Multi-Level Marketing

About two month ago I wrote about Network Effects. What fascinates my in Network Effects is their exponential nature. Our human brain is used to think about linear phenomena. It is very hard for us to deeply understand and predict exponential phenomena.
Another exponential economic phenomena is the phenomena of MLM (Multi-Level Marketing). This is a way to build a marketing organization by compensating an affiliate marketer for bringing more affiliate marketers to market the company's product or service.
A powerful combination is to combine MLM and the web to create Online MLM. This is a powerful economic activity which harness the power of the online world to do marketing in a wide scale.
There are many who think MLM is just a scam. You can find a good criticism of MLM in the following link: http://www.vandruff.com/mlm.html. Even though the criticism can have merits in some MLM plans, I don't think it proves that MLM plans can't produce a good, healthy and stable organization.
In a later post I plan on showing why Vandruff's arguments does not rule out all possible MLM's programs. But in the meantime you can try a some Online MLM yourself. Choose a program in the Internet MLM page and join it using my sponsorship link.

Khen

Information in the "Information Age"

As you all know we are living in the "Information Age". From this title it is clear that Information is an important element of our lives. But, what is Information?
There are many answers to this question. We can go to the computer scientists and they can tell us that Information is just a set of bits. When we go to the layman we will get a different answer, something along the lines of "Information is knowledge that helps us do things" (well, this leaves us with a greater question of "what is knowledge?").
I think that indeed everyone in every context should define for himself the meaning of the word Information. It is good that Information has become such an important word. If people will try to forget words like God and try to see words like Money as a means to acquire Information, then maybe our world will look better.

Khen

Technology Network Effect

Network effect is a fascinating phenomena. The name relates to an economic effect. According to wikipedia "a network effect is the effect that one user of a good or service has on the value of that product to other people".
The power of Network Effect comes from Metcalfe's Law which "states that the value of a telecommunications network is proportional to the square of the number of connected users of the system".
There are many examples of things that succeeded because of Network Effect and of things that failed because they didn't have enough Network Effect.
In the age of the Internet the competition for using the Network Effect is fiercer then ever. There are many factors which influence the power of the Network Effect.
One of the main factors is how open the technology is. The Internet itself (i.e. TCP/IP protocol) was established mainly due to the openness of its underlying technology.
As you can see above, the Network Effect is defined as the effect of one user. This implies that every user counts and every user should be aware of the effect he creates in the network.
With this awareness comes responsibility to do the right thing. It is like voting in a democratic process. Unfortunately not all users take this into account when doing their decisions. For example, whenever a user chooses to use MS-WORD file format and not ODF format he creates further Network Effects in favour of the monopoly in office formats and against an open alternative.
The latest issue of Network Effect on the Internet is now the H.264 video format. You can read Christopher Blizzard's blog post about this issue. I think we should all help make the Internet open by supporting Mozilla's decision to not support H.264 video format and demand from the sites we use to support open formats such as Theora.
We can further discuss Network Effect examples in the comments section.

Khen Ofek

Aspects of Paradigm Shift

My friend Daniel recently posted regarding Paradigm Shift.
This made me thinking about the different aspects of a paradigm shift.
First there is the technical aspect. If it is a system then the technical aspect will be apparent in its architecture. If it is a science then the technical aspect will be apparent in the current theories.
But, there are more aspects. The most important aspect is the people. Both the system architecture and the theories of a science can't change their paradigm if the state of mind of the people working on them is not changed. Even if there are objectively compelling reasons for the paradigm shift, if the people have not changed their mind it won't happen.

Since it is very hard to prove the need for a paradigm shift, we are left with politics. Whoever is more politically strong will decide if we need a paradigm shift and to which direction.

Khen Ofek

Engaging communities against Linux and OpenOffice.org

I like paradoxes. Paradoxes of all kinds always facinate me. They enforce you to think and often reveal deep understanding on how things work. You can read my analysis of the Paradox of the Cloud in an earlier post.
This is why I was amused to read Glyn Moody's blog post about a Microsoft's job description.
Microsoft wanted to recruit somebody to fill the “Linux and Open Office Compete Lead, US Subsidiary (CSI Lead)”. Glyn was concentrating on what CSI job description meant for OpenOffice.org. But, I want to stress here the paradox that is apparently inherent in how Microsoft treats the Open Source community.
According to Moody's blog post the job ad contains the following words: "The core mission of CSI is to win share against Linux and OpenOffice.org by designing and driving marketing programs, changing perceptions, engaging with Open Source communities and organizations, and drive internal readiness on how to compete with Commercial Linux and participate with Open Source Communities."
What caught my eye is the paradox of "win share against Linux and OpenOffice.org by ... engaging with Open Source communities and participate in Open Source Communities". Linux and OpenOffice.org are Open Source communities, among other things. So, how can Microsoft engage and participate with Open Source communities and act against them?
I think this paradox is not coincidental. Microsoft's engagement with Open Source communities is not aimed for the better of Open Source, but for the better of Microsoft against Open Source. It doesn't have to be like that, just look at the engagement of RedHat and IBM in Open Source communities and you can see that a good engagement is not against something but for something.
The only one that can solve this paradox is Micrsoft itself, and until that happens, Open Source communities should not trust Microsoft.

Khen Ofek