Wikinomics Ideagoras

There are many great perspective-shifting points in Wikinomics, a 2006 book by Don Tapscott and Anthony Williams.

One of the most interesting ideas is how organizations (companies, teams, groups, institutions, etc.) are opening beyond their traditional boundaries to solicit external contributions to their problems and challenges. Consumer products behemoth Proctor & Gamble, for example, currently sources 35% of new product and service ideas externally from participative global R&D communities such as InnoCentive where scientists solve R&D problems for cash rewards.

Ideagoras
Wikinomics refers to online ideas marketplaces like InnoCentive as ideagoras. Other examples of global ideas, R&D and project communities in life sciences and technology include NineSigma, InnovationXchange Network, Eureka Medical, YourEncore, Innovation Relay Centres and TopCoder.

Ideagoras give a huge boost to efficiency in at least two primary ways:

1) Multidisciplinary approaches accelerate advance of human progress
Ideagoras expose challenges to participants from both within the field and across many other fields allowing infinite creativity to be applied. In the gold mining example in Wikinomics, a plethora of diverse solutions using applied math, advanced physics, intelligent systems, computer graphics, organic solutions to inorganic problems, etc. were received, 50% of which were completely new ideas and over 80% of which were useful.

Ideagoras allow a wildly diverse and large group of participants to apply their special tools and approaches to problems. In this saturation of approaches, a fuller solution set of possible answers is quickly obtained and the pace of the Earth's meme encephalization, the increasing interconnectedness of human minds extending and implementing knowledge and information, is quickened.

2) More effective use of human capital - mindset of abundance
Ideagoras allow human capital to be more effectively utilized both inside and outside the organization. Internally, just as companies may be using only 10% of their patented IP, they are most assuredly also underutilizing their staff in terms of project fit vs. skills and interests. Instead of being assigned to projects, staff members could self-select projects of value and interest by participating in remunerative ideagoras or open-source practice communities as in the software example.

The new abundance of external human capital resources promotes the corporate mentality that a land grab to get the best people on staff is no longer required, just the need to provide the best project incentives. An entity's workforce can extend way beyond any salaried employees, to those employed elsewhere and others. Ideagoras provide a tremendous opportunity for retired or underemployed participants, such as women, to find activities where they can make a useful contribution.

This is a Transparent Society

As with any new technology, there is the useful application and the dark side. Google Street Views, real street-level photographs of places, is no exception.

The benefit of Google Street Views is being able to virtually experience a place without having to go there physically, such as a tour of Times Square. Most of the time, specific people are not yet identifiable, but sometimes they are in varying embarrassing or even possibly illegal situations.

Is it worth it? Too late!
Some debate whether the perceived privacy loss is worth it but it has already happened. Even the usually forward thinking Internet rights watchdog Electronic Frontier Foundation exemplifies the mistaken understanding of the current world, as staff attorney Kevin Bankston remarks that "Everyone expects a certain level of anonymity as they move about their daily lives."

In reality, we have already been a surveillance society for some time. If anything, Google Street Views brings a more explicit realization of this and as David Brin importantly points out, an open availability of the information.

Privacy was already lost in many ways but especially when the cost of audio and video recording equipment dropped, the reach and quality improved and devices became ubiquitous. The technology is small and can used in unnoticed ways. One has to assume that everything one does or says in public or semi-public environments is being recorded and will be increasingly played back. There are opportunities in this as lifecammer TV is showing and also risks but most importantly inevitability. What are creative ways to provide value in a transparent society?

Do bits want to be free?

There is a lot of focus on the question of whether IP protection fosters or inhibits growth and whether bits should be free or proprietary. In reality, the response to this question can already be seen in present economics.

There are more types of offers available in a broader marketplace with more sophisticated value propositions than ever before. One example of this the wide availability of hybrid offerings - different flavors of free and pay versions of the same product or service.

For example, Linux is free but companies pay millions each year for a related service, support contracts. Individuals are paying for offsite data backups of their personal information (read: trusting offsite data backups of their personal information). Products as services, e.g.; SOA, salesforce.com, etc. are expanding, with the infinite feedback loop of the Internet available for instantaneous rating, ranking and review.

The same cable television show can be watched live, TIVO'd, downloaded onto an iPod, viewed for free on YouTube, rented via Netflix or the local video rental store or purchased on DVD just to name seven distribution mechanisms, each with its own price point. Consumers are paying for the attributes - the quality, timeliness, convenience and control of the content. Paying for attributes is not new (e.g.; higher priced convenience store milk) but the number of attributes has increased as well as the purchaser's ability to control the experience he/she has acquiring and interacting with the product.

