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How would you classify a book that begins with the salutation, "People of Earth..."? While the captains of industry might dismiss it as mere science fiction,The Cluetrain Manifestois definitely of this day and age. Aiming squarely at the solar plexus of corporate America, authors Christopher Locke, Rick Levine, Doc Searls, and David Weinberger show how the Internet is turning business upside down. They proclaim that, thanks to conversations taking place on Web sites and message boards, and in e-mail and chat rooms, employees and customers alike have found voices that undermine the traditional command-and-control hierarchy that organizes most corporate marketing groups. "Markets are conversations," the authors write, and those conversations are "getting smarter faster than most companies." In their view, the lowly customer service rep wields far more power and influence in today's marketplace than the well-oiled front office PR machine.
The Cluetrain Manifestobegan as a Web site (www.cluetrain.com) in 1999 when the authors, who have worked variously at IBM, Sun Microsystems, theLinux Journal, and NPR, posted 95 theses that pronounced what they felt was the new reality of the networked marketplace. For example, thesis no. 2: "Markets consist of human beings, not demographic sectors"; thesis no. 20: "Companies need to realize their markets are often laughing. At them"; thesis no. 62: "Markets do not want to talk to flacks and hucksters. They want to participate in the conversations going on behind the corporate firewall"; thesis no. 74: "We are immune to advertising. Just forget it." The book enlarges on these themes through seven essays filled with dozens of stories and observations about how business gets done in America and how the Internet will change it all. WhileCluetrainwill strike many as loud and over the top, the message itself remains quite relevant and unique. This book is for anyone interested in the Internet and e-commerce, and is especially important for those businesses struggling to navigate the topography of the wired marketplace. All aboard!--Harry C. Edwards
How things can change in a short time.... This book reads like a period piece, with about as much connection with current reality as a Victorian book of manners--except, of course, it is rude and abraisive. Even in its heyday, the Manifesto was a measure of wheat in a mountain of techno-pyscho-babble, quasi-Marxian, what-we really-need-is-to-just-sit-around-and-rap chaff. Now that the Internet is largely a tool to make customer service and contact even more difficult that before (ever try to use the "knowledge base" of most companies?) it look even quainter.
All I could think of was Webvan and the mass of uneconomic ventures that these and like fantasies spawned.
Don't bother. Read David Ogilvy instead.
Could have been much better As the name suggests, this book is an outburst of irreverent iconoclastic idealism. It is strongly reminiscent of the verbal gushing that characterize the manic outbursts of those attention-deficit-disordered hyperactive uber-creative types; characters whom teachers and managers recognize as banes of ordered working environments despite their occasional creative genius. The book resonates in every paragraph with the voice of prima donnas who hugely overestimate the value of their work, its value not withstanding. Euphoria is the marketing hype employed here. Ironically, it is the hype of choice of four authors ostensibly united in their rejection of marketing hype. But the firm is not dead, nor is business-as-usual banished to bad old pre-wired days, as they wishfully proclaim.
Free markets fail in three ways. First, there are never an infinite number of buyers and sellers; even commodity markets are comprised of a finite number of individuals. Second, there is never perfect knowledge among all traders. Third, markets ignore externalities. These are the costs and benefits that do not enter the pricing mechanism; generally goods taken from, or goods given to, the commons. Unregulated markets allocate to the commons fewer resources than would be pareto-efficient. As Ronald Coase (Nobel prize, economics) pointed out, however, when all parties affected by and who have an effect on the commons are able to negotiate - especially when catalyzed by their rights as set out in the law - efficient outcomes can be approached. The efficiency is limited by the costs of organizing, negotiating and coming to an agreement. These costs are highest when many independent parties are drawing benefits from, or paying costs to (or suffering costs arising from) the commons. Furthermore, this process breaks down to the degree that free riders prevent (or at least, undermine) collective bargaining, so that there are limits to the degree to which Coasean bargains can increase market efficiency.
