The Exponential Power of Connectedness

Robert Metcalfe is recognized and revered as the inventor of Ethernet, “the local area networking (LAN) technology that turns PCs into communication tools by linking them together” (Mitchell, H. 2001:3). This technology “would be used to link together more than 50 million PCs worldwide” (Mitchell, H. 2001:3) and fundamentally impact the way people work, learn and operate within organizations.

Ethernet’s origins date to Xerox PARC, 1973 with a memo Metcalfe sent to his bosses (Mitchell, H. 2001). Next, Metcalfe and his assistant David Boggs worked together to link computers using coaxial cable and implement an algorithm for data transfer across those cables (Metcalfe 2006, Metcalfe & Boggs, 1976). While we don’t have details of how Metcalfe and Boggs collaborated, it isn’t surprising, in light of Andrew Hargadon’s research into the collaborative nature of invention (Hargadon 2003), to discover that the most collaborative technology ever created itself resulted from a collaboration.

Fast-forward three decades to MIT in Cambridge, Massachusetts, in September 2006. Metcalfe is speaking in defense of his Metcalfe’s Law--developed circa 1980 to convince early Ethernet adopters to try LANs (Large Area Networks) large enough to exhibit “network effects”. The law states that the value of a network is in proportion “to the square of its number of users, V=N²” (Metcalfe 2006). Metcalfe’s Law was under attack in a cover story to a prestigious 385,000-member engineering publication called IEEE SPECTRUM (Briscoe et al 2006 NEED Citation--IS A CITATION STILL NEEDED?). Metcalfe argues that Network effects are basically a point at which some “critical mass of users is achieved which creates a value greater, and at a lower cost, than the mere addition of all the one to one connections” (Metcalfe 2006).

(See VC Mike blog August 18th, 2006, Guest Blogger Bob Metcalfe: Metcalfe’s Law Recurses Down the Long Tail of Social Networks for Metcalfe's original slide explaining his law)

The exponential power of networks is why we should pay close attention to Metcalfe’s Law, and other network laws, especially Moore (Moore 1965, Ethan 2006) and Reed (Reed 1999). It’s the force behind the value creating power of connected intelligence and how it works in organizations to generate learning and results in increased productivity as measured by network economics. It’s the reason we believe organisations need to adopt technology and organisational infrastructures that together support connecting diverse individual intelligences and collaboration rather than impeding interaction and knowledge flow.

Moore’s Law, from Intel co-founder Gordon E. Moore, is a prediction that by the complexity of silicon chips doubling every year, the cost of computing power will accordingly decrease (Moore 1965). Reed’s Law draws attention to “that sneaky exponential” and proposes “Networks that support the construction of communicating groups create value that scales exponentially with network size, i.e. much more rapidly than Metcalfe’s square law” (Reed 1999:2). Reed calls such networks “Group Forming Networks” or “GFN’s” (Reed 1999). John Seely Browndraws attention to the power of network laws in a Story Telling workshop (Brown 2001).

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From Learning Through Participation and Connecting Intelligences: Experimenting with a Wiki to Co-Create an Article
Submission to Knowledge Tree eJournal July 2007 by Jenny Ambrozek, Victoria Axelrod & Kiki Mulliner