What's Cool

There’s a David Brooks op-ed in the New York Times today about social entrepreneurs. It’s a good overview of social entrepreneurship, and Brooks brings up interesting ideas like America Forward’s proposal to create semipublic funds that invest in local organizations.

It does, though, underline the fact that social entrepreneurship is appealing to conservatives because it involves a smaller role for government in meeting social needs. This is not necessarily a bad thing, but it makes me think that ‘social entrepreneurship is displacing the public sector because it’s more efficient’ and ‘public sector failures create vacuums that are being filled by social entrepreneurs’ are equally plausible stories.

It’s also interesting the way social entrepreneurship is ‘cool’. Brooks writes about “some of the smartest, most creative people in the country” who are building new social service models based on a “decentralized worldview.” (This article makes me think our team ought to be dressing snazzier.) I think he’s right to be excited, though some of the more hopeful next-big-thing rhetoric reminds me of what people say about any trend that arises quickly and seems like it’s going to revolutionize everything.

But what’s striking is reading this op-ed next to articles on the current financial crisis. (David Leonhardt’s is particularly good.) Over the past ten years I’ve seen investment banks recruit lots of bright and confident young people from college campuses. The quantities of money involved made i-banking cool in a ‘masters of the universe’ kind of way: you could step up to the plate and conquer financial risk and see how much wealth you could create before turning thirty.

But now it looks like nobody knew anything. (If you’ll pardon the snark, some of these guys made millions for not understanding complicated investments. I, on the other hand, would have been willing to not understand complicated investments for free.) In a great profile of the investor Blaine Lourd, Michael Lewis says: “One day, someone may look back and ask: At the end of the 20th century and the beginning of the 21st, how did so many take up financial careers on Wall Street that were of such little social value?” That might be overly harsh. But I wonder if this crisis might reduce the allure of finance for an entire generation of smart, creative, impatient young people- and if social entrepreneurship will be the new cool thing for them.

-Isaac

Cumulative advantage

It’s an exciting thing to write an inaugural blog posting! This is the official blog of Citizens Market, an online database and community dedicated to promoting socially responsible choices in the marketplace. Soon we’ll have an official (and properly epic) “About Us” section on the homepage. The short version is: we’re a six-person team based in Cambridge, MA who wants to make it easier for consumers to inform themselves about the social and environmental behaviors of corporations.

We’re not sure what this blog will be, exactly; partly news and analysis of developments in responsible consumption, partly updates on our website’s progress, the occasional “what-does-it-all-mean” musing. This, like our platform, will evolve.

Today I’m wondering about the factors that ultimately will determine the success or failure of our project. I recently re-read this article by Duncan Watts about cumulative advantage. Watts and collaborators created online worlds where users could listen to, rate, and download songs by unknown artists. In one of the worlds, users only saw the song names (i.e., they were making independent judgments about the music), but in others users saw how many times the songs had been downloaded by other participants (i.e., they were subject to social influence). Success in the social influence worlds was unpredictable: different songs became big hits in different worlds. There was little correlation between what was popular in the social influence worlds and the ‘objective’ quality of the song, measured by popularity in the independent judgment world.

It’s a great article, and/but the lesson is many things become popular not because they have inherent ‘likeability’, but through a series of arbitrary and chaotic interactions. In these experiments, the hits didn’t even result from mobilizing Malcolm Gladwell’s connectors, mavens, and salesmen; they just emerged from random forces bouncing around in a ‘rich-get-richer’ environment.

Our project depends on getting a critical mass of information and users. But it’s possible that we could do everything right and still not take off.

On the other hand, these cumulative advantage effects seem to emerge in ‘rounds’ of popularity games. But in the real world, what’s a discrete ‘round’? If you’re determined and you keep incorporating feedback and re-launching your project, you increase the odds that people will recognize your awesomeness.

-Isaac