Interview with AK MAvani & Ray Everett Church
During the last ten years, the Internet has spawned a new economy: one where users create tremendous economic value but hardly get anything in return. With AGLOCO we want to change that thinking. We hope that all companies that depend on its users will eventually believe in what we do – The Members should share the value they generate for the company.
We believe that AGLOCO will be a success if we can change the entrepreneurial mindset on the Internet. Instead of only looking for ways users can help them build the company, future entrepreneurs will be asking how the users can share in the value creation.
We believe in a different way of looking at users on the internet. We developed the following philosophy for AGLOCO and we welcome your comments (philosophy@AGLOCO.com). After all, it's your company.
10. Members should be owners
The Members who are the source of value for an internet company should own that company. This brings transparency and rewards the right people who contribute to developing the company.
9. Providers should be stewards
The providers of a service where Members create the value should act as stewards, not owners. The stewards of the company have a duty to do what is right for the community, and maximize the benefits for the community. The stewards will act in the best interest of the community if the incentive system is aligned.
8. You can make money without changing anything you do
The internet currently generates value from nearly everything a user does online. From a simple internet search, to clicking on an ad, to making a purchase, someone is making money from these activities. Our job, as stewards of a large community, is to ensure a fair part of that value is returned to our Members.
7. Privacy is not a nice to have, it is a must have
Our Members privacy is paramount. After all, without our Members, the community would not exist. That is why we will never sell, disclose or give away any or all of our Members' information. A high level of privacy is far more valuable to the community than any alternative.
6. Trust is everything
The AGLOCO platform can be a gateway for an array of other services developed to provide both monetary and service benefits. Whether early virus and phishing site alerts or simply a trusted information exchange, Members should benefit from such a community.
5. Every single Member benefits
Every Member should benefit in his or her way by joining a trusted community. Whether earning money while surfing, or giving that money away to charity, we believe the platform should represent what the Internet should be: a source of benefit for a large section of the population.
4. Members that own the community should help promote and police it
A user that owns part of the community has more incentive to promote it and keep it free of malicious software and ill-intentioned individuals. We believe that the overwhelming majority of our Members will want to reach out to friends, family and colleagues, as well as protect themselves from scams and pitfalls on the Internet.
3. A community with a shared sense of responsibility
We stray away from advertising and products that are socially unacceptable. We strive to create an active and socially responsible community.
2. A global community
The internet unites the world across cultures, borders and languages. AGLOCO wants to bridge the divide in global understanding and promote itself as a cross cultural, socially aware and responsible community.
1. Free is too expensive (our favorite)
A free service is always great. However, if Members produce what becomes the core value of the company – as we have seen with recent online mega-deals - then we believe Members should receive a good portion of the financial benefit that the company derives.
--- The AGLOCO Development Team
AGLOCO HISTORY
The Infomediary. In February 1999, four of us sat around in the backyard of a house on the Stanford campus (we were either current or former Stanford students) and created a new concept – the online infomediary. We realized that individual users of the Internet, by their actions and the information they were providing (both willingly and not), were creating tremendous value. Yet none of this value was accruing back to the individual users.
We also realized that individuals held much more information about themselves which they might be willing to share if they would share in the profits from this information, and if other conditions - such as privacy and security - were satisfied. We knew that companies were willing to "pay" for increased information about users. But no system existed to bridge the gap between these two parties.
AllAdvantage.com. So, we launched AllAdvantage.com in the spring of 1999 in an attempt to bridge this gap. By downloading and using the AllAdvantage.com Viewbar, members were effectively "renting" some of their computer screen and their clickstream data for hourly cash payments.
This "get paid to the surf the web" concept proved wildly successful with consumers. Tens of millions of people are happy to share some non-personal information and share in the profits that are being made on the Web, even though this was being questioned in the business press. The concept also proved to be highly successful in generating revenues, as most people agree that AllAdvantage.com generated more revenue in its first 12 months of operations than any online consumer/advertising company in history.
Ultimately – and unfortunately rather quickly – AllAdvantage.com failed as a company because we relied too heavily on venture capital financing and our growth in members far outstripped our growth in revenues early on. Put simply, we signed up members in Internet time and sold ads (our primary form of revenue) in old-fashioned media time. The AllAdvantage.com model started paying members as soon as they downloaded and started using the Viewbar, but it took time to monetize these incremental hours.
