Last Tuesday morning I sat in my pyjamas, reading Clay Shirky’s essay, “The Collapse of Complex Business Models” while waiting for the kettle to boil. The essay struck me as interesting, the kettle whistled, I went to eat breakfast.
That evening I reread the essay more closely, and the closer I read it, the less I liked it. At sunrise the essay had been an entertaining set of anecdotes built around an intriguing core idea; by sunset it had wilted, revealed as an entertaining set of anecdotes pulled from all over the map in the vain hope that there might, somewhere, be a theme that would hold them together.
It’s not the first time I have had this reaction to a Clay Shirky essay, and as each essay he writes gets a lot of attention (published earlier this month, googling [Shirky “Collapse of Complex Business Models”] already returns over 150,000 hits) it might be worth sketching out why he, along with other influential speakers who use a similar style, consistently fail to provide substance even as they succeed in reaching and influencing a large audience. So here are the Four Rules of Big Ideas: techniques the masters use to make that keynote more stimulating, that essay more likely to catch fire, all without doing too much thinking.
The thesis of Shirky’s essay, in case you haven’t read it, is that the nature of bureaucracy is such that traditional media companies, faced with declining revenues, are unable to cut production expenses, and so are headed towards collapse. Despite his title, the stories he tells are not a problem of “complex business models” but of “expensive production”, and even though it is uncredited, many readers will recognize the core of the essay from that other Clay, Christensen’s The Innovator’s Dilemma.
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Everybody likes a story, and Clay Shirky tells a good one. Collecting stories is not difficult: if you think about a subject long enough, all kinds of tangential happenings remind you of it, so you’ll get a good selection to draw from before long. Sometimes these stories are only peripherally connected to the theme you are developing, but that doesn’t matter because their role is not to advance your argument in any material way. Their role is to contribute to the impression of a widely-read, eclectically educated piece of writing and to keep your audience off balance, not sure where you are going next.
In 1983 Nobel Prize winner Roald Hoffmann visited the chemistry department at McMaster University. As the audienced assembled, Professor Ed Hileman leaned over a chair and said to me and other graduate students: “You watch – he’ll give an interesting talk but there will be no questions”. And he was right. Hoffmann’s talk was an extension of his Nobel lecture, a fascinating exposi
tion of how the orbital symmetry rules he had developed could be extended to explain the structure of hundreds of organometallic complexes and clusters. But his talk answered all the questions it raised, and by answering them, sealed off avenues where questions could have been asked.
If you want to provoke discussion, logic and detail are not your friends. Instead, don’t worry about loose ends and half-expressed ideas – just keep the audience’s interest and provide colour, and let them fill in the gaps later. Make sure your audience is not sure what’s coming next, not sure if they quite understood what they just heard. That’s what makes for good entertainment. It’s the First Rule of Big Ideas: tell stories and think by analogy.
Here is the shortest of the stories in Clay Shirky’s essay:
Dr. Amy Smith is a professor in the Department of Mechanical Engineering at MIT, where she runs the Development Lab, or D-Lab, a lab organized around simple and cheap engineering solutions for the developing world.
Among the rules of thumb she offers for building in that environment is this: “If you want something to be 10 times cheaper, take out 90% of the materials.” Making media is like that now except, for “materials”, substitute “labor.”
The loose analogy with cheap engineering solutions tells us nothing new about the media and its problems. Why invoke it then? Well, it does suggest that successful engineering solutions for the developing world are evidence in favour of the thesis of the essay, although they are not, and it brings MIT on side with the argument, which can’t be bad. This is how stories and analogies work – they suggest connections between different fields, connect solutions to different problems.
But stories and analogies should be a starting point for thought, and not its terminus. They should be the spark that prompts more analytical, more rigorous investigation and introspection, testing out your idea to see where it fits reality and where it fails. In this essay, and in some of his others (see below) anecdotes are all there is, and that’s just not good enough.
Clay Shirky tells no fewer than five separate stories in his short essay. He explains how his title is taken from a book called The Collapse of Complex Societies; he tells a story about a consulting engagement he had at AT&T; he spins his short MIT story; he talks about a web video comedy called In the Motherhood and how ABC failed to turn the web video into a successful TV series; and he talks about Charlie biting his brother’s finger on YouTube. Charming, each and every one, but what you might not notice on a first casual reading is that there is little to hold them together or back them up. Switching from story to story keeps the reader off-balance and makes it seem plausible that there is, in fact, a coherent mechanism behind the anecdata if only we were quick enough to catch it as the stories f
ly by. But there isn’t. The resolution never appears. There is nothing behind the curtain.
