The four stages of social

Homo Staticus

The web as we now know it burst first into the open in the early nineties. It certainly did not start among the typically more socially active classes. It was an invention by and for nerdy CERN physicists. The objective was to exchange data about elementary particle experiments. But it wasn’t long before academics figured out additional valuable uses of this technology: You could put your face online, along with a CV. This is how “personal” academic webpages came to life. Those early home pages were mostly dour affairs, replete with long publication lists.

Unfortunately, the bigger masses of corporate folk did not have the luxury of public presence - except maybe when used by HR as examples of “interesting” co-workers during corporate recruitment drives. At some point Linkedin sensed the plight of this great under-served constituency and made it their business to fulfil the universal need for a virtual presence. Thus was born Homo Staticus - a human with an online profile.

Today we know that Homo Staticus exists, given the millions of LinkedIn profiles, but we know precious little about him/her because they don’t seem to actually do much online. Sometimes they even forget they have a profile and people congratulate them for job anniversaries in positions they no longer hold!

But the great social media river did not stand still!

Homo Responsus

After some years of delay, college students finally got wind of the powerful instrument of self-promotion that their professors were monopolizing. Facebook got started as a collection of college student faces in an online book. The key technical difference with prior static homepage versions was that all texts were in a database. Suddenly data entry and submission of forms to databases (the very definition of corporate white collar boredom), became very sexy. It became clear, in particular, that students would maniacally click on like (form) buttons to indicate unambiguously who is “in”, and by exclusion, who is “out” from their (database) circle.

Other social networks followed suit and Homo Responsus developed into an avid clicker. That does not mean he/she is unaware of the social context and its implications. Au contraire. They know that what you like defines who you are and carries potential counterparty risk. That is, somebody in your network may get the wrong impression about you if you like something inappropriate. This universal need to mitigate this counterparty risk gave rise to the hunt for good collateral, stuff that is universally liked. Alas,

There is a real shortage of content that is both high quality and universally likeable.

This shortage of AAA content gave rise to people being affected en-masse by a type of Richard Branson pathology: This is the process of becoming a benign virtual entity, designed explicitly to utter the most likable sentences so that nobody can possibly disagree with anybody liking them. Some deceased, but otherwise nice and likeable people like Albert Einstein have also been summoned to this worthwhile cause.

In the meantime, in other parts of the ecosystem, social media evolution would take further powerful steps.

Homo Scriptor

Some people do not worry about alienating a fraction of their audience if that would strengthen their following with another part. They have opinions and they feel a strong need to let others know of their opinions. Such people are not the majority, but they are numerous enough to require a specially designed database that allows for upload and retrieval of longish pieces of text. This was dully provided in the form of… WordPress and other blogging platforms. Which brought us to the dawn of Homo Scriptor - a human equipped with a blog.

The barriers to publishing are now demolished. While it is still the case that push media are the best friend of an average author, any really interesting writer has the world and Google on his/her side. It is a remarkable new state of affairs. But it gets better.

Homo Creatoris

People always created things in groups of varying sizes. Now those groups can span the globe in virtual community networks that interact using more sophisticated databases like Wikipedia or Github. This is the dawn of the digital Homo Creatoris, people co-creating online.

The online interactions of these types of social networks are qualitatively different than anything we have seen before.

• For starters, they require more quality time. To contribute knowledge towards an article or to build a piece of open source code you must move beyond chatter and get into “real” stuff. Yet remarkably, millions of people around the world do contribute this quality time!
• These platforms are still just a database in the backend, but the database schema is now more dynamic, the content starts having evolving semantics. Remember that early geek inventor of the web at CERN? Guess what he is busy advocating these days.
• The social network interfaces as well, shift to facilitate peer-review, debate and even a measure of conflict. Stackoverflow, a social collaboration site for programmers allows down-voting, that is disliking somebody else’s contribution. The financial (market) analogy is that Linkedin is a form of a “long-only” market where you can only buy, not sell, whereas Stackoverflow allows short selling (Guess which version is more bubble prone!).

Do you feel like getting into the next stage of social? Financial services are not an early adopter of social network technologies. The future seems being inflicted rather than being sought after by this industry. Yet the impact on many areas of the industry, including in particular risk management, can only be expected to be extremely positive as it enables widespread adoption and improvement of good practices.

Open Risk has great facilities to help like-minded people join in this journey of exploration of this promising new technology:

• The Risk Manual is a semantic mediawiki for developing an open risk manual, a free knowledge base by risk managers for risk managers
• The Open Source Risk Models repository has already some brave early adopters contributing towards a widely accessible library of risk and portfolio management models
• The Open Risk Commons, a discourse instance where all things risk management can be discussed.