michael sippey on Wed, 16 Jul 1997 22:06:16 +0200 (MET DST)

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<nettime> Moving Day at Electric Minds

pit asked me to x-post this to nettime.



*** This is retro-push, the email version 
*** of Stating the Obvious.

Moving Day at Electric Minds

The offices were empty.  There were no chairs.  There were no desks.  There
wasn't even a table for the foccacia sandwich lunch spread provided by the
PR agency.  Nothing on the walls...save a big orange nylon banner which
read "Wide Load.  Community On Board:  www.minds.com."  The sign was to be
attached to the van driving the Electric Minds servers from San Francisco
to their new home at Durand Communications in Santa Barbara.

I'm not sure what I expected exactly, but it was a strange press
conference.  Attendance was sparse -- a few friends of Howard Rheingold's,
a few online journalists, a couple curious hangers on, and a bunch of
representatives from Durand wearing newly pressed yellow golf shirts with
the Electric Minds and Durand logos joined at the hip.  They handed out the
obligatory press kits and t-shirts, but when we all gathered in a small
room for the "announcements," Casey Hughes, Durand's COO and apparent
ringleader, asked us to sit on the floor.  In a circle. 

It seemed to be the "bottom up" thing to do.

Until a few weeks ago, Durand Communications was just another startup
trying to make a go of it building tools for end users to create virtual
communities.  Their service, CommunityWare, which is less than a month old
in its current incarnation, enables individuals to create their own
threaded discussion groups, chat rooms, email lists and (yes) web sites.
Instant community -- at $3 a month, with the first 60 days free.  It's a
nice proposition, actually, especially for small groups of people that need
access to this technology yet don't have the skills or resources to host
their own web server.

But with the acquisition of Electric Minds, Durand takes center stage in a
growing debate over whether there is actually money to be made by providing
services to let people discuss, argue and pontificate about whatever they
damn well please.  Electric Minds obviously couldn't make it work on their
own, for reasons I outlined a few weeks ago in these pages:  too little
advertising, not enough strategic partnering (the IBM deal was just too
late), and a deadly allergy to anything approaching the subscription model
that seems to work for The Well.

With CommunityWare, they've built a nice, if somewhat bland, planned
neighborhood -- complete with all the standard digital amenities.  But
their business model -- which rests on premium subscription fees, targeted
advertising, and slices of electronic transactions -- depends upon people
actually working and living in that new neighborhood. It's no secret that
Durand's acquisition of Electric Minds was not for the servers or the nice
logos, but for a ready-made community for the new neighborhood.  72,000
registered members.  6,000 active participants.  A governing body of around
500.  50 content hosts.

Casey Hughes, Durand's COO, could barely contain his excitement at the
prospects of having all those members "on board."  Hughes seems to have
embraced the Kevin Kelly mantra of "bottom up" and "chaorganic" with a
religious fervor, and he's clearly excited by the notion of having all of
those minds "self organizing" into "communities of interest."  After all,
in the friction free future, you won't be conducting commerce with all
those corporate monoliths, instead, you'll be trading digital product with
your immediate, like-minded community.  And Durand, with the electronic
commerce infrastructure to support transactions within a community, wants a
slice of every transaction.

Whether the self-organizing community of Electric Minders will buy into all
this store-bought wisdom is yet to be seen.  To me, the short term
integration plans seemed a bit fuzzy...  What will happen with the topic
hosts?  "We're not sure yet."  Is there a process in place to handle
development suggestions from the Minds governing body?  "We'll deal with
those requests just like we deal with our own development items."  Will the
Minds site continue to use the Well Engaged conferencing system?  "We'll
see after thirty days how things are going."  (While the tool does not
necessarily make the community, it certainly influences it.  Just as
picospan has influenced whole slews of Well users, the Well Engaged
conferencing system has been just transparent enough to reinforce that it's
the conversation that's the star of the show here, not the technology.)

If the community, and its new landlords, have one thing going for it, it's
the involvement of Rheingold.  "I want to see them succeed in what they're
doing.  I want to see the community thrive," said Rheingold yesterday.
"It's kind of like sourdough bread.  You need some of that starter from the
old batch in order to bake a new one."

The details of the financial arrangement weren't disclosed, probably to
thwart writers like myself from instantly calculating a "per registered
user" cost to Durand.  But in an off the cuff remark, Rheingold hinted at
the fact that Durand probably struck a pretty good deal.  "None of the
stockholders of the company are receiving any cash -- all of the cash goes
to our creditors," said Rheingold.  "We have essentially kept this business
alive six weeks to two months longer than we should have because of the
possibility that we'd be able to pay our creditors."

After those two months of dealing with creditors and acquisition
candidates, Rheingold seemed visibly relieved that he was no longer
responsible for the bottom line.  "The business model is obviously not my
bag," he half-joked.  "I'm glad I'm not the guy that has to answer
questions of how they're going to make money.  But to me, the fact that the
business failed is not as important as the fact that the community will

--- Michael Sippey

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