About the Rise of the Knowledge Market

Due to the personal schedule I seldom blogged technologically in the recent months. Today, however, an article from Forbes caught my attention and pushed me to blog again. The title of the article is The Rise of the Knowledge Market. The topic represents a very important phenomenon in our modern society. In fact, I believe it is indeed the soul of the ongoing information revolution, which is the greatest event in human society since the industry revolution. The information revolution is fundamentally reconstructing our life in nearly all the levels and all of the aspects.

More than two years ago, for Internet Evolution I wrote an article titled User Generated Content, Revisited. In the article I pointed out a fundamental problem inside the model of Web 2.0---to the content creators UGC (User Generated Content) is about fame generation in contrast to the exchangeable value creation. The success of implementing the social network explained why Web 2.0 rises. The failure of bringing up a system of the individual valuation would be, however, the cause to the sunset of Web 2.0. The next day in Thinking Space, I thus coined the term UGA (User Generated Asset) and emphasized that the Web evolution urged us upgrading UGC production to be UGA production. With such a transition, the Web will evolve from a social playground to be a social marketplace in which people sell and purchase knowledge (more precisely, it shall be some type of the embodied knowledge) from each other. When we come to the Web, we no longer just browse or socialize through the Web. We use the Web building up our mind asset and trading it on the Web.

Apple's App Store is a great example of UGA production. When the developers create a third-party App and sell it through the App Store, Apple actually provides these developers a way of embodying their knowledge and selling the embodiment through the platform it designs. The success of Apple and its App Store has demonstrated us the power of the UGA business.

But the model of App Store is not even close to the ultimate vision of the UGA production. Right now one must first of all be a professional software developer so that he can take the advantage of this UGA business. Otherwise, the UGA business is simply an illusion no matter how creative a thinker he is or how compelling his mind truly may be. The model must be improved and simplified! By doing so successfully, a tremendous power of production will be released from people and a new golden time of the global business comes. Without a question the world will then be out of the recession.

Another related recent news is J.K. Rowling's decision that she will sell her electronic books directly to the readers but bypassing all the publishers. Although J.K. Rowling is likely too famous to be a typical example for the discussion of the UGA business, this decision is a sign showing the broken of the traditional knowledge trading business models, gradually but indefinitely. In tradition one have to be VERY much knowledgeable in order to earn the eligibility of entering the knowledge market. With the evolution of the Web, however, such a barrier is loosening and eventually it is going to be torn down.

As Jennifer said in her Forbes article, one may start to trade his limited knowledge as long as their is a buyer. The reason? The advancement of the Web has significantly lowered the cost of embodying human's knowledge and making it exchangeable.

This is the trend for the new-generation Web business! And this is where the Web is evolving toward at present.

How much will a domain name be worth in the next decade?

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What have made them greater than the others? (Not about Beatles)

What have made them greater than the others? If you ask the question about The Beatles, I will answer you that it is because they had successfully absorbed people---they made people by part of them in contrast to just being engaged to them! And so did the other great things, such as Netscape, such as Yahoo, such as Google, such as Apple, such as Facebook, and Twitter.

Recently I was approached by a question: how do you think of this company? [I omit its name here, no intention to offend anybody, and it indeed does no matter to the topic of the post either.] It was a name with much hype right now. Many people think it is great; but is it truly? Will it be such as, the next Facebook, for instance?

When The Beatles were popular, their music had been part of the life of the fans. The music led people think more about their own and the life they lived. It improved the human wisdom. It was not just that the music was touching. By contrast, the music lead to more human thinking. And human thinking makes our society grow.

The same was done by those great inventions related to the Web. Netscape made people think more and led to the idea of competing on domain-name registrations. Yahoo made people think more and led to the idea of publishing business through portals and being indexed. Google made people think more and led to the idea of better advertisement through SEO. Apple made people think more and led to the idea that even a tiny enlightenment could be leveraged and be profitable. Facebook made people think more and led to the idea of being benefit and profitable through each other's social network. And, Twitter also made people think more and led to the idea that has revolutionarily updated the News industry.

So, what are the common character among these great of the greats? They make people think more, and they make people be smarter! They have enriched the whole human intelligence. They are not (or at least not only) tools. They are the human-wisdom generators.

On the other side, why aren't many the others great as these ones? Those the others might have once engaged people as well but did not encourage active human thinking as the great ones did. They want to be so "smart" that disclaim the "need" of think among their followers. Ironically, however, with no need of human thinking few new business could be born because of them. And thus they lose the ground to become great.

Innovation: discover the profoundness behind simplicity

From Google, Facebook, to Twitter, the innovative businesses start with simple idea, but are developed in profound way. A secret of innovation is thus to discover the profoundness behind simplicity.

