Its been a while I posted an idea online . . . I guess my brain has been on execution mode lately. So here goes the setup . . .

There are 3 major themes happening on line today:

First one is obvious . . . the online world has moved quickly from replicating the one-to-many relationships in the offline world to quickly creating its own interaction models through the many-to-many model. In many ways, web 2.0 is the lichpin of the explosion of the movement.

Broadcast -> Peer Participation

Second is the driven by the fact that more people are online and those that are online are spending more and more time on rather than off. What this does is create a critical mass of people online doing EXACTLY the same activity at EXACTLY the same time. This has enable activities such as MMOG, BitTorrent, and various site centric chat features to gain value and critical mass. When the web was first “invented” most of its applications are asynchronous (email, forums), it quickly evolved to realtime (IM, Chatrooms), and now is going through an exponential participation and fragmentation phase.

Asynchronous -> Realtime -> Swarm (to borrow a phrase from bittorrent)

Lastly/Thirdly, ebay was the first to create the p2p transaction model for e-commerce; but missed out (until now) the p2p nature of online shopping between buyers. There are many many social shopping bookmarking sites out there, Yahoo Shoposphere, Wist, MintPages, something Hive?, and Kaboodle etc . All of them are asynchronous. (There is a good reason ofcourse - they want natural search traffic). But what we know through reams and reams of research with consumers is that what makes people like shopping offline vs. online (ie walk the mall on weekends for no particular reason/window shop) is that online shopping has been tainted by search and thus lacks a social/group aspect to its experience. (e-commerce growth in general is slowing because people still spend majority of their wallet offline.) You shop online when you NEED something, you shop offline when you WANT something. Women(and many men) go shopping with their friends at the mall as much as for buying a new pair of jeans themself as for eachother’s company.

Search to buy -> Browse to buy -> Share to buy

Long setup for an simple (still flawed) idea . . . the world need a IM/Skype plug-in that allows people to co-browse and co-navigate online shopping destinations. (If x-fire can do this for gaming, someone can do this for shopping) Invite friends or join an existing “raid” (borrowing from WoW). Instead of emailing friends cool stuff or deals asynchronously, the activity could be done in real time. The interactions could come form discussions (is this vacuum really the best, other recommendations?) as well as discoveries (look at what I found . . . great for eBay). It should allow co-shoppers to diverge from eachother’s path but still show what the other people in the group is looking at so they can converge again. The business model is simple . . . advertising/affiliate program . . . in the short term. But also, the ability to create somesort of wallet could be huge (one click purchase, security, group discount etc). I can see people do this during work hours as another incremental entertainment above just IM between friends. There still some scalability issues (not techincal but usability) I havent thought through . . . but I know the problem exists and this could potentially be one solution.

Just being a complete couch potato for the afternoon. . . after close to 5 hours of TV, I realized I must have seen those “law offices of james sokolove” commercial atleast 3 times.

As usual, my overly imaginative (and unrealistic) brain started to churn and I decided that what the world needs is a class action search and lead gen engine.

I did more sleuthing around to find the top paying keywords on google/overture. Search yahoo. The list is pretty old, but I think the point is that law suit related keywords are a gold mine. . . even more so than finance/mortgage/real estate related keywords.

$100.00 - structured settlements
$100.00 - mesothelioma attorney
$33.50 - cord blood - what the he** is that?
$29.75 - student loan consolidation
$25.01 - tax attorney
$19.13 - contract management software
$18.99 - drug rehab
$13.00 - lemon law
$10.24 - brochure printing
$10.01 - cerebral palsy
$ 9.99 - term life
$ 9.51 - software escrow
$ 9.20 - document scanning
$ 9.00 - cash advance
$ 8.60 - refinancing
$ 8.00 - payday loans
$ 7.16 - auto insurance
$ 6.93 - donate to charity
$ 5.99 - defibrillator
$ 5.00 - scooter

The funny thing is that James Sokolove is not even a real law firm. Yes they have lawyers and practive law in MA, but they are mostly a lead generation business since license/bar is state by state, and thier referals comes from all over the U.S. (since they advertise in CA and probably all 50 state). Law firms pay significant amount of money to firms that bring them into class action firms (this website say its 35%) . Now, I’m no expert on legal industry’s business model, but this seems like a gold mine to me. . .

I’m extremely disappointed at the lack of vision (or maybe just imagination?) here in the valley. Meebo just raised ~$3.5M at a pre-money of ~$10M from Sequoia and all we get is a collective moan and groan from the blogosphere on what the hell Roelof Botha was thinking. Isnt it kinda obvious? Its all about the long tail of software . . . first coined by Joe Krause. (BTW here is my old post on that topic).