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Aside: here is Clay Shirky writing about YouTube:
The most watched minute of video made in the last five years shows baby Charlie biting his brother’s finger. (Twice!)
which is, as of this date, no longer true. The most watched video made in the last five years shows Lady Gaga and a group of hired models dancing on an elaborate set in a video that embodies complex production methods, that is part of the Vevo channel (a joint venture between Google and major record labels) and that features product placements by Nemiroff Vodka, Parrot by Starck, Carerra sunglasses, and HP Envy [link]. Now there is a complex business model.
As a further aside, analysts Visible Measures add in all copies of a video together with spoofs and pastiches, and their list of the top fifteen videos is as follows.
- Soulja Boy: Crank Dat (music video: Universal) – 722,438,268
- Twilight Saga: New Moon (film: Summit Entertainment) – 639,966,996
- Beyonce: Single Ladies (music video: Sony) – 522,039,429
- Michael Jackson: Thriller (music video: Epic Records) – 443,535,722
- The Gummy Bear Song (music video: Gummibear International) – 394,327,606
- Lady Gaga: Poker Face (music video: Universal) – 374,606,128
- Lady Gaga: Bad Romance (music video: Universal) – 360,020,327
- TImbaland: Apologize (music video: Mosley Music Group) – 355,404,824
- Susan Boyle: Britain’s Got Talent (TV: Freemantle/ITV) – 347,670,927
- Twilight (film: Summit Entertainment) – 343,969,063
- Modern Warfare 2 (video game: Activision) – 339,913,412
- Jeff Dunham: Achmed the Dead Terrorist (TV) – 328,891,308
- Mariah Carey: Touch My Body (music video: Universal) – 324,057,568
- Charlie Bit My Finger Again (user generated) – 288,666,331
- Michael Jackson: Beat It (music video: Records) – 286,279,009
It seems that complexity has its place after all.
A natural response to this complaint would be that this one particular video is not “the point”; that I don’t “get it”, that it is not what the essay is really “about”. After all, Clay also writes this sentence:
In the future, at least some methods of producing video for the web will become as complex, with as many details to attend to, as television has today, and people will doubtless make pots of money on those forms of production.
And here is one benefit of building an essay on anecdata: you can always argue that a particular story is “not the point”. To take it one step further, here is the Second Rule of Big Ideas: make the point catchy, but make it ambiguous. As Thomas Friedman has said, “He who names an issue, owns it”, so a memorable name (”The Golden Arches Theory of Conflict Prevention”) counts far more than an accurate one, and an oracular title is the best of all. The title of Shirky’s essay is not up there with that of his next book “Cognitive Surplus”, which is an obvious attempt to coin a new phrase, but it does use the rule. The Collapse of Complex Business Models has a ring of down-to-earth pragmatism about it: if you are slave to an obsolete business model, then you get what you deserve. But a business model is a strategy for matching costs to revenues in such a way that you end up with a profit, and all he really writes about is one part of a business model: production costs. Why then not call it “The Collapse of Complex Production Methods”? My guess is that, consciously or not, Clay chose “business model” because it is a bigger, more abstract, and less concrete concept than “production costs” and using “business models” keeps the point of the essay ambitious, ambiguous and open to interpretation.
The rule extends beyond the title into the text itself. Clay has a reputation for being plain-spoken and jargon-free, but that’s not really accurate. He doesn’t load up his talks and essays with the jargon of the field he is talking about (culture), but he does sprinkle them with jargon from many places, leaning most heavily to economics and engineering. He borrows liberally from economics with his talk of “the marginal value of complexity”, Coasian transaction costs, and also the ”supply-and-demand curve” (really?). He switches to engineering when he refers to societal collapse as “sudden decoherence” and discussed negotiations that “took place in the grid of the television industry”, and to business lingo with his talk of “ecosystems” and supply curves going “parabolic”. The language is colourful, and it carries the reader along. It speaks to his natural audience of geeks and techno-enthusiasts, but the lack of precision keeps the audience on its toes while hinting, again, at deeper truths behind the anecdotes. But there appear to be no such truths; we are left with theoretical language without the theory.
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The five stories in Clay’s essay follow a practice attributed to The Economist, which is the Third Rule of Big Ideas: simplify and exaggerate. Take the one about network television’s failure to translate Web TV program In The Motherhood to the mainstream. Clay writes this:
Once the show moved to television, the Writers Guild of America got involved. They were OK with For and About Moms, but By Moms violated Guild rules. The producers tried to negotiate, to no avail, so the idea of audience engagement was canned (as was In the Motherhood itself some months later, after failing to engage viewers as the web version had).
The critical fact was that the negotiation took place in the grid of the television industry, between entities incorporated around a 20th century business logic, and entirely within invented constraints. At no point did the negotiation about audience involvement hinge on the question “Would this be an interesting thing to try?”
