Datawocky

Stop Email Overload and Break Silos Using Wikis, Blogs, and IM

Email is the central nervous system of most modern organizations, from startups to large corporations. Every communication, from the most important (planning for the big client meeting tomorrow) to the most trivial (fresh donuts in the kitchen) takes place through the corporate email system. The results: email overload and lowered productivity for the entire organization. Employees are tethered to their email via Blackberries even over the weekend, leading to communications burnout.

The biggest single reason for this is the inherent nature of email itself: it is a point-to-point communication medium. The sender has to decide both the content of the message as well as who the recipients are. If the recipient list is too large, it contributes to email overload. If it is too small, that could lead to communication gaps and "informational silos" in the organization, where one group in the company doesn't really know what the other group is doing. Another problem is that each email message is a single unit, making it hard to track conversations among multiple parties. Many email readers thread conversations, but that is done at a syntactic rather than semantic level. Finally, putting everything in email makes it difficult to build institutional memory.

We hit the email wall at my company Kosmix recently. When we were less than 30 people, managing by email worked reasonably well. The team was small enough that everyone knew what everyone else was doing. Frequent hallway conversations reinforced relationships. However, once we crossed the 30-person mark, we noticed problems creeping in. We started hearing complaints of email overload and too many meetings. And despite the email overload and too many meetings, people still felt that there was a communication problem and a lack of visibility across teams and projects. We were straining the limits of email as the sole communications mechanism.

We knew something had to be done. But what? Sri Subramaniam, our head of engineering, proposed a bold restructuring of our internal communications. He led an effort that resulted in us relying less on email and more on wikis, blogs, and instant messaging. Here's how we use these technologies everyday in running our business.

Blogs for Status Reports

Each employee and each project has a dedicated blog. People can post as often as they wish to their personal or project blog, but they are required to post at least one weekly status update. All blogs are visible to everyone in the company. Anyone can subscribe to the feed for any particular team or individual blog. So for example, Josh in engineering can follow the blog of Mike in sales, if he's curious what Mike is up to. This results in complete 360 degree visibility throughout the organization. People can also post comments on these blogs. Someone might post a problem they are facing, and others can post comments providing suggestions. This results in automatic grouping of conversations based on topics of interest.

The biggest advantage of the blog approach is that it is a publish-subscribe mechanism. I don't need to decide who to direct my communication to;  I just post on my blog. Anyone in the company who is interested in what I'm doing can subscribe to my blog to be notified of updates. And if someone just has a passing interest, they can always read my blog periodically without subscribing to it. This approach also breaks silos, for example, between engineering and marketing, or between marketing and sales. Sometimes the best product ideas come from sales people. And sometimes the best sales ideas come from engineers.

No one is required to read any particular blog, with two exceptions:

1. Managers are expected to read the status updates of their team members and post feedback.
2. People working on a project are expected to read each other's blogs.

The blog approach has reduced email overload at Kosmix and even reduced the number of time-consuming "status update" meetings.  Most important, the blog serves as an institutional memory -- an electronic record of our business. Conversations do not get lost in the ether but are recorded and can be searched at any time in the future by new people on a project or new company employees.

The Wiki for Persistent Information

While blogs are great for status updates and discussions around ideas, they are not the best place to put items that serve as reference material: for example, documentation, specs, reports, and so on. The problem is that blogs are in reverse chronological order, and each blog can have just one author, preventing collaborative editing. For these situations, we use a wiki. The internal corporate wiki has sections corresponding to each project and each functional group in the company. Documentation, specs, and reports go into the wiki.

The other critical section on the wiki is the Team section. Every employee has a homepage on the wiki, with a recent photo, describing their responsibilities at work and interests outside of work. As the team grows, and you see a new face at the office, this is a quick way of finding out who that person is.

Instant Messaging for Spontaneous Discussions

As Kosmix has grown, we now have people working from more than one physical location. In addition, we promote a culture of people working from home whenever it is compatible with their job responsibilities. Thus, we need a substitute for the face-to-face hallway conversations that cannot happen because someone is working from home or from another location. Email is not the best option because it is asynchronous and thus loses the spontaneity of a hallway chat.

Instant messaging fills this need very well indeed. The entire Kosmix team is on IM. Each team member is required to set the "status" message on their IM client during normal sane working hours to indicate where they are working from. They can also post a "Do not disturb" message to indicate that they don't welcome interruptions at the moment. Instant messaging leads to quick resolution of many issues without spawning interminable email threads.

If I needed to have everyone in the company on my IM buddy list, that would be a very long buddy list indeed. To avoid this problem, every team member's IM handle and status are displayed on their wiki homepage. You can initiate an IM session with anyone from their wiki homepage.

