The world of wikinomics

Chris Middleton profiles two very different approaches to so-called "wikinomics". One is a small not-for-profit organisation that happens to be the number four web destination in the world, and the other is a West Coast start-up intent on making it big.

The Web 2.0 model removes any distinction between creation and consumption, and the only restrictions in distribution are the speed and security of your network connection. It is about two different kinds of IP: internet protocol, versus intellectual property bit versus unit many to many versus one to many.

One of the prime examples of this is the Wiki. Wikis replace the webpage with the wikipage, the location of a piece of ongoing, collaborative content-generation (a project) rather than a fixed piece of content (a product).

Wikis favour flat organisations and collaborative processes - such as research and development, but also information creation and dissemination horizontally across the enterprise. As such, they are seen by some as a threat to traditional organisational structures and management hierarchies - which wiki users say is precisely the point.

Arguably, the fact that information can be corrected and shared across the organisation encourages people to participate in both its creation and consumption. People feel that they have a stake in the information, and, therefore, in the organisation it describes. Large organisations from Apple to Airbus via the FBI see sense in this model. Here are two very different organisations that are making the model work.

Many of the leading lights of the Web 2.0 world believe that data should be free - in both senses of the word - and the WikiMedia family of sites is in the vanguard of that movement, led by free online encyclopedia Wikipedia.

Wikipedia was conceived in 2001 by Jimmy Wales, CEO of web portal company Bomis, and Larry Sanger, then editor in chief of Nupedia. Two years later, the WikiMedia Foundation was established as the charitable umbrella protecting a growing family of branded wiki projects, funded mainly by donations from over 45,000 supporters. Its annual budget is just $4.6m.

Projects under that umbrella include Wikipedia (contributed to and edited by millions of people, and the fourth most visited website in the world) Wikibooks and Wikisource (out-of-copyright or "copyleft" texts) Wikimedia Commons (royalty-free multimedia files) Wikinews (which, like "microblogging" site Twitter, often breaks news globally), and Wikiversity (free-to-use courses and educational materials). potentially has a multibillion-dollar brand capitalisation: an intriguing challenge to a non-profit organisation that has 300 million page views per day, but less than two dozen employees in a small, rented Bay Area office. With so few page views translating into donations, can the "wikinomics" be sustained?

The Wiki-woman
Canadian broadcast journalist Sue Gardner is WikiMedia's executive director, having joined the organisation from the Canadian Broadcasting Corporation (CBC), where she was director of the company's website. Her appointment from CBC - a site which generated millions of dollars in advertising revenues - has re-ignited the argument that WikiMedia cannot continue to resist the temptations of the corporate world.

"We are not interested in putting ads on Wikipedia," says Gardner. "We feel strongly that revenue generating should not be about using Wikipedia itself as a platform.

"Our fundamental principle in monetising the brand in certain ways is to seek what we call 'mission friendly' partners. They might be partners who strongly support open-source formats, open technologies, or free knowledge.

"We also need to ensure that the specific initiatives we undertake support our strategic goals: help us increase global participation, improve the quality of Wikipedia, or communicate the core values of the project. We would never pursue partnerships that go against our values."

Gardner was brought in to fix the fundamentals, and changes have been afoot since she joined. She relocated WikiMedia from Florida to San Francisco in December 2007. There the foundation rubs shoulders with the giants in the heady atmosphere of billion-dollar brand capitalisations, revolutionary zeal and high-profile philanthropy that still characterises Silicon Valley today.

The foundation certainly does not lack ambition. Wikipedia itself reaches one in 24 people in the world, and Gardner says she wants to reach one in three. That alone should set alarm bells ringing in any income-generating enterprise whose business falls under the shadow of WikiMedia's not-for-profit umbrella.

Surely millions of unpaid people generating free-to-access data, including news, for a global audience is many enterprises' worst nightmare?

"Income streams for volunteers are not really in the future," says Gardner. "They believe in the power of a free project. It taps into people's natural desire to share information, make it better, and to inform others.

"It is pretty clear that lots of major organisations, for whom intellectual property is their central business, might be concerned about that. There will probably never be a day when intellectual property-based organisations can give it all away - but they can certainly consider better ways of sharing more of it."

"We do not think intellectual property ownership is bad thing," she adds. "Some protections are essential: trademarks for example. But we advocate for the production and sharing of more free content."

For some traditional businesses, however, the word "free" remains tainted by old-economy notions of lower inherent worth - not to mention dwindling profits. So what lessons are there for the enterprise from the project's success?

"Wikipedia is built on trust," says Gardner. "In the early days, the notion of trusting other editors and volunteers to 'do good' was central to the project's early success, and certainly for its explosive growth and rise in traffic.

"By starting a wiki in your organisation you are not promised the same kind of formula or output that comes with Wikipedia, but the core principle of letting others edit it is an important first step.

"If you lock up the content, confine users, or restrict the process you are ensuring the wiki will not be active and embraced. You have to follow the energy of the contributors: let them build the content they care about first and the rest of the content should fill in.

