Dis-intermediate This

Yes, it's true, I don't post often.  You can't expect to see much here, particularly with the new blog.digg.com refresh.  I'm considering just redirecting there, but I figure I'll leave this up a wee bit more and if enough people ask me to keep this here I'll let it stay.

I'm being asked a lot about what I mean by dis-intermediation.   Essentially, the idea is that a monopoly of some kind, whether it exists because of tradition, inertia, or simple corruption, forces a supply chain in such a way that it can't be bypassed.  For example, in the past, you always had to pay a small subset of telecommunications carriers to host a website (1995-1998), or at least for the T1 or whatever the pipe was to feed it, and thus those few carriers collected a dime on every website launched.  However, if you allow the content to sit next to the various networks, bypassing the local loops, you dis-intermediate the supply chain that used to exist.  You are not closing the telecom companies out of the competition, you just force them to literally compete for hosting.  It has economic impacts, of course, and pricing tends to fall and quality tends to climb.

With media, the same principle applies... To create a truly level playing field, allow any media object to access equal size markets as a publisher who controls a distribution platform.  You don't need to have a printing press any longer, or a large publishing network, to get the same idea or media object to millions of people (like blogs, videos, news articles...).  Digg tries to do this, like Equinix did for telecom and Internet infrastructure.

Equinix was a physical solution, which required billions to be spent on relocating networks into physical buildings scattered around the globe.  Digg leverages that infrastructure (Internet) to accomplish this virtually.

Comments

[Paolo]

What is interesting is that you also seem to succeed in making an ally out of your monopolistic "enemy": the largest networks peering at Equinix, building the foundations for its success, the media putting a digg.it button on their pages, underlining the importance of getting on its front page...

By the way, I don't think there's a word for dis-intermediation in my language... A LOT to do here if you're interested... just kidding...

My vote to keep this space open, for what it's worth.

[Jay Adelson]

Paolo... Your comments are always appreciated.

Yes, I think the idea is that the people, even the leaders, of these companies believe that they are caught in this cycle almost against their will.

The shareholders don't want change, as profits motivate their actions. If you change to an open policy, you disappoint those shareholders.

However, long term, you can prove it is better for that company's survival and profits. The trouble is shareholders don't behave with the long term in mind.

Thus, when it comes down to it, it's not so hard to get media companies and telecom companies to cooperate. It's hard to surf things like revenue justifications, etc...but you can find ways around that (i.e., more traffic to a news site when stories are promoted, more IP traffic being sold at a point of presence, or more IP traffic being sold because the Internet can grow, etc.).

It's not as sinister as people think, I've learned, which helps make companies like Digg and Equinix work. If it was all a conspiracy, believe me, we wouldn't exist.

Still, I found this video amusing the other day...

http://video.google.com/videoplay?docid=1057391195915718366&q=smigel&hl=en

It's a total exaggeration but funny nonetheless.

[Pete Fuller]

I could see two reasons to keep posting here from time to time. For one, comments are allowed here, whereas I don't see that functionality on blog.digg.com. I can understand why; you'd be inundated with comments on digg's blog.

And so that leads to reason number 2: Here, you have (apparently) a bit more anonymity. So the comments, and therefore the discussions that come out of them, will probably have a bit more substance. Well, not including this one haha.

Blog about digg on digg's blog. Use this to, uh... pontificate a bit? ;) Eh. You'll figure something out.

[Paolo]

I do not want to monopolise this space... :-) ... but I have a (kind of ethical) comment/follow up/question to your post - no need to answer, however, I have already wasted your time enough, recently, and I'll be done after this post.

>>I think the idea is that ... the leaders of these companies believe that they are caught in this cycle almost against their will.

You are probably right, but I think real leaders do recognise when a revolutionary idea comes out, ESPECIALLY if it is a potential threat to their monopoly.

As an Equinix related example, I know that, in the very dark times of the data center glut, a Level 3 manager, asked to comment on the colocation arena, indicated Equinix as the potential winner and the best business plan. Neutrality was the revolution coming, he could see it.

What if he had tried to get a share of this new winning environment (neutral data centers rather than its own Telecom owned) as that was the best decision for his shareholders? Could Equinix have accepted Level 3 (or any other Telecom) as a big investor? (well, let's face it, the S'pore Government, controlling both Singtel and Starhub, wasn't really a neutral player in the Telecom sector, although not USA based. But the merger was bringing much needed money - to avoid bk - and also giving immediate access to Asia, a new market)

The question is if dealing with the devil (accepting a Telecom as shareholder, in this Equinix related example, as long as the business model isn't compromised) is acceptable if it helps (is instrumental in) clearing the monopoly, breaking the status quo, and spreading the revolution.

When I was young I would probably have answered no to this question - you don't compromise when you're 20 years old - but the older I get, the more the Macchiavelli in me comes out... ;-)

Digg related, how far could this revolutionary approach go with some kind of media partnership (in terms of new sectors, areas, markets, etc.) - not saying you are considering or needing it, but would it be worth partnering if it could help spread it faster, wider and may be better, always in full respect of its business model?

>>The trouble is shareholders don't behave with the long term in mind.

I might be minority, but I'm not alone thinking it's all about long term when you invest... and revolutions tend to bring a lot of value only in the long term...

Ciao

[Jim]

I'd keep this blog going. I would think there's less pressure to hold the company line here (even though technically, you are the company line, heh).