Over The Counter Culture

An interesting comment popped up after my “manifesto for microphilanthropy” post. In it, it was suggested that micropayment was important for microphilanthropy. I disagree, and here’s why (this is a reblog of my reply:)

Pure commoditisation - which ultimately, is what needs micropayment - is almost the exact opposite of microphilanthropy! It leads to donation requests getting so micro as to make the donation they ask for so small that potential donors can’t be bothered to do it - it’s too much effort to get your wallet out, type in the card details, etc (hence the need for micropayment systems to get over this transaction barrier).

Microphilanthropy is not (in my eyes) the act of commoditising charity into tiny, massmarketed, micropayment experiences (i.e. micro-donations by millions of people) - it’s about fostering a Long Tail in our new hyperconnected world. The micro relates more to the size of the niche - specific families, specific stories - than to the size of the donation. Micro-donation is an alternative model for charity more suited to the existing, highly institutionalised model of philanthropy (but could be very important/useful to it, so also requires discussion)

There’s no reason why average donations can’t stay relatively upscale in microphilanthropy - it’s based around the creation/display of hyper-personal, very niche charitable actions, thus it finds unusually devoted people (and because it’s highly personal, it should be of high value to people, hence the large donations), and it finds enough of them to put together a group just large enough to make the world move in that tiny niche. Before the internet, it was too hard to find those people, so charities had to stick to mass-appeal issues, staying very general. Since everyone is different, millions of niches get worked on, all in parallel. Microphilanthropy is a hyper-parallelised model of charity - its a similar boost that you get from a dual-core processor (parallel computing) versus single-core.

Just came across an interesting behavioural economics paper by Stutzer & Frey. Behavioural science is an extremely ‘hot’ field of academia at the moment, hitting the mainstream with books such as Freakonomics (Dubner & Levitt), Predictably Irrational (Ariely), Blink (Gladwell), Nudge (Thaler), etc), and with increasing influence in politics, notably within the Conservative Party here in the UK.

The key finding is this:

Our main  result  indicates [...] that people with  long  journeys  to  and  from work  are systematically worse off and report significantly lower subjective well-being

So you make yourself systematically worse off,  and much unhappier, by buying a large suburban house (with long commute) with an extra bedroom for the rare occasions when your parents come to visit, instead of a short-haul townhouse - even though at the time of purchase, going for the larger suburban house seemed like a totally rational decision.

Same deal with getting a highly paid city job in Canary Wharf or on Wall Street or Madison Avenue even though it dramatically extends commute time - when we would lead a happier job working a ‘worse’ job locally. 

The conclusion is not totally unexpected, but it’s an interesting example that makes you think about how irrational human existence can be - pretty depressing really. It highlights the importance of behavioural economics: we may be able to achieve a much happier society if it can succeed in revealing these paradoxical lifestyle choices and thus helping us to avoid them.

We don’t understand, long term, the relative contributions to our happiness and well-being of different factors in our lifestyle. Behavioural science in the 21st century could have a similar ‘enlightenment’ effect to nutritional/dietary science in the 20th.

I’d be interested to know what other examples there are, from your life, where you now think/suspect a decision you took at some point in life *thinking* it was totally rational has led to you being worse off overall?

(hat tip)

Spectre’s put together a great set of articles about Surrey Satellite Technology ltd. (SSTL). Get this, from a 2005 article: “A company formed by a small team of boffins in Guildford yesterday launched the first Galileo satellite, beating a rival consortium of three of Europe’s technology giants [Alcatel, EADS and Thales].

“SSTL expects to have a turnover of £30m this year, with pre-tax profits of  around £1.5m. The company has grown by 25pc a year since it was spun out of Surrey University in 1985. The consortium, Galileo Industries, originally tendered at five times the price quoted by SSTL, but their satellite is still in testing and not expected to launch until mid-2006.”

