Business Models, Experimentation, Nostalgia, Research, Technology, World of Tomorrow

Businessman Closes Product, Community Enraged! The Death of Tools of Change

I was there, man. There, right at the very start. I was there when Manolis Kelaidis, a designer from the Royal College of Art, delivered a stunning and genuinely awe inspiring keynote talk on how to hack a book with electrically conductive ink.

To this day, it’s the only genuine standing ovation I have seen and indeed enthusiastically participated in. If you were there, dear reader (and I know that at least one of you was), you’ll know exactly what that moment felt like.

Sometimes, it seems like a lifetime ago; other times, like it was only yesterday. The Fairmont Hotel, San Jose California, June 18-20 2007. This was the very first Tools of Change (TOC) Conference from O’Reilly Publishing. It’s fair to say, it was a signature event in the world of publishing. I made the pilgrimage from dear old Blighty, sitting on the train from SFO down to San Jose, through mystical names that made the future — Menlo Park, Palo Alto, Mountain View. Truth is, when I booked the airline ticket, I wasn’t exactly sure where San Jose was . . . and back then, one had to work a little harder to figure out the location of something.

I still have the first TOC programme

I still have the first TOC programme

Anyway, I made it there along with a few hundred like minded pilgrims in search of . . . well, back then, we weren’t really sure I think. I was trying to see something other than the usual in terms of what was on offer at the publishing conferences. I’d always wanted to attend the Web 2.0 Conference (now deceased: 2004-2012), and this was from the same place with a similar mindset, but y’know, it had publishing in the title so it was an easier sell to my bosses. And readers, yes, it really was awesome. Tim O’Reilly was there — he did “the brief history of publishing” routine and birthed a cliché since repeated in conferences too numerous to count. So was Jimmy from Wikipedia, Chris Anderson from Wired, beta testing his arguments on marginal cost (later to become the underwhelming Free!), Bruce Chizen, and many more. But Manolis, man, that dude utterly stole the show.

And now it’s over.

I’m not surprised. See, I attended the second TOC, in New York in February 2008. And the third in 2009. And having eulogised to anyone who would listen about how great TOC was, I was actually a little disappointed with the third one. Don’t get me wrong, there were still some fantastic talks and keynotes, but by now I was really starting to feel like I was getting a handle on this whole disruptive wave of publishing business and perhaps my increased knowledge was enabling me to be more discerning about the arguments and viewpoints I was witnessing.

About the same time as TOC, the Association of Learned and Professional Society Publishers (ALPSP) asked myself and Leigh Dodds to put together a training course on Web 2.0. We did, and introduced a steady stream of scholarly publishing types to the wonders of blogging, mash-ups (I know, how quaint!), and wikis. Thing is, we kept having to rework the course every six months. Leigh left, and I continued with a colleague from the Royal Society of Chemistry (Will Russell, take a bow). The Web 2.0 course morphed into “social media and communities” and then we added in big data (well, little data, really). And then this year, it ended. I’m not sad. Its time was over. People had mostly got to grips with how to think about all this stuff. Looking back on the feedback in the pre-course survey, one can see a progression from wide-eyed and borderline panic-stricken, to calm, rational, and professionally skeptical.

So when the announcement arrived via the TOC mailing list, I read it, thought, “fair enough” and moved on. A short while later, Twitter did what Twitter does so well, and started to disgorge various mutterings of discontent with this decision. OK, fair enough, some people get too attached to things, and I guess if you had gotten into the habit of rocking up to the Big Apple in February, then you might be a bit upset not to have an excuse to carry on. But then it all got a bit strange. Brian O’Leary of Magellan Media, wrote a rather aggressive post decrying O’Reilly’s decision to close the conference. Then there was this one from Publishing Perspectives. The quote “O’Reilly’s article is easily one of the most reviled publishing statements in recent memory” stands out as being particularly hyperbolic.

There’ve been a few of these things happening recently. Google announced it was going to close Reader. Cue uproar as people were enraged over the ceasing of a utility they paid not one single penny or cent for. Mendeley takes one of the two available routes for companies funded by investment vehicles, and the “community” erupts in outrage as “company and investors seek financially attractive outcome for all their hardwork/investment gamble.” What exactly did “disgusted of teh interwebs” expect was going to happen? And now Tim. Tim, the high priest of all things Internet, has taken the holy tablets of Meme and unceremoniously dashed them upon the rocks of reality. He’s closed something down. Taken a business decision. Hold the sentiment, heavy on the pragmatism.

