Facebook and markets.
For readers who have yet to be seduced by the charms of Facebook, this Business 2.0 article and JP’s series of posts are good places to get a better understanding of the platform and what makes it interesting (for the over-30 crowd!) 
Many, many column inches have been written of late on the subject of Facebook, to the point that people who haven’t taken the time to try it out and migrate some of their (real-world) social networks to the platform are understandably cynical and wonder how the site can possibly live up to the hype. I’m not suggesting that this suspicion is entirely misplaced but I would however suggest that the fundamental enthusiasm surrounding Facebook is based on the real value it provides as a medium through which you can easily organize your networks online.
So what’s the Park Paradigm angle? Well, I would say that it is the closest online simulation of a trading floor environment that I have ever come across. I’m not talking about the content - although if you put all the people on a given trading floor on Facebook, you’d have that too - no, I’m talking about the connectedness, the interactivity, the multi-threaded narratives, the buzz… It’s not easy to describe, but anyone who has spent anytime working on a trading floor would identify with the energy that is generated on a good* trading floor. (* Some trading floors don’t work. If you don’t get the balance, acoustics, spacing, etc. right you can end up with a glorified wired reading room…) This is the same energy that can be harvested, seemingly effortlessly, by building a network of friends and applications on Facebook. Of course this is potentially interesting and useful in thousands of different contexts but let’s come back to markets. And trading floors.
Anyone who has worked in capital markets is likely to be familiar with the ubiquitous Bloomberg terminal. And notwithstanding the myriad of excellent analytical and trading applications available on Bloomberg, the ‘killer app’ - the secret of Mike’s success - was Bloomberg’s private instant messaging. Yes: IM with credentials, with context. Yes, “chat” is the main reason why Mayor Bloomberg is one of the wealthiest men in the world. (Remember the rise of Bloomberg in the world’s trading floors was long before ICQ was dreamed up. And once they hit the tipping point, Metcalf’s Law just took over.) There is no irony intended. Getting this right - providing this service - was of huge importance and benefit to people and firms working in global capital markets. Why? For the same reason the first modern stock market emerged out of conversations between trusted acquaitances in the coffee houses of the City of London:(in the words of my friend Patrick, “the essence of markets like most essences of civilization centers upon community.” (from The Exchange Manifesto, page 12)
Indeed, a heretic might say that the investment bank of the 21st century, the capital markets of the digital generation might not be built on a Bloomberg platform but on a Facebook (or other yet to be invented?) platform. (A heretic. Not me.) The irony of a number of investment banks banning Facebook access from work is abundant. So how will Bloomberg and Facebook compare in 2015? Of course by then, Mike will be President, and Mark may be Mayor of New York. Stranger things have happened. And as for my friend Dave (pictured above), well maybe he’ll stick around and run FB while Mark runs Manhattan. 
November 2nd, 2007 at 12:05 pm
[…] For some time, I’ve been highlighting the similarities between Facebook and Bloomberg and the importance of social networks as the core foundation of successful markets and so it is nice to see that others out there agree: […]
June 16th, 2008 at 2:14 am
[…] You could be forgiven for thinking - based on my writing here - that I think investment banks are full of unenlightened dinosaurs, and so not fit for study if one wants to ’see the future.’ In fact this is quite far from the truth - sure there are lots of reasons to pull your hair out if you love change and disruptive innovation and work in an investment bank. BUT there are lots of reasons not too as well; indeed I think much of my passion for accelerating such innovation comes from my many years of first-hand experience of seeing the power of it on the front line in investment banks. Yes, they can innovate (although often they are most succesful when they don’t realize this is what they are doing.) Traders in investment banks invented and nourished social networking 20 years ago. (And they figured out how to make money from it - I’d take Bloomberg’s bottom line any day…) […]