy the virtual currency and lots of it.  The problem is, this is more of a loan then it is straight profit.  Theoretically, the people who bought the virtual currency may exchange it for real currency again someday.  The goal here has to be to get the money retired, get it out of circulation after its been put in.  A couple thoughts on making this happen:

  • Work like a bank, charge something off the top on the exchange.  For example offer a unit of virtual currency for $1.05, but only offer $0.95 for the same unit of virtual currency.
  • Require people to exchange the virtual currency in a specified block amount.  Say $10.  That means if you have $104 worth of virtual currency when you quit the game you’ll get $100 and the game keeps the rest.
  • State in your ToS after a certain time of inactivity, the money is reclaimed.
  • Sell things and retire the money when they are purchased.  What’s sold could be anything.  Since the developers get to decide, it’s like God opening up a corporation.  He could build more land and sell the land.  He could build a device that can fly (even though no other devices can) and sell that.  He could sell immortality pills.  The options are endless.
  • Charge taxes, this is perhaps the most interesting one.  It’s important to charge only the customers that will pay and let the others live for free.  Second Life for example only charges land owners, most people don’t pay a cent.

The “Gotcha”: Continued revenue for the game company will require that the game and the economy continue to grow.  If the game stops growing or users start to quit and ask for their money.  There could be a recession in the virtual economy.  Assuming the economy is a partial-reserve system, this could cause a run on the virtual economy’s “bank” (the gaming company) and potentially a bankruptcy.  It’s amusing to talk about a virtual depression, but it’s possible.

How to Make Sauerkraut

As I go through the week, I use twitter to send out little updates and links.  I realize that I do this quite a bit and that not all of you have Twitter, so with that in mind I’d like to take Sunday to do sort of a week in review.  I’ve selected the most useful of my tweets from the last week and placed them in to the categories that I use in this blog.  Please let me know if you find this useful or if you don’t like it.

Local Politics

• Brilliant line from @Bram_R, “if ‘everybody does’ that type of thing then everybody should go to jail.”   http://tinyurl.com/s7jff
• Congratulations to @nataliarudiak. Let’s see some action in the new term! http://tinyurl.com/ykn9xne
• Wait, this Darlene Harris is now council president? I hope Luke’s feeling healthy. http://tinyurl.com/yg5nbjf

Pittsburgh

• Only 20 days left for @Bram_R‘s Comet! Better get it while its hot!  http://tinyurl.com/yfgmk88

Startups

• Huge news out of the South Side, DynaVox to go public.  http://tinyurl.com/yh77mjh
• What makes an entrepreneur? Cojones! Good advice @suster, I followed a similar path to a startup as he did to a VC.  http://tinyurl.com/y9n55vg

Personal Technology

• If you’re in to gadgetry and internet videos / huluing TV. This could be the next big thing.   http://tinyurl.com/yfh9zph

Tech News

• Post from @fredwilson – The Nexus One enables organizations to “go Google.”    http://tinyurl.com/s7jff
• Interesting article on the similarities between the Android guy and Steve Jobs. http://tinyurl.com/yzpkz7y
• Great article on the use of web 2.0 technologies in marketing. Is 80% using social networking sustainable? http://tinyurl.com/s7jff

Sports

• PSU’s Nick “Obvious” Sukay, “Playing Alabama … next season will be a great motivator for us in the offseason.”http://tinyurl.com/yzwwsvo
• Interesting, the Pirates hired a mental specialist to improve composure, concentration and confidence.  http://tinyurl.com/yg4vg4u
• I hate saying it, but Pete Carroll was the best coach in the NCAA, good to see him go. http://tinyurl.com/yatoeow
• Navarro Bowman was a great player, with nothing to prove at the college level, unfortunately. http://tinyurl.com/ya3xtfx
• Ravens are going to win, thus endeth the Steelers’ season. Is it weird that I’m already psyched for the Buccos?