Transcript: Inside the first Wiki company, SocialText

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1604/inside-the-first-wiki-company-socialtext

Guest: Ross Mayfield - SocialText
Host: Robert Scoble - ScobleShow

Ross Mayfield - SocialText
I'm Ross Mayfield, I'm the CEO and co-founder of SocialText, the first Wiki Company and so we've known each other for a little while I guess because of blogging, whatever that is and otherwise (Inaudible)...

Robert Scoble - ScobleShow
I link to you, you link to me.

Ross Mayfield - SocialText
Exactly, sounds like a trade, yeah, and its even more self referential in the Wiki world, I don't know, so I guess I'm a Wiki guy in the end.

Robert Scoble - ScobleShow
You were really the first to start up that -- it was building a product around a Wiki.

Ross Mayfield - SocialText
Right and the first I think kind of, within our space, kind of throughout all of social software to say, "Hey, the opportunity", well it sounds all nice and bubblyishis, on the consumer Internet and it's lot of fun, that there's actually an opportunity for these little tools that are dead weight, simple, Web-native, for them to grow up and be adapted for the enterprise, right. We started this whole thing what, four years ago in December 2002 and there was me, Peter Kaminski, Adina Levin and Edviel Meddie (ph) and we started with 5000 bucks. This thing over here is, this monitor stand, is actually the first server as in emachines that cost us like $300. We ended up, of course, the phone goes off while I'm doing this (Cross Talk).

Robert Scoble - ScobleShow
I always forget to turn off my phones during interviews and could always cause this problem.

Ross Mayfield - SocialText
Yeah, but lately the phone just keeps ringing, which is a good sign of we're at the -- when we started off with this silly machine server, what happened was actually, at the very first Supernova Conference, where I think, you were at, Pete Kaminski, who I had met originally through Rise, was sitting with me in the audience and there was this panel on collaboration and we had these little bit older guard from companies, talking about the pain of enterprise software, the worst time in history to be in business, basically right after the bubble and all they could talk about was like compliance and fear and how hard it was to sell and things like that and in the middle of all this, Doc Searls, who is one of our advisors, stood up and said, "Hey wait a minute, you guys are totally missing it."

There is this collaboration that's happening despite you, Dan Gilmore just blogged about the last panel and I was reading it; we're passing notes like little kids using IM, Word, banging on things and sharing information just freely and openly and that's something that you guys just are missing out, but it's what people are going to start doing and late that night, Pete and I said, "Hey, you know that's the sign we've been talking about." I was trying to talk him into doing enterprise blogging. He had this thing about Wiki's and was a lot smarter than me about the whole thing and really was right that that was going to be the primary Enterprise Tool on the Inside and now it's grown to the point of not just kind of legitimate, legitimacy and lots of validation by different moves at (Voice Overlap).

Robert Scoble - ScobleShow
Why is that? What do you think about the Wiki makes it better for inside the Firewall, kind of working together?

Ross Mayfield - SocialText
Right, so they're both great tools and in fact SocialText has both. We don't promote the blogging features that we have quite as much, but it's almost like this Ying-Yang combination, right? Blogs are about individual voice, they are great for kind of collective sense making; they're a lot better than email, as most of this is -- all we're doing with Web 2.0 is taking things out of email, adding back links, pings and RSS feeds, right, and out of that shifting from push models of attention management to pull models, right? But, a blog is great for communication kind of, one too many and getting some dialogue going, that conversation word. With a Wiki, it's about collaboration, what emerges is kind of group voice, it out performs in particular in memory, something that enterprises just lack. There isn't a sense of group memory and opportunity, when you really are building institutions...

Robert Scoble - ScobleShow
There isn't individual memory.

Ross Mayfield - SocialText
Right, wow...

Robert Scoble - ScobleShow
Both of my big companies, are left a gig-and-a-half of emails and as there was a lot of really cool stuff in those emails that my co-workers and that guy who replaced me, would have loved to have.

Ross Mayfield - SocialText
Right, but probably for you, your personal knowledge, management tool as you blog and the ability to leverage Google are one of the cool things.

Robert Scoble - ScobleShow
It's interesting, I didn't do it as good a blog internally as I did externally. Externally there is this social pressure, like ones with Google and you can put things in Google -- I mean that's why I started blogging, was partly to talk to Dave Weiner (ph) because he was the one of the two people who told me to start blogging, but also to stick stuff into Google. I knew that when I went to a copy place, and I didn't have a link on Google, that I could write up the copy place and put or link into Google (Inaudible).

Ross Mayfield - SocialText
Yeah exactly, but search isn't the only way to recall things and we're a little bit infatuated with it, a little too much right now, where -- what I really like, for example in a Wiki, what you end up having is, I may blog something in effect in a Wiki page, but the ability for somebody to come across and go this is out of date and update it and then for that to pop back up to the top of recent changes, right, where I'm moving from kind of a private inbox and email or a blog that's just going to cast out there and maybe other people might revive it, but they revive it through conversation, not improving the content itself.

You're moving from a model where an inbox is an isolated solitary event to kind of a shared inbox where you have lots of different bread crumbs of attention that help things bubble up. So what you see in a Wiki is like -- figure it this way -- you remember knowledge management, right? Fill in this form is a side activity, even though you have no incentives to do so and people hate filling in forms and then you'll have some artificial intelligence over here.

Robert Scoble - ScobleShow
I even hate doing tagging and that's a very simplistic (Voice Overlap)

Ross Mayfield - SocialText
Exactly, but do you hate tagging of posts that you write, or do you have -- what about the things that you read?

Robert Scoble - ScobleShow
Oh, I like it then, right.

Ross Mayfield - SocialText
That's a lot easier.

Robert Scoble - ScobleShow
Again on the outside world when you tag something, you get more traffic because people can find it, while you're going on. So there's the social pressure to do it, whereas inside a corporate Firewall, there is often not that much traffic to be gained and so there is not that social pressure to do things like tagging or form filling out.