As the online ad market and the Internet financing markets crashed in 2000-01, the revenues from the business could not keep up with the rapid growth in members (and their associated fixed hourly costs). We unfortunately had to close the business, even though new members were continuing to join the network.
While we had no choice but to shut down the business, AllAdvantage.com did deliver everything it promised to members: We mailed out over $100 million in checks to members, and advertisers delivered the most targeted, information-rich advertising opportunity on the Web.
The company maybe failed, but the ideas behind it never did…
Where are we today? Online advertising, after stalling in 2001-02, is bigger than ever (Google, of course, has changed everything). Targeted search and contextual text ads – almost non-existent in 1999 – are now everywhere. Companies – Google and Yahoo, for example – are trying to convince users to download "toolbars" (sound familiar?) to gather more information from their members. All this information – and the companies that gather it – is worth more than ever. Yet the individual users still do not have an effective way to get their share back.
YouTube was acquired for $1.65 billion by Google in October 2006. The story of how three guys made hundreds of millions of dollars in one year is a great tale of entrepreneurial success. But what happened to the first users who posted their videos on the site and told their friends to do the same? We don't hear about them, because they did not get anything (other than free video hosting). Wasn't it really these users that helped turn YouTube into a multi-billion dollar company? Sure the site is great and the founders deserve all the credit they get, but it is the users who ultimately made it valuable. There are plenty of video sites, and if it wasn't YouTube, another site could have filled the space, become a household name and been acquired for an amazing price.
We are not trying to pick on YouTube (which we happen to love using). How about the early users of Skype? What about those who first downloaded the software, made calls to their friends in different countries and told their parents to use it as well? They did not see a penny of the $2.6 billion that eBay paid for the company in September 2005. And MySpace? How about the millions of members there? How did they do when News Corp. bought the company for almost $600 million? After all, it was the members that Rupert Murdoch was after when he purchased the site.
The point we are trying to make here is that there are plenty of social networking sites out there, but it is the members that make these sites and services valuable. Yet, they get no monetary value from it.
We could go on. But the story is always the same: users (and the information they bring with them) are valuable. Creating a system that enables users to share in all these profits is the next big thing. We call it an economic network. Others call it a global online community co-op. Or "Linux for consumers." It's a big idea. And it's happening now.
AGLOCO. We started AGLOCO at a coffee shop near the Stanford campus. We sat down with a group of Stanford graduate students to design the next generation of the Internet enterprise using the infomediary as one of the foundation blocks.
We decided we wanted to build the economic network that enables individuals on the Web to share in the profits that their data and their actions help create. AGLOCO is more than a Web site and it is more than a Viewbar company. It is a network that links people, their information and their friends together to form something bigger.
Like all networks that have come before (from the Internet itself to MySpace), this one gets stronger as it gets bigger. AGLOCO with 1,000 or 10,000 members is not much more than the sum of its parts. But AGLOCO with 1 million or 10 million members starts to become important. It's important because it changes the consumer-company relationship online and changes the way everyone thinks about their online experience.
Why It Works. AGLOCO works because the network effects are self perpetuating. It gets stronger as it gets bigger. With more members and stronger cash flows, the profits that the members share in increase – and this draws in more users and hence stronger cash flows. The incentive to join early and tell many friends is big, as early members who help build the network stand to benefit the most (similar to nearly all start-ups, where the early employees tend to share disproportionately in the success of the company).
As AGLOCO grows, the economic incentive continues to grow as it is able to offer more and more value for its members. Unlike AllAdvantage.com which incurred incremental costs for each additional member-hour, AGLOCO generates positive free cash flow from each additional member-hour and has virtually no incremental cash expenses for additional use of the Viewbar. AGLOCO will have standard operating costs (site maintenance, bandwidth, insurance, telephones, office space, sales and administration etc.), but like Google these costs should be very low compared to the revenue Members generate.
The Members Own the Company. That's right – 100% of the company is member-owned. Users make good ideas valuable. Good ideas are great, but without members, they are just that – ideas. Every decision is made by asking what is best for the members over the long-term. It's a new way of thinking, but it works because we are all in it together. So how do we make money?
