P2P By Design provides radical design thinking for brand builders and business leaders. It is dedicated to showing how design can help businesses adapt to the peer-to-peer world rising from our networked culture. It takes a radical view, because, in this new world, the only path closed to us is the one where we turn back.
Ten years ago, if you had told any economist that you intended to establish an encyclopedia that asked people to work 20 - 30 unpaid hours a week writing articles that you planned to give away for free, that economist would have stared at you as if you had three heads. “Why on earth,” he would have wondered, “will anyone participate in that?”
Though we Wikipedia triumphed where Nupedia failed, the economist’s question remains unanswered. Why do people decide to participate in P2P communities in the first place? Why are highly skilled, technically sophisticated people using their limited discretionary time to do the unpaid work of writing and editing articles for an online encyclopedia?
To answer that, we must pose a new question: “What motivates us to work?” This was what the Federal Reserve asked when it funded a study in 2005 led by behavioral economists from the Massachusetts Institute of Technology, University of Chicago, and Carnegie Mellon. Generations of economists and businessmen had assumed motivation followed a carrot-and-stick logic: dangle a reward in front of a mule and the mule will improve its performance. The better the reward, the better the performance.
Conducted on the MIT campus, the Federal Reserve study required that students complete a series of challenges: memorize strings of digits, solve word and spatial puzzles, and complete physical tasks.
All involved creativity, motor skills, and concentration. To give the students an incentive to perform their best, the study offered three levels of monetary rewards – the highest was $50.
What happened? As long as the task involved only mechanical skill – i.e., “put ball in hoop” – the carrot-and-stick rewards worked: the better the reward, the better the performance. That makes sense. But if the task required even rudimentary cognitive skill – i.e., “prevent the candle wax from dripping on the table”—better rewards led to poorer performance. The results suggest that if an activity requires cognitive skill, rewards hurt performance.
Perplexed, the team hypothesized that the $50 prize was not enough of an incentive for MIT students. So they redid the experiment in Madurai, India, where $50 is a significant reward. The results, however, did not change: higher incentives had an adverse effect on performance. Since then, psychologists, sociologists, and other economists have replicated the study with the same results. Even researchers at the esteemed London School of Economics – alma mater of 12 Nobel Laureates in economics – examined 51 pay-for-performance studies. “We find that financial incentives can result in a negative impact on overall performance,” they concluded in June 2009. In other words, “if/then rewards” can undermine our ability to think creatively when we try to solve a problem.
If dangling a carrot can undermine even rudimentary cognitive engagement in an activity, the question remains: “What motivates us to work?”
Economists believe that the motivation to participate depends on the presence or absence of three psychological needs:
Autonomy: the urge to direct our own lives.
Mastery: the desire to get better and better at something that matters.
Purpose: the yearning to act in the service of something larger than ourselves.
If a structured activity offers these benefits, people will participate in it with their full being. And that is why people chose to participate in a common P2P endeavor.
(NOTE: to understand the next paragraphs, you need to first a previous post on the seven components of designing thriving P2P activity.)
Autonomy, mastery, and purpose are the intrinsic psychological rewards of the P2P models. Every platform begins with a higher purpose as defined by element #3: a motivating goal. Motivating goals always point toward an inspiring, transformative end and never to a payday. In pursuit of that goal, individuals act with element #6: tools for autonomous and creative action. To surround an individual with the means to act creatively is to fill him with the sense of autonomy he demands. Finally, P2P platforms nurture desires for mastery through element #7: measure progress. Measuring progress facilitates learning and acquiring the skills needed to achieve mastery at playing the game.
Yes, man is a profit maximizer, but only up to a certain point. After that, we are purpose maximizers. This is why people flock to a P2P platforms: such infrastructures of cooperation tap into the intrinsic drives of the human spirit. So if you want to inspire people to involve themselves deeply in your organization, don’t treat them like mules. Treat them like people who possess the dreams and aspirations to create meaningful change in their lives and in the world. Do this, and they will author encyclopedias with you. They’ll produce music albums with you and invite people to sleep on their couches. They will build homes, share their pantry, and write textbooks with you. And if you ask them very nicely, they just might help you create a billion-dollar revenue stream for your company.
1. Dan Ariely, Uri Gneezy, George Loewenstein, and Nina Mazar, “Federal Reserve Bank of Boston, Working Paper No. 05-11,” July 2005.
4. Bowles, Sam, “Policies Designed for Self-Interested Citizens May Undermine ‘The Moral Sentiments’: Evidence from Economic Experiments.” Science 320 (2008): 5883 (June 20).
5. Teresa M. Amabile and Steven J. Kramer, “What Really Motivates Workers,” Harvard Business Review (January 2010).
6. Karim R. Lakhani and Robert G. Wolf, “Why Hackers Do What They Do: Understanding Motivation and Effort in Free/Open Source Software Projects,” Perspectives on Free and Open Software, edited by Joseph Feller, Brian Fitzgerald, Scott A. Hissam, and Karim R. Lakhani (MIT Press, 2005).