Ross Mayfield - SocialText
Well, there is social pressure -- so you've had an experience, particularly, I think Microsoft made this really big shift and embraced the use of these tools internally as well as externally. I really like the way that Tim Bray (ph) made a comment once that, "You know what, I can change things a lot more with my external blog, than I can with my internal blog". Now, not everybody is Tim Bray, and not everyone's going to try to change things in the same way that he would. A lot of what happens behind the Firewall is actually, it's relatively boring. Its just -- I'm looking for a communication tool that's more efficient than email, but isn't an enterprise system that gets in my way of getting stuff done and I want to be able to -- be able to, had it be a little bit social. Let's put it this way, there's like blog people and there's Wiki people -- go ahead. So, think of it this way where there is blog people and Wiki people.

A blog person is going to be more apt to get on a Soap box, be able to express points of view, sometimes people use it in publishing mode, some people use it in communication, conversational mode, the best ones do, but the other thing that happens, mostly behind the Firewall it's a way to communicate about projects, reveal the innovative threat of the project over time and also it's a really great thing in particular when I've got a new team member and teams change so dynamically inside the enterprise. It's a way for them to help get up to speed, see the temporal context, but there is a logical context that unfolds from Wiki pages, I mean there were just messages, right, it's just how you're sorting them but and then also the revision history benefit that you get out of a Wiki page. So, I don't know -- in the end...

Robert Scoble - ScobleShow
Well, blog is also written usually by one person, where on Wiki it's done by groups of people and that's changes how I interact with that content. I like using Wiki's for projects; for setting up a Spreadsheet or even doing a brochure or something like that, where I can write a paragraph, then you can come over and write a paragraph and then somebody else can say, "Oh that sucks!" So you may start two paragraphs and do it again and then we can all work remotely and together on one page.

Ross Mayfield - SocialText
That's right, that's right and then...

Robert Scoble - ScobleShow
A blog is more like getting my view of the world, my history of the world.

Ross Mayfield - SocialText
So, we do kinds of blogs in SocialText, one is a little bit more traditional, limiting authorship. The other is more of what we call, Wiki blog, where anybody can walk up and there is right next to that permalink you've got another one that says 'Edit this Post', which freaks traditional bloggers out, but when it's introduced in the right way, in a traditional enterprise, oh that makes a lot more sense for projects in the same way that you just described, right.

The interesting thing is how we can also read the tight integration between Wiki and blog where something can start off as a Wiki page off in a corner and with someone starting to just state something and then they want to share it with a group; all they have to do is add the tag, that's the name of the blog, so a lot more of it then, to get this very nice dead simple easy to use tool. I think it is now since 2.0, definitely the simplest and easiest to use Wiki on the planet and that's actually the only thing that matters except for, there are requirements you have to meet on the enterprise side and then the interesting thing is, with these tools, they are not easy answers. There is a myth that you just deploy the Wiki and suddenly things start bubbling up like crazy and you've got a Wikipedia inside your company.

The practical reality is, though strength of a Wiki is, it starts off as a blank page, right. So, that just makes you ask you the right questions like, what do I with this blank page, right? This is, especially at times right now, where people are just learning how to use papers, it's kind of an analogy, right? In the same way that Spreadsheets started off. At the beginning people didn't have the practices, it starts off as a blank page, start poking at it and you figured you can actually do some interesting things, and you realize there's different dimensions to the tool that what you see at first.

Robert Scoble - ScobleShow
Yeah, I didn't learn Excel for a couple of years until I saw Naster (ph) using it and I learned all about formulas, and like charting and all sorts of cross tabs and all sorts of funky things or if you just play with a Spreadsheet, you just see a row and a column and you don't realize there is all sorts of stuff underneath and Wiki its sort of the same thing.

Ross Mayfield - SocialText
And it sounds like the way you learned was socially, right? So Jay Cross points out that 80% of learning is social, its informal learning and the nice thing is that with the Wiki, that learning affect can be very compounded because of the social nature of its tool. A lot of people don't get Wiki's and I'd say it's because they haven't had an experience really with a Wiki yet. When you've been within a team that's used it effectively, then the light bulb (Inaudible) and goes off in a heartbeat and then they're stuck, then they're going to be Wiki people forever right?

So, actually this whole part of the conversation started with four years ago, none of that existed right? Wikipedia was not known whatsoever, now and over time, and I'd say the way the market has unfolded is, there have kind of been three forces. So you have Wikipedia, just this juggernaut of knowledge that just keeps going and its not running into the scaling limits that everybody continually predicts.

Robert Scoble - ScobleShow
Out of a 1,000 people, who've used the Web, who knows how to use Google, or Yahoo! or MSN or (Inaudible) how many of them do you think know how to -- that you can actually go to a Wikipedia page and click edit page and add their own thoughts on that.

Ross Mayfield - SocialText
So, I'd say somewhere around 75% know that. They probably will not have done it, they've probably will have known it from the popular media understanding of what Wikipedia is, because part of the attraction is that chaos that anybody could change it. Think of it this way, there is this power law distribution of participation within Wikipedia and also within all social software tools.

Robert Scoble - ScobleShow
Oh yeah, I've learned right away, in the first week I did my blog, I could only see like 200 blogs out there. I didn't even think it was important enough to do a conference session on, but I started one because Dave Weiner and Tory Smith told me about then and within a week or maybe ten days, Dave Weiner linked to me and sent me 3000 people and I was like, "Wow, there is a lot more people reading these things that are writing up (Inaudible) today."

Ross Mayfield - SocialText
Oh it's still true. I mean, the vast majority are going to be free writers. There's people who are going to read first, and might start getting into commenting, they might gradually, gradually there's only a small group that's going to be really the core of given community around a given tool, right the heaviest users. Wikipedia 50% of the people are -- I'm sorry 50% of the edits are done by 500 people, which is just 0.5% of the population. Was it 750 people do 75% of the edits, so you have this parallel long tail distribution and a real core group that's doing the heavy lifting that's one of like three forces and unfortunately, when it comes to the Enterprise use of these tools, a lot of it is really shaped by the understanding of what Wikipedia is right?

Its strength and a benefit -- a lot of my business today is -- I don't have to educate people on what Wiki's are to go Oh Wikipedia! And then I'm building Wikipedia inside the companies, but the funny thing is that those vast majority of those edits on Wikipedia are fending off vandalism, because it's out there for open use in the public net. Inside the enterprise it never happens, right. We haven't had a single complaint of a user that abused a Wiki inside a company. Nobody has gotten fired for using SocialText yet.

