Web-based Communities conference keynote #1

Here's the first keynote from the Web-based Communities conference presented by Peter Kollock, from which I took notes.

How Not To Build Online Markets by Peter Kollock on February 26, 2006

- intermediaries are a source of friction
- case study: social life of propane in Texas
- successful online market
- relationships were important
- traders on the phone
- how to combine anonymity and reputation
=> preclassify companies into categories
- technology for a centralized market makes no sense
- small group => anonymity impossible, think peer reviewed journal
- TX propane not same as CA (California) propane
=> CA isolated from TX
=> aggregation doesn't work
=> even though same product, but different due to environment so becomes different products
- many physical markets are like CA propane (fragmented)
=> requires fundamentally different technology
=> identity and reciprocity are key, social networks are crucial, but no technology support for them
=> small-scale fragmented markets, so aggregation of them doesn't work!

- different markets require different social technologies
- commoditized, centralized markets are exception
- most markets composed of many fragmented markets
- technology must match the sociology

why? behavioural realities of markets and how people use were ignored

- IM could have been better fit for fragmented markets
=> traders now using IM because preserves identity and social networks