A fortnight ago, I emailed Jerry Yang, the co-founder and CEO of Yahoo!. It was yet another unsolicited Yahoo! Turnaround Strategy proposal. My little offer to help turn Yahoo! around.
Given that Jerry doesn't know me from Adam I wasn't expecting an immediate reply. But it's now been 2 weeks and still no reply. If anyone knows Jerry Yang and finds my proposal useful, I'd appreciate it if you could prod him to get back to me.
You can find the email I sent below. Apologies for the message being in lower-case — Jerry is famous for writing in that way. And given that for a long time I also had a fascination for the miniscule, I found it rather natural to write to him in that manner.
The email also serves as an introduction to some of the Espian ideas. Would love to hear your comments on those aspects too. Thanks!
Mon, Jun 23, 2008 at 7:28 AM
i'd like to help you turn yahoo around
congratulations on having beaten off the microsoft takeover and, as a fellow entrepreneur, my deepest emphaties for the unnecessary shit now being thrown your way. the way of the entrepreneur is little understood and it's easy for people who have never been in similar situations to criticize. i just hope that you have people around you to provide the emotional support that's critical at junctures like this.
it would be very easy for you to walk away from all of this. but if you are intent on working through, then i would be truly happy to be of service.
you might be wondering what a random 26 year old in london has to offer, but hear me out =)
and if you like what i am saying, then fly me over to sunnydale!
of the many things that need to be tackled, i'd like to focus on 2 aspects in this email:
yahoo! was the undisputed king of web 1.0. not only was yahoo the first search engine i ever used, but all the other services that i and others used — rocketmail, geocities, egroups — all became yahoo! properties. it consolidated its position effectively.
but despite making some really wise acquisitions — flickr, delicious, upcoming, &c. — yahoo! passed up on being the web 2.0 player that it could have been. it's too late to do anything about that now.
innovation happens in curves — http://blog.guykawasaki.com/2006/01/the_art_of_inno.html
“Too many companies duke it out on the same curve. If they were daisy wheel printer companies, they think innovation means adding Helvetica in 24 points. Instead, they should invent laser printing. True innovation happens when a company jumps to the next curve—or better still, invents the next curve, so set your goals high.”
and this is the opportunity that i believe you now have. time to jump to web 4.0 — a web 4 the people by the people.
because none of the approaches being taken by your competitors are tackling the real problems that we all face:
you've reaped the benefits by being a pioneer with yahoo! it's time to be a pioneer again and let the others play catch up!
your major competitors are now focused on being the ultimate middle-men. but if you can jump ahead and totally disrupt the market — much like paid search has done to tv advertising — then not only do you strengthen your position and revenues, but also take away from the others.
how can this be done? well, with a series of simple developments.
the first, i call “trust maps”. this is an extension of the concept of “friends” introduced by the various social networking sites. but instead of being just fun, it can be used as a basis for a whole new economic model. and you already have the largest social network on the world to bootstrap this — yahoo! mail/messenger.
how does it work? well, a user simply states who they trust and in what context, e.g. i trust “Indy, Katy and Alice” in the context of “architecture”. this trust map can then be used as a filter for information flow. taking what already happens in real life — but making it more automated.
a way of enabling people to overcome information overload.
and yahoo! has one of the best properties on the internet to make this happen: del.icio.us.
delicious has already come very close to implementing this. you can setup what is called a “network” and subscribe to links under certain tags, e.g. i can subscribe to alice/architecture. unfortunately, delicious never added a transitive element to this. that is, if Alice also subscribed to Xiao, then i never receive Xiao's links.
some of yahoo!'s researchers have also written a paper on something called “TrustRank”. this can be used to evaluate the entire network from the perspective of the various individuals relatively well.
so instead of sites like google, where users are limited to the same global perspective, yahoo! could start offering search results in a way that reflects their personal tastes and perspectives.
now, with this new form of search — which in many ways, takes us back to yahoo's original roots — you can in one stroke help people overcome information overload, take back market share in search and make social networking actually useful. but it does not stop there =)
as a next step, you can completely destroy the paid search market. microsoft is currently accidentally stumbling towards this with their live search cashback scheme.
this is what i call plexchange.
to faciliate this, transactions simply take place in specific contexts. for example, let's say that i go and buy the book “Timeless Way of Building” from a supplier for $30. given that this is in the context of architecture, a certain commission set by the supplier (say 10%) is split between the various individuals in my trust map. that is, Indy, Katy and Alice would get $1 each (the $3 commission split between each of them equally).