Here’s the thing. If this “outrage” is going to erupt every time something like this happens, we’re going to need a better filter. Because Mendeley has two million users, and my count of the unique Twitter users who troubled themselves to #mendelete on Twitter was an infinitesimal proportion of that. But they were the loud ones who always have an opinion to share (not criticising, just observing). Same with Google and Reader no doubt. I can’t do numbers for the O’Reilly “outrage,” but seriously opinionistas — you are publishers. You’ve all had to kill something that no longer was performing. We all have. It’s not nice. But absent a mythical patron with bottomless pockets, this happens.

Frankly, I expect better from those who attended TOC. One of the best lessons I learned from Tools of Change, was this:

Fail Fast, Fail Often, and Fail Cheaply.

Buried in that statement is a simple message about measuring what you are doing and whether it’s (still) working. And if it isn’t, then you have some decisions to take. O’Reilly has been there before. Google ate half the O’Reilly book business between 2000 and 2003. Hard decisions had to be taken. You can read about that here in an account of his visit to talk to Nature. That was the genesis of the O’Reilly conference business. Agility isn’t always about doing the new stuff, the cool stuff, the meme-worthy, and the rest. Even when you are distributing the future, you still have to clean up after yourself or you’ll end up in a mess. Personally I’m glad TOC is over. It tells me that behind the many and influential thoughts that spill out of Sebastopol, CA, there is a businessman doing the thinking. He’ll be talking to us at the SSP Annual Meeting. I’ve always found him to be good value for money, even when I’ve disagreed with what he had to say.

TOC is done. What’s next?

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Discussion

22 thoughts on “Businessman Closes Product, Community Enraged! The Death of Tools of Change

  1. Emerging technology spawns emerging rhetoric and reasoning so seeing what’s next is in part a matter of semantic analysis. Reading the buzz as it were. Panels proliferate then become conferences. OA is near the top of the list but not alone by any means. Semantic analysis is there somewhere as well. See I have used the term twice.

    Posted by David Wojick | May 9, 2013, 7:12 am
  2. David, you write well. I mean the style and flow, the enjoyment reader gets from the start of this piece instantly recognizing it is a short story (not a mere blog post). Thank you.

    Have you ever considered writing a “Futures” -piece for Nature?

    Posted by JanneSeppanen | May 9, 2013, 7:33 am
  3. Google Reader may be a free product, but for me it’s a productivity tool that I am willing to pay for. The problem is that Google never gave its users the chance to put their money where their mouths are. When Xmarks was floundering in search of a useful business model, it both asked its users if they’d be willing to pay for the service and looked for a buyer who believed in the product. It got both. Google, on the other hand, made no such efforts AFAIK. Given that there are no comparable alternatives and that Reader is used as a productivity tool, I think the uproar was justified.

    Posted by Autumn | May 9, 2013, 8:20 am
    • As you point out, there’s peril in becoming reliant on a free product:

      http://scholarlykitchen.sspnet.org/2013/01/24/mendeley-connotea-and-the-perils-of-free-services/

      Posted by David Crotty | May 9, 2013, 8:50 am
      • At the risk of descending into mutual backslapping, that there was a nice article.

        It’s the fact that folks just seem to think that free is forever that surprises me. Surely, if one uses a free thing, one keeps an eye out for substitutes to switch to should free cease to be. We use free stuff at work. There’s a set of developer stories that sit there waiting to be enacted with a high priority when the situation changes. It ain’t rocket science, it’s risk management and scenario planning.

        Free things are time limited. Period. When the funds run out, you are done if you cannot secure more money. I’ve wandered through ghost site after ghost site funded by donor funds that stopped arriving. Sites just waiting for a sysadmin to flick a switch on a server somewhere. VC funded free? No different. Big Corp funded free? No different. Govt funded free? Yup, same there.

        Posted by David Smith | May 9, 2013, 10:47 am
        • When the funds run out, you are done if you cannot secure more money.