Firms exist because groups are able to achieve some ends more efficiently than a free market of individual traders. When groups of people get together to pool their resources and bargaining strength, they are effectively decreasing the transaction costs associated with making a Coasean bargain. In the case of companies, groups of people come together to achieve their aims by becoming organized and focused; typically these are the dreamers, the managers, the workers and the providers of capital. Capitalism is predicated on the success of these associations to provide the engine of increased efficiency; I refer here not just to increased efficiency in the production process (which also takes place), but to the increased efficiency of the market when these Coasean bargains become possible. Read John Roberts, "The Modern Firm", Oxford University Press for an outstanding discourse on the where, when, why and how choices that managers of firms must understand in order to succeed. The manager of a modern firm is a shepherd of Coasean bargains. The firms that get this right are not about to disappear.
The Internet enables market mechanisms to function more efficiently insofar as it provides more and better knowledge of the competing goods being offered and the relative prices of all possible trades. It does not always do this; most of us are aware of the vast volume of disinformation out there. Nevertheless, it often does this. In addition, the Internet increases the number of traders. Markets that were once local are now global. It is trivial to observe that a system which improves the knowledge of traders and increases the number of traders will increase the efficiency of the market; and in so doing redistribute the benefits more evenly to all traders, sellers and buyers alike. However, this does not alter the other mechanisms responsible for market failure: that markets ignore externalities that are not internalized because of high transaction costs. And that Coasean bargaining is reduced in efficiency when free loader problems appear. That is why we need governments, laws, police, partnerships, joint ventures, corporate entities, copyright and patents; and we need methods of management for all of them. The authors of the Cluetrain Manifesto seem unaware of these principles.
Indeed, the Internet is itself a victim of these market failures. That is why we have spam, viruses, worms, spyware, phishing and so on. The transaction costs associated with getting everyone who suffers from spam together to negotiate with the spammers is impossibly high, so high that the bargain shall never be made; to say nothing of the moral hazard that would arise where such a bargain possible.
We are not standing on the lip of a revolution in human affairs. The canned and clichéd accounts of history, the ignorance of mechanisms that operate in social, political and economic systems, and the irritating slap dash style of this book - alas - spoil something that could have been much better. What, for example, does this mean:
The point is what this latest technological wonder brings back into the world: the human story. A story that stretches back into our earliest prehistory. A story that's been in remission for two hundred years of industrial "progress."
The scare quotes are not mine. And this is flatulent nonsense; not only in technical senses - prehistory is by definition the epoch before which the earliest `stories' are known - but in the suggestion that ancient, medieval and modern history are not human stories. Markets are about people making choices. Progress is about improvements in the human condition. Industrial activity is about as quintessentially human as any activity taking place on this planet.
The flaws of style are reflections of the shortcomings in content. We read, for example, "Oh the new computer was nice and the usual customers would buy it, but the larger market ... could care less." The author means "...could NOT care less." We read, "But an editor would rather insert a crab in his butt than a press release in their publication." So, is "an editor" a new kind of royal plural, or should that be "his (or her) publication"? The book is crammed with this kind of illiteracy and poor copy editing. These errors - and the euphoric hype - make it difficult for a sympathetic though critical reader to suspend disbelief and enjoy the show. Alas, I give this book but three stars, and each are for the potential that is largely not realized.The central startling simple revelation in the book is that business is (or should be) a conversation. There is an excellent book (and accompanying website) called "The Cluetrain Manifesto" (http://www.cluetrain.com/). The central startling simple revelation in the book is that business is (or should be) a conversation. That customers want to talk with the people behind the faceless corporations. That these conversations are already taking place on the Internet in places like Yahoo stock boards, Usenet newsgroups, mailing lists, AIM (AOL Instant Messenger) sessions, and chat rooms. That the conversations are taking place with or without the people behind the corporations. That these conversations are taking place inside of companies as well on unfettered corporate intranets. Some companies are listening - to their employees and to their customers - and some are not. And most importantly - customers are talking with their wallets, employees with their at-will status.