Robert Scoble - ScobleShow
Yeah.

Ross Mayfield - SocialText
It will happen eventually. The funny thing is -- well that's because there's an existing organizational contacts, laws and norms, right. The other two drivers have been Open Source Wiki's have just gone on as they have -- I mean Wiki's have been around for 10 years, since Lord Cunningham invented them, and I'd say 90% of Wiki use, isn't little vendors like SocialText but its Open Source use. That's something we started to play into a lot more with our own Open Source alternative but I'd say today you can go to any enterprise, this is where all the analyst projections are wrong which say, so like Gartner says that 50% of companies will have Wiki's by 2009, 80%, will have blogs. Let's say, we're already there. It's just you can't measure it because it's Open Source. The third part and this is...

Robert Scoble - ScobleShow
Oh! then (Inaudible) starts coming out with Wiki's, and blogs and SharePoint 2007.

Ross Mayfield - SocialText
Yeah, we should talk all about that.

Robert Scoble - ScobleShow
So, the big boys have woken up to this stuff. They're not doing it maybe to the extent, but...

Ross Mayfield - SocialText
That's because of the third part, which is us doing our job very well. So, as the first people in the market, I think we did our business differently. We didn't play self mode games, we just got out, and we started talking about it, partially, because we started without that much in the way of resources. Just kind of that culture and who we were and stuff like that and so we've shared a lot in terms of practices, in terms of code, in terms of kind of the vision for where these things should go. I think as a result, that category has grown a lot more and there are lots of independent Wiki vendors. I still do believe that we're in the lead of the market that we've created but realistically, things are changing really fast alright. We had one of our -- I'd say...

Robert Scoble - ScobleShow
Well that's why I did you last right, because I've gotten around to quite a few Wiki vendors lately and I wanted to get educated before I came inside here and hear what their story was, then I could hear how they're playing off of what they're doing or with each other and certainly like Jot Spot has a whole office suite that they sold to Google. Why didn't you sell to Google?

Ross Mayfield - SocialText
Yeah, why didn't I? Google isn't the only game in town and also, I don't know, I've been really explicit about, selling out is not the goal, right. It's building the biggest cult business and people underestimate how large of an opportunity this is where you have to think of it this way. There are two kinds of enterprise systems, there are enterprise systems that seek to automate business processes to drive down cost transaction oriented systems and then there is everything else meaning, mostly what we're doing with email and the stuff around office. Now people playing email volleyball with attachments all day long. Guess where employees spend their time, it's not in automation business processes. It's not doing process.

It's handling exceptions to process and the reason is, the world is too dynamic there's changes that we can't anticipate through an automate around. There are also things that people are better at doing than machines or people who make machines. So, the opportunity, people call it all kinds of things. Whether it's Enterprise 2.0 or Tacit Interactions or Enterprise Social Software and I'd say the opportunity is like not just cannibalizing things like collaboration portals, content management, knowledge management, email itself. The opportunity is actually a little bit larger it's the stuff that hasn't been supported yet.

Robert Scoble - ScobleShow
Well we've certainly seen that with some of the spreadsheets that I'm playing with, that's magical that I can go in edit a number and then somebody else can edit a number along with me. Things like Groove have been there and sort of done their job but you needed to have a download and you needed to buy into a proceed cost and you needed probably a Windows box, because I didn't work on Mac, it didn't work on Linux and now with the Web-based approaches like Wiki's we're free to get a lot of that stuff and it...

Ross Mayfield - SocialText
Well, but you're also going to have -- I mean let's put it this way. Groove's being baked into Offices or into Windows itself, right. Let's put it this way, I think a lot of -- there was a -- think about the history of collaboration. The very beginning you had Lotus Nodes. This big Juggernaut, that was -- a lot of that was around the automation of processes, the ability to create different kinds of applications to institute workflow. Then you had the second generation, which was just messaging, or I should let's put it this way; what did they do with groupware? They used it to share files.

They didn't really -- there were some people that really loved that stuff and they were also -- happened to be the experts who learned how to create the applications within nodes; but otherwise it was just like, "Okay, this is how I share a file." Then you had the messaging phase which -- now that market is carved up between IBM and Microsoft Exchange. Now, what you have is a different kind of phase where -- I mean you had Groove somewhere in the end of that where the trusted workspace model really excelled and the peer-to-peer architecture was something that was addressing some of the really difficult things that I'd say groupware ran into, about how do we get people to work across Firewalls. Well, lo and behold here's -- Port 80 is blindsiding everything and we are able to develop these.

Robert Scoble - ScobleShow
Port 80 you said, normal people on the outside don't know what port a 80 is?

Ross Mayfield - SocialText
So, doing stuff on Web pages. There are businesses where they don't want their employees to use a Web still.

Robert Scoble - ScobleShow
Well I remember -- I was the net meeting guy before I joined Microsoft. I had a net meeting Website and stuff, I created net meeting with Microsoft's other employees; that you don't do because they're corporates -- they were getting hammered by so many viruses and security threats that they closed off every single port except for port 80 and even then they closed up port 80; but it is opening up a little bit today, but I still couldn't use Skype at Microsoft in a lot of places.

Ross Mayfield - SocialText
Right now that's interesting, actually and so there's always going to be good advances like Groove and let's say Skype that are able to take higher bandwidth communications and be able to find a way to get around Firewalls and get around -- and resolve security issues at the same time. But yeah, there is a tremendous amount that you can actually do it turns out with simpler tools and that's actually -- the real insight so with the Wiki is it's not actually about the features, it's the absence of features. It's that if I trust these other users we'll work out more of a social protocol for using the tool and that avoids us having to hard code features that actually end up working out to be barriers against other people working together.

So, that what I do see within Wiki is now you have these amazing -- well, the practices are evolving, people know how to use them finally. You are at a point where every company has got them and the management is trying to figure out what do we do with this stuff that's emerged from the bottom up. You saw that new champions are just discovering it now and taking it into different used cases that we've never anticipate. What we have is -- particularly since SocialText 2.0. The tool is evolving to the point where it's just simple and easy to use as email, and you can do final sharing with it at the same time. So, you're getting the messaging and you're getting the files sharing and even the really interesting stuff is people's models of what files are, are breaking.

Robert Scoble - ScobleShow
Explain the concept.