Once Sandy from meebo announced the funding (BTW, Sandy looks familiar, I think I went to high school with her), both Om Malik, Paul K, and their readers (read the comments at TechCrunch too) wondered aloud why a thin client IM aggregator deserves to get funded by Sequoia of all firms. I suspect the key metric that got the partners over there excited wasnt their incredible week over week user growth but the average duration of the visits. Because IM is the stickiest of all apps, Meebo has essentially created a persistent connection/relationship with their users . . . the first requirement for becoming the third “desktop” . . . (windows and the browser were the 1st and 2nd).

Because the economics of the long-tail distribution, the real money to be made is not in serving the individual niches underneath the tail (by definition small in area) but in the aggregation of the entire long-tail (by definition disproportionately larger than the head). The problem with creating “platforms” capable of aggregating the tail is that without some applications ontop, the platform is useless and unable to create network/platform effects. So Meebo (and others) have all built trojan horse applications on top of their platform in order to attract critical mass of users which can in turn be monetized through the platform by selling “access” to independent developers. As a result, all the complaints about Meebo and the unsustainability of thin client IM as a business is really stupid. They could care less if their IM app makes them any money, its only for traffic building. Why do you think Meebo needs to raise money? Why do you think Sandy said they will not be pushing ads for now? They need to invest in the infrastructure and continue to grow. . . they are not even close to the harvesting phase of their venture life cycle.

What is special about Meebo is that unlike other players (Mashable has a good list of Ajax desktops and Ajax Office Apps), they have picked the right application (IM) as the trojan horse (persistent, realtime, social, sticky, high switching cost, high ubiquity, portable, variable access points, and highly controversial in the enterprise thus encouraging new access points). Goowy spent all this time building a platform using e-mail as the trojan horse but didnt realize IM is a better app for that purpose. Other Ajax office players spent too much time building applications rather than the platform and will eventually have to pay Meebo (or whoever wins) to have access to its user base.

Of course the platform itself really includes two components: backend and frontend. On the backend its pretty uniform in implementation (from the feature standpoint), its API (like konfabulator), payment metering/processing, and some sort of directory/marketplace that helps users discover new apps.

The front end is much much harder to define. The so called “ajax desktop” implementation that Meebo is trying to do is only one methodology. The portal players (Yahoo, MSN) can and is playing in this space aggressively without a virtual desktop (for now, though start.com is here). (BTW, Yahoo is probably the only website I keep up persistently on my browser). The Wiki approach by JotSpot and SocialText is another. Lastly, salesforce.com is also aiming for this space through the enterprise application (again another persistent web-app/page/site for the enterprise worker).

Thus Meebo might have a leg up on the desktop players, the battle for the dominance of the software long-tail is far from over because competition could come from all directions. Due to time/space constraints, I highly doubt there will be more than one winners in this space (if at all, it could remain forever fragmented). We already have the OS, the browser, and for some Outlook “up” permanently on our desktop . . . one more seems reasonable if it could aggregate all messaging needs but two or three more will for sure cause carpal tunnel syndrome from all the Alt-Tab I have to do.

Apparently me and Phil Wainewright shared the same thoughts around the need for a revenue sharing infrastructure for the long-tail. My post is here and his here.

But what I neglected to say in that post is that the techniques for doing this are still at a primitive and elementary level because so little experience and best practice has been built up. Nobody knows for sure how to measure and price on-demand functionality, and even when that has been resolved, there still needs to be an infrastructure for presenting the bills, collecting payment, and distributing the proceeds. This is the biggest headache facing the pioneers of Web 3.0 and it’s not going to get resolved overnight. I suspect it’s a topic I’ll have to carry on asking awkward questions about throughout 2006.

I’ve gotten a couple emails regarding my post and I’ve been struggling with how to reply given that I am an insider at a company that does have a vested interest in the space (eBay-Paypal). (please accept my apology) But given that Phill already brought up many of the issues, I think I can share a little more thoughts. I believe a lot of the lessons of how a startup could own this space could be learned through how paypal built a multi-billion $ business ON TOP of the existing ACH and CC infrastructure. That given the right value proposition, the right functionalities, the right barrier to entries, and right integration with the required payment and metering pieces, a startup could very much become Paypal’s strategy into the space rather than competing with it.