Above all, every great Internet business begins with a simple idea. The idea must be so simple that it requires less than 30 seconds to explain and the listeners get it and agree to its reality of value.

A sophisticated, profound idea may be a great science but it is unlikely a great business, especially a great Internet business. A great Internet business must engage at least millions of the ordinary Web users, who are often thought to be dumb, lazy, and possibly stupid (indeed, however, they are not, but they do seemly be so when they are not interested in some "smart" thought). If an idea is too complicated to be explained in 30 seconds, it cannot engage the "stupid" majority. Hence the service built up the idea (thought itself could be as great as the theory of relativity) cannot sustain.

But simplicity is far less than enough to assure success. A simple idea is easy to be copied, especially in the cyberspace. Hence simplicity by itself does not bear great business. The real thoughts behind the great innovative Internet services are the ones that can not only be "understood" immediately in 30 seconds by the ordinary listeners, but also be expressed further in another 30 minutes and still not totally understood by the same listeners. This is the profoundness behind simplicity.

Google was created on a simple idea---search information in the Web. Everybody seems "understand" the idea and agree to its reality of value. Indeed, however, few truly understood it before Google. Google discovered that the Web search was not just about finding answers, but more about to enable the information producers to produce the answers to be asked. The best search business is not the one that does the best on finding answers, but the one that allows and helps the information producers to directly produce the answers to be asked. Therefore, it bore the AdSense and AdWords, which directly connect the information consumers and the information producers. This is the profoundness behind simplicity.

Facebook was also based on a simple idea---make friends online. Everybody seems "understand" it and agree to its reality of value. But again, few truly understood it before Facebook. Facebook discovered that friend making was not just about allowing friends writing each other messages, but more about to explore one's self-potential in all of his social extents. The best friend-making service is thus not the one that does the best on communicating friends, but the one that allows a user to display all of his social abilities. Therefore, it bore the open platform, which transformed a friend-making board to a self-extending space. This is again the profoundness behind simplicity.

Twitter is the newest member in this innovative club. The service is based on a simple idea too. Instant messaging! Everybody seems "understand" it and agree to its reality of value. Still, few truly understood it before Twitter. Twitter saw that instant messaging was not just about sending a message from one to another instantly, but more about producing a network of real time information. The best instant messaging is not the one that can deliver messages the quickest, but the one that can weave all the instant messages to leverage their collective power. This is still the profoundness behind simplicity.

Do all these visionary founders pre-know the profoundness from the beginning? Actually, very likely the answer is no. For example, the Twitter founders still have not thought out their business model yet. These founders are not prophets. But what distinguishes them from the others is that they can sense, even it is unconsciously, the crucial profoundness behind the seemly simplicities. And thus they succeed.

Tell an idea to somebody. In 30 seconds he gets it, but in 30 minutes he still does not really know. This is thus an innovative business.

"Internet is not for Information, yet!" in China

Gang Lu has a brilliant post about microblogging in China. In the post, he shared that in China "Internet is not for Information, yet!" The quote is indeed a crucial point that all western Internet businesses must learn to be successful at China. Due to various reasons (especially the political reasons as well as some sort of historical tradition), Internet in China is not about information, it's about entertainment. This insight is a modern interpretation of a long-history idiom in Chinese history---莫谈国事 (do not talk on the affairs of state).


Until now, 莫谈国事 is still an important part of the life of Chinese. The emergence of World Wide Web (supposed to be able to change the custom) has not been able to change it yet. Lu's post tells us that the idiom has only extended its influence from the real world to the virtual world in China.

Xu Jinglei (Chinese: 徐静蕾), one of the most well-known celebrities in China and whose blog is known to be the No.1 personal blog in visiting numbers in China (and probably in the world). She is known to be a belle not only in her appearance, but also in her mind and brain. However, 莫谈国事 is also one of her maxim to ensure the popularity of her blog in China. In fact, the Chinese Characters 莫谈国事, reading from right to left, shown above is written by Miss Xu.

Certainly, however, it is not a duty for western Internet business to try to change the culture. By contrast, they need to learn to be customized for the culture to succeed.

Art and Engineering

How to be a successful business? How to be a successful Internet business? These questions puzzled many entrepreneurs; and the puzzle continues. Set the puzzle be the background, it makes us better understand the recent declared Google departure by Douglas Bowman.

I am sympathizing Bowman's experiences. However, history tells us that it takes time for business to evolve from engineering-dominating to art-dominating, though such an evolution is nearly certain. The reason is not hard to explain. In the beginning, novel innovation on technology breaks the wall and starts a new sector of business. It is like the Google at present. When time moves forward, technology becomes mature. Thus, art in design becomes a dominant power to determine the fate of business.

Bowman, the future stands beside you.