Attribute pricing models will likely continue to proliferate, imagine customers paying for their point of maximum utility on an attribute gradient, a security/privacy gradient for example, where different levels of the service provider not tracking and selling user profiles and activities is more expensive. When will life Flashblock be available?

Annoyance-based models are another example of attribute pricing already in existence. For example, directory assistance 411 costs $0.50 - $1.50 per call where as 1-800-FREE-411 is free but requires the caller to listen to an advertisement before obtaining the requested information. Similarly some European wireless carriers are contemplating free devices and service if the customer accepts advertising-based service.

The primary principle of economics is value exchange, not price or protection. If it is not competitive to be free, or not competitive to be protected, the market will align to optimum value exchanges as can been seen on a daily basis.

Pace of Encephalization

Humans have so much in their brains and so little shared outside. This has to change for true intelligence and species advancement and there is a great opportunity in developing tools to facilitate this.

1) Communication and interaction are currently limited by the mindset of the individual

Human interaction is fragile and conditions have to arrive at some optimum before meaningful communication can take place. A physical presence is generally though increasingly less required. Certain mixes of other people must be there or not be there and trust which generally must be developed over time must be present.

Only the few people in close proximity circles to others [may] have some level of understanding of what is in human minds. Peers, those that share similar ideas and values, may have a deeper but still sparse knowledge.

2) Communication and interaction are currently limited by language as the dominant tool

Communication is necessarily governed by the narrowband of language. Language was certainly an amazing evolutionary advance when it arose but it is time for new communication tools. Language is essentially a few pithy comments trickling out of multi-dimensional plane of existence or thinking on a topic. Other options to language that would allow the permissioned knowing of value systems, beliefs and history would contribute to enriched communications. Mechanisms for sharing clusters of thought rather than individual ideas would also be a start.

Tools
Two types of additional tools are needed: more tools for creating and sharing content and better tools for making the content meaningful. Content has proliferated but step function increases are coming. Humans will be creating and sharing more and more personal content (ideas, creative endeavors, personal life details, how-tos, resources, etc.) on the Internet via blogs, video blogs, tumblelogs, lifeblogging, interactive lifecasting, twittering, FaceBook, LinkedIn and other new methods. Aggregation, summarization and abstraction tools (like meta tag clouds and jaiku-style diverse feed aggregation) will be increasingly important to mark content relevancy and make it findable and interactable.

Just like businesses are wikinomically learning that they should not have boundaries at the edge of their properties, employees and ideas, individuals will hopefully start to realize the great benefits of extending their personal content boundaries.

Optimum size for intelligence

What is the optimum size for intelligence? Human intelligence is currently packaged in individuals but this need not persist in an upload world.

Even now we are already seeing the emergence of collective intelligence mechanisms such as prediction markets, wikis, extended collaborative teams, simulations and the Internet especially the meta data level and the linkage and interaction through tags, profiles, social networks, recommendations and blogs.

Applications for intelligence can explode in the digital medium with essentially unlimited mind file copy, backup and merge capability.

In some cases, less intelligence may be useful, permissioning out segregated resources for low level activities. Currently, humans only have primitive processing resource allocation choices and must generally devote, despite not engaging, their full intelligence to any activity irrespective of mundanity.

In the more obvious case, larger intelligence may be better for a disparate range of applications from pure compute power to emotional experience. Three cases are considered:

a) Large intelligence: collected capability of individuals
The general use of larger intelligence could be for an individual mind file to conduct more projects requiring cognitive capability. The activities could be for advancement, amusement or in satisfaction of any variety of goals. Merging and orchestrating diverse capable resources is non-trivial especially since mind files will likely have vestiges of ego, status-seeking behavior, narrowband communication and other EEA characteristics however coordination would likely occur via self-organizing mechanisms.

b) Large intelligence: collected raw compute power of individuals
Individuals may choose to copy and permission out raw compute resources to projects of interest but not capability in an essentially improved partial implementation of government and directed capital. Coordination is important but it is possible that architecture (e.g.; distributed or concentrated) does not matter until reaching the logical extremes of resource limitations and information processing superobjects such as Jupiter brains and Matrioshka brains.

c) Large intelligence: collected sensory experience of individuals
Emotional experience, to the degree occurring in the digital medium, could be enhanced with merged intelligence both by amplifying sensory input and providing a multiplicity of experience.