          Is that not true for a paid service as well? Also, even if something is commercially viable, that is not a guarantee that the service will still be available six months from now? Even profitable things can get shut down in moment’s notice if shareholders/executives decide time and resources are better spent elsewhere.

          Posted by JanneSeppanen | May 9, 2013, 11:12 am
          • True, but probabilistically, you can judge the stability of things by working out how they are powered in monetary terms. Paid for things that die either never got the audience/user-base or they left for something else. Yes, restructuring does happen of course. My thesis is that it’s better to assume that free = unstable. And another point, things you pay for are a two sided transaction. O’Reilly Conferences were designed to be profitable to O’Reilly. We attended in order to acquire value back to the organisations that sent us. All that community stuff? Basically a nice way to drive repeat attendance – amortise the risk. And as members of the ‘community’, folks should have been smart enough to figure that out. There very few things out there that are free and look to be stable, and the ones I can think of (Wikipedia and linux) are likely products of their time, rather than exemplars of some new business paradigm.

            Posted by David Smith | May 9, 2013, 11:41 am
            • You are right, one can and should assume a free thing can not continue indefinitely, but I am not sure about the converse that paid would be inherently more stable.

              An analogy from my world: I once though a research grant for a year or two (“free”) is undesirable compared to a job contract (“paid”), because of the lack of stability… Until I realized people with a job (in the private sector especially) can really only be certain about their pay for the length of the termination period guaranteed by law: three months here in Finland, and much less I think in the US.

              If you know that the “free” service will certainly be funded for the next X months (gov’t funding for example), that is much more stability than a fully commercial service, that is continuously evaluated and subject to termination depending on business logic, can ever offer.

              I am not trying to argue for or against either paid or free, just saying sometimes free has better short-term stability than paid, even though free is more likely to die in the long term.

              Posted by JanneSeppanen | May 9, 2013, 12:37 pm
          • I think I’d side with Janne in this context. “Free” doesn’t necessarily mean unstable. Google provides a free search engine, and given the enormous amount of money they make from advertising, I’d suggest it’s a pretty stable bet for the near future, much more so than if someone else offered a pay-per-use search engine. Rather I’d look more to see if the service has a sustainable business model, or really, any business model whatsoever to make that call. In that context though, free services often do seem to be the hallmark of a “we’ll figure it out later” business mindset, which nearly always ends in disappointment for someone.

            To me the real peril of many free services is not that they’re free, but that if you’re the free user, you’re not the real customer. In the case of Mendeley, the customer turned out to be Elsevier. For something like Google or Facebook, the real customer is the advertiser and the user is the product being sold. This often results in business decisions that are not in the best interests of the users. Better to be a paying customer, to be the focus of all of the company’s business strategy rather than a pawn to be sold out to the “real” customers.

            Posted by David Crotty | May 9, 2013, 12:53 pm
            • That is exactly why I have deep distrust at anyone offering a free service that does not explicitly and openly state what the business model is. Either they do not have one (which is bad), or more likely, they have a reason to hide it from me (which is worse).

              However, while the “pawn” vs “customer” caricature of free services is often true, I don’ t think it holds for companies that openly offer a service at an interface between two or more entities, charging one party and giving the resulting service free for the other. A traditional subscription publisher’s service is free for authors who seek dissemination-service for their work, but I suppose you would not call the authors “pawns” that are sold out, even though the paying customers are libraries? The differentiating thing here is openness; the business model of such services is not hidden from the “free” user, and the free user knows and understands who pays and why, and how that is beneficial to all parties.

              Posted by JanneSeppanen | May 9, 2013, 1:50 pm
              • Well put. It is possible to serve multiple customers at the same time and transparency is increasingly important.

                Posted by David Crotty | May 9, 2013, 4:08 pm
            • I’m tempted to say, when Google has been doing resource discovery for 100+ years and survived two technical transitions I’ll agree with you! But that’s being somewhat flippant. They certainly are dominant…

