Here Comes Everybody Chapter 2

There is an important caveat on page 30 to the decentralized, web-based organizations that Shirkey seems so excited about:  "The more people are involved in a given task, the more potential agreements need to be negotiated to do anything, and the greater the transaction costs..."

For an example of this, see the revision history of the Wikipedia article on abortion...

Page 31 also includes a big idea on the institutional dilemma:

Because the minimum costs of being an organization in the first place are relatively high, certain activities may have some value, but not enough to make them worth pursuing in any organized way.  New social tools are altering this equation by lowering the costs of coordingating group action.  The easiest place to see this change is in actiities that are too difficult to be pursued with traditional management, but thta have become possible with new forms of coordination.

The Flickr/Coney Island/Mermaid Parade example leaves out a cost that Flickr DID have to incur:  The web site had to promote itself broadly, so that people in the world in general would be aware of it.  This promotion may be able to be done at least partly through social media, as Flickr's creators once said, but it would cost time and some money to accomplish.  People have to know a tool exists to use it...  Or to choose between Flickr and Photobucket.

Does Page 44 indicate Shirkey thinks social media makes larger companies possible?  "When an organization grows very large, it reaches the limit implicit in Coase's [management] theory; at some point an institution simmply cannot grow anymore and still remain functional, because the cost of managing the business will destroy any profit margin."  Shirkey thinks social media reduces the cost of organizing a group...  He is excited about decentralized, volunteer driven efforts, but maybe the internet is also making bigger companies possible?

I am also struck that many of Shirkey's examples cite the collection or use of information.  Information-based products may work well in an internet context becasue they not only benefit from reduced management overhead, but they also can be created and delivered digitally.  Not only management costs fall, but transportation and production costs can drop.  If you already have the necessary equipment, it is cheaper to e-mail a photo than to print it and mail it.  The cost reductions that Shirkey describes may be specific to media products (photos, music, video, text), because it can be translated into 1's and 0's.  This would NOT apply to other types of production.  You still can't send someone a blender over the internet.

I think page 53 is interesting because it implies what might be coming in the future.  Could social media bring about new types of cooperative organizations?  More food coops or energy coops?  Or other types of businesses where the consumers are the owners, and vote on how the business is run, and what the staff does?  Perhaps organizations that don't need to be housed in a specialized facility like a factory or a greenhouse could do away with a central location, and rely more on telecommuting?