Capitalist or Socialist Upload Scenario?

There are at least two scenarios for how mass uploading could occur, the Capitalist model and the Socialist model.

1. Capitalist Model (Evolutionary)
In the Capitalist model, uploaders would choose from a selection of storage, processing and security packages. Offerings would be presented with marketing aplomb, perhaps featuring modules analogous to the Gandhi [minimalist], the Toyota [adequate, fully functional] and the Cadillac [premium]. The capitalist model is a Darwinist or evolutionary approach.

2. Socialist Model (Developmental)
In the Socialist model, all storage, processing and security upload packages would be the same, perhaps directed by some sort of quasi or overtly governmental or private advocacy body. Each uploader would receive the same storage, processing and security resource module.

Analysis
At first blush, the Capitalist model seems most likely; it is a logical extension of how economics and marketplaces function in the current world. However, the key issue is the hyper-evolution capability that is assumed to occur in the digital substrate. Perhaps uploads should at least be equalized at the beginning such that all those who upload have the same chance of becoming a super-intelligence.

However, trying to equalize uploads (such as via a handicapping system) or the resources available to them at the offset is both unlikely to occur, and more importantly, unlikely to make a difference. The magnitude of digital evolutionary changes makes the starting point irrelevant, both in terms of capability and processing power.

The real question is what processing power will become available to digital intelligences post-upload or post-creation and the resulting evolution and goals which may become at odds with those of biological humanity. It is not reasonable to assume that external control can be imposed for long.

Historical Simulation Ethical Issues

Historical Sims will be a tremendously useful tool but they are also rife with ethical issues, even without considering that ethics will also evolve morefold by the time historical sims are a norm.

Sim Influencing and Harvesting
To what degree (if any) will external influencing, probing, shifting, etc. be acceptable once the sim has begun? Outsiders do not bring medicine and electricity to tribes living on Earth, the general thought is not to interfere with less-technologically advanced cultures if they are found elsewhere in the world or the universe, but many might want future technology introduced from outside if it were possible. One of the great potential benefits of a sim would be to extract and deploy any developed technologies that do not exist; is this ethical? Both the technology extraction and the introduction would need to be considered, for example, should attribution and royalties accrue to the sim world?

Sim Participant Ethics
Perhaps the largest class of ethical issues relates to sim participants. Self-aware agents (either recruited or created) as sim participants will presumably be more effective than non self-aware agents. The sim participants will either know that they are in a sim and have accepted the historical terms (as in Charles Stross' Glasshouse), particularly the primitive pain and misery of historical harm and death (war, disease, etc.), or not know that they are in a sim, in which case perhaps some argument could be made that it is all right that they do not know since in fact we cannot prove that we are not in a sim ourselves.

Sim Mindfile Access and Participant Privacy
One benefit of sim space is that not just the event outcomes can be known but also much more about the views and experiences of all of the participants not just those who wrote about it or were written about and even before writing and records were preserved. Is it appropriate and ethical to "mindtap" without the sim participant's permission? If the participants know they are being mindtapped, will that heisenberg behavior? Although lifecasting is rapidly approaching normalcy in the current technophilic world, it would be culturally unacceptable in historical periods.

Sim Termination
The issues concerning the termination of sims are non-trivial. Given unlimited processing power, and as a test of existential risk, there is an argument to let all sims continue indefinitely. How is extinguishing a sim not the murder of the self-aware participants or will it be desirable and possible to offer mindfile backups to all participants? This can be tricky, should "death rights" be different for those dying naturally within the sim vs. those dying in an extinguishment of the sim? What are the best approaches if the sim culture does not yet have mindfile backup technology; introduce the idea to sim participants and let them choose, save everyone irrespectively (this could be the future law anyway) with or without their knowledge or allow extinguishment? What would the options be for a mindfile exiting a sim? A state-assigned runtime area and survival resources, and access to the dial-a-world console?

Sims Sponsor Technological Advancement

Running simulations of the past, present and future will be valuable tools in exploring, understanding and testing any and every situation.

What if Rome did not fall, what if Germany won WWII, what if humans were not corrupt, what if it were socially unacceptable for educated women not to work in the paid labor force, what if hormone management programs had become possible and de rigueur centuries ago, what if the Pangaea split had been different, what if the Chicxulub asteroid had not rendered the dinosaurs extinct, what if sustainable life had started earlier?