Last week I loaded up my AIM and got the following mesage

AIM added a new AIM Bots Group to your Buddy List
Send IM to moviefone and shoppingbuddy for great holiday flicks and gift ideas

I looked around the blogosphere to find out if I was the only one and found this post on PaidContent which referenced a WSJ article. After confirming it was from AOL and not some random IM spam I was pretty confused . . . I IM’ed with the bots for a while, and came to two conclusions . . .

1. hey thats pretty cool. . .
2. damn AOL is fucking around with my buddy list . . . if there ever was a egregious violation of privacy/trust this is it

Ideas like these bots have been around since bubble 1.0 but the “warn” feature in AIM prevented scalable implementation of these applications since anyone (including competitors) could shut down a bot app. AOL, being the draconian walled garden enterprise that it was, refused to open up their API to allow “certified” bots to be built that could not be “warned.” As a result, a slew of entrepreneurs threw away their business plans and went after some sort of 2.0 opportunities instead.

Instead of railing on AOL for being a “sbot” master, I’m going to take another (perhaps more harsh) approach. That is . . . I can’t believe AOL hasn’t learned its lesson from the last 5 years. After squandering the chance to kick MSN’s ass and failing to realize that it already is what Yahoo! hopes to but may never become . . . (nothing on Google . . . we all fucked up on that one) . . . its following a web 1.0, proprietary approach to interactive IM again. . . ie . . AOL is thinking way too small and way too closed . . . Is virginia really this far from the valley that these guys just dont get it?

This is what I think AOL should do with this market opportunity

1. Open up the AIM API
2. Build hosting infrastructure (open not proprietary) for IM bots (with slews of technical backends - jboss, php, ruby on rails etc)
3. Build a certification, re-certification, and dispute resolution system (think Verisign + Truste + whitelist infrastructure) for bots
4. Create a simple to use “if-then-like” XML based language for creating simple bots (but still support standard rest and/or soap interconnects for more advanced apps) and simple web based development enviroment (like wordpress is for content)
5. Charge for hosting (which is optional) and the certification system
6. Build a marketplace for discovering and rating these bots
7. Build a payment mechanism for bot builders to charge for these bots (and take a slice from each transaction)
8. Build a text based advertising network (more on this later)
9. Lastly, integrate voice XML standard into the API

Now, if you ask me if this is really that big of a market for this kind of investment I’ll say two words . . . mobile applications. The premium SMS market is way too screwed up (I talked about this in this post. . BTW before eBay bought Skype). Essentially greedy mobile carriers are killing the potential of the market by insisting on taking 30%-70% of GROSS REVENUE of premium text messages. With AIM having decent penetration into mobile devices, this is an end around for entreperneurs to build ANY type of mobile text applications which they could not before due to economics of the value chain (such as selling movie tickets through the cellphone). The idea here, which I hope AOL gets, is that anyone could get up and running, with less than $1,000 in startup cost, his or her version of 4info. The opportunity for running a location based SMS advertising network embedded into the hosting infrastructure as a monetization tool for app developers is HUGE as well (ie adsense for mobile apps). Furthermore, the voip/mobile voip opportunity is just as huge if not bigger . . . BUT I’m not going to talk about it since everyone knows about Skype and Nuance. . . (plus other personal reaons).

Come on AOL, you missed out on web 2.0, this is your chance to be the ultimate enabler and aggregator of Mobile 2.0 . . . dont fuck it up by spamming my AIM instead. . .

Back in 2000, Clay Shirky wrote a seminal piece against micropayments.

The original thesis for the need for micro payments goes something like this . . .

P2P creates two problems that micropayments seem ideally suited to solve. The first is the need to reward creators of text, graphics, music or video without the overhead of publishing middlemen or the necessity to charge high prices. The success of music-sharing systems such as Napster and Audiogalaxy, and the growth of more general platforms for file sharing such as Gnutella, Freenet and AIMster, make this problem urgent.

However, Shirky argues that

The Short Answer for Why Micropayments Fail

Users hate them.
The Long Answer for Why Micropayments Fail

Why does it matter that users hate micropayments? Because users are the ones with the money, and micropayments do not take user preferences into account.

In particular, users want predictable and simple pricing. Micropayments, meanwhile, waste the users’ mental effort in order to conserve cheap resources, by creating many tiny, unpredictable transactions. Micropayments thus create in the mind of the user both anxiety and confusion, characteristics that users have not heretofore been known to actively seek out. Embedding the micropayment into the link would seem to take the intrusiveness of the micropayment to an absolute minimum, but in fact it creates a double-standard. A transaction can’t be worth so much as to require a decision but worth so little that that decision is automatic. There is a certain amount of anxiety involved in any decision to buy, no matter how small, and it derives not from the interface used or the time required, but from the very act of deciding.

