With all the renewed interest in network effects these days as a way to explain the economic value of things like peer production and social media, the Stalwart cautions against the inherent optimism of Metcalfe's Law and, worse, Reed's Law. (Metcalfe's Law states that the value of a network is roughly equal to the square of the number of things connected together by the network, while Reed's Law goes one further and says that the value is equal to the number of subgroups that can be made by connecting any subset of things within the network. So if you do the math, a network of 100 people by Reed's calculation would be roughly 20 times more valuable than the same network by Metcalfe's calculation). Before we get too carried away with the power of network effects, though, perhaps we should consider the less-heralded work of Derek J. de Solla Price, who came up with Price's Law after studying the distribution of citations among scientists in academic papers. Explains the Stalwart:
Price's Law states that among a group of scientists, half of the output will come from the square-root of the total group. So, at a university with, say, 100 physics researchers, 10 will be responsible for half of the output, leaving the remaining 90 to publish the other half. This simple idea should be pondered by the whole Reed's Law/Metcalfe's Law/Long-Tail Crowd . . . [because] this stands in direct contrast to Reed's and Metcalfe's optimism. As a field expands, value doesn't necessarily grow exponentially, instead a greater percentage of the whole is simply less productive. His study of bibliographic citations also led him to believe that just a few papers get cited frequently, while the majority get cited rarely, and eventually not at all.
Now take that logic a little bit further. If there are 10,000 contributors, Price's Law would imply that only 100 (or one percent) produce half the value. If there are one million, only 1,000 (or 0.1 percent) produce half the value. Anyone trying to build a business around consumer-generated content should think about that.
It is certainly true in Flickr, for instance, that a small group of photographers get an inordinate amount of links to their pictures. The fuzzy image above is from a presentation that Flickr co-founder Stewart Butterfield gives, showing each person in Flickr as a pixel and the linkages to other members as a cluster of lines. "If you zoom in," says Butterfield, "you can see that each of those clusters make beautiful patterns. These patterns tell us something, but I don’t know what exactly it is." One thing that can be inferred, though, is that the people at the nodes of those clusters are the most productive ones, or at least produce the most interesting photos as determined by the links they generate.
But there is also an argument to be made that not everybody has to be equally productive. The many can benefit from the productive efforts of the few. Look at tagging. Even if only one percent of people bother to tag things online like photos or Web pages, the rest of us benefit because those things are now easier to find Some people tag things obsessively, others only occasionally (say, when they find something that is mistagged and they want to correct it). The former group is more productive, but the latter is still improving the set of things being tagged. The same can be said for anything that is collectively-produced.
So even if the many can only add marginally to the productive enterprise as a whole, millions of marginal contributions eventually add up. As long as the cost of adding those marginal contributions is negligible (as it usually is in the digital world), it does not matter how marginal each one may be.