Ross Mayfield - SocialText
Think what are the dominant file formats, Word and Excel, and PowerPoint as examples, as PDF and others. So, think of it this way; maybe a Wiki page is a different kind of file format than what we've had. The revision history in it is fundamentally different than what you've had before, beyond like Word 'Track Changes' and stuff like that. So, I think -- just watch kind of it evolve because there is a vast sum of human knowledge that's being put into this format. It is an Open Format; there is a need still for a lot more standardization, a lot more Open Standards work and that stuff that we're really -- even with some of the folks that you have been interviewed before, it might shock you, but we would actually be really open in involving them in some of the work we are trying to foster. We have a good track record, as you know from helping further things like RSS and Atom in particular and we'd invite...

Robert Scoble - ScobleShow
Is there going to be a new W3C?

Ross Mayfield - SocialText
I don't know, I mean...

Robert Scoble - ScobleShow
Because it seems like the W3C's power in the world or involvement in the world has waned in the last five years.

Ross Mayfield - SocialText
Power always shifts; I wouldn't be the right person to comment on that organization enough. I'd say...

Robert Scoble - ScobleShow
But, they weren't involved in the development of Wiki's, and they weren't involved in the development of blogging, they weren't involved in the development of syndication, RSS. They got involved in -- IETF got involved in Atom, but that was after RSS had happened.

Ross Mayfield - SocialText
So, the approach is implementation is truth. Get a group, particularly while your industry is so small and there are a handful of vendors and none of them are so massive and play such stupid games that you can actually get some bases of cooperation. As you know, one of the best things about like -- part of the reason that I like my job the most isn't just like my company and the people that I work with on a daily basis here. But, there is a community, and this community -- I remember at -- I think it was like the second E-Tech, O'Reilly Emerging Technology Conference; Peter Kaminski, my CTO created a BOF session called the "Social Software Alliance" and suddenly what you had were all these people jumping in, who'd never really talked together that much before and he started it in a way which was not just like, "Hey, let's get together and talk about Standards, but also let's involve like the Social Software practitioners.

So, you had people like Dana Boyd showing up for example; and we didn't -- that didn't result in a very specific Standard, but out of it, it got lots of people talking. You did have based on SocialText Wiki's and others, new groups forming, like left and right talking about -- from the far left field of filth to the right wing, I don't even know if that's the right way to put it, of stuff like Atom to little games that ended up -- RSS is still really -- it is what it is. It's great that there's alternatives out there and now we're getting some real progress I think the Adam API right, but what happened was you got people together, they worked out, can we work together and we just implemented and iterated and iterated and nitrated and good people like Sam Ruby are doing the right thing of taking these things and then bringing it into the institutions after its a little bit more fully baked, right?

Robert Scoble - ScobleShow
What's 2007 going to be known as?

Ross Mayfield - SocialText
Well, we already -- journalists have already said the year of the Wiki for the last couple of years right, I said that 2006 is going to be the year of video actually and I guess its time for me to start sitting down and writing my post for the damn predictions.

Robert Scoble - ScobleShow
Or you want a free ride?

Ross Mayfield - SocialText
Yeah, apparently it was.

Robert Scoble - ScobleShow
Too bad we didn't start YouTube (Inaudible).

Ross Mayfield - SocialText
Yeah, exactly, exactly, I don't know -- like at this point, also it is easy to call that because right before that there was all the stuff that was happening; still images and stuff like that right? I do think that this might be the year we're part of the consumer Internet bubble pops and I see a lot of signs where just that valuations are at a certain kind of peak. I do think there is still a lot of room for innovation within Social Software, I think there's a different model that plays back into Social Networking a little bit more than what it does today. There has been this, we're already starting this, there's a cycle right, between consumer and enterprise and back again and I think we're cycling right now over to the enterprise side, if you look at the number of Enterprise 2.0 companies that are popping up.

Robert Scoble - ScobleShow
That's really where the money is.

Ross Mayfield - SocialText
Well, that's where it's easier for people to understand there's money there, right. It's also harder to get that money right?

Robert Scoble - ScobleShow
Because you got to wrench it out of Oracle or (Inaudible) or Microsoft.

Ross Mayfield - SocialText
Or better yet there are customers, right, and they're really good at wrenching the money out, but let's put it this way right. So, I have to have define Enterprise 2.0 a little bit for people.

Robert Scoble - ScobleShow
Go ahead.

Ross Mayfield - SocialText
So, we have this -- one of our best customers is Dresdner Kleinwort Wasserstein, a Bank in London and we had this Professor from Harvard, Andrew McAfee that was doing some case studies just by observing the environment there and what he saw was something really different where you had the CIO actually J.P. Rangaswami was really forward thinking since moved on to BT, he embraced the use of Blogs and Wiki's and RSS and what Andrew saw was something different. He describes it with the SLATES paradigm; search, linking, authoring, tagging, extension, signals. In other words the Web inside a company, and you went on to kind of define and the definition that stood still for the most part to sweat a lot of debate as we liked to divide, debate about namings and definitions on blogs when we had nothing better to write.

It's freeform social software adapted for organizations. Freeform as in emergent, its unstructured, I work and as a by product of working with other people, a structure emerges, not just a link structure, but other ways of looking at the bread crumbs of attention and then you get these emergent properties that appear out of the system, so suddenly you can do things like see what are my employees talking about? What are they actually working on? Is there some new issue that's bubbling up to the surface that as, let's say an executive I just can't see, because I'm often my own echo chamber. The other part is with social software it's getting the social incentives right for people to participate. For participation, sharing, it fosters a different kind of transparency than what you had to and then adapted for organizations mean you actually have to sell to an enterprise.

There is an interesting thing where the enterprise software industry has just been taken in over the last five years and as you may know a lot of the power is consolidated like the top three vendors of SAP, Oracle and Microsoft and the mid market companies having a lot of problems particularly with Sarbanes-Oxley producing new burdens if you're a Public Company of two million dollars in operating costs a year, the interesting thing always that in the meantime you've had these things like SocialText start to pop in, different business models, Commercial Open Source. What they've really been about is, so with SocialText I think, we're doing something new as in what the application is, but we're also doing something new in how we're delivering it and servicing our customer's. So, I have this equation of explaining in a way that enterprise software used to work right, which is one plus seven divided by two. So, one million dollar license fee paid upfront, plus seven million dollars in service fees to actually make that thing work.