Micropayments, like all payments, require a comparison: “Is this much of X worth that much of Y?” There is a minimum mental transaction cost created by this fact that cannot be optimized away, because the only transaction a user will be willing to approve with no thought will be one that costs them nothing, which is no transaction at all.

Thus the anxiety of buying is a permanent feature of micropayment systems, since economic decisions are made on the margin - not, “Is a drink worth a dollar?” but, “Is the next drink worth the next dollar?” Anything that requires the user to approve a transaction creates this anxiety, no matter what the mechanism for deciding or paying is.

Of course Shirky is arguing this from the buyer angle. Will I pay 10c for viewing/reading this article? If its a pain in the ass to pay than I will not. . . and thus his argument holds completely.

Time have changed however. The hottest topic right now is revenue share with content providers. Pete Cashmore has the latest on the Shoposphere rev share story - with inspirations from Kevin Burton and TechCrunch. This time it is no longer about will READERS pay for content. They are free to read whatever they want for nothing. The advertisers themselves are not paying in micro-chunks either. . . no they are spending colletively billions on search advertising. . . so who are the ones getting paid in a few cent or dollar at a time? The so called “slaves” who graciously fill blogs and whatever social networks full of content will get paid based on ad clicks they generate.

So then, the better question Shirk would have asked today is. . . Will these content generators want to get recieve $.96 a month from 15 different sites on 15 different checks? Of course not. I rather you pay me one large check. . . better yet . . . I hate going to the bank so acrue it till its atleast $20 before sending it to me. . . or even better yet. . . ACH it to my bank account directly. . . As a blogger I know how LITTLE google is actually paying me. So if I actually have one of these random “pick lists” that should be about the amount I am expecting, so I think the use case is completely reasonable.

To do everything above, you need a micropayment micro-commission system. If I was paypal (which I kinda am ) I’m licking my chops right now for a chance to dominate this market. . . and for bitpass, yahoo wallet (eek), or google wallet (forgone conclusion it coming out), I’m thanking god for the latest turn of the events. . .

If I was an entrepreneur (I think I am ), I’m letting the newsvines, shopospheres, fotolia (sp?) of the world work on their little niches. . . I’m gonna go sell pans and shovels to the gold rushers instead. . . ie provide the infrastructure to make this all happen. My pre-money starts at $12M . . .just like 4info

Not sure how this whole Business 2.0 VC contest has to do with the “Thesis Investing” meme that was so popular a few months back. Idea based investing? Better or worst? not sure, but I do know that whatever this is, it has been around for a long time. A lot of times entrepreneurs mistakenly think that a VC stole their business plan when all along the VC has been hunting for a startup to fit into their own idea. Of course VC’s will incorporate ideas/data from various entrepreneurs and re-position/improve their own ideas and thats not exactly kosher. Anyways, thats not a topic for this post. Mainly I wanted to talk about the upsell engine Greg Martin of Red Point mentioned in the article. Here is the excerpt:

$5M-THE ULTIMATE ONLINE UPSELL
WHO: Greg Martin, Redpoint Ventures, Los Angeles
WHO HE IS: Martin handles communications and digital media investments for the venture firm, which has recently scored with portfolio companies like MySpace and Topspin.
WHAT HE WANTS: Software that makes better product recommendations to online shoppers.
WHY IT’S SMART: Amazon may have been the pioneer in so-called collaborative filtering — matching online customers with products they’d be likely to buy — but by no means has it mastered the discipline. The percentage of buyers who make recommended purchases online is abysmal. “It’s about 3 percent for major Web retailers, and for most other merchants it’s lower than that,” Martin says. Software that can better sort and sift customer data and increase the conversion rates by just a percentage point or two, he says, would generate a healthy business. Beyond Amazon, after all, thousands of online merchants still don’t have access to such tools. “There’s a lot of information out there that’s being ignored,” Martin says.
WHAT HE WANTS FROM YOU: A group of no more than 10 people to tinker with and refine the algorithms to make online purchase suggestions more efficient. Says Martin, “I’d want to see the technology working, with a few customers onboard.” The next phase if all goes well? Developing algorithms for websites to serve up more relevant ads.
SEND YOUR PLAN TO: gmartin@redpoint.com