unlike the current setup, this creates a win-win-win proposition. the supplier can increase/decrease their commission appropriately to compensate for how good/established their offering already is. they don't need to waste money on intermediary search advertising. the various individuals in my trust map get compensated for keeping me informed. and if they start spamming me, i simply take them out of my trust map and thus they are incentivized to provide value. and myself, i benefit from being well informed and being able to have a higher quality of life.
and in terms of gaining adoption for this, this gives a true business model for all the millions of bloggers (early adopters) out there. it's good to have them on your side. and by giving them a working model — taking them away from being dependent on adsense dollars — you gain their trust and support.
i don't know if you still have the stake in alibaba — but it'd tie in quite nicely with that investment too. not to mention revitalizing subsidiaries like kelkoo.
next up, you can create a working economy for all the cultural creatives out there — starting with musicians. the music industry is currently in turmoil. and their attempt to regulate the market of “file sharers” simply hasn't worked. and as more and more things go digital, e.g. movies, designs of cars, &c., the need for a new working model for intellectual property becomes important.
the only inevitable solution is to create a “gift economy”.
imagine that your browser kept tab of everything you've been reading/listening/watching and asked you every month about what you want to give. and say a user decides to give $50 — this then gets split up between all the artists/bloggers/developers/musicians that they've been benefiting from.
creators may provide incentives to encourage more giving. for example, the band radiohead may say that the top 100 and a random 50 from the top 10,000 givers in any city get invited to an intimate performance when they are next in the given city. by creating a generic platform for all of this, yahoo! can get the millions of cultural creatives on its side and truly disrupt many markets.
building upon this, yahoo! can go onto enabling a new reputation economy. based on something that i call pecus — personal economic currency units — pseudo shares in individuals — individuals can actively promote those who are working towards creating the conditions they want. not only does this allow for fluid, fast-paced and decentralized organizational structures, but it reflects the way that the markets are heading in.
such decentralization would focus the world's efforts on truly vital efforts like rebuilding the biosocial infrastructure. because as the new opportunities for growth cease to be in growth and various aspects of the market disappear into economies of free, there is very little left to “capitalise” upon. opportunity lies in the new non-growth growth markets.
and biosocial infrastructure is interesting in this regard because due to its scarcity one could set its price as infinite. and anything that has a theoretical infinite value is interesting!
and, finally, if yahoo! just did all of this through the web, then it'd do well, but not be truly placed to profit as it could. to truly do this, an open platform needs to be created. the work that yahoo has been doing with regards to building an open platform has been great. extremely under-appreciated by the developer communities, but good work regardless.
things like search can become an integral part of this new network — obviating the need for external search providers. all the information could be stored locally. letting people overcome concerns of privacy because it's not sitting on centralized servers outside of their control. and the various post-PC devices like mobile phones can be leveraged to create effective “peer computing”.
and by making all of this totally open source and public, yahoo! can totally blow the efforts of others like microsoft, google and adobe out of the water. the web is nearly 20 years old. and the time has come for a major upgrade!
now, by following down the line i've sketched out above, yahoo! can re-establish itself as a pioneer. and this is the key to regaining brand value and revitalizing internal morale.
the above solves real problems that people face and can make yahoo! the ultimate middle man for the world.
by appealing to people's imagination, hopes and aspirations, you can propel yahoo! back to the center-stage.
and, as you already know, on wall street it is all about perception!
the old adage of an attack being the best defense needs to be brought into play. with this new model, yahoo! can question the model of its competitors and take the negative focus away from yahoo!
i would also recommend doing this as a grand 10-month project in which all of this is developed totally openly and executed. and to do this in a “reality tv”-esque style that will engage with the imagination of the world.
get back to the yahooligan roots! make it truly engaging and sexy. like it was back at the start.
spin the exodus of the various executives as an advantage — free-ing yahoo! to truly pioneer again — unburdened by egos.
and with a solid plan in place with the imagination flaring, getting your shareholders appeased and supportive should be an easy task. they will be slightly reticent to start with, but they can be won over with conviction.
i would like to help you do all this. i have the charisma, strategic capacity and technical know-how to make this happen. i can even bring together many of the appropriate people to make this happen — and if you will let me, put together appropriate people from within yahoo!
anyways, that should be enough for a first email =)
i'm much better at communicating in person. so if you find it at all useful to your current situation, then please fly me over. i'm based in london, but can be over at short notice.
PS. i'm cc'ing a list of my collaborators — hope that's okay.
good luck and speak soon!—
plex:espians/tav | firstname.lastname@example.org | +44 (0) 7809 569 369