Convention over Configuration

The effects of the communication restructuring have been immediate and very visible. They include a lot less email and almost none on weekends; better communication among people; and 360 degree visibility for every member of the Kosmix team. After we instituted these changes, everyone on the team feels more productive, more knowledgeable about the company, has more spare time to spend on things outside of work.

Kosmix is certainly not the first company to use internal blogs, wikis, and IM for corporate communication. Google has been using blogs for status reports for a while now. The big difference is the conventions we have established about we use these tools. For example, one of the common complaints I've heard about Google's use of internal blogs is that most employees feel no one reads their blog. I've heard of one case where an employee for several weeks posted a status report that read: "Is anyone reading this?" By establishing conventions around expected read-write patterns, we have avoided this problem so far at Kosmix.

No doubt as Kosmix grows further, even this model will break down at some point and we will have to look for new communication models. I'll post an update when that happens! In the meantime, please do share your experiences of innovative corporate communication practices.

Implementation Notes

We use twiki for our wiki and blog software at Kosmix. The wiki functionality in twiki is great, but it took quite a bit of customization work from our indefatigable Sri Subramaniam to make it work well as a blogging platform too. We are planning to release our twiki tweaks as open source in the next couple of months, once we have a chance to package them neatly.

Another great option for blogs is WordPress, which allows you to host blogs internal to your company. We went with twiki because of the integrated wiki/blogging solution.

We have standardized on Yahoo! Instant Messenger for instant messaging. However, the other IM products such as MSN Instant Messenger and Google Talk have comparable functionality. I would suggest you pick the one most people in your company already use for personal communication.

Why Google Doesn't Provide Earnings Forecasts

Most public companies provide forecasts of revenue and earnings in the upcoming quarters. These forecasts (sometimes called "guidance") form the basis of the work most stock analysts do to make buy and sell recommendations. Much to the consternation of these analysts, Google is among the few companies that have refused to follow this practice. As a result, estimates of Google's revenue by analysts using publicly available data, like comScore numbers, have often been spectacularly wrong. Today's earnings call may be no different.

A Google executive once explained to me why Google doesn't provide forecasts. To understand it, you have think about the engineers at Google who work on optimizing AdWords. How do they know they're doing a good job? We know that Google is constantly bucket-testing tweaks to their AdWords algorithms. An ad optimization project is considered successful if it has one of two results:

• Increase revenue per search (RPS), while not using additional ad real estate on the search results page (SERP).
• Reduce the ad real estate on each SERP, while not reducing RPS.

The tricky cases are the ones that increase RPS, while also using more ad real estate. It then becomes a judgment call on whether they should be rolled out across the site. If Google were to make earnings forecasts, the thinking went, there would be huge temptation to roll out tweaks in the gray area to make the numbers. As the quarters roll by, the area of the page devotes to ads would keep steadily increasing, leading to longer term problems with customer retention.

Of course, this doesn't mean there is no earnings pressure. In reality, whether they issue guidance or not, Google's stock price does depend on whether they continue to deliver robust revenue and earnings growth. So implicitly, there is always pressure to beat the estimates. And for the first time, as Google's stock has taken a hammering in recent months, I've heard about hiring slowdowns at Google. So there is definitely pressure to cut costs as well. It will be interesting to observe the battle between idealism and expediency play itself out, with its progress reflected in the ad real estate on Google's search results. It's easy to be idealistic with the wind behind your back; the true test is whether you retain the idealism in the face of headwinds. Time will tell.

This brings us to today's earnings call. In my experience, the best predictor of Google earnings has been Efficient Frontier's excellent Search Engine Performance Report. EF is the largest ad agency for SEM advertisers, and manages the campaigns of several large advertisers on Google, Yahoo, and Microsoft. As I had noted earlier, in Q1 an estimate based on their report handily beat other forecasts, most of which use ComScore data. (Disclosure: My fund Cambrian Ventures is an investor in EF.)

EF's report for Q2, released this morning, indicates a strong quarter for Google. Google gained more than its fair share of advertising dollars in Q2 2008. For every new dollar spent on search advertising, $1.10 was spent on Google, at the expense of Yahoo and Microsoft. In addition, Google's average cost-per-click (CPC) increased by 13.8% in Q2 2008 versus Q2 2007, while click volume and CTR increased as well. And, there was strong growth overseas as well, which should help earnings given the weak dollar.

I don't have the time right now to do the math and figure out whether the robust performance was sufficient to beat the Street's estimates. You should read the report for yourself and make that call.

Update: Google's results, although robust, were below expectations. The biggest moment in the earnings call for me was this quote from Sergey (via Silicon Alley Insider):

Sergey said the company may have overdone its quality control efforts in the quarter (reducing the number of ads), and the reversal of this could provide a modest accelerator to Q3

Quality efforts "overdone"? Apparently those pressures are telling after all, and Google is going abandon their principles a wee bit to venture into the grey zone. Is is the start of a slippery slope?