Robert Scoble - ScobleShow
Team of consultants.

Ross Mayfield - SocialText
Right, but you get hassled what you're paid for because the vendors spend 50% of it's budget on selling and marketing to you and getting you to buy often this big ROI theoretically upfront and whether they deliver the returns or not who knows. So, what we are doing is the opposite of that. So, we do it through a combination of having Open Source Software as a service and appliance offering, where somebody can grab our Open Source version if they've got technical skills get going build a pilot that has some level of its success before it gets on IT's radar, before it gets on managements radar about whether they should make a bet on this aspect of their portfolio.

Same thing happens on the software as a service version we're free for five users then start charging on a user group level per month and it can bubble up from business users in that way. Eventually, IT does get involved, eventually management wakes up to the opportunity not the threat as a lot of the misconception is, they do have to recognize that embracing these technologies means sharing control to create value...

Robert Scoble - ScobleShow
Yeah.

Ross Mayfield - SocialText
...which is a little alien in some schools of thought, but in others like Peter Drucker's visions of a New Pluralism within the enterprise like the last form of an organization that doesn't have any Pluralistic dialogue is an enterprise with its employees. But I think when you talk to people that are at the tops of these organizations, they are the ones who just dislike that there is six chains of reporting and by the time they get any information it's so watered down, it doesn't reflect reality. They are the ones who want to breakdown Xylose, they are the ones who want transparency, it's people in the middle management that don't get a lot of that, yeah and what's funny is you seem...

Robert Scoble - ScobleShow
(Inaudible) from it doesn't it.

Ross Mayfield - SocialText
Well they think it does, or at least it might have used to.

Robert Scoble - ScobleShow
If you work with a famous big CEO; your power comes from being able to tell the CEO what's going on.

Ross Mayfield - SocialText
Right, while that's true, what happens when the CEO can get his information more freely.

Robert Scoble - ScobleShow
Absolutely, that's why they're scared to (Inaudible).

Ross Mayfield - SocialText
Trust others to do it too, -- so pardon the noise here. So, it's interesting where in some of the organizations that we have, really done a really good job in the deployment. You suddenly have a level of transparency in the organization you haven't had before. The thing that we observe is people who hoard information are punished relative to those who share, people who share information get a different kind of recognition, different kind of reputational benefit and so that's a change, I do think that technology can have a change on corporate culture and it can be a positive one, I do think transparency is something that's hard to argue against, particularly in a way with all these, what did we just deal with, why do we have Sarbanes-Oxley, right? How are we supposed to be managing and operating our enterprises today? So, that's an opportunity, it's a little, you have to introduce those opportunities very gently to people, especially the middle managers, because immediate reactions to things that are new can be threatening.

Robert Scoble - ScobleShow
Yeah.

Ross Mayfield - SocialText
So, things like that.

Robert Scoble - ScobleShow
What's it, -- you're relatively a Web 2.0 businesses what's the business climate right now, certainly it seems like a lot of things are getting funded.

Ross Mayfield - SocialText
Yeah.

Robert Scoble - ScobleShow
Seems like we're at the top of the bubble, as you said, although it's a weird bubble it's not like the last bubble.

Ross Mayfield - SocialText
Right.

Robert Scoble - ScobleShow
My mum and dad can't invest in this, (Inaudible) last bubble

Ross Mayfield - SocialText
Well, so there is a bubble going on where I see a kind of (Inaudible)

Robert Scoble - ScobleShow
How do you know it's a bubble, everybody, a lot of people are still disagreeing whether it's a bubble or not.

Ross Mayfield - SocialText
Well and actually maybe because we're having that debate it's not one right? I think we all learned enough and went through enough pain to keep us in check to a degree. There is a healthy degree of skepticism, I'm really, I remember, two years ago even, you would have a period where any exuberance whatsoever was squashed down so quickly, there was just general pessimism and the only things that made it through that were companies like SocialText and like NewsGator and Technorati and these others where other, somebody just created it as a hack at first, put it out, started building a little bit of community, yeah, may be there is some long-term dreams of what this could grow up and the financial return, but that's not what kind of get people going.

There were a lot of people who stuck it out through the bust and just kept making stuff and building relationships and I think people operate and think differently here. The only part of it that's a little a scary to me is to build a flip mentality that does exist here, right. You even have entrepreneurs coming out of the wood work, who weren't here before, or new folks that have just kind of like you know what, "I am going to the Silicon Valley, I am fresher at school and I am going to and be like a Kevin Rose and be on the cover of Business Week," or something like that. Instead the problem is we started SocialText with this little server, and 5000 bucks and got a first customer idea across the street in two months, we had revenue within six months and raised a small inch around but that time it was only a 150 grand, right and that's what we needed to get the business going and you can because of commodity hardware and software, the way that you can communicate on the Internet and you can build things without that much.

Now, the thing that's disturbing and its not what we did, but there are companies, who will start of somewhat in stealth mode, still I don't know why if they are on the Internet business; pick a part that's a feature that is missing out of the portfolio at the big portal companies, solely develop that, never make any attempt to making and monetizing whatsoever and then just build it to flip. Now, some folks have done this really successfully and I think ...

Robert Scoble - ScobleShow
Are there examples you can give?

Ross Mayfield - SocialText
...like (Inaudible), okay. So, here you have a company where you actually -- in that case you had an experienced team that had done a product like this before in previous generations of technology, so they actually knew what they were doing, but they never tried to even generate money off of the advertising. Never once, so they never tried to turn it into a business, and where did they sell to; one company, right and just focused on that, I guess and flipped it. Now, that's fine, that can work for some people -- what I worry about is what about -- what if other entrepreneurs, who've got maybe a little bit less experience are thinking they can just do the same thing, and will never be able to measure it. I mean the IPO market is still closed unless you're one of the very best companies; I do believe it will open again despite the burdens of Sarbanes-Oxley. I also think Sarbanes-Oxley will eventually be reformed just because of the burdens that it's putting on entrepreneurship.

Robert Scoble - ScobleShow
YouTube if they had revenues that they actually continued and actually built a business, they probably could have done IPO.

Ross Mayfield - SocialText
Absolutely.

