The Increasing Cost Of Bad Behavior On Innovation

The cost of innovation is increasing due to bad behavior. This ran through my mind as I learned that the great bicycle experiment in Paris has hit an expensive traffic bump (NYT 10/30/2009). The idea of being able to rent a bike for an hour or two and drop it off, not where you started but wherever you end up, seemed perfect for our new green and healthy mindset.

But as with many ideas that make life better, affordable implementation depends on general ‘good behavior’.

Expected behavior has a large impact on how you develop an idea. Dr. Leonard Kleinrock, who was a major force in the development of the internet (Happy Birthday Arpanet), explains in a recent Science Friday interview what he feels was a mistake we are still paying for:

“Yes. In fact, in those early days, the culture of the Internet was one of trust, openness, shared ideas. You know, I knew everybody on the Internet in those days and I trusted them all. And everybody behaved well, so we had a very easy, open access. We did not introduce any limitations nor did we introduce what we should have, which was the ability to do strong user authentication and strong file authentication. So I know that if you are communicating with me, it’s you, Ira Flatow, and not someone else. And if you send me a file, I receive the file you intended me to receive.

“We should’ve installed that in the architecture in the early days. And the first thing we should’ve done with it is turn it off, because we needed this open, trusted, available, shared environment, which was the culture, the ethics of the early Internet. And then when we approach the late ‘80s and the early ‘90s and spam, and viruses, and pornography and eventually the identity theft and the fraud, and the botnets and the denial of service we see today, as that began to emerge, we should then slowly have turned on that authentication process[…]. But it’s very hard now that it’s not built deep into the architecture of the Internet.” (Dr. Leonard Kleinrock interviewed by Ira Flatow on NPR’s Science Friday)

I kind of thought bike riders would be nice like that. Even so, in the Paris rental bike business they tried to adjust for human behavior. The bikes are $500 tanks (The NYT’s says $3,500 but other sources indicate that is a misprint) that lock securely into pay stations. Unfortunately, daredevils use the bikes as stand-ins for bone jarring jaunts down stairs, bikes are stolen, and some are intentionally vandalized. I’m not sure where the critical failure points are or if the attempts at security created its own problems. Heck, it could be angry taxi drivers for all I know. The point is the system is in danger of collapse due to the unexpectedly high rate of loss.

Real world testing messes with even the most robust products, whether due to a lack of comprehension or vandalism. (There are reasons why instructions include seemingly incomprehensible steps like “Do not use as a cup-holder”, “Take the product out of the box” or my favorite kindling for the yearly Darwin Award candidates – “Don’t try this at home”) A general lack of respect for property – whether caused by societal stress, criminal advantage or simply the movie JackAss – is increasing the transaction rates for publicly beneficial entities like the Parisian bike rentals, the same as spam and phishing creates costs and headaches for internet users.

Is there any defense against bad behavior?

Unfortunately, changes in societal norms from place-to-place and time-to-time mean that products will be subject to sources of predictable and unpredictable use and abuse.

To proactively defend your service or product from bad behavior there are three basic paths to follow in parallel:

  1. Build to the big desire. Meet the core user need in a straight forward, easy to understand way. Limit barriers to proper use of any kind.
  2. Identify the big failure points. Build against ‘Toaster in the Bathtub’ and ‘Gaining by Destroying’ moments. Keep in mind that rapid deployment and iterative development advantages could outweigh short term flaws.
  3. Share the big rewards of positive behavior. By utilizing social engineering tools you can build in rewards and opportunities to legitimately share in a products success. Create barriers to negative behavior. Leave open paths to use your product as platform for other businesses. Watch for uses that drive the “I never thought of that” gold mine.

Could the bike program have benefited by creating social media plays for users to comment on their experience, on the condition of the bike, to report naughty use? While the bike program appears to have been a failure on the cost side, from a usage standpoint it is a crazy success with between 50,000 and 150,000 rentals a day and 63 million rentals since starting in 2007. That success means there is a driving customer demand reason to find a solution by all parties involved in the business. If time had been spent building a bullet-proof security system the business might never have been launched in the first place.