The message is clear: unions and media corporations are inflexible dinosaurs, unable to deal with the chaotic creativity of the digital 21st century.
He could have chosen other stories with other messages. Media corporations are not as inflexible as Shirky would have us believe. Rupert Murdoch, one of the media barons Clay quotes as a dinosaur, is an expert at reducing production costs and limiting union rights (Wapping, anyone?). And has Clay not noticed reality television? The networks have been hugely successful at cutting the cost of Writers’ Guild members from their balance sheets over the last ten years.
On the other side, the brave new world is not so different. For a small startup to be bought by a large company and ground down by the bureaucratic pressures of its new environment is not unique to the media business: it’s commonplace in the software industry too. And there are many “complex business models” in the digital world that Clay chooses to ignore: Google’s partnerships with major media companies, the licensing complexities of Facebook’s ever-changing privacy rules and third party APIs, Amazon’s outsourcing of warehousing through its complex partner programs – these business models are not just complex, they are positively byzantine, charting ever more circuitous and indirect routes between production and revenue. They just don’t appear in the stories he tells.
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Useful though they are, the rules of telling stories, keeping the core idea ambiguous, and following the “simplify and exaggerate” maxim can only go so far in bringing your audience on to your side. The Fourth and Final Rule of Big Ideas is to play on our natural identification with the underdog by casting the anecdotes and your overarching theme in a rebellious and revolutionary light. The stories Clay tells may be diverse in terms of their origin, but they share a common tone, which is that of the creative individual (hooray!) against the stuffy institution (boo!); the plucky and resourceful underdog (go Charlie!) versus the monolithic, massive but ultimately stupid corporation (down with ABC!).
Back to his Charlie story again:
Expensive bits of video made
in complex ways now compete with cheap bits made in simple ways. “Charlie Bit My Finger” was made by amateurs, in one take, with a lousy camera. No professionals were involved in selecting or editing or distributing it. Not one dime changed hands anywhere between creator, host, and viewers. A world where that is the kind of thing that just happens from time to time is a world where complexity is neither an absolute requirement nor an automatic advantage.
But Charlie didn’t “just happen” because Charlie is not the only story here. As YouTube became a phenomenon, those 174 million-and-counting views could only be delivered by acres of these:
housed in several of these:
Complexity is not going away. It’s just moving to a different spot in the production chain, and as it moves so does the balance of power.
Years ago companies like P&G, Coca Cola and the other manufacturers would dictate to the stores that sold their goods how to do so, mandating marketing campaigns and product positioning. But now the balance of power has now shifted closer to the customer – to Wal-Mart and the retailers, who send Coca Cola back to change the taste of their drink and who tell P&G to pay for the privilege of managing Wal-Mart’s shampoo shelves. Amazon and Google are trying to become the Wal-Mart of the cultural world, increasingly dictating terms to their suppliers. But while the stories of Amazon and Google are part of today’s reality, they are not stories Clay wants to tell because they don’t fit his agenda. He would rather stick with Charlie and the finger biting. And that populism is a problem, partly because for all his promotion of the underdog Clay ends up consistently on side of the free market and against collective efforts by working people to gain a respectable source of income.
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If the problems with The Collapse of Complex Business Models were restricted to that essay I would be more forgiving, but they show up elsewhere too. In a recent conversation with Evgeny Morozov on Digital Power and its Discontents Clay talks about the 1959 Krushchev-Nixon “kitchen debate”, jumps to Iran, then immediately to Singapore’s efforts at censorship, and on to Burma, to China, and to Belarus and to his favourite author Habermas. He covers a lot of ground, but never stops to look around or to reflect on what we can learn from one case – he’s on to the next before you can stop him.
And when Clay talks about “a public that can… self-synchronize”, asks “how much is the political sensitivity of the [Iranian] regime titrated to the price of oil?” and suggests that Iran is “acquiring a kind of technological auto-immune disease” it is impossible not to think that he is more concerned with the novelty of his images than with actual clarity or, in fact, meaning.
The same goes for the ambiguous title of his forthcoming book, “Cognitive Surplus”. In the lecture it has grown from (text version here) he talks about the role of gin in the industrial revolution, about Wikipedia’s article on Pluto, about a Wiki map of crime in Brazil, about Gilligan’s Island, and about a friend’s four-year-old daughter looking for a mouse. It’s entertaining but there is more cuteness than substance to the title. I look forward to reviewing it.
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Towards the end of his conversation with Evgeny Morozov, Clay observes that “This is one of the really interesting things about these questions, … you very quickly get a kind of philosophic vertigo. You think you’re asking a question about Twitter, and suddenly you realize you’re asking about, say, Hayek and markets.” I can only say: Clay, vertigo is not inevitable, it is a choice you have made, and maybe you should make a different one.