Robert Scoble - ScobleShow
They had a brand name, a big enough brand name that normal people on the street recognized it and they didn't wanted to buy it.

Ross Mayfield - SocialText
Well, I don't think that they would have gone public this year.

Robert Scoble - ScobleShow
Not this year, but maybe next year.

Ross Mayfield - SocialText
Yeah, exactly.

Robert Scoble - ScobleShow
If they had come up with a (Inaudible).

Ross Mayfield - SocialText
Well, so MySpace and Facebook are great example of the kinds of companies that probably would have otherwise gone public and pretty much any other acquisition, that was up at the 400 or 500 million; well, million, two million three million or a billion level as well. Would Skype be a publicly traded company for example? Maybe the economy would have been better off if so, but right now what you have is a handful of companies that are taking on the burden of regulation and being in the public markets. They all have the formulas for making it work.

In the meantime what we have is the biggest MNA market that's ever existed it's not just (Inaudible) and Tech, but in all lots of other sectors, and the question is whether that creates false incentives. I think that it is driving the people to innovate for sure, but the question is; is it innovation that directly translates into revenue? I don't think quite as much and if it ain't revenue, it ain't real.

Robert Scoble - ScobleShow
Well, you're trying to guess what the next mode that Google or Microsoft needs or -- and YouTube was a -- I see it as a mode play not as a actual business -- I mean, they might turn into business five years from now, but in the next two years, it was a mode around the castle, where Microsoft would have a harder time to attack the castle, right?

Ross Mayfield - SocialText
Right.

Robert Scoble - ScobleShow
But if you let that thing go to Microsoft or let it go to Yahoo! then all of a sudden they have a relationship with the avid buyers that could...

Ross Mayfield - SocialText
With their synergy. No.

Robert Scoble - ScobleShow
Could have let down their synergies, and now you could have attacked them; the real castle which was the search engine in the search advertising market, and could have said, "Hey, we have a search engine too. You want to (Inaudible)." I can just see where they've gone, but a lot of people don't recognize that, they assume, well just because it didn't have any business, that wasn't legitimately worth 1.6 billion.

Ross Mayfield - SocialText
Well, I think actually I'm not arguing -- I wouldn't argue actually, if with the valuation itself necessarily, because there is a direct -- we have a dearth of ad inventory that is out on the Web relative to the demand to spend right now. I think, Calacanis has a point not that he puts it in the right ways, but Calacanis with -- how much of this is just simply fueled by the advertising market, right? That's not bad. There's other -- I would say though that it would be very interesting to see with all these buy ups I'll pick on Google for fun.

Think of it this way, like how many -- how many of these acquisitions have directly translated into something that has gone off to be a killer app? Is -- for Google for example, I think they are a media company. I think they have a great search product, it's not the best technically necessarily, but it has gained -- there's a marketing impression that gives confidence in the results of the search. Whether they're actually the best search results or not, it doesn't really actually matter, right? But the question...

Robert Scoble - ScobleShow
Just arguing whether Beta or VHS was better, right?

Ross Mayfield - SocialText
Yeah exactly.

Robert Scoble - ScobleShow
Beta was a little bit sharper, but VHS was a better format.

Ross Mayfield - SocialText
Right, and it ended up generating network effects around.

Robert Scoble - ScobleShow
Google has a couple of things going -- it's fast, it's consistently fast.

Ross Mayfield - SocialText
Right. So, this fast thing like Marissa said at Web 2.0. Have you noticed, is it just me, you used to email to, but now every time I click a button, it refreshes the page twice. Now it's doing that really fast and then we just have a stupid bug.

Robert Scoble - ScobleShow
(Inaudible).

Ross Mayfield - SocialText
Okay, Yeah. It's okay and I'm unfortunately one of these pilers, that would put every -- I'd like the notion; of I can keep everything in my inbox, but that ends up messing up with pop access.

Robert Scoble - ScobleShow
Yeah, I dragged it out, I put it in the folders.

Ross Mayfield - SocialText
Right exactly, you're a filer, I'm a filer.

Robert Scoble - ScobleShow
Yeah.

Ross Mayfield - SocialText
So, actually like here's the interesting thing that I thought about the Web 2.0 Conference, right? The very first one you had Sirgey (ph) on stage when he was asked by John Battelle "Are you guys going to rebuild Office on the web?" Reality is that, and -- what did he say, "No, why would we ever do that? We will build something fundamentally different. Why just put all these things on Web pages?" Well, then you fast forward to this last one, it was said really clearly by Eric Schmidt that that's exactly what they're doing, and in a way it make sense, where the opportunity is regular users understand what Office is, replicate the stuff on a Website.

So, then you can surf ads and make it for free, and then that's going to get a certain portion of people that aren't going to pay $400-500 for the upgrade or whatever it might be, and are comfortable now putting a good amount of their personal data off in the cloud, right? Dan Brooklyn makes -- okay so, then we also had this Ray Ozzie saying that, "No, we're not going to replicate what we've got on Web pages, we're going to build something different." Now I don't know if they've done that yet.

Robert Scoble - ScobleShow
They're in the process. I mean it's pretty clear that Ray hasn't had anything major to announce, yet. It's still in that sort of (Inaudible)

Ross Mayfield - SocialText
But, there are some things where -- I mean so SharePoint is the fastest growing server product in the history, for example you have this Excel Server thing, so that let's you do a lot of the things that people really do dream about doing, beyond what is in Excel -- itself. There's, I mean I don't know, so, we partnered the week before Web 2.0 with Microsoft and we came up with SocialPoint, which is SocialText running on SharePoint and it was interesting, as you know for -- you mean you knew my stance on Microsoft and attitudes towards it and stuff like that and I don't think any of that's changed. It has changed in connecting with humans like you, watching -- particularly getting (Inaudible) like on the research side, or some of the better social computing thinkers, and -- one by one different human interactions add up to be a lot and can overcome an institution. I'll tell you the funny thing was when I met -- my very first interaction with somebody at Microsoft, where I was exploring should we do this or not, the guy told me, "You should rebuild your (Inaudible) product on .net, and this open source thing that you do, that's not really -- we don't do open source. Have you ever heard of this shared source thing or something?"

Robert Scoble - ScobleShow
Yeah.

