Joi Ito's Web

Joi Ito's conversation with the living web.

Date: Sun, 03 Oct 1999 15:37:04 -0400

From: "Wayne Silby"

To: Joichi Ito

Subject: Re: NPO Buyouts and Sustainable Communities

Joichi- I liked the article on NPO buyouts and Sustainable Communities. It echoes some of the concerns that I have about the Net. Basically, almost every major player is there to get your credit card in some manner or fashion. And you make a good point about not being able to attract the talent that is now so concerned with stock options during this gold rush.

Of course we are in the same boat and we have investors who want the big returns for the high risk. Given some of my social change background, we have some desire to focus on the non-profit market. I am thinking of going to some of the foundations in the US that might be able to bridge this issue by financing and manifesting some of our work in the collaborative tools space.

The added value of working in this space might be that nonprofit share a common do good mission as opposed to focusing on profits. Accordingly, though some may argue with this, they may be ripe for the knowledge management tools that could be applied ACROSS their different organizations without fearing the consequences of sharing knowledge. We have one such application in development that is about people sharing their contacts, using our GroupDOT platform.

But I don't know where the "governance" controls are. In the mutual fund industry the users own the fund but make a contract with the manager. This contract must be approved annually. Perhaps some kind of user group committee is created, which might include a few representatives from management, that approves the contract with the "managers." They take into account profit margins, etc. Of course there are standard models in the mutual fund industry and our Internet industry now has no such standards for proper community management. This user group might approve of the kinds of ads that are placed, how often, fees and charges for special services, and full disclosure and review of sensitive content issues. Occasionally the user group may even authorize extra charges for a new service that they want for their groups.

What is accomplished by the above is that you don't get a non-profit mentality going among the managers. They need ways to win and create value and take responsibility. And the big "win" for the managers is that the community becomes more trustworthy with these controls, which will eventually keep and attract the choice users. I am both chairman of Calvert Funds but also sit on the holding company board of the Management company. It's an interesting dynamic and balancing act. But $3 trillion dollars has been entrusted to mutual funds, partly as a result of this way that trust it built. Of course this is also monitored by the SEC, but generally it is a self regulating industry.

Thanks for allowing me to share this and you may pass on these remarks as you see fit. Again, the key for me is to focus on the "standards" that the user group oversight board might develop in determining what's appropriate for revenue generation from the community but maintains the proper level of integrity.

Wayne Silby