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Social Business Regulation: Introduction & Socio BIZ Rule #1

Over the weekend, I spent an entire day working on what I will present today as Socio BIZ Rule #1 for Social Business — but first let me backtrack a little bit about how I got to this place.

If you have been following along with chapters 1-20, then you are already quite up to speed. If you do not have enough time to catch up right now, I will give you a brief overview about how I introduced the topic to many of the thousands of participants @ WordCamp Europe (WCEU) this weekend in Porto.

This has to do with the economics of marketplaces … in particular what are often referred to as “free market” economies with very competitive markets. In the very abstract form of economic theory taught in introductory courses in colleges and universities, there are some quite significant assumptions made about how such markets work. Two of the most stupendous assumptions are the way economists simply assume complete information and free access to the marketplace.

Anyone even just somewhat familiar with any kind of “real world” scenario should immediately be able to understand how ridiculous this is.

I don’t know about you, but my own view of utility in general and useful ideas in particular is that they need to be applicable to “real world” applications. I do not live in fantasy land. In Germany, people might describe their preference for the actual real world application of ideas by saying something like “wir machen Nägel mit Köpfen” (in other words: “we make nails with heads”, a sort of pun on being street savvy and smart enough to make actually useful tools, instruments, solutions, etc. for the real world).

If you want a brief review of some of the background for the next step in my argument, please consider taking a look at chapters 3 (“What is the Primary Goal of Social Business?”), 17 (“The Law One“) and 19 (“That’s Just the Way IT is“) … and the next step is indeed quite a doosy for people who are happy to drift through life via the fantasies created by the assumptions described above.

This is it: We want barriers to entry in marketplaces. We do not want free and open. We want things like regulations, law and order, and organizations which can help organize the organization which enables things like standardization, standards and similar norms and similar normative effects … such as “the way we do things here“. Long story short: we want hurdles, sort of as if to “separate the wheat from the chaff”. Likewise, we want to filter out spam, we want to prevent criminal activity and we want to feel as secure as possible when we embark on a new adventure or any kind of risky business. Perhaps we cannot eliminate risk completely, but we do want to reduce it as much as possible.

This is the reasoning that leads me to Socio BIZ Rule #1:

There should be some degree of market regulation built in to the validation of identity for market participants.

Each market ought to have specific certification hoops to jump through and hurdles to jump over, which are suited to each marketplace’s specific requirements … and indeed this is already usually the case for the world’s leading specific markets (here, I refer to a specific market as a marketplace which is focused on a particular industry, market segment or so-called “niche” markets). In contrast to such undifferentiated behemoths such as Google or Amazon, more specific sites like “hotels”, “weather”, “movies”, “food”, “clothing” and so on can better cater to the specific wants and needs of their more specific market participants.

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