We Own the Management Company. The employees and investors own the management company. The management company collects 10% of the revenues of AGLOCO (like Tom Cruise pays his agent 10%). This should be enough incentive to continue to attract a great team of highly talented people that AGLOCO needs to maximize the value to its Member/shareholders.
Trust is Everything. We lose your trust, and the network fails. We work on behalf of the members and everything we do must keep that in mind. Our members know what we are doing with their data and how we are using it for their benefit. Do you know how other Web sites are collecting your data or how they are using it? Chances are, you don't. Think about it.
No cost to a Member – Ever. AGLOCO never costs anything for Members. Ask former AllAdvantage.com members what it cost them to join and most will try to remember how much they were receiving in monthly checks (that's right – receiving).
Privacy is paramount. No spam, no pop-ups, no selling information, no emails from people you don't know, no emails to people you don't know, and no tricks. Period. Our track record is public – there are no hidden costs. The upside for members is potentially very large and the sky is the limit. The downside is essentially nil.
Be Patient. People always want everything right away. We do too. But things take time, so stick with us. It takes time, money and people to build everything, and we'll get there. Members at AllAdvantage.com complained that we were moving too slow, and then after the company was gone they realized how good it had been and complained that it had gone away! It takes time to be able to send checks for over $100 million to members. And so it will take time to set up an economic network to share the wealth of the Internet with millions of online users. However, you have a role to play and can help us speed up the process, even making some money along the way. Here's how:
Get Involved. Pitch in. Tell your friends and build your referral network. Design a Web site explaining the economic network (you can probably do it better than us). Email us your ideas. Design a cool Viewbar. Tell your company they should partner with us. Write about us on your blog. Ask yourself how you want to share in the value of the Internet. Think big. It's your company. Have fun.
--- The AGLOCO Development Team
AGLOCO DEVELOPMENT TEAM
Akshay Mavani: A.K. coordinates strategy and represents our Indian Members. He brings experience as an electronic engineer, and worked in sales and strategy in China and Hong Kong before attending Stanford's Graduate School of Business.
Allison Cui Allison is AGLOCO's China specialist and represents our Chinese Members. She worked as a software engineer in Shanghai, China before attending the Stanford Graduate School of Business.
Anne Sophie Mayos Anne-Sophie handles AGLOCO's website and her sense of style makes sure it is always up to date. Originally from Paris, she designed media information sites for millions of online users at France's leading television channel.
Brian Greenwald Brian works in business development at AGLOCO. A scientist by education, he worked in marketing and development for several biotech companies before attending Stanford's Graduate School of Business.
Cannon Bonar Cannon is AGLOCO's ambassador within the teenage community. Currently a student at Central Middle School, he will represent our teen Members (and he tried hard to think of a cool-looking name for our company).
Dan Jorgensen Dan is AGLOCO's Member recruiting coordinator. He worked in sports marketing and online advertising before helping AGLOCO create its network.
Javier Alvira Javier is our in-house blogger expert. A native of Spain, he worked as an engineer in telecommunications around Europe before joining Stanford's Graduate School of Business.
Jim Jorgensen Founder of AllAdvantage and Discovery Zone. Jim's experience of paying $100 million to members in 1999 and pioneering the “returning value to Internet users” idea, is an invaluable source in guiding AGLOCO's new Development Team members.
Moshe Pinto Moshe is AGLOCO's resident lawyer, he negotiates and executes contracts. Prior to joining Stanford's Graduate School of Business, Moshe worked as a corporate lawyer and political strategist in Israel and the US.
Nick Punt Nick advises AGLOCO's technological and community development. He worked as a video game designer and online communities' product manager prior to attending Stanford's Graduate School of Business.
Ray Everett-Church Ray was the world's first corporate Chief Privacy Officer, pioneering the field of corporate privacy professionals. An attorney and technology expert, he is responsible for ensuring the privacy and security of AGLOCO's Member information and providing guidance on privacy and anti-spam issues.
Sam Flax Sam is AGLOCO's Chief Architect for the design of our economic network. Sam's 30 years in Russia and then 20 years in the US give to AGLOCO a unique perspective on managing and implementing our database.
Steve de Bonvoisin Steve coordinates AGLOCO's communication and strategy implementation. Originally from Belgium, he has lived and worked on four continents and brings experience in economic consulting and as a reporter for a leading economic newspaper. He is attending Stanford's Graduate School of Business.