The truth is, if the internet pioneers had focused on security from day one it is possible that the internet would not be the engine for innovation that it has become. The ease of use, the openness and even the anonymity of the early system allowed thinkers to focus on utility not fear security. Focusing on the negative might have stopped the whole thing right in its tracks, without providing overwhelming benefit.

Balancing the cost of bad behavior with the need for innovation will continue to be a work-in-process.

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11 Responses to The Increasing Cost Of Bad Behavior On Innovation

  1. Brad Shorr says:

    Fred, Many types of innovation spawn abusers, and those abusers spawn new innovators. For instance, credit cards were a great innovation despite the infiltration of credit card fraud. Credit card security and identity theft companies responded.
    .-= Brad Shorr´s last blog ..4 Blog Typography Tips that Enhance SEO =-.

  2. J.D. Meier says:

    Context matters a lot and I think knowing the values and culture of the context can tell you a lot whether an something will work or not.
    .-= J.D. Meier´s last blog ..Permanent, Personal, and Pervasive =-.

  3. Hi Brad, Absolutely. I guess the question I’m wondering about is where is the tipping point when security starts killing innovative ideas.

  4. That seems to have happened in Paris. Smaller towns in other countries have done OK. The concentrated urban environment seems to have a negative effect raising abuse. Of course usage is higher as well so maybe it all balances out.

  5. Andrew says:


    It is simply unfair that innovators and good faith consumers should have to put up with the behavior of those who seek to exploit such innovation.

    Unfortunately, the abuse of innovation in a destructive manner seems to be something of an ingrained reality – I wish it weren’t the case.
    .-= Andrew´s last blog ..Should models be sacked for being ‘too fat’ =-.

  6. Hi Andrew, I think that in the end it is unfair to the neighbors more than the innovators. Businesses will figure out the best way to get a return. If that doesn’t include bicycles then its we who suffer, the entrepreneur just heads off to the next idea.

  7. Walter says:

    With all kinds of people running on the internet it is impossible not to run over by bad people. The problem with the internet is that we cannot impose an ethics to which everyone should comply, it’s like a big organization sans order.

    However, there’s no such thing as a perfect system. I have faith that in due time, people will come to their senses and make some concessions about respect. 🙂

  8. Hi Walter, Things do seem to go in cycles. Let’s hope your right about an uptick in respect!

  9. I would argue the “defense against bad behavior” is innovation itself; bad behavior crops up when businesses neglect to really understand human behavior and the incentives wrapped up in their innovation (kinda follows your third point of “share the big rewards of positive behavior”).

    The real takeaway is that as an increasing amount of products and services are built upon communities and aggregating masses of people, understanding group interaction dynamics (game mechanics, for one) is an increasing key performance indicator and must be built into the product/service itself.
    .-= Taylor Davidson´s last blog ..Creating the Intention Economy =-.

  10. I agree that managing behavior brings about innovation. But as more and more services are based on communities if mutually acceptable modes of behavior aren’t agreed upon then the cost of managing behavior becomes excessive. In other words, the rules of the game become so onerous no one is able to play any more. Bad behavior encourages stricter enforcement which morphs into uncomfortable control mechanisms.

  11. “Fool me once, shame on you. Fool me twice, shame on me.”

    Innovators (any businesses) should factor human behavior (and the potential for bad behavior of individuals and groups) into their business model. Failure to do so is the fault of innovators, not the public-at-large.

    If businesses can re-organize around niches a) the cost of enforcing behavior is going to decrease, b) surfacing hidden costs like externalities becomes cheaper, and c) it becomes easier to monitor bad behavior. The mechanics, of course, is the most interesting bit.
    .-= Taylor Davidson´s last blog ..Working Nowhere and Everywhere: The Zen of Running A Virtual Studio =-.

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