Zen and the Art of Nonprofit Technology

I read three books recently that I thought would be worth reviewing here. They fall into that category of “business” books that I basically never read. I came upon these three for different reasons, and although I’m not interested in adopting their primary points of view, there were tidbits that were worth the read (or a skim, in one case) in the end.

The first book, called “Made to Stick:Why Some Ideas Survive, and Others Die.” I picked it up by happenstance, I think because I had NOSI on my mind, and I was thinking about how to talk to people about open source and nonprofits. It’s an interesting book, with a basic premise. in order to get an idea to stick, the idea needs to be Simple, Unexpected, Concrete, Credible, tug at Emotions, and tell a Story (their acronym is SUCCES). They do a good job of using examples for each of these things (like why Southwest Airlines is so successful, and why the Kidney Heist urban legend sticks so well, among other stories. It’s worth a read, I think, if you have a message to get across.

The second book, called “Elements of Persuasion” is a book that was sent to me for free - someone thought that I might want to review it on my blog. This was the book I skimmed, because, honestly, I was bored after the first chapter. It basically only focuses on the last “S” part of the first book: storytelling. It uses examples and such, but it is not anywhere near as engaging and readable as “Made to Stick.” There ae a few interesting and useful tips, but if you are only going to buy one book about getting your message across, buy the first one, not this one.

Although in most cases, these books are designed for people who want to get more business (the first book not so much - they have some good nonprofit examples.) The third book is in a bit of a different category - not about landing more business, per se, but making more money. It’s called “Value Based Fees.” It’s written by this guy, Alan Weiss, who has written the “Ultimate Consulting” series, which seems to be focused primarily on making a lot of money in consulting. I would never have bought this book if it didn’t come recommended by a colleague who I respected. I mean, the cover has all these dollar bills on it! To explain a bit - he does big money consulting with huge Fortune 500 companies, and does projects for hundreds of thousands of dollars that result in the companies saving, or making, millions. A very different context than I, or most people reading this work in, for sure.

All of that said, he had some very interesting perspectives. One of which is something I would love to talk with other consultants (and clients, too) about. He thinks that time-based billing is bad. His reasons are interesting. On one hand, he feels that consultants should base their fees on the value they bring to the consulting relationship, not the time spent. He feels that there is an inherent conflict of interest in working for time - it is in the consultants interest to spend more time on the project, regardless of the outcome. And he thinks that deliverables are also problematic. He thinks that ultimately, all consulting relationships should boil down to the ultimate results for the client. His examples are things like saving millions by reducing employee turnover, increasing profits by streamlining processes, etc. Not about how many hours you spent at the client office, or how many reports you wrote. Really, what he thinks is that these forms of billing reduce the fees you can charge.

It’s a little odd, because mainly what he’s interested in is making more money. But some of his ideas are interesting, especially the notion of setting the fees on the value you bring, rather than the time you spend. I’m not sure how to make the translation to nonprofit consuting, but I do find it interesting how blanket his rejection of time-based fees are. And I do, certainly see his point about conflict of interest - if we charge by the hour, we have an interest in spending more time.

My favorite consulting book is still “The Consultant’s Calling” which, in some ways is diametrically opposed to the values of this book. But, there are some useful ideas to mull over.

Chapter 2: Some Basic Economics of Information Production and Innovation

This is a really interesting chapter, where he lays out the basic economic theory behind information production. He basically starts out with asking what is the most efficient way of producing information, in the sense of the greater good. Basically, the most efficient for society’s greater welfare is if everyone gave information away for the cost of distribution only. He says that the standard reason why people say that exclusive rights are important is that this will encourage information production and innovation:

"In order to harness the efforts of individuals and firms that want to make money, we are willing to trade off some static inefficiencies to achieve dynamic efficiency. That is, we are willing to have some inefficient lack of access to information every day, in exchange for getting more people involved in information production over time."

This is, in fact, a critical issue. He further says:

"If information producers do not need to capture the economic benefits of their particular information outputs, or if some businesses can capture the economic value of their information production by means other than exclusive control … the justification for regulating access by granting copyrights is weakened."

He goes on, in a variety of ways, to show that both of these things are true.

He talks about quirks of information production, and the concept of rival vs. nonrival goods. A rival good is something that if you have it, I can’t - if I want one, someone has to work to get/make it. Food items are rival. Cars are rival. A nonrival good is something that both of us can have at the same time, without any additional labor or resources. Electronic information is nonrival - it’s marginal cost (cost after initial production) is basically zero. Because of this, there in fact might well be negative benefit to copyright, not positive benefit. In fact, he shows that the data shows that there is a decrease in information production with increasing patent protection. This is because the cost of more information production (which, of course, is based on previous information production) increases with patent protection and copyright.