From UGC to UGA, and the limitation of Web 2.0

Yesterday, at ThinkerNet I posted "User Generated Content (UGC), Revisited", which led to interesting and constructive discussion. More or less, all of the discussion pointed to a broader issue implicitly mentioned by the original post, i.e., the limitation of Web 2.0.

To really understand it, however, we may need to review a few of the basics of economy. How is capital generated? When we say that our hard work produces capital, what does it mean? Is capital freely convertible to certain amount of labor and vice versa, or there is something more in the formula?

Capital generation demands labor. No new capital could be generated without labor. But labor only is not sufficient to produce capital. For example, throwing bottles to strangers is a labor, but hardly can it produce capital. To make the labor result be capital, the labor work must produce things that are exchangeable. The internal value of a product is measured by the amount of labor to produce the product; its true commercial value (i.e. the product as a piece of capital or asset) is, however, eventually determined by the degree of exchangeability of the product in the market. The commercial value of a nonexchangeable product is close to zero no matter how much the internal value of the product is.

By this mean, we have capital flow. Things that cannot exchange cannot flow; things that are hard to exchange are hard to flow; and so on. Exchange causes capital flow, and capital flow generates the wealth in our society. When a type of economy can consistently produce wealth to the society, it is a sustainable business model; otherwise it is not.

The essential UGC-based Web 2.0 business model is not sustainable because it does not produce enough exchangeable product. This is the limitation of Web 2.0.

In the post, I revisited a few fundamentals of UGC. From the study, I found that UGC primarily produces attention. Nevertheless does attention contain value, it is not a highly exchangeable product. The connection/attention generated by Web 2.0 help capital exchange rather than itself being capital. Therefore, the businesses built upon this model can hardly walk in a long journey into the future. We need to invent new models to build the real user-generated asset (UGA), or probably we may call it the exchangeable mind asset. By doing so, we will enter a new age of the Web---Web 3.0.

There is one more argument that is interesting. People used to say that nobody would like to pay to read a blog or a message. This is true. But there is actually one more sentence which should follow the previous one. That nobody is willing to pay is because Web 2.0 itself has not really produced anything that is worth of being purchased! Again, it tells the main limitation of Web 2.0.

There are many things we are willing to buy using money. For example, gold, a TV set, or even a pencil. Why do you want to buy them? They have internal value, AND they have exchangeable value, which makes them be asset more or less. Web 2.0, on the other hand, is poor on converting human's knowledge to be exchangeable capital/asset, despite it does help exchange capital in the other forms. This distinction tells the strength as well as the weakness of Web 2.0.

Anyway, from UGC to UGA is not trivial. It demands a great deal of ability of innovation to accomplish the request. But, at least, now we know where we should approach, don't we?

A good news for online retailers, but one more little thing

ReadWriteWeb has reported today that although economy is slow, online sales are going strong. This news somehow supports my prediction that the golden time of World Wide Web is coming. When more and more people have to stay at home because of the economic downturn, they are on the Web.

At the same time, now people are trying to buy cheaper stuff. The Web allows us to compare the price of a product in different retailers so that we may easily get the best deal. And we do not need to drive to the local stores, which again saves a few bucks.

There is, however, one more little thing that is worth of considering by the retailers: try their best to remove the shipping and handling fee. Amazon has done it quite well. With a moderate line of purchase, the Amazon customers get free shipping and handling. Believe it or not, this little thing may somehow be a determining factor, especially in this economic hard time. One dollar higher in price might be accepted by a little bit superior in quality (either on the product or on its service). One dollar on shipping and handling is, however, nothing but an overhead.

The coming of the golden time does not mean that we can now be careless on running the online services. On the contrary, now the online retailers must be more careful in details than ever because they might never get a better chance to enlarge the base of their customers, if they could not do well in this period of time.

The Golden Time of World Wide Web is coming

I have justed read a great post by Drake Bennett at Boston.com, which is titled "Depression 2009: What would it look like?" Despite of this inevitable modern depression, this post actually delivers an implicit message that the author himself might have overlooked. The golden time of World Wide Web is coming!

The Boston.com post is unquestionably excellent and everybody should read it carefully, more than once at least. There is, however, a regretful flaw in the article. Despite of the many differences between this "21st-century depression" and the old Great Depression at 1930s compared by the author, he forgot to mention the most critical and fundamental invention that distinguishes the two depressions---World Wide Web. Astonishingly, even Tim O'Reilly missed this distinction too in his post of recommendation.

In the post, Bennett repeated emphasizing that people who lose their jobs are going to stay at home watching TV for "free time is one thing a 21st-century depression would create in abundance." But wait a minute! Why not the people staying with computers and killing time on the Web in contrast to watching dumb TV shows? This distinction is incredibly crucial. By watching TV these jobless people could hardly produce any substantial value to the society. On the contrary, Web 2.0 has allowed people making substantial contribution to the world even if they are "jobless."