The reason that Amazon has built a somewhat successful recommendation engine is because they have a database of purchasing data that is both CROSS-CATEGORY and LONGITUDINALLY significant (statistically) to run collaborative filtering algorithms (either association rules or clustering algorithms) which mines the data to discover bundling opportunities. Most e-tailers are vertically focused and does not have big enough sample of customers (not mentioning technical & knowlege limitations) to be able to build this engine. (BTW the urban legend in the KDD circles is that beer & diapers is the most commonly bundled super market product . . thus the need for cross-category data) The basic algorithms are not complicated, see here, the Amazon implementation is actually even simpler and technically not considered clustering from a data mining perspective. Given those limitations, and the explosion of SEM/SEO driven e-tailers, lots of money can be made in creating not just an upsell engine but an “upsell network.”

Now, I think Amazon should create a “product recommendation” based webservice (thus still keeping their data proprietary). But I’m not sure if its going to happen given that they rather sell the complete bundle of merchant/website services. The bigger question then is how Greg can find a suitable “replacement” for that database of purchasing history.

This is where the blogosphere comes in. Remembering Tom Foremski’s post that created a storm on monetization of of the blogospher? This is a another method for monetization the blogosphere focusing on product based blogs (gizmodo,engadget, apple secrets, etc etc).

The idea to use linquistic frame structures to mine texts and infer relationships between products actually came from Alan Abraham. I met Alan at Wharton and we spent some time just kicking around this particular idea as a basis/case study for me to learn more about text mining algorithms. Alan is one of the leaders in the field and has created an application which uses this technology to infer contractual relationships between users and “electronic communities.” The software , called CAMpace, “incorporates coverage-checking components for contract monitoring and contract/policy conflict detection.” The paper can be downloaded here. Instead of writing my typically convoluted explanations, I’m just going to quote Alan from one of our email threads.

The paper that I mentioned to you concentrates on interpreting natural language business contracts, but the tools are very generalizable to the applications you’re interested in (inferring up-sell and cross-sell opportunities). In particular, the paper mentions some linguistic databases (See Section 3 on page 2), which can be used to identify words/tokens (like the word “prefer”) that function as comparatives in English and the linguistic slot frames that these words possess. You can then pull down web-pages (e.g. from magazines, newspapers, and other web-pages), parse sentences (Like “I prefer the Compaq US252 to the IBM ThinkPad T60″) looking for the above-mentioned comparatives (e.g. “prefer … to …”), and then pull out role-players (to populate the above-mentioned slots) from those sentences to dynamically populate the list of individual complementary and competitive products. e.g. the slots/linguistic-frame structure for “prefer”is as follows: “[person] prefers [productA] to [productB]” (where the items in square brackets [] are the slots/frames). You can, with some accuracy (e.g. 60%), pull out productA and productB from this, and associate them as competitor prodcuts.

My rambling stream of conscious response back is here

I thought about this all night. . . and came up with something I think we can commercialize. . .are you familiar with the UCCnet initiative? its a database of UPC codes, product descriptions, manufactuers etc. . . its an retail industry initiative. Anyways, if we marry UCCnet database + a web crawler + natural language database + some language processing engine and use it to create a database of “relationships” we can essentially map out all the relationships between all retail products (replacement, upgrade, complementary, accessory, upsell, crossell etc) we can than create a webservice that allows large e-tailers to dynamically do recommendations (ala Amazon) . . . PLUS. . . even cooler. . .we can use a google Adwords business model .. . .smaller e-tailers (yahoo stores) can participate in the “platform/marketplace” and cross link their products with each other . . . using ad serving contextual technology , we can actually serve products rather than text ads based on products viewed on the page . . .. (we also make this totally selfserve like adwords) example.. .Zappos.com sells shoes. . . if they join, they can cross sell products from eBags. . . . and vice versa. . . we take a cut of any successfull cross sell and share it with either eBags or Zappos. . .tell me if I’m nuts. . . do you think the technology exists to do this?

Anyways, the thread goes on for much much longer. So why am I sharing this? Well, call it pitch to Greg if you well (but I’m not naive enough to believe Greg will openly share his best ideas ). But more so, I think this is an social experiment in changing the VC-entreprenuer dynamics (ala Matt Marshalls’ thoughts on transformation in VC-land). If a VC can openly solicit ideas, why cant entrepeneur respond openly as well. If open source can free society from the shackles of “intellectual property,” why cant an “open business” do the same? If the spirit of co-production and peer-participation can create softwares, communities, websites, why cant companies be built without delineations on foundership, employeeship, customership, or even ownership. Who knows? . . . its getting late and I’m talking as if I’m high, I better stop before I hurt myself.