The Real Long Tail: Why both Chris Anderson and Anita Elberse are Wrong

A new study by Anita Elberse, published in the Harvard Business Review, raises questions about the validity of Chris Anderson's Long Tail theory. If you're related to Rip Van Winkle, the Long Tail theory suggests that the dramatically lower distribution costs for media (such as music and movies) enabled by the internet has the potential to reshape the demand curve for media. Traditionally, these businesses have been hits-driven, with the majority of revenue and profits being attributable to a small number of items (the hits). Anderson argues that the internet's ability to serve niches cost-effectively increases the demand for items further down the "tail" of the demand curve, making the aggregate demand for the tail comparable to that for the head.

Anderson's insight resonated instantly with the digerati. It is said that Helen of Troy's face launched a thousand ships; the Long Tail theory certainly launched more than a thousand startups, all with an obligatory Long Tail slide in their investor pitches. Recently, however, there has been a creeping suspicion that the data don't support the theory; the backlash has been spearheaded, among others, by Lee Gomes of the Wall Street Journal. In her piece, Anita Elberse does a deep dive into the data and concludes that the Long Tail theory is flawed.

Anderson has posted a rebuttal on his blog, pointing out a problem with Elberse's analysis: defining the head and tail in percentage terms. There is some truth to Anderson's rebuttal. But the heart of Elberse's criticism lies not in the definition of the head and the tail. It's in using McPhee's theory of exposure to conclude that positive feedback effects reinforce the popularity of hits, while dooming items in the tail to perpetual obscurity. She presents data from Quickflix, an Australian movie rentals service showing that movies in the tail are rated on average lower than movies in the head. Thus, movies in the tail are destined to remain in the tail. Elberse exhorts media executives to concentrate their resources on backing a small set of potential blockbusters, rather than fritter it away on niches.

The big problem with this argument is that it conflates cause and effect. Before the internet, distribution was expensive, and there was no way for consumers to provide instant feedback on products. Consumers then got little choice in the matter of what items were readily available and what items were hard to find. Thus, the hits were picked by a few studio executives, publishers, or record producers who "greenlighted" projects they thought had hit potential. But when distribution is cheap, and consumer feedback loops are in place, the items that a lot of consumers like become popular and move into the head. It's not that items in the tail are inherently rated lower; items are in the tail precisely because they are rated lower.

It's as if we're comparing two systems of government, a hereditary aristocracy and a democracy, by comparing the sizes of the ruling elite in the two cases. That misses the point entirely. What matters is not the size of the ruling elite, it's how they got there. So, the big change wrought by the internet is not so much to change the shape of the demand curve for media products, as Anderson claims; nor has there been no change whatsoever, as Elberse posits. The big change is not in what fraction of the demand is in the head, it's in how the items that are in the head got there in the first place. Any change in the shape of the curve itself is incidental.

There's another market where we are seeing this phenomenon play out: the market for Facebook (and MySpace) apps. In earlier years, it took a lot of capital to get a company off the ground. The companies that got funded were the ones with good business plans who could convince VCs to take the plunge based on the people, the plan, and potentially some intellectual property. But it doesn't take much capital to write a Facebook app, leading to a proliferation of them. This paves the way for the expected inversion. Facebook users don't use the apps that VCs fund. Instead, Facebook users decide which apps they like, and VCs fund the ones, such as Slide and RockYou, that gain popularity.

It is instructive to look at the Facebook app trends study published by Roger Margoulas and Ben Lorica at O'Reilly Research. The study shows that at last count, there were close to 30,000 facebook apps. Usage, however, is highly concentrated among the top few apps, a classic example of a hits-driven industry (see graph) -- no long tail. However, these hits have been produced by the collective action of millions of Facebook users, rather than by a small set of savvy media executives. And there's a lot of churn: new applications join the winners and old winners die and are buried in the tail.

The real Long Tail created by the internet is not the long tail of consumption, but the long tail of influence. Earlier, the ability to influence the decisions on who the winners and losers were rested with a few media executives. Now every social network user has some potential influence, however small, on the result. The long tail of influence, combined with instant feedback loops, leads to a short tail of consumption. The Facebook app market is a leading indicator of the path the entire media industry will take in years to come.

Update: Chris Anderson has posted a rebuttal in the Comments. Thanks Chris! Please do read his comment and my response. Chris points out that Facebook apps still follow a power law distribution. It doesn't matter how long the tail is, what matters is how heavy it is. The area under the long tail is a function of both length and depth, and depends crucially on the power law exponent. For the mathematically minded, the details are here.