Before this 21st-century depression, most of the regular Web-2.0 content creators are either the less-experienced young generation (who have much free time to kill) or the few computer geeks (who are passionate on the Web). Due to this 21st-century depression, however, the Web is going to welcome a great force of new Web content generators who are more experienced in real life and with much greater diversity on the professional background. From the positive aspect, these people are freed from their previous labor work so that now they can be more actively participating into the creation of a new world. A truly blooming age of the Web is coming.

In this time of depression, the last thing we need is another depressive news. By contrast, we need to seek hope out of hopelessness and we must look for chances from crisis.

So, Web companies and Web investors, now it is your chance. You are going to have more users who are more experienced in real life. The input by these new users would significantly improve the quality and diversity of the Web content. Are you going to grasp this opportunity? Have you noticed their compelling capability of producing (comparing to the earlier regular Web content generators)? Are you able to provide these people new ways of value production from home?

The golden time of World Wide Web is just ahead. Thanks to the Web, we should all be wishful but not be depressive.

swing between big and small

In his recent Harvard Business Publishing post titled "Obama's Seven Lessons For Radical Innovators", Umair Haque had a few insight on how the business might walk into the future.

yesterday, we built huge corporations to do tiny, incremental things - tomorrow, we must build small organizations that can do tremendously massive things.

In fact, the swing between big and small is a natural phenomenon that exists not only in the business sector but also in nearly any domain sector. A similar statement was claimed at least as early as 14th century in a great Chinese historical novel named "Romance of the Three Kingdoms" (Chinese: 三国演义; pinyin: sānguó yǎnyì). The novel is based upon events in the turbulent years during the Three Kingdoms era of China, starting in 169 AC and ending with the reunification of the land in 280 AC. The novel is one of the greatest oriental literature not only because of its living story and characters but also because of the war strategies described in the book. For many Japanese and Chinese businessmen, Romance of the Three Kingdoms along with The Art of War are in the short book list of must-read.

At the beginning of the Romance of the Three Kingdoms, the author had written the following:

话说天下大势，分久必合，合久必分。[Said the general trend of the world: when being separated lasts long time it would be united, while being united lasts long time it is going to be separated.]

In the other words, the swing between big and small are constant cycles.

After the long time period that corporations compete to be bigger to survive, being big starts to gradually lose its superiority in innovation. By contrast, being big becomes, again, the obstacle of technological advancement. On the Web, many times we have witnessed the fade of innovation once a small venturous startup is acquired by some big company.

This phenomenon is not new at all in history. Just about two to three centuries ago, our ancestors had witnessed how the big landlords tried to buy the small but aggressive industrial factories into their own territory, and they also had witnessed how some comparatively bigger factory owners tried to acquire smaller factories and then mechanically link the factories together with the lack of long-sight plans. The old-style landlords thought that by acquiring new innovations they could still maintain their old glory. The new-style capitalists thought that by purchasing the newer inventions they might strengthen the leadership. Unfortunately, however, neither of them was right.

When we are in an age of innovation (or an age of great transition), we'd better thinking less of acquiring innovation, but growing proactively with innovation!

This is how being big is swinging to the side of being small.

More private, more focused, survive the economic downturn

Today at ThinkerNet, Mike Moran had an interesting post about virtual worlds going private. It reminds me a few thoughts in my mind for quite a while: is the Web industry moving to a sector that is more private and more focused (in contrast to more public and more general)? Moreover, is it the way that IT companies may survive through this economic downturn?

What is the difference between Unisfair and Second Life? Or what is the difference between Yammer and Twitter? Private versus public, target-focused versus general-purpose.

During an economic upturn, free, public, and general-purpose services could be great in revenue generation. The model maximizes the door to allow as many users as possible. The service providers may then monetize the traffic flow in a decent way.

However, the former model could be dangerous in an economic downturn, such as at present.

By nature, we humans would like move closer to our family or close friends when a danger is coming. In an economic downturn, people become less interested in casual social activities. By contrast, they want to make their actions more focused and more private. Either may they get comfort from the relatives, or they may obtain serious help by communicating with particular groups of people. As the result, the small private and target-focused social sites might become more popular than their general-purpose and much larger competitors, even if they may ask for a small amount of subscription fee.

As a brief summary, World Wide Web and the Web industry are still new. There are so many new phenomena that need us to think and discover the new regulations. A crisis is indeed a terrible thing to waste.

New generation business demands new DNA

Due to the spread of financial crisis at Wall Street, more people start to rethink the intrinsic problem in the present business infrastructure. In a recent Harvard Business Publishing post, Umair Haque, Director of the Havas Media Lab, appealed to "building a better kind of business" that would challenge the rot he saw at the heart of the institutions of business.