“We specifically make low-cost and quick satellites,” he said. Giove-A, which weighs 600kg, has gone
from drawing board to launch in 30 months. “We take these components out of iPods and so on, and work out whether we can fly them in our spacecraft.” Sir Martin said conventional components can take up to 15 years to test, by which time they may be obsolete. “Imagine if you bought a PC that was 15 years old.”

The best thing about this: Surrey University owns 80% of the company (the rest is owned by the employees, and by Elon Musk, a name that should be familiar to anyone in the dotcom scene). So they held 80% of a very profitable company growing 20-25% y/y that makes its living stripping bits out of your gadgets to make ultra cheap, ultralight satellites - in a country with no real culture or history of space exploitation/exploration - in fact, SSTL was formed just when Maggie Thatcher nabbed the entire UK space budget! Surrey University really cashed recently when it sold SSTL to EADS earlier this year.

I don’t think we in the UK realise just how much potential we have locked up in our universities, waiting to be exploited and to take on commercial giants from way out leftfield.

Stanford owns the patent to Google’s search engine technology. Would tuition fees faced by students be so onerous if UK universities were doing the same with their bright stars?

Microphilanthropy is the Next Big Thing. It’ll be a child of the Age of Choice - the same way humans no longer tune into a channel an Watch What Is On, but instead flick through the hundreds of channels the AoC has made available to them (or, pushing it to an AoC extreme, go to Youtube and search for their entertainment - i.e. micro-personalises his/her experience). No longer will mass campaigns, focused at the head of the curve, be the dominant force in philanthropy - the Long Tail phenomenon that has revolutionised industries like bookselling, electronics retailing, publishing, music, the arts, TV, etc, will also hit charity.

We will see a move from charities and foundations as monolithic armies of street teams and envelope lickers on the donor side, and reasonably large and static deployments of Western expat “missionary” forces on the ground, receiver side - to an entirely new model for charitable institutions, much more like a telephone exchange of old - operators, there to connect you to the ground level, to the cause you care passionately about - even though nobody else in your social circle, neighbourhood or even city cares about it. The Internet will bring enough ‘freaks’ like you together to make the world move in that specific, totally unique way that resonates so strongly with you). The ground level will need to be mobile and flexible and able to react to spontaneous coming-together of interest groups - taken to an extreme, that is a concept I call ’smartmob philanthropy’ and to be totally flexible and responsive on the ground level, it’s going to need Adam Smith’s “invisible hand” of the markets. But that’s not my focus today. I’m looking donor-side.

Future charities will need to make themselves as transparent and connective as they possibly can - a no bullshit, no interruptions, constant connection with your cause. Keep the pipeline up, and they can get more dollars flowing from your bank account than a mass media, totally untargeted mailout, TV spot or street ‘attack’ could ever have. You, as a donor, have so much more than just money to offer, if you can be connected with causes you care about. You can become its greatest advocate in your social circle, far more persuasive and actionable than some well-meaning spotty teenager in a fluorescent bib with a clipboard and a nametag could ever be. You can also be a source of inspiration, networking and innovation to those on the ground level receiving your passionate support.

The Internet is the key technology. My generation, unlike that of my parents, has grown up totally native and accustomed to the Age of Choice - we go to iTunes and we download the music that resonates intimately with us - mainstream radio bores us. The AoC is an unstoppable force - every message, every experience - marketing, entertainment, retail, google ads - trend towards becoming ever more tailored, customised. Charity can’t stick to standard, mass broadcast modes. With the internet, it has infinite gallery space and a rich framework for recommendation tools - old charity is stuck in the mentality of mailing out 3 page pamphlets in which it can only hold one story, aimed at tugging the heartstrings of an entire population - and FORCING the message through with the spotty clipboard brigade or other rude and aggressive moves like including a pen with the mailed-out  pamphlet.

Time for a change.

[I suppose the only reason philanthropy is so far behind every other Internet-revolutionised industry is the lack of market forces - it's damn hard enough getting a dollar out of you, let alone competing for it against other charities. That'll change.]