Groups and Value

Thinking here about group forming and group forming networks; here’s one of those typical B-school 2D drawings:

Presuming we have solved both the problem of aggregating the group and extracting the value then points on that surface more valuable per size-of-group * value-of-member.  This is the calculation that any site with an audience makes, or any shop with regular customers, or any club.  The definition of value varies a lot.  A knitting group wants something different from it’s members than does a standards body.  The word authentic get’s tossed around to label the miss-match between what affiliate  marketing platforms (like Amazon, or Google ad-sense) value in site visitors v.s. what makes a site attract an authentic membership with some particular enthusiasm.  A lack of appreciation for how diverse of value is goes a long way toward explaining how dismissive people are of sites with narrow  enthusiasms.  People dismissed open source for years because they were blind to the values that attracted it’s participants, people are no less blind today even if they are less dismissive.  It really pull my cord to watch observers rapidly dismiss sites of other enthusiasms just because they can’t be bothered to puzzle out what might be the value those members (or the site operator) has managed to find in there.

It seems useful to be clear that value-of-member has at least four aspects.  There is the member’s value the members see in each other (a p2p network scoped by the group).  The value the members contribute to the common cause of the group (a sarnoff kind of value to the groups barn raising).  The value the site owner (or steward) values in his members (i.e. a site for lawyers wants the lawyers who are highly respected and well networked to participate).  The value that feeds clearly into value extraction (i.e. the lawyer site values those who click thru on the ads or regularly subscribe to premium services).  Value is messy.

Presumably the universe of groups, the population, is distributed on that chart such that most groups are down near the origin.  Again it frustrates me how people are dismissive of those.  [Apparently I’m easily peeved :)]  So they complain about the how github’s fuzz of forked projects is confusing, or how google code and source forge are cluttered with tiny projects; or how the numbers yahoo groups or ning has are inflated by groups with little or no traffic.

Which brings us to the question of aggregating groups.  We can visualize this as regions on that chart.  Consider the local Dayton Business Journal, it’s got an audience that is valuable in a particular way and when rolled up into a company like American City Business Journals (see the select city pulldown on one of their sites).  Or consider this set of  local newspapers  around Boston.  In both cases the set of groups aggregated is some range of distances from the origin the definition value-of-member axis has been narrowed down.  That narrowing is in part tied to the cost of rolling up the aggregate, which presumably involved negotiation and money.  Sourceforge is a different story.  They rolled up their groups organically which goes to explain why they have a lot of groups close to the origin.  Sourceforge’s value-of-member  definition  isn’t very broad spectrum.  But there are platforms where you see extremely broad spectrum value-of-member definitions.  Plenty of examples: Yahoo groups, Meetup, NingvBulletin, WikiSpaces or Acquia are all  examples.  I’ve often thought that Yahoo’s strategy was to roll up these kinds of companies; and it’s a puzzle why that aggregate hasn’t turned out to be more valuable.

Well, it’s all food for thought.

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