Among the five steps of resolution Haque recommended, I am particularly interested in his third suggestion (which mentioned by himself to be the "simplest, and most fundamental step"): understanding that next-generation businesses are built on new DNA, or new ways to organize and manage economic activities.

Haque believed the reason behind the institutional flux to be that "the centuries-old institutions of orthodox capitalism cannot support the transition to a hyperconnected global economy." Therefore, a tactical adjustment of the present financial policy might not be enough to really solve the problem. By contrast, Haque asked for a strategical revision of business fundamentals.

Unquestionably bold the claim is, I do agree to his words about "bringing new DNA to a table." This is what we need to do now.

What is the new DNA?

In his article, Haque, however, has not clearly explained what the new DNA of new business is. He mentioned the demand as well as the functions the new DNA must hold in order to "addresses the rot which pervades the economy at every level." But there is no explicit interpretation of the new DNA itself.

Certainly to define such a new DNA is not easy. I would also not pretend to knowing the answer. However, from a Web researcher's point of view (since many business people including Haque believe that Internet is the future of economy), I would like to share a few of my viewpoints.

I believe the new DNA would be mind asset. The crisis happening at Wall Street right now is rooted by the fundamental of capitalist economy. By nature, capital is near-sighted and selfish. As long as the economy is still built upon capital transaction, there is no way to really overcome the problem occurred today at Wall Street. The only possible solution is to revise the fundamental. By saying that I do not mean communism. By contrast, I expect the rise of mind asset and a new form of human society (harmonious society?).

Mind asset, as the name suggests, is property of human thoughts. The term is contrast to capital asset, which is property of all kinds of products and services.

About four months ago, before this financial crisis I have discussed a vision on the rise of mind asset when sharing with Adam Lindemann, CEO of Imindi. This vision is a reasonable derivation by my theory of Web evolution.

Web evolution is essentially a gradual increment of quality of Web resources. Meanwhile, Web resource is the basic presentation form of modern mind asset. Therefore, the eventual formation of modern mind asset is an inevitable consequence of Web evolution. Since mind product (in contrast to capital product) is the essential asset type of input and output of the postmodern industry, saying the Web industry (or Internet industry), mind asset would replace capital asset being the basis of the coming new economy.

To understand why mind asset being the new DNA can overcome the fundamental problem in the capitalist economy, we need to learn another subtle difference between capital and mind. In essence, capital is mass/energy while mind is information. As we discussed earlier, mass/energy cannot compute itself unless it consumes while information may compute by itself without consuming extra energy.

Now back to the current financial crisis at Wall Street. The crisis happens because the greedy Wall Street bankers tried to let capital compute itself to produce more wealth without literally consuming any real-world mass/energy. Fundamentally this thought contradicts to the computational nature of mass/energy. Therefore, this financial behavior itself is a bubble to burst from its beginning. It only matters when (but not whether) the financial crisis would come.

On the contrary, in theory information may indeed compute by itself without consuming any real-world mass/energy. Therefore, by replacing capital asset with mind asset we may eventually solve (or at least greatly eliminate) the future financial crisis when it is in reality impossible to get ride of the financial business at all (and nor might we remove greed from human's heart).

Referenced resources:

• How to Build a Next-Gen Business Now (Harvard Business Publishing)
  
• Who Needs Unfinished Business? (Torch is Wicked)
  
• We are in a new transition, part 1 (Thinking Space)
• We are in a new transition, part 2 (Thinking Space)
  
• Programming the Universe, Part 2 (Thinking Space)

Marketing strategy in social networks

In a 2-minute yBC video clip, Anastasia Goodstein, a Gen-Y book author and the founder of Ypulse, shared how corporate campaigns might have missed their mark on marketing the social networks. I am impressed by her observation that opaque marketing is not the right way to explore business opportunities in online social networks.

By Goodstein, quite a few present retail firms try to hire online young ambassadors to spread their positive buzz over varied social networks such as Facebook. Instead of regular salary, the retailers give the young ambassadors free stuffs as gift. The retailers, however, advise their young agents not to disclose the gifts they received. The retailers ask their young ambassadors pretending to be objective volunteers who happen to like the services or product instead of being "paid" salespersons. The policy seems smart, while indeed, however, it is a miss of the mark on what social networks are.

Here are some thoughts that Goodstein did not explicitly say in her short speech while I want to extend the speech a little bit.

Social networking is to connect people with various "expertise". A social network is where one helps everyone else and everyone else helps her. To help each other, in social networks people look for a member's strengths but not the amateur comments. This is why the strategy executed by the retailers is wrong.

