Thu 17 Jan 2008
Duncan Riley's recent post at TechCrunch is a little contradictory, on its face, about the fate of the new Digg-clone Ximmy. Ximmy is Digg-style social voting with the twist that they pay people for making pro-social (or at least pro-Ximmy) contributions. First Duncan says "Will Ximmy steal away top Digg and Reddit users looking for pocket money? probably not" but then he ultimately concludes:
I’d bet that sites such as Ximmy (although perhaps not Ximmy itself) will win the hearts and minds of a decent portion of the market, after all, if we’re going to spend time building value for these sorts of sites, it’s not much to ask in return that we should be compensated for our time, even in a small way.
Now, there certainly is a subtle distinction there between what could happen to extremely dedicated Digg users and what could happen to the rest of the rabble. I'm just not sure that Duncan is making it. I'm going to make a slightly different prediction that sort of splits Duncan's down the middle. First, I agree – Ximmy will not steal away top Digg-ers, any more than Knol will steal away top Wikipedians (see my previous post on this subject). If we were to prioritize the incentives that motivate these people, monetary incentives are far down the list, and much less powerful than robust social psychological incentives like rational zealotry (i.e. fierce belief in the cause), reputation, status, and group belonging. Greenbacks just can't compete.
However, Ximmy and sites like it will never be a large part of the market in the long term for at least two reasons.
- Cash recruits the wrong kind of content, the wrong kind of users. Paying users to submit and promote stories may indeed promote a certain amount of contribution – but what kind of contribution? Ximmy chooses to offer a comparatively large payoff when a submitted story gets promoted to the front page – undoubtedly a move that's intended to encourage high-quality postings. However, experience with Digg has shown that quality often has little to do with what gets promoted to the front page. Some have argued that a small cabal of powerful users can effectively get any story they want promoted. Other analyses have shown that stories in certain categories are much more likely to be promoted overall. Case in point – stories with the word 'Linux' in the title are almost 10 times more likely to be promoted.
So, gaming the system is possible – that's not news. The story here is that when you pay people, you make it about the money – social norms, ideology, community-orientation can all take the back seat. Amongst several options, you encourage gaming the system. So, though a caring, thoughtful, internally motivated user might view the payment as an incentive for quality, most users will just see it as a way to make money. So, cash will promote the wrong kind of users and the wrong kind of contributions. Quality will suffer, promoted stories will be old-news, garbage, or within a few narrow, stereotyped categories like Linux and lolcats. Critical mass will never arrive for the Ximmy community, it will fold right quick.
- The economics won't work out. This is a corrollary of reason 1, in a way. (Keep in mind, I've not done the reasearch necessary to back up this claim, but one could speculate, for example, about what would happen it Diff were paying users Ximmy-style, if the right stats. were available.) So, now Ximmy is paying plenty of people, but the content is garbage. They're drawing the wrong kind of users who are motivated by the money. It becomes something of a closed system – a relatively small number of people who submit and promote each other's stories. Since Ximmy doesn't provide anything new content-wise over Digg or Reddit, its postings are lower quality and its community is smaller, they're having a hard time getting pageviews. How does this business model work out? It's a simple equation if we had the right inputs. How much is each of Ximmy's 'points' worth in dollar value? How many do they give out each day? Take that amount, plus overhead, plus at least 40% to make it a sustainable, profitable business. This scenario seems very unlikely to me. Is this a funded start-up? I hope not. I assume the guys at Ximmy tried to work this out themselves, and if they got funding, convinced some VC's that it would work. But if they did, they were operating on a false assumption – that cash would stand in for other motivations.
So, anyway, I expect that Ximmy will fail, and soon. I would guess that most of the user-generated content site-clones that are popping up will fail in the same spectacular way when they try cash-based models. I'm sure I sound like a broken record by now, but Duncan got the most important part of online participation wrong. He thinks that 'it's not much to ask in return that we should be compensated for our time.' But people are compensated. It just turns out that the narrow-minded view of online participation is that anything we can't fit on a spreadsheet or assign a dollar value to can't count. But I think cash is a weak and fickle tool when compared to the powerful social and psychological incentives that drive people on the web, and I think the next year will prove it.