Here Comes Everybody: The power of organizing without organizations

by Clay Shirky

                             
 

Clay Shirky is a well regarded commentator on the Internet and its effects on society. His basic premise in this book is that the need to manage and organise people is a significant transaction cost that limits what organisations will or will not do. In other words, organisations generally will not carry out activities where the transaction costs are higher than the value created.

He then goes on to state that the effect of the Internet, and the modern tools that are available on it, is to significantly lower those transaction costs and in some circumstances make them effectively zero. This means that activities that involve the organisation of people, which previously would not have been undertaken, are now not only possible but a huge amount of human energy has also been unleashed because of the change.

It is my view that we are only at the early stages of the changes the Internet will wreak on society. Shirky tells the story of Johannes Trithemius, the Abbot of Sponheim, who wrote a treatise called De Laude Scriptorum (“in praise of scribes”) in 1492. This treatise was a defense of scribes against the effects of the printing press. Before the printing press, scribes would copy books and documents and so held a prized and privileged position in society. The printing press would change all of that and the Abbot was trying to hold back the tide. Ironically, in order to get his view out to as many people as possible, the treatise was published using a printing press. There are some parallels in some modern responses to the Internet, in particular in the printed press.

Shirky goes on to postulate several rules and principles:

1.    That a power distribution exists in internet systems where people do stuff together – in many cases, such as photo sharing and the editing of Wikipedia, a few people make a very large contribution and most people make a very small contribution. This means that the concept of average is less important than that of median and we must remember this when analysing what is happening because there is no such thing as an average user. He illustrates this point with the joke “Bill Gates walks into a bar and everyone in the bar becomes a millionaire….. on average.” In the example of Wikipedia, Shirky makes the point that it would not work without both the massive contribution and commitment of the dedicated few, and the occasional contribution of the many.

2.    That the removal of transaction costs for organisation of people has speeded up the rates at which people can organise and take action but has also speeded up the rate at which such a group can decay.

3.    That “small world networks” are really loosely connected groups of densely connected small groups and therefore there are two types of connecting capital:
  • Bonding capital – the glue that holds the smaller group together and essentially binds a homogenous group together.
  • Bridging capital - the glue that holds larger numbers of small densely connected groups together.
4.    That the internet and the way that people organise on it gives you “failure for free.” It is Shirky’s view (and I would strongly agree) that the ability to fail is one of the keys to getting true innovation. However, most conventional organisations spend a lot of their time trying to avoid failure. On the Internet, if transaction costs are virtually zero then the cost of failure is almost zero. For example, if 1000 groups form on a site such as Meetup and 999 of them fail then there has been little economic cost. Can you imagine a commercial organisation allowing a 99.9% failure rate? Therefore, in certain situations, the Internet provides a brutal but extremely low cost way of winnowing out bad ideas, but only after they have been tried rather than just assessed.

5.    That successful internet ideas that involve collaboration require three things in order to be taken up and adopted:
  • A promise that people can grasp and that inspires action
  • A tool that provides the ability to do the job with low transaction costs
  • A bargain that people can sign up for
That sounds basically simple but many people are wrestling with how to do it successfully.

Shirky provides a number of real-life examples to both explain and backup his theories but what I really liked about the book was that he provides some simple and well explained principles that you can apply to future possibilities. Anyone whose business or organisation is going to be affected by the Internet should read this book and try and understand the principles. In my view that is nearly everybody. I would strongly recommend you read it.

Paul Higgins

March 30 2009