Knowledgeswarming

So, the whole “bloggers vs. journalists” debate was getting a little tired from my point of view, and I just figured out why. It was getting tired because that debate doesn’t matter. It is trivial in comparison to a more fundamental change that is taking place.

• The cost of publishing has effectively dropped to zero for any individual.
• The cost of aggregating information that has been published by others has effectively dropped to zero for any individual.
• For any information topic of interest, there are people who are passionate about it, who will share their passion and knowledge for free.

Now put those three things together and make a picture. Stand back and look at it. The picture I see is the following: if you are in any role where the only thing you provide is information that is available from publicly available sources, your industry is about to experience a tectonic shift. The only reason this came out first in journalism is because journalists have the barrels of ink.

This “knowledgeswarming” has been taking place for years in areas where there are a large number of individuals who are passionate about a topic. Usenet and other online forums are great examples of this. The twin problems, however, were the barriers to both publishing and accessing the information in these areas, since some level of technical acumen and knowledge of technical arcana were required to participate. No longer. Now, anyone can publish anything with two clicks, and anyone can aggregate information on their myYahoo page.

An industry that is about to be swept up in this maelstrom is the “analyst” community on both on the finanical/Wall Street side of things, as well as the high-tech industry analysts. In both cases, the attack will come from the low-end, a la Christensen, and the entrenched players will be left wondering “what happened?” if they don’t get out in front.

Historically, the Wall Street analysts have had priviliged information given to them by their clients. This made the analysts a valuable asset to their customers, since the analysts possessed information not available to the average investor. This is no longer the case since Regulation FD went into effect. Now, anything that is “material” needs to be disclosed publicly, without any preferential treatment given to analysts, insiders, or anyone else. In other words, the analysts are now getting their information from company press releases. Just like you and me.

Some students at Babson are starting to swarm around this idea, and are proposing an “open source” model for financial research. They feel that motivated individuals, working in concert, can provide the same (or better) research than the sell-side analysts. They are talking a lot about “mosaic theory,” and the belief that it is possible to take non-material information from a variety of sources and create meaningful observations out of it. The larger the number of contributors, the clearer the mosaic is going to be.

This model is starting to creep into the industry analyst community as well. Why pay $25K a year for Gartner, when Techdirt is blogging on the same events, and giving analysis in real time? Now take that model, and expand it out to a collaborative blog/wiki model, where users, developers, and customers are sharing information about the good, the bad, and the ugly regarding the vendors they are working with.

Oh yeah, Encyclopedia Britannica is dead, too. They just haven’t fallen down yet. The Wikipedians swarmed, and a 250 year-old company is effectively rendered obsolete.

At most, a very few hands will be required as guides. Each of these communities will require some way to ensure reputation and quality. In some cases, it makes sense to have an editorial voice ensuring that the results being generated by innumerable participants are valid. In other cases, emergent reputation management systems (think eBay) will provide the signposts.

So. Open source software has already gone this way. Journalism is trending this way (actually here’s a great example). Financial and industry analysis seem to be headed for the offramp. What other industries are next?