Every media revolution has given individuals greater access to the control panel of civilization. Consequently, the capacity of the individual – for inquiry, invention, influence, and collaboration – now rivals that of global institutions. Individuals are no longer content to simply consume what companies make or to be “engaged” by it. Increasingly, they want to co-produce it: The product. The service. The marketing. Thus, the dominance of mass communication is being trumped by that of mass collaboration.
Early efforts to enter this new domain reveal mass collaboration can reward organizations with:
Self-propagating forms of marketing.
Lowered dependence on media buys.
Deeper involvement with consumers.
New forms of value to offer the marketplace.
New streams of revenue.
Innovative business models.
Even so, a vast portion of commerce hesitates. For the uninitiated, designing a P2P systems—or “infrastructures of cooperation” as I like to call them—seems daunting. “I know how to make an ad, but how the hell do I build a community? I don’t even know where to begin.” “How do I make sure it works out if I don’t put anyone in charge of it?” To the untrained eye, it looks like chaos. Most advice out there is so macro or so vague that its near worthless for a hopeful practitioner. Luckily the theorist Michel Bauwens has conducted some great work in this area. Michel published a paper, called “The Political Economy of Peer Production.” In it, he lists five criteria necessary to facilitate the emergence of peer-to-peer processes.
A networked technological infrastructure that enables distributed access to ‘fixed’ capital.
Multiple communication systems which allow for autonomous communication between cooperating agents.
The existence of a ‘software’ infrastructure (or as he later calls them “Tools” for autonomous global cooperation.
A legal infrastructure that enables the creation of use-value and protects it from private appropriation.
The diffusion of human intelligence.
I like these. A lot. They do a lot to move the conversation forward. But I still feel like they’re too broad. I’m really looking for concrete, actionable components that lead to massively collaborative behavior.
Over the last five years, I’ve been studying the fields concerned with emergent social production. They include the new institutional economics (i.e. Elinor Ostrom), systems theory (i.e. Donella Meadows), computational social science (i.e. Robert Axtell and Joshua Epstein), and evolutionary psychology (i.e. Mark van Vugt). What was remarkable to me that not only did their insights overlap, but they also overlapped with Bauwens criteria. The only difference is that, coming out of their research, I see not five but seven components needed to design a successful P2P platform:
Goal People must know the “Why?” and “To what end?” of a P2P effort to perceive any value in it. Purpose spurs participation.
A Shared Resource A shared resource is the “raw material” (data, soil, hard disk space, patents, workspace, a car fleet) that the community of participants transforms into new value or uses in new ways.
Place The more often people bump into each other the more likely they are to develop strong social bonds, share knowledge, collaborate, and feel a sense of a community.
Rules People need a sense what they can and cannot do in a particular P2P effort. Simple rules grease the skids of interest by helping people spend more time interacting within the brand commons and less time figuring it out.
Information Exchange Facilitating sharing gives people the means to educate each other, help each other, create shared meaning, develop a shared identity, and self-organize around ideas that excite them.
Tools By providing tools for creative and autonomous action, the sponsoring company lowers the barriers for all levels of people to create and contribute.
Feedback A well-designed P2P effort should collect data about participants’ activities, analyze it, and feed it back to them in useful ways. Such a mechanism is called a “feedback loop.” Feedback loops, which come in digital and nondigital formats, are powerful tools that help people change destructive behavior — even those that seem intractable—and encourage constructive behavior.
Now you might say, “That’s nothing new. I knew all that.” Sure. You probably knew each of them individually, but you didn’t put them together. After all, you’re familiar with a bar, a chain, a wheel, a seat, a pedal. But put them together, and you get something greater than the sum of their parts. You get a bike. Thats the idea behind this model.
While I created this model to feed creative thinking, service design, business model development, and marketing campaign development, it’s been highly effective as a diagnostic tool in explaining successes and failures. Let’s consider the design of the collaboratively created information commons known as Wikipedia. Before Wikipedia was Wikipedia, it was Nupedia (a.k.a. component #3: Place) — a project dedicated to producing a free online encyclopedia (a.k.a. component #1: Goal). Nupedia, however, enlisted highly qualified volunteer contributors and vetted their writing in an elaborate multi-step, peer-review process (a.k.a. component #4: Rules). After one year, only 12 articles (a.k.a. component #2: Shared Resource) had been produced. In commons terms, Nupedia’s rules clogged the creative process by demanding a laborious peer-review process. Even if it changed those rules, the site did not provide contributors the tools to create and post articles autonomously. To remedy these problems, Jimmy Wales, the founder of Nupedia, rebuilt the site with Wiki software (a.k.a. component #6: Tools). This software allowed anyone the ability to create, post, and edit (a.k.a. component #7: Feedback) the articles at will. Most importantly, it provided the community with the ability to debate disputed content (a.k.a. component #5: Information Exchange). No more panels. No more vetting. Just free reign to create and publish on any topic. As a final move, Jimmy renamed the site Wikipedia. Six years later, the site contained more than 2 million articles, making it the largest encyclopedia ever assembled — a record previously held by the Yongle Encyclopedia (1408). Today, Wikipedia has 11.5 million articles it ranks as the 6th-most-trafficked site on the Internet; and tests show it is just as accurate and more up to date than traditional encyclopedias.
This model also works well to explain the Kony 2012 phenomena. Give it a shot.