He goes into a very interesting discussion of the matrix of strategies of information production: Rights-based, Nonexclusive-market, and nonexclusive-nonmarket types of production. He then discusses the strategies of each: like the Romantic Maximizer film director who sells work to a "Mickey" like Disney, or the ‘Jane’ (he uses Joe, but I’m taking liberties) Einstein sitting in her basement coding, releasing her software via copyleft to a Limited sharing network.

He then talks about these different types, and the revenues that they actually get that depend on copyright protection (not a whole lot.) He then says:

"The difference that the digitally networked environment makes is its capacity to increase the efficacy, and therefor the importance, of many more and more diverse, nonmarket producers falling within the general category of [Jane] Einstein. It makes nonmarket strategies - from individual hobbyists to formal, well-funded nonprofits - vastly more effective than they could be in the mass-media environment."

What I took home from this chapter are two things: 1) in effect, in this networked environment, copyright and patent protection are, in fact, counter to the greater good of society (I knew that one already - but it’s nice to have economic arguments to help) and 2) There is a lot of potential that is available to be harnessed from people who are doing things for a wide variety of reasons. Stay tuned for Chapter 3.

I kept hearing about this book. My friend Katrin over at NTEN told me about it first, then it kept popping up all over. The book is "The Wealth of Networks", by Yochai Benkler, who is a professor at Yale Law School. It’s available at that link in a multitude of forms. I have it in nice, wonderful book form. I like portable that way.

Anyway, I should apologize in advance for overlapping series (or not, I guess.) I’m not finished with the Web 2.0 series, but I really wanted to delve into the meat of this book, and blog about it. I think I’m liking the book so much because it’s an amazing combination of some of my favorite things: technology, law and economics. (No, sadly, no theology here, but I could probably find a way to weave it in.)

I’ll start out with Chapter 1, which introduces the basic ideas of the book, and the importance of this particular moment. He lays out the beginnings of his arguments - that information and cultural production are central to human freedom and development, and that this new, "networked information economy" is providing a disruptive moment in time, and, with social action, we can use this new kind of economy to further human freedom, even as other forces are trying to create systems that will limit it.

He lays out some interesting concepts, things I’d been aware of, but not really studied enough to articulate. He talks about how the motivations for information and cultural production are very often nonprofit and nonproprietary, and that as the costs of information production goes down, those motivations start taking the fore - they become more important. He talks about the ways that a networked information economy increases autonomy for individuals, and he deftly answers the critiques of the democratization of information that the networked information economy provides. And then he lays out the resistance of actors which he calls part of the "industrial information economy" that are working to limit this broadening effect on autonomy and freedom. He argues that we are going to have to work for this - it’s not going to just happen because the technology provides these opportunities.

I’ll be blogging chapter by chapter, probably. They are pretty dense, although I’m having a great time with Chapter 2 already - it’s nice to see empirical evidence for things I’ve been thinking for a while.

First off, this post is in honor of the EFF Blogathon. Read all about it. I’m hoping that by writing this series, people who haven’t been aware of these issues become more aware, and understand the stakes involved.

In the first part of this series, I talked about my perspectives on open source software, and it’s position in the whole intellectual property debate of our times. The second post was about the evil of patents. This third post, I want to talk about the issues of intellectual property and creative work.

First, though, some background on my own "vested interests" (or, more honestly, lack thereof.) Although I am a published poet and author (that’s a stretch - I’ve written some articles that have been published in edited volumes, journals and a magazine few have heard of,) and I occasionally make music (that’s a real stretch,) I’ve never made a dime off of my creative work. I have made many dimes from my creation of software, but that was part one. So, for some, this does not make me one who should say much about copyright of creative work. But, I’m going to plunge in anyway.

And, also, in internet parlance, IANAL (I Am Not A Lawyer). I am fascinated by the law, and read about the law, but I’ve never been to law school. Copyright law is a pretty obtuse field, and I don’t even begin to pretend I know it. What I’m going to talk about, though, is broad brush issues. What does the current landscape in copyright law look like, what are the issues arising, and who benefits from the current system, and who could benefit from a system that is more open.

Right now, creators of creative works are protected by copyright for their lifetimes, plus 70 years. So many works will be protected for 100 years or more. (Most work that was created prior to 1923 is in the public domain.) Copyright means that no one can take the work, whole or in part, and reproduce it without the consent of the copyright holder. Also, no one can produce derivative works without the consent of the copyright holder. Copyright is granted automatically when a work becomes tangible - but it is up to the holder of copyright to enforce copyright. (Some links are at the end of the article.) There are exceptions, called "Fair Use."