In short, objective volunteers are not necessarily experts (and most regularly they are not), even if their names are on the list of one's friends. This is where the whole problem is sitting. A person wants to seek professional suggestions in contrast to unprofessional buzz through her social network. Therefore, if the young ambassadors are known competing to be the official service/product representative and receiving free stuffs from the service/product providers are the proof of their expertise, their recommendation and comments would immediately become more valuable than the others among the friends.

Note that there is a subtle issue of trust inside social networks. In a social network, by default there is already existence of certain degree of trustworthy between declared friends. Hence being "professional" or not is a more crucial issue than the issue of trust since the latter one already has been reached. If I have two varied recommendation of services from two friends, I will certainly pick the service recommended by the friend who I believe is more expertise on the related domain. I trust both of my friends; but when trustworthy is not longer an issue, I choose the expert's suggestion.

Now the error the mentioned retailers made has been clear. These retailers are addressing the issue of trust instead of expertise. In real life we have learned that many salespersons are not trustworthy. Hence the retailers want their young ambassadors to be looked like trustworthy. What they missed is that the issue of trustworthy has already been automatically solved by default in the social network. The young ambassadors, no matter whom they are, are already quite trustworthy among their friends (or otherwise they should not have been friends at the first place). What the retailers really need to invest following is to train the young ambassadors so that they looks like professional in front of their friends. That is the miss of the mark!

We are in a new transition, part 2

By two parts, I response to the Harmonious Age suggested by Adam Lindemann. In the first part, I describe its philosophy by civilization evolution. In the second part, I explain the impact of this theory to Web industry. This is the second part of my response.

World Wide Web, the new-age Watt steam engine

At the end of the 20th century, an Englishman Tim Berners-Lee invented how information could be transferred easily over the Internet by using hypertext. The invention is named World Wide Web. This invention is bringing human society to a new age.

Two centuries ago, another Englishman James Watt invented a machine called Watt steam engine. The machine made use of steam at a pressure just above atmospheric to drive the piston helped by a partial vacuum. This invention is more than another technological innovation. By contrast, the invention is a formal mark in history that capitalism had replaced feudalism. Because of Watt steam engine, industrial production was upgraded from the traditional, low-quantitative handicraft work to the modern mass production. Modern industry started emerging above the surface. Also due to this upgrade, capital (the base of modern industry) replaced land (the base of traditional agriculture) becoming the key asset in human society. Human civilization thus evolved from feudalism to capitalism.

World Wide Web is the modern-time Watt steam engine. Due to WWW, information industry is upgraded from handcraft, low quantitative production, elite-conducted work (by professional journalists, photographers, software programmers, etc.) to machine-powered, mass production, plebeian-conducted work (by every regular Web user). Information industry is evolving to its postmodern stage---Web industry. With this upgrade, mind, the base of information industry, is replacing capital, the base of traditional industry, to be the key asset of human society. Human civilization is evolving from capitalism to a new age.

Mind asset, the essential issue

Mind is always an asset. The potential productive power of human mind is known to be overwhelming. Nearly none production could be done without the participation of human mind. Furthermore, people has realized the power of mind for long time. Modern education is a typical effort that people are trying to make a product line of high-quality mind asset.

On the other hand, however, we often experience difficulties when trying to effectively use mind as asset. Unlike land or capital, individual mind is essentially intangible except for the owner of the mind. Presenting mind explicitly in formal ways is a long-time hard problem. Without explicit, formal presentation of mind asset, we cannot efficiently connect and compose varied mind asset and we cannot well measure the value of mind asset. The issue of mind aggregation is particularly critical because individual mind is often too shallow to be high quality.

Among all the others, the issue of mind-asset presentation is the central one. A formal, tangible presentation of mind asset is the key to let mind asset be circulating. Circulating mind asset is then the basis of the new civilizational transition.

Web resource, new presentation of mind asset

In tradition, we have developed varied forms of mind presentation. For example, books, tapes, drawing artifacts, buildings, etc. Through these forms, humans embody mind and preserve the embodied mind to be asset.

There are, however, at least four common problems in these traditional forms of mind asset.

(1) [cost] It is costly to produce mind asset in these presentations, and it is generally more expensive to share mind asset in these forms. In consequence, only the mind asset produced in superior quality (such as best books or artifacts) can be widely spread and shared.

(2) [strength] None of these presentations last long time. They can hardly survive from various natural or man-made disasters such as earthquake or war.

(3) [quality] By adopting these traditional presentations, we may embody mind in its static and passive aspects. But the forms are not good enough to embody the dynamic and active (which is the more valuable) aspect of human mind, let it alone some deeper implicit aspects of human mind such as self.

(4) [measurement] We do not have generic, objective methods to measure the value of mind asset in these traditional presentations.