Ross Mayfield - SocialText
I mean it's just funny, because you're going to have people -- like...

Robert Scoble - ScobleShow
There's a lot of group thing (Inaudible).

Ross Mayfield - SocialText
Right and its old group, but I do think like with Ray Ozzie, with other folks you see it from the top down and the bottom up a lot of change. I don't know if they're going to turn on the dime like they did for this, rather than that, it might be a little more difficult but it's a cultural change.

Robert Scoble - ScobleShow
It might be that blogging is leading somewhere that, I don't know if I would have predicted it before I worked there but by having 3000 people talking about the Web, and learning to use things like Technorati and you can do through a blog search, they can listen to the Web and they can see what people are complaining about and talking about. They can see that there's a group of people who are leading them. They could see with that .net only group thing, Windows only group thing now they're still thinking about that, right, so and you are out there and you are separated you don't get to see -- and to be fair to one, that might actually work for them in the long run because Silicon Valley has its own group (Inaudible).

Ross Mayfield - SocialText
Very much, but what you just said was that transparency is part of the care too, right, and so I think we will wait and we'll kind of see. I do think, just, there is this general thing that's ironic to me where, the company that is replicating office for the Web is Google and the one that isn't partially because of the position of (Inaudible) Office is probably going to be Microsoft and that's just weird to me, and kind of cool, but I don't know...

Robert Scoble - ScobleShow
Well, it's in a bit of dilemma too and let's be fair, they're having four billion dollar of your business in Office, they are going to do things that attack that business very solely. Now if you are really a disrupted thinker I would say disrupt it from implied and you know you are going lose that business someday so why don't you lose it to yourself, then that's hard thinking by a lot of people because a lot of people see their pay check coming from one place -- this -- we have lots of famous stories in Silicon valley at Xerox park. Xerox knew that it had that disrupted side but didn't how, when the final "pull the switch" came...

Ross Mayfield - SocialText
And it's worst now because even if you are sitting on the top of a 50 billon dollar war chest, when you've got the quarterly pressure to deliver results and how to explain that strategy and be try and open about that strategy, I don't envy that position that's not very easy. I do think -- let me -- I'm going to change the subject and talk about like kind of how we do things differently to a degree but it's also a way of kind of sharing where some of these companies are going to end up wanting to go eventually and if they don't quite frankly, the way that I look at it is I'd rather and they don't and I 'd rather we build this different thing and we stay best of breed and the position that we are at; we work with a lot of them but we get to the point of realizing this billion dollar company opportunity. So, I mean if...

Robert Scoble - ScobleShow
Wake up and get started, you know that the elephant is the going to move. Microsoft already put Wikis and blogs on SharePoint, right, and then you come along and say, "Well I have a better version and I do XYZ that you don't and so you need to buy me, that's a great - "sit on the back of the elephant", kind of strategy. "Hey I'll pick what, you go wherever you want, crush whatever you want, I'll sit on your back or I'll even be the guy who leads you around and as long as you keep moving you won't get stepped on, right? If you stop, the elephant steps on you, you know.

Ross Mayfield - SocialText
So it's a good analogy not as necessarily a survival strategy or like the free readership aspect of that but I mean, think of it this way, so by offering SocialPoint it's not just having -- or let's put it this way, there's a need, what's going to happen to this whole market right as -- forgot about all the interviews that you've done lately, the thing that will matter is that when Microsoft comes into the market and says blogs and Wikis are part of this solution area, it's -- there is a level of legitimacy but more important, they've got this market share that will mean that more people will use blogs and Wikis than ever did before and this is very different from let's say when they launched Public blogs, which had some kind of effect but not -- it wasn't what do they call the old AOL thing, the endless September, endless November, I forgot like the real sea change of bringing in another group of main stream users. That bugged the heck out of sysadmin's a long, long time ago, that will be a very big sea change. IBM coming into the market eventually is and possibly next year is going to be a very big change and so we are going to be dancing with elephants and the trick is, I mean I am not...

Robert Scoble - ScobleShow
So, what is the SocialPoint; what does that do that SharePoint 2007 won't like it -- what are you going to go into the CTO office at Chevron, and say "Yeah, you ought SharePoint 2007, but you should also buy SocialPoint?

Ross Mayfield - SocialText
Well, so for example we have little features like the ability to click a button to make a link instead of remembering the two square brackets, that's a little joke at it but I think let's put it this way, we have a more robust Wiki offering and we've developed it over four years and making lots of mistakes in public and learning a lot from customers. The thing that you'll discover, I think with SharePoint is a good entry into, it's a good entry, that will get people like going okay, so that's kind of what a Wiki is and I could maybe use it on a project.

You couldn't build a Wikipedia, inside your company with SharePoint, with SocialPoint, you can, where, what you'll have in the very initial release that we did and it's very early for us and all the things that, we want to develop around the Microsoft ecosystem. You look at, it supports one used case, I have SharePoint, where I am using it as a portal, I have a lot of attention there, right, but I want to develop this Wiki capability, whether it be for collaboration, whether it be for building a Wikipedia inside a company, I want to be able to present almost like a portlet, recent changes, different Wiki pages, have the integrated search, have the ability to offer them up for editing.

I also want to do something's with my Wiki that you can't do in the 2007 Version of Microsoft SharePoint; like things like link to a file, like when (Inaudible) you type SocialPoint and the file name and you make a link and so all it is, I think, over time, the Wiki offering will keep getting better, at the same time, that is so, by the time they get it to the next release -- well we've been doing releases every one or two weeks or something like that and keep iterating, and gaining more and more requirements and I think, that we are going to fill some interesting gaps. Put it this way, if was a Microsoft sales rep and I am having to go up against like Oracle or IBM, I'd want to be able to have this as something that's in my quiver, to be able to say, to offer solution.

So, I think, it's not just, us riding on the elephant but trying to get some elephants to dance with us and making the party a little bit bigger and I think, what we'll end up doing is not just selling more SocialText seats by selling more SharePoint seats and that's okay, particularly because we have a mission statement and it took us a long time, and it ends up being kind of a silly stupid one...

Robert Scoble - ScobleShow
What is it?