Technological Advancement
The most useful sims would be those either arising naturally or "managed" such that advancement optima were achieved and the sim world evolved at a faster rate than the world that initiated the sim (how many sims and iterations will that take?) Sims could be run at sped-up time to iterate and generate results more quickly. Ideas and technologies could then be harvested for use in the initiating world. (Would that be ethical? Would that be cheating?)

It might be easier and more desirable to join the sim world, at least with a self-copy rather than extract and apply the technology. Lequel est plus réelle? Some interesting questions could be studied regarding technology relevance in the absence of the ideology, politics, economics, culture [and world] of its founding.

The current human population is gated by physical-world resource constraints, sims could make it possible for billions, trillions, etc. of 'people,' self-aware autonomous intelligent agents, to exist. Would this be desirable? Would this extend human knowledge, productivity, creativity and happiness? What kind of restrictions, fears, threats and opportunities would this impose?

Prosper's $50m loan pool - high risk, high reward?

Prosper has reached a milestone of $50 million in P2P loans extended, however $10 million of these may end in default. Despite the high rate of Prosper defaults, much higher than traditional consumer credit defaults, lenders should not and may not mind if they are receiving appropriate returns.

P2P lending is emerging as a new credit category, not just in the visible ways of loan origination and delivery but also in the financial sense of how risk and reward are defined. P2P lenders are able to accept higher default rates since they are also theoretically realizing higher returns. Some portion of the 10% traditional spread in bank lending between borrowing and lending accrues to the lender.

It is clear that Prosper loans default at higher rates than traditional unsecured consumer credit loans. The chart below shows Prosper defaults in pink and Experian (as a proxy for the consumer credit market as a whole) defaults in blue. In every credit tier, Prosper loans have higher defaults. In the prime market of AA, A, B and C credit tiers, Prosper narrowly underperforms Experian. However as credit quality worsens, so do Prosper defaults with Prosper loans defaulting at double traditional rates in the E and HR (high risk) tiers.


Default data can be found at the Prosper website by scrolling to the bottom of the Performance page and selecting the Estimated ROI link. Lender ROI estimates are trickier, ranging from a blended portfolio ROI of -1% using the Prosper site data to 17% using the data from Eric's Credit Community.

The marketplace aspect of Prosper is working as sub-prime borrowers have seen the opportunity and are creating most of the volume on the site, 75% of listings and 60% of fundings. Although many loans receive funding that probably would not in traditional credit settings, the majority (75%+) of listings do not get funded.

Prosper is only about a year old and the P2P lending market needs to achieve much higher volumes before meaningful performance can be evaluated. The question is whether rates of return can be delivered which are appropriate given the higher risk from the higher defaults and if lenders can learn how to price default risk effectively in this new credit product.

My house is an AI

Smart homes sound great but what about the next step, what will it be like when dwellings are artificial intelligences (AIs)?

At first, tools that know people better than they know themselves including predicting behavior and speech may be disconcerting and even creepy and people might not want to live in a dwelling that is an AI. However after getting used to it, presumably there will be many benefits, including continuous health monitoring, companionship, critical feedback and transfer of menial tasks. The AI would be residence based with mobile accompaniment.

Residents will likely be able to select a personality interface for their AI, or even multiple personality interfaces. The critical feedback personal AI would be a nice complement to the socially groomed empathy received from friends and family. Deception and excuses would be nearly impossible "I felt sick all day" might elicit a response like "No, your body status and health levels were fine but you watched ShowStash content for 7 hours." A friendly diplomatic upbeat personality interface would be a good default for the 'inner critic' team member, rather than a HAL-like interface.

A genial AI interface, "the buddy," would be another logical member of one's AI personality suite. This personality could provide companionship and monitoring for everyone, particularly higher needs-based individuals like seniors and children. Some might worry that a personal AI could become a more fulfilling emotional companion than a human partner but most technologies mean more not less, and more ways an individual could be emotionally fulfilled would be a good thing.

New industries could spring up, for example AI personality interface design and human-AI interaction psychology, including a new kind of dysfunctional home relationship.

Residence AIs would be autonomous entities licensed by local municipalities. A person would negotiate rent and other aspects directly with the AI. The AI would have purchasing authority and run the household, essentially acting as a more resource appropriate implementation of the concept of wife.