If an asset is costly to present even in its low-quality form, with weak strength to survive longer, and unable to be measured objectively of its actual value, surely it is not a reliable asset for public to own and share. This problem is fundamental to information industry since mind asset is actually its base. The invention of World Wide Web solves the problem.

W3C defines World Wide Web to be "the universe of network-accessible information, the embodiment of human knowledge." This specification expresses three facets of the Web. First, the Web is a place for people to embody their mind. Second, the Web is a network of embodied mind. Third, through the Web people may access each other's embodied mind.

In particular, the mind asset on the Web is presented by Web resources, which are independent pieces of embodied human mind that can be used for producing. Note that this definition of Web resource is not a common one. In common (such as the one in Wikipedia), a Web resource is any object on the Web that is referenced by an URI. Such a definition has not precisely described the essence of Web resources if we compare it to the W3C definition of World Wide Web. By contrast, my new specification is directly based on the W3C Web definition. A Web resource may be a collection of Web data, a Web service, a Web link, or a mixture of them. A Web resource could and should be referenced by an URI, but a Web object referenced by an URI might not immediately be a Web resource unless it may produce. (more descriptions of my interpretation of Web resource are at here.)

the issue of cost

Comparing to producing the traditional forms of mind asset, Web resource production is cheap. The Web is a free and open place for everyone to embody mind. Web resources are presented in digital form, and digital form consumes very few natural resources. Hence in total Web resources are inexpensive to produce. Moreover, sharing Web resources also costs little. In consequence, we can now afford spreading and sharing the embodied mind even if it is in inferior quality.

the issue of strength

Web resources can last long time. Due to the low cost of digital copy and the flexibility of resource transmission on the Web, we may ideally preserve any piece of embodied mind nearly forever. In addition, World Wide Web is a virtual world. Hence it has great strength to survive from most of the real-world disasters, either natural or man-made.

the issue of quality

The most important improvement Web resources have made beyond the traditional forms of mind asset is their presentational quality.

In the traditional forms such as books or video tapes, we can introduce a mind as well as how it works. For example, a stock-market expert may write a book about what stock is and the timing of buying and selling stocks. But the book would not (if ever possible) tell the mind-asset consumers (the ones who read the book about stocks) the exact judgment of stocking selling the author would do in real time cases. The book readers have learned from a book the general principles. But it does not mean that the readers can consume the mind asset as well as the author does in real life. There is a natural gap between the presented value of the mind asset in the book and the real value of the mind asset in real world. This gap of knowledge understanding is a typical difficulty of mind asset measurement.

To solve the problem, on the Web people can program their mind (a typical dynamic mind asset) so that the production of their embodied mind could be precisely predictable by adding real-time parameters. In our example, stock-market experts can program their thoughts so that the program always produces the identical decision in the same real time case no matter who use it. This type of mind asset thus has higher quality than the standard static mind asset because it is more productive in use.

Moreover, on the Web we may embody a special type of mind asset that we rarely have successfully expressed before. It is self.

Self, self-consciousness, or self-awareness, is "a personal understanding of the very core of one's own identity." Due to self everybody is unique. By self, different people may develop varied use of the same knowledge. We thus have the variety of human mind. Self is so unique that nobody can embody the self of the others. The embodiment of self shows the ultimate value of a person, and hence it represents the respect of humanity. As a typical mind asset, self plays a critical role in many fields of World Wide Web, such as the implicit Web and Web evolution.

the issue of measurement

By presenting mind in Web resources, we are able to objectively measure its value as if we measure the value of capital asset. As we know, though there is a large variety of capital asset (such as stocks, real estates, etc.), we can uniformly measure its value by testing the capital asset in free market. In the similar way, we may objectively measure the value of a mind asset presented by Web resources. On the free Web, the value of a Web resource can be arranged completely by the mutual consent of producers and users.

Web Industry, platform that mind flows

While World Wide Web is a network of embodied mind, Web industry is the platform that mind flows. In the real capital world, modern industry (represented by the manufacture industry) takes capital as input and produces capital with greater value. In the virtual mind world, postmodern industry (represented by the Web industry) takes mind as input and produces mind with greater value. This analogue tells the essence of Web industry.

Web companies are the factories that produce Web resources. They may primarily produce data resources such as Amazon, or service resources such as Facebook, or link resources such as Google. Discarding all the superficial distinctions between each other, all Web companies are taking a few mind assets as input and producing a few mind assets as output. Ideally, the value of the output mind asset must be greater than the value of the input mind asset. Mind is the blood flowing around the system of Web industry, which is similar to that capital is the blood flowing over the system of manufacturing industry.