How come no one is talking about SkyePay? I found it through Skype Journal. Of course it is still a third party proposal without official Skype sponsorship so we’ll just have to stick to our imaginations.

I guess anytime there is a debit/credit relationship there is an opportunity to create a payment platform. Using SkypeOut/In as a method for money tranfer is actually pretty ingenuous now that I think of it. Its certainly not that far fetched since land line phones bills often act as a bill aggregator. In China ,the payment war is largely based on the mobile phone as a platform.

If this is actually built, I think there is an opportunity for Skype or a partner to create a Keen.com like infrastructure for 1-900 advice service with little or no infrastructure investment. OR copying the latest keen.com incarnation, Ingenio, and create a pay per call advertising network for classified services, again with little or no cost.

Also the problem with short code sms services is that the phone companies take over 20-30% of the total billing amount. So its next to impossible to sell anything with a COGS since the 30% take rate will for sure eat away the gross margin (such as pre-paying for movie tickets using a mobile phone) . With this, and a fixed SkypIn/Out cost per minute, all this might be possible using gateway services (like the ones from the company that proposed SkypePay, Connectotel). This is huge as I’ve talked to numerous entrepreneurs who wanted to use sms short codes as a billing method but was stymied because of the take rate.

I tend to get stuck on one train of thought and it takes me a while to get off it. . so more open souce ideas today . . . (I promise to get off this open source thing over the weekend)

I think the world needs an open source hosting platform. Before I get into what it is exactly, here is why. . .

1. Software as a service - aka hosted model, aka ASP, aka on-demand (thanks to salesforce.com for adding to a list of confusing acronym) is finally becoming a reality after over 5 years of hype (anyone remember Corio?). SMB and even some larger enterprises have begun to adopt the model.

2. Open Source software is moving beyond infrastruture to applications (both enterprise and personal/group utility)

3. Some Open Source applications will need some sort of hosting to be delivered to the end user to offer end-to-end solution, increase adoption, and compete with commercial hosted software.

4. Hosting costs money

5. Open Source contributors contribute brains but not money (asking for contribution doesnt quite work)

6. Open source infratructure stack is becoming more and more standardized - LAMP+Jboss?

7. Open Source contributors & users do have some limited bandwidth and CPU cycle on their machine

So why doesnt someone create a program that aggregates the LAMP stack and add virtualization layer to the stack so that users of open source software as well as contributors can “tie” their computers together to create a free virtual p2p hosting platform? Be a great way for users to give back and contribute to the programs they are using. Can definitely let hosting resource contributors set limits as far as bandwidth/cpu cycles. And perhaps only people with broadband speed of over XXX Mbps can join the network. Also integration with eclipse and sourceforge would be nice to let project admins push code to the platform seemlessly.

Obviously lots of people will still want to modify the open source code and host the software themselves. But for lots of applications that would not make a lot of sense. Think of all the personal or group utility/ware thats being produced ( all the open source wiki’s for one) that could be hosted on the platform. BTW, this could be used for open source webservices too which would need a hosting service even more critically.

If whoever is creating this really really wants to make money he can also embed an option for the source owner to charge for usage. By building a billing platform for source owners (like content owners in Brightcove’s biz model), the company can take a cut of the transaction.

I’m sure there is a lot of lantency issues that still need to be solved. But it might not be such a far-fetched idea in the near future.

Ripple has to be the coolest application of this whole social XXXX (network, software etc) trend. Thanks for Bubble Generation for pointing this out to me. It is even an open source project, the sourceforge project home page is here. Too bad it doesnt look like Ripple has a lot of traction getting code contributors. (But if they need a PM, I’m able and willing)

I think the idea has legs given enough resources and integration with an existing social network (linkedin?). What has me excited was that there is actually an analog analog in Asia. Given their less developed financial markets, emerging countries in Asia has long developed P2P, micro-lending, and social network based “mini-financial markets.” When I was little, I remember groups of relatives, neighbors, or co-workers will form co-ops (no more than 10 people) where members of group will take turn borrowing from the rest of the group for a short duration (~1 year). Credits are established through friendships or blood relations implying simple understanding of the borrower’s willingness to pay back as well as financial standing. Ofcourse Ripple extends that model by finding trusted “chains” rather than circles which makes sense given our ability to map networks through technology. Although I do think marketing wise, Ripple shoud focus on acquiring “group” based lending networks which will be much easier to achieve critical mass while “chain” based model will allow it to scale in the future.