So what’s up now? Why is this such a huge issue, and what’s at stake? Very simply, technology. It all started with the Xerox machine, the audio cassette deck, and the VCR. These technologies, and the technologies that have followed (computers, scanners, DVD recorders, MP3 players, software for ripping CDs, etc.) have made copying creative works trivial. At this very moment, if I wanted to, I could find (and download) most of the music that has been recorded in the last 20 years or so, most of the movies, quite a number of books (text or audio), etc., and pay not a dime, except the cost of bandwidth and storage, which is minimal, compared to the cost of buying all of that content.

Of course, I’d be infringing on the copyright of all of those copyright holders, which, for the most part, are record companies, publishers, and movie studios, all of whom have big bucks, and all of whom are extremely unhappy at the current state of affairs.

Now I’m sure some of you reading this remember the brou-ha-ha about cassette tapes, and how that was going to spell the end of the music industry. Didn’t happen, did it? And VCRs were going to spell the end of the movie industry. Not hardly.(In the end, they benefitted from it mightily.) Now, of course, Napster’s progeny (currently named bittorrent) will spell the doom of both the music and movie industry. I have my doubts about that, too.

But they are very busy making their case that they will be done in by this technology, and, because they have all sorts of money on their side, they are getting heard in Washington (as well as Silicon Valley - more on DRM later.) The most important law that bears upon this is called the DMCA (or Digital Millenium Copyright Act.) This was a very broad law, that basically criminalizes production of technology that makes it easier to infringe on copyright, and increases the penalties for copyright infringement on the net.

There is a fascinating example of the new ways in which technology can be used to create and disseminate content in ways that, although violates present copyright laws, in fact hurts no one (and might be argued would help the owners of the copyright.)

In 2004, an artist named DJ Dangermouse created a mix of the Beatle’s "White Album", and rapper Jay-Z’s 2003 "Black Album," to create an album called the "Grey Album." It was only available as a bootleg, since he didn’t get permission from anyone to do a mix. The result was amazingly creative, and critically acclaimed. Although DJ Dangermouse violated the copyrights of varied owners, it would really be difficult to argue that the resulting work would in any way damage those owners of copyright. EFF has a good review of the legal issues.

Now some people realize that the internet could provide a really great vehicle for disseminating creative work. (Wow, really? Took them a while.) Enter ITMS (iTunes Music Store) and the reborn Napster. These two sites have different models (ITMS you download a file, and are free to do certain limited amount of things with it, Napster is a subscription service. Let the subscription lapse, and your music library goes silent.) What they have in common, though, is called DRM, or Digital Rights Management. One of these days, I’ll actually spend some time to write about DRM, because the concept and technology are interesting, and there are ongoing arguments as to whether it could work at all. But what the folks who are allowing you to download content for a cost are doing is hobbling that content in various ways to control your access to it.

This is a lot like commercial software. You don’t really own it, and you are told specifically how you can use it. Who does this benefit? Like software, it’s basically the big, powerful people who already have lots and lots of money. Most musicians and authors, like software developers, make a living (actually, many don’t), and that’s about it. Some do better, many never make a living.

So, as the content industry (record companies, movie studios and publishers) move in the direction of disseminating content electronically, but in ways that strictly control how you can enjoy it, there is another movement, that is a combination of people who’ve learned lessons from open source software, musicians that have always been friendly to music copying, and content creators who would like to more directly be in control of their own creative content.

This movement is made up of small, independent music distributors that allow you to download, sample and/or buy MP3s (sans DRM) online and creative authors licensing their work with open source-like licenses, allowing you to create derivative works from their own work. Let me talk about why I think this model, rather than the model being fostered by the RIAA and MPAA works in everyone’s interest (er, except for people who want to make oodles of money off of other people’s work.)

1) Creators of content can choose how and when to disseminate their creative work - they can choose someone to help them promote it, or not.

2) As happens often, word-of-mouth and freely released copies of content and derivative works actually increase the interest (therefore revenue generated) in the creative work. Here’s a new example. And here’s another, from a sci-fi author.

3) Consumers of creative work get maximal control of how they can use the content they have obtained (either for a fee, or for free).

4) Authors of creative work can be inspired to create new work based on the work of others, taking it in directions that are unpredictable, and potentially very interesting (like the Grey Album, except in this scenario, DJ Dangermouse won’t get ceast-and-desist letters.)

I think this is a much better model than the model that only lets you play music you bought on pre-approved devices, only read a book you bought on your desktop computer, and not also on your laptop and palmtop, and continue to pay a fee for music, and if you stop paying, you lose the music. I can’t believe that most consumers will put up with this for a long time (although I have been amazed before about what consumers will put up with when it comes to technology.) It will be interesting to see how things finally shake out.

Links:

- basic copyright FAQ
- wikipedia entry on copyright
- EFF on DMCA
- ALA’s guide to the DMCA
- Creative Commons

Blog-a-thon tag:
EFF15