Web companies also partition their work load and cooperate to each other the same way as the other industrial corporations do. Take the traditional manufacture industry as an example, some corporations (such as iron puddling factories) pretreat crude materials and produce refined materials or parts while some other corporations (such as automobile manufactures) take refined materials and parts to produce further manufactured products. In similar, some Web companies (such as Blogger) are to help people embody their mind into Web resources from scratch while some other Web companies (such as del.icio.us) are to take the already embodied mind as input (such as a blog post in Blogger) and to produce higher quality mind assets that can be consumed better by end users.

There is, however, a unique restriction of Web resource producing and consuming in Web industry. Due to Web evolution, neither the production nor the consumption of Web resources may beyond the evolutionary stage of World Wide Web at the meantime.

Web resources produced in quality higher than what can be efficiently consumed at the meantime is overqualified. Yahoo! Directory is a typical example. The quality of link resources produced by Yahoo! Directory was generally beyond what Web 1.0 users could efficiently consume. Hence the service became very expensive to maintain. Eventually, Google Search replaced Yahoo Search being the leader of Web search industry thought the actual quality of link resources produced by Google Search is lower than the quality of link resources produced by Yahoo! Directory. (This is, however, not necessarily the end of the story. Y!OS is the newest step Yahoo is taking for Semantic Web. Will Y!OS eventually tend to produce overqualified Web resources again? We have this concern.)

On the other hand, Web resources produced in quality lower than what can be efficiently consumed at the meantime is underqualified. The examples in this category are plenty. In the age of Web 2.0, many Web-1.0 companies have to update the quality of their produced Web resources to the level of 2.0 or otherwise their market share is quickly taken by their Web-2.0 startup competitors.

Because of Web evolution, mind asset production is so dynamic that no company (including Google) can stick to one product quality for long. Web companies have to upgrade the quality of their produced mind assets with the progress of the Web every few years in order to just survive. Hence Web industry is indeed a business type with high risk and high payback.

We are in a new transition

We are in a new transition. The widespread of World Wide Web is the trigger of the transition. Because of the Web, the first time in history human mind becomes a critical circulating asset in society that ordinary people can buy, sell, produce, and share. The rise of mind asset will eventually push the human civilization evolving from the age of capitalism to the next.

We are still at the early stage of this transition. In similar, the Web is still at an early stage of its evolution. The Web companies that lead the progress of Web evolution will simultaneously be the leaders of human civilization in this transition. Until now, we have seen a few of these leaders such as Google and Facebook. They have led not only new technologies, but also the change of culture in our society.

Based on what we have analyzed, to be a leader of Web evolution is actually less about doing business in a particular realm such as "Web search". By contrast, the success is primarily determined by whether the founders of company have (either actively or unconsciously) well foreseen the quality of Web resources (or mind asset) in the next generation. Google approaches the quality through Web search while Facebook approaches the same quality by social networking. Neither of the success is due to the path they choose to take because at the same time many other companies were taking the same path as they did. The key of their success is the distinction of the quality of Web resources the two companies produce.

Which companies may be the next in the list of success? Though we don't know the names, one thing is certain---the ones understanding the resource quality upgrade of Web evolution may get the better chance to be the winners. Such a successful company might be another Web search company, might be another social networking company, or might be a company with a brand new focus. As we have said and I emphasize it again, the particular path taken by a company is not the deterministic factor. Different founders may have their preferred realms of interest. To the end, the variety of human mind allow us to approach the same goal in various paths. The actual key to the success is whether the founders are capable of foreseeing the progress of Web evolution, especially the progress of Web resource (mind asset) quality upgrade. Neither over-qualification nor under-qualification may clinch a winner. It can only be a perfect hit of the right quality.

Evolution of Web Business

This is my newest article in Semantic Report. In this article I present my thoughts of web evolution in the business realm. A truth is that when the Web evolves, most of the businesses on the Web must evolve simultaneously to simply survive. Maybe it is a little bit surprising, but Web business is indeed one of the most risky business categories in the world because of web evolution. New businesses always have plenty of chances, while old businesses often struggle on catching up with the step of web evolution.

In this article, I describe that the success of a hard-core web business (i.e. a company cannot survive without the Web) depends on the implementation of three things: bring its customers the chances of making money, bring its customers the entertainments, or help its customers be recognized and remembered. A successful implementation of any of the three philosophies can lead to a successful company. But a great company always engages at least two of the thoughts. If a company successfully implements all the three issues, it becomes unbeatable.

On the other hand, the progress of web evolution provides richer and richer ways for people to implement these three philosophical thoughts. If a company does not frequently upgrade its implementation according to the progress of web evolution, the company may easily be swapped out of the market by its new competitors that directly adopt the newest implementation methods in web evolution. This is thus the exciting but also the cruel side of the web business evolution.

You may check out the full article at the December 2007 edition of the Semantic Report.