Ross Mayfield - SocialText
It's Wiki everywhere, right, that's our goal and we're doing a pretty good job at it so far. So, part of that meant, that also means Wiki for Microsoft users too and also moves that we are doing like the Open Source Version to be able to get it out more globally and in different places than what we have. Also like we should talk a little bit about maybe SocialCalc, what we are creating with Dan Bricklin, right, so, if you think about it, so far everything we have done has been about unstructured information, and it took us a while to figure out, what would be the approach we'd have for handling structured data, for us it ends being Wikicalc.

So, Dan Bricklin, who invented VisiCalc, the first spreadsheets, that (Inaudible) had, is co-developing and we are distributing it under a brand called SocialCalc, today it's available as in Open Source Download, we are integrating, it with SocialText, towards the end of this year and it does things very differently, right, where by Wiki based spreadsheet one example of it, is how it's designed for collaborate views is, you have a change -- you have a log of every change that it makes to any cell. So, what do you get out of that, well a way for you to be able to find out, what did Larry do at this time, or hunt down that bug in this model in a different granular way, and a way that has identity within it. The other thing that, you got is an Auditrail; we have been talking about Sarbanes-Oxley, a lot for example, think about when you look at like the 10Q Filings, or something like that from a publicly traded company, you have the financials and then you have got like this little table with a big note, right and then it explains some kind of exception, where the hell did that data come from?

Is there an Auditrail for that or even a text that accompanies it, maybe there should be an Auditrail like the history of a Wiki page from where all this comes from? So, it's interesting in that, we might end up being able to solve some of the fear issues that people have, which are around compliance and at the same time give people a greater opportunity because all the things that we are doing right are about additional productivity, finding competitive advantage by not just making organizations more transparent and get people to share more, but what a Wiki does, is Social Fabric is help adapt to the environment. We talked about exceptional handling at the very beginning.

Robert Scoble - ScobleShow
Wiki started as a Webpage, now it's moving into a spreadsheet and other things, right the metaphor of a grouping will change something, sort of a Wiki metaphor right, are we going to see you going to Wiki Video, or Wiki Audio or Wiki other or Wiki PowerPoint's or Wiki because there is a lot of data types that group can work together on and change things, update things and add things.

Ross Mayfield - SocialText
So, we have a lot of ways to go, on...

Robert Scoble - ScobleShow
So, we are going to see Wiki everywhere.

Ross Mayfield - SocialText
What is that?

Robert Scoble - ScobleShow
It can be putting a Wiki on every human's brain, but also putting a Wiki on every data type, bringing that metaphor to every data type, which is we're a long way from that, I can't go to YouTube and stick a frame of video into somebody else's video.

Ross Mayfield - SocialText
Right, but and I think, there is a real point there, but I'd say, so we still have hard work to do on kind of the core product, making it simpler and easier to use than it even is today. They -- we are going to play with some really different interesting models as we blend WikiCalc or a SocialCalc into the product itself, there is going to be a thing, I think you're right in that there is a characteristic support of Wiki is of revision history of shared recent changes, a display mode and edit mode, not locking down control of these things, relying on more trust and transparency.

I think, we will bake those into other things, I think, also we are fostering lots of other people, rethinking how should they redesign the software, right, that they are starting to work with. There is kind of a, I mean I'll give you just like weird examples. It maybe the Wiki way, but it also might be slightly different things, like there is this guy, Eric who runs a consulting firm, called One Ponty, -- I just ruined it and I'll have to post a link somewhere later, but I asked him to send me a copy of an article he wrote like four years ago, about IM when he was just kind of getting going and he was pointing out that like, you know what with IM, because of two things, it's not just about presence, but membership. If I was able to constrict the membership with my buddy lists in the right way, I could with configuring my IM Systems, make a better Supply Chain Management System, than a Gazillion Dollar install and a whole bunch more to make it work, complex thing, because all it is is how do we handle exceptions.

When I have got an exception in the supply chain, hey the box arrived empty. Being able to figure out who in the chain, can I contact and see, through their presence and queues and be able to work towards resolution, socially very quickly, that's kind of interesting, as a different kind of metaphor. So, is the metaphor that is really changing everything just Wiki, I don't know, I think Social Software and more broadly, I think, Enterprise 2.0, more broadly is going to change more tools. That's kind of an exciting thing. I mean, mostly because we just hate the enterprise tools that we are suffering with anyway, right, and I think geeks like us, we've already found another way, we've found another way through a lot of the Hosted Services Tools, that are out there, the Open Source Tools that are out there, you know, it just takes a little bit of time for that to end up seeping into what is main stream for an enterprise, but there is ...

Robert Scoble - ScobleShow
Tell me something, how do you get the customers, how do you get the people outside the geek world to see the value of this?

Ross Mayfield - SocialText
I think a lot of it is you just keep telling your story, the -- lets put it this way. So, you have a success and a customer, the traditional way to do it is, you try to document that success and you try to promote that and there is nothing wrong with it. I'd say, we have been really big in trying to evangelize what we do and not just what we do but I think the movement overall? I'd say, for reaching out to more main stream audiences, the way that we're doing it is, low cost softwares to service for business users, you know lot of freedom included, Open Source Distribution to get us into the markets that are just way too expensive for us to market to. Like how am I going to sell the market into China, right now, I can't, but I can let the Open Source one pull us in at the right time, it's that kind of approach. We're all set like we are distribution things that we've been doing, which is actually kind of exciting, so remember, when I was talking about Enterprise 2.0, I think...

Robert Scoble - ScobleShow
Two minutes of tape.

Ross Mayfield - SocialText
Okay, so we announced this partnership with Intel, which is bundling the other SocialText, SixApart, NewsGator, on to an appliance, marketed to small to mid-sized enterprises, through all of their channels, Dell, NECE, Ingram, Tech-Micro, Red Hat, Novell, even Microsoft, and that's going to be serviced and maintained by SpikeSource. So, we really have like the best-of-breed Wiki blog, RSS all put together in a box and sent out in a much more mainstream way than we'd be able to accomplish ourselves. So, I think that holds a lot of promise, little moves like that we keep making and if we can keep finding good sales guys and good engineers and stuff like that then there aren't that many limits for what we can do.

Robert Scoble - ScobleShow
Well, thanks for spending an hour with and let's get a demo.

Ross Mayfield - SocialText
Yeah let's do it, okay cool.