"We are moving towards a 'write' web, from the previous days of the 'read' web. Future generations will probably not think of web content as being static or non-editable. The wiki has paved the way for this shift in how we look at the internet."

It has been suggested that among the avenues WikiMedia might explore are joint ventures, branded USB sticks containing reams of text data (for those without internet access), and brand licensing to mobile providers (Nokia is a licensee). Gardner confirms this approach, and suggests that the sun may already be rising in the east.

"We are interested in working with other businesses that can help us extend our reach in the mobile markets - allowing more mobile-web users to access Wikipedia and to improve the ability for people to edit on mobile devices, for example.

"If you consider that a huge number of new web users on the internet are accessing content from their mobile devices, especially in places such as the Middle East and Asia, then you can appreciate why this is an important area for us.

"Clearly some of those mobile operators see revenue potential in working with us and the Foundation will in turn be able to generate revenue by licensing the trademark, and so on - again, always in the context of working with mission-supporting partners."

Jigsaw Corporation
Although wikis might seem limited in scope to "share and share alike" projects, free resources, and backroom collaborations, an emerging breed of enterprise has found a way to use wikis as the foundation of a revenue-generating business.

The California-based Jigsaw Corporation is one such company. Jigsaw was founded with the aim of bringing the advantage of user-generated and moderated online content to bear on the lucrative world of business contact directories and corporate information.

To date, the business contact market has been dominated by big online hitters such as Hoover's on the one hand, and highly expensive, industry-specific print directories on the other.

Directory enquiries
Given production times and the challenges of compiling them by small teams, print resources of this kind are often out of date, of dubious value and lie unused in corporate libraries. Any exclusivity they appear to have is often based on the external research of a handful of people, rather than provided for free by people within each profiled company.

"Jigsaw was founded at a point of pain," says Jim Fowler, Jigsaw founder and CEO. That "point of pain" was the former sales executive finding that business contact details and leads were often out of date or incomplete. Fowler decided to turn the traditional data business on its head. "Corporate data is a commodity," he explains. "It is contact data that is at a premium."

The idea is that while business cards themselves might swiftly fall out of pocket or date, the information they hold can be easily updated if the work is done by insiders and tipsters, and that information is rigorously checked, cleaned and policed by distributed teams of volunteers - just as Wikipedia is in multiple languages.

Business card data is exactly the kind of information that directory providers find hard to maintain, but which their customers rely on for new customer leads and clinching deals. Sales teams, for example, need up-to-date contact data to reach the right individual within large, complex, ever-changing organisations. In markets where employee churn and turnover is inevitable, the challenge is greater still.

"Data changes so fast, it is the basic stuff that gets left behind," says Fowler. "If that data is wrong, then that can be expensive for others."

Wikinomics laid bare
The idea behind Jigsaw, he continues, is that contact data becomes a currency and an end in itself. The internal economy of Jigsaw and other wiki-based enterprises runs on people contributing their labour so they can access the fruits of other people's labour: you get out information or services of similar value to what you put in.

Thousands of volunteer contributors within their own companies contribute information about the company's postal address, who works there, what their job title is, and what their contact telephone and e-mail addresses are.

Data is limited to business card level, so personal privacy is maintained, and people can opt out of having their information on the site. Personal or hotmail e-mail addresses are not included, and neither are any other non-corporate data. "There is no trade secret in business cards," says Fowler.

It works because the community grows as more people come to the site to seek information. For example, if you want the name and contact number of job title z at customer company x, you will be asked to contribute similar information about personnel within your section of your company - or to check data already held by Jigsaw about it.

"People trade information on Jigsaw," he says. "Our system is based on points. If people do not have data to give, they clean the records that are there," he says.

Fowler explains that technology itself is not the bedrock of Jigsaw and of wikis in general, it is the new business processes and collaborative models that wikis enable. "You need human beings to do this," he says. "We use technology to complement our community. If there is no community, there is no business."

The company has 10.25 million personal records on file for nearly two million companies and counting, provided by 650,000 contributing members at the time of writing. That said, user and contributor numbers tend to increase exponentially on all types of wiki project, and the reach within each company will grow as the community grows.

"Every single record is complete," continues Fowler. "Usually, most such information [in other company's systems] is incomplete, dead, incorrect, duplicate, or in a non-standard format. We ensure that all of our records hold complete and standard sets of information."

Since Data Independence Day (4 June 2008) the company has given away its "bread and butter" business contact information, says Fowler, with a view to persuading members to pay for more in-depth services on a subscription or bespoke basis. This is a classic Web 2.0 business model: give away your competitors' crown jewels and incentivise your unpaid community to generate more content for you.

"Web 2.0 communities need to be self-organising, and self correcting," says Fowler. "If those two do not work, then the community does not work." As with Wikipedia, he says, contributors build up levels of trust.

"It is not sexy, but there it is," he says smiling. "There is no reason we cannot be a $100m company soon. Our vision is to be the 'Intel inside' of contact data. Do one thing, and do it well."

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