Trey Reasonover Trey is our in-house community dynamics specialist. He became a Web 2.0 addict after working as a strategy consultant, and attends Stanford's Graduate School of Business.
AGLOCO PRESS RELEASES
November 21: AGLOCO Launches Internet's first economic network
November 15: Meet AGLOCO's chief internet's privacy officer. An interview with Ray Everett-Church
AGLOCO : HOW IT WORKS
Today’s hottest Internet businesses are all about the power of social networks. Companies like MySpace, Facebook, and YouTube have become worth billions because businesses have realized that these social networks are generating huge advertising and marketing opportunities. As these social networks grow, the economic potential for its owners – and the advertisers who target the site’s users – is remarkable.
At AGLOCO, we asked a simple question: The users created the community, where’s their share of the profit?
It was from this question that AGLOCO set out to create the Internet’s first Economic Network, harnessing the power of Internet-based social networks to directly benefit the Members who help to create the community.
Becoming a member of AGLOCO is as simple as completing a brief sign-up page (name, age, location and email address.). Once you’re a Member, you will be asked to then download the Viewbar™ software. (Note: the Viewbar™ software is currently unavailable, as it is in closed testing. It will be ready for public download in a few weeks, and members will be notified when it is available.)
AGLOCO makes money for its Members in many ways:
Search: Every time you use the Viewbar™ to do an Internet search, AGLOCO earns money from the search engine providers. (For example, Google pays as much as $0.10 on average for each search that is directed to its search engine.)
Advertising: The Viewbar™ itself displays ads that are targeted based upon the websites you’re visiting. When you click on an ad and make a purchase, AGLOCO receives a referral fee, which we pass on to our Members. (Please note: Individual members do not receive any compensation for clicking on ads in the Viewbar™, and the Viewbar™ can detect if someone is clicking ads in a fraudulent manner.)
Transaction commissions: Many major retailers pay commissions when you refer customers who make a purchase. AGLOCO collects that commission and passes it on to our members. (For example, Amazon pays an 8.5% commission to most websites who refer customers, and has cut deals for even larger percentages. The bigger the AGLOCO community, the better commission we can negotiate for our Members.)
Software distribution: Numerous software companies pay websites to encourage the download of new software releases (for example, Adobe’s Flash and Acrobat Reader software), and trial versions of new programs. AGLOCO members not only get access to the latest and coolest software, they get paid for it.
Service distribution: Many online service providers will look to the AGLOCO community as a source of new and active users for their services. (For example, eBay, Skype, and PayPal, among others, all pay fees to people who help them recruit new active users to their services)
Product distribution: When Members agree to use a product, such as cell phones, high-tech gadgets, office supplies, new credit cards or financial services, AGLOCO can collect referral fees. Some companies even offer special rebate and cash-back programs.
AGLOCO Members make money in four ways:
Members earn a monthly share of the AGLOCO revenue based on the use of the AGLOCO Viewbar™ that month.
Members earn part of the company based on the use of the AGLOCO Viewbar™ that month (currently a maximum of five hours are rewarded).
Members who use our referral system to help build the AGLOCO network will earn more. (AGLOCO only has significant value as a large network and people who help build it should be rewarded. – We also feel that the early users who told friends about YouTube or MySpace or even Google probably deserved something too, but no referral system was available to record their work).
Members will also get a share of any commissions AGLOCO gets when a Member purchases a product or service from an AGLOCO Sponsor company.
Why should I join now?
First, it costs nothing to Join and takes less than one minute.
Second, you can help build the AGLOCO community by recruiting new Members TODAY.
Right now, inviting your friends to join AGLOCO is as easy and productive as it will ever be – but you need to invite your friends before someone else beats you to them.
Remember, the bigger the AGLOCO community, the more attractive AGLOCO is to potential business partners and advertisers.
Recruit your friends and family by contacting them through email. (But remember we have a strict anti-spam policy.)
Use your blog and your existing social networks, such as MySpace and Facebook, to contact your friends and encourage them to join a new community that will actually let them earn money.
Be a part of the Internet’s first Member-Owned Economic Community.
Join AGLOCO - Own the Internet!
