My talk focused on how our society and culture shape us so much that it makes it hard override our “default settings”. I believe it undermines our happiness by preventing us from understanding what really matters to us. One specific area where it impacts our lives is socialization. This is a topic I have been researching on for quite some time due to my work on online communities. As I invested quite a bit of effort in this talk and only shared it with the 50 or so people who attended, I went the extra mile and subtitled it for online viewing. Enjoy!

“The Myths of Innovation” talks about the misconceptions around entrepreneurship and innovation.
In a nutshell: entrepreneurs who make it big are lucky people with not only ideas (which they might have borrowed), but good timing (too early and you’re doomed) and access to both talent and capital. There is a significant incentive to iron out this narrative into a super hero story, and a huge selection bias in doing so.

“Digital Innovation in Asia” is about some innovative services and business models found in Asia.
The Western framing of innovation has short-changed the rest of the world despite their achievements, and Asia is definitely doing fine in many aspects.

Here is the original article by IDG “Wal-Mart steps into China’s e-commerce market“.
Below is the uncut version of a recent exchange on e-commerce in China.
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Both Gap and WalMart stepped up their game in China with online stores. Here is my take on it.

It is a logical step for mature brands to create an online store, especially so in China.
Offline retail channels are limited – how many cities can Gap open a store in? Reaching the 100+ cities with over 1M inhabitants will take a long time. In addition, logistics costs in China are quite low and an advantage for such premium brands as delivery is at a marginal cost. Even MacDonald’s does delivery for no extra charge!

Also, many e-commerce sites in China have a trustability issue: how can you know if the product is
- real
- fake
- real but “grey market”, i.e. extra inventory or “night shift” from the official factory
- stolen goods
The official store would offer a very trustable channel.

It is possible that online retail might overtake offline retail for successful brands – the apparel retailer Vancl started purely online,
saving on commissions, logistics, etc. I believe new brands might replicate this success and China could be a fertile ground for “retail leapfrogging to digital“. It is likely local players are better equipped for that and nimbler than foreign ones.

For Walmart who already retails offline, it makes sense to offer what is essentially low-priced commodities, while it would not for pure online retailers. Actually, their online store pushes rather pricey items, many over 100 RMB. Best items are likely items like wine, tea or appliances.

The business of large retailers like Walmart is in finance: get cash upfront, pay suppliers late (generally 3 months later) enjoy the interests and cash flow. In China it’s even better as delivery costs are low and online users enjoy the larger variety of products online, and trust the Walmart brand enough to buy.

For pure online “e-commerce” players it would not pay off so well as they would have to figure out logistics, would not enjoy the cash flow advantage as a main business model, would not have simple ways to promote their service, and would only make little money per product.

Hence: a good move for Walmart – to be followed by other large retailers if things work out.

I would like now to move on to the second part of my talk, the one connecting online and offline behaviors.
Just like many of you, I was surprised when I heard about, or witnessed, some extreme behaviors:
- Flaming wars in forums
- Guys dying in Internet cafes
- Parents neglecting their “offline” baby in favor of some online thing
- People protesting online
- Bots mistaken for people and people mistaken for bots
- Even Chatroulette was interesting – though at that time it was not a surprise to me anymore. At least the creativity of people such as the piano guy, remains encouraging to witness, and stays alive as long as the environment does not reach a too high toxicity.

So what did I find in social psychology and social dynamics? I picked a few key things:

- People’s behavior is largely shaped by their environment. The simplest example is the “broken window theory”.

- People behave differently according to the likelihood of getting caught, or interacting again. There are examples from Zimbardo’s “Stanford Prison Experiment” to the abuses of Abu Ghraib, or simply “would you cheat a stranger if you knew you will never meet him again”. The depressing answer to this is: many people would. You can study Stanley Milgram’s “Obedience to Authority” experiment to see the reality of it.

- There are mechanisms to socialization and even seduction. I studied the research done by various social coaches, and looked into ways to engage and interact with total strangers. I even advised a startup who was developing an iPhone app just for that purpose.

Unfortunately, I don’t have time to go into details about those mechanisms but in short, they mean that as a service operator or “virtual world” builder, or a “resident”, there are ways to improve dramatically socialization and behaviors within digital environments.

Which leads me to the conclusion of my talk: what about the future of digital socialization, and the business around it?

There is enough research and proven cases out there showing what people are happy to pay for, so the business aspects I am not worried about. It is more about the pace: things like the semantic cells around “virtual” and “game”, payment systems are hurdles to overcome to help the market grow. It is getting better, but is still slow.

More interestingly, I actually think digital environments are one of the solutions to a real social problem. With neighborhoods disappearing and the prevalence of the “car” or “commuter” culture, we, as social beings, are very isolated, constantly in contact with vast numbers of strangers. The beauty of online environments – and they can be text-based, 2D, 3D, Stereoscopic and what not – is that those spaces – and I call them spaces in an architectural sense – can help us create new neighborhoods.

Some of you might be familiar with the concept of “third place” – the collection of places aside your home and workplace. Those are often essential to us to be social, creative and enjoy our life. A city with lots of them is very enjoyable to live in. What I am looking for – and working on with the company Cmune as an early iteration of that – is the creation of those “digital third places”. Second Life has been a great inspiration and raised awareness to a very high level, but is limited on many aspects: the business model, the clunkiness, the client install and more generally the poor social design and lack of “fun”. I am looking forward to seeing the next generation of services tackle those challenges and enrich our lives with old and new experiences in digital places.

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+8* | Plus Eight Star believes in a better future online, as proven by Asia. Follow us at @plus8star or @benjaminjoffe for more.