              I think we are actually quite in agreement here. Time limited funding is unstable over time, because you know the party will end, and that’s it unless you can find more money. So, as I said above, I’ve seen many info resources drifting into obsolescence because the money ran out and nobody thought about what to do when it did. Free in the internet age absolutely correlates with no business model. This applied to Google by the way until they discovered the precursor to adwords (which they didn’t invent by the way) their original business plan was “get bought by Yahoo” IIRC (the details are in John Battelle’s excellent “The Search”). And yes, free services are typically leveraging the people who take advantage of the service. What I didn’t say in the previous comment, was that one should of course do due diligence on the thing one is about to make use of. And so, to get back to my post, Do the opinionista’s really think their armchair MBAing is better than a crack team of digital ninjas who know exactly how a tech conference trends out over time? If you are a user of a VC funded anything, expect stuff to happen during its lifecycle as it heads towards an out for the investors. Cough PeerJ Cough…

              Posted by David Smith | May 9, 2013, 2:08 pm
              • You may enjoy tomorrow’s post about the seemingly oppositional forces of crowdsourced egalitarianism and authoritative expertise.

                Posted by David Crotty | May 9, 2013, 4:10 pm
    • Valid points and I think there’s a nuanced debate to have about the effect that free products have on distorting a market. I’d want to know why Google has given notice to shut it down. To be fair, they’ve given time for alternatives to be found. But my point was really about the need for us to also own the decisions we take. The market set the value for an RSS tool at zero. When one uses a tool that must be subsidised in some way, then a smart approach is to keep an eye open for the day when it might end. People shouldn’t have been shocked once they’d thought about it for a moment. Same with anything backed by VC money.

      Posted by David Smith | May 9, 2013, 10:37 am
  4. I was there! I, too, cheered wildy and genuinley for Manolis. Change was in the air. Heady times indeed.
    Watch the video. Remember that it was 2007. Dream on!

    Posted by Bill O'Brien | May 9, 2013, 10:38 am
    • Yes! Now where are those mobile powered books with touch interfaces on the page? Actually, I’m being semi-serious. We have second screen experiences for the TV, why not for the physical book? Although, I’ve not bought a physical book for a while now…

      Posted by David Smith | May 9, 2013, 11:25 am
  5. One article I read about this stated that O’Reilly’s next move is a platform move, with something currently called “Atlas.” Again, this speaks to agility, which O’Reilly has consistently demonstrated by matching action to words. He invests, takes risks, reaps rewards, and cuts his losses. What’s not to admire from a business perspective?

    Posted by Kent Anderson | May 9, 2013, 11:24 am
  6. You’ve misstated the content of my post. I didn’t “decry O’Reilly’s decision”; I criticized the way that they closed down a community without notice. I also pointed out the conflict between words and actions. I don’t think my post is “aggressive”; the arguments made there are fully documented, at times in O’Reilly’s own words. If you read my post and still think that O’Reilly is “matching action to words”, as Kent put it, then we disagree.

    Posted by Brian O'Leary | May 10, 2013, 8:43 am
    • Hi Brian,

      Look, basically I think TOC was a conference first and anything else second. Furthermore I think that the community stuff was always an adjunct to the business of getting bums on conference seats. And the one drove the existence of the other. No conference, no anything else. So it’s then axiomatic that shutting down the conference means everything else goes. Finally, and based only on public info, my assumption is that alternatives to shutting it down were debated and rejected. I can think of some reasons why that might happen. You may well have more data to drive your assesment that selling TOC was a viable thing to do. So yeah, I think we are going to agree to disagree on this one. But I certainly value your point of view.

      Posted by David Smith | May 10, 2013, 12:40 pm
  7. I don’t like that you made a straw man of Reader to add legitimacy to your argument. Google killed Reader for competitive reasons. They could have easily tried to charge for the service and people would have paid. Based on an arbitrary $20/yr and reading that Feedly has already acquired several million users, Reader could have been well over a $100 million/year business.

    Posted by Mike Perlman | May 10, 2013, 11:52 am
    • That’s not my point. My point is that when one decides to use something for which there is no reciprocal transactional arrangement, one had better go into it with ones eyes open. I use free stuff all the time. I’m aware that I use that thing basically for so long as the provider chooses to make it available. Service level expectations should be set appropriately.

      As it happens I’m surprised that Google shut Reader down. But my suspicions are that it was shut down for reasons that aren’t really anything to do with the product itself. And as I’ve noted elsewhere in comments, there is a debate to be had around the potential distorting effects of free on markets, where free dominates a market. But’s that’s a complex debate.

      Posted by David Smith | May 10, 2013, 12:50 pm

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