What do open source, shareware and Wikipedia have in common? They’re all part of the ‘gift economy’, the idea that you can do work for nothing and ‘gift’ it to others and somehow, you will be provided for. By Rosanne Bersten.

It’s a dream that goes beyond barter: you don’t hand someone your software in exchange for something of equal value; rather you simply hand someone your software or your hard work and sit back satisfied, knowing you have done good deeds and trusting that karma or the law of averages will mean your good deed is repaid, either by someday having a piece of software handed to you or more likely by looking up something in Wikipedia and benefiting from an entirely unrelated but equally gifted type of work.

Part of this idea was noted in the 2000 movie Pay It Forward but it’s been around a lot longer than that.

In 1986, a small group of people started a little festival called Burning Man on a beach in California. More than 20 years later, this week-long extravaganza has moved to the Nevada desert and creates a temporary city of 50,000 people. One of the most striking things about this city is that — after the citizens have paid their $300-plus entry fee — there is no money exchanged inside its borders. Instead, everybody brings everything they need for the whole week and live by exchanging gifts with the other citizens. According to founder Larry Harvey, the difference between a market and a gift economy is that the former is based on scarcity while the latter is based on abundance. And he says a gift economy fosters what Robert Putnam called “social capital”, that is, it forms connections between people.

The gifts that are given on the Burning Man playa range from handmade necklaces to fresh oysters on ice (yes, in the middle of the desert) to large-scale art installations.

Deron Beal, founder of Freecycle, notes that giving — not just charity — has a long tradition. “In Berkeley, there [was] a telephone pole which everyone knew. If you wanted to give something away you just put it underneath that pole and they called it the Giving Pole,” he says.

Taken to its logical conclusion, the ideal is a world without money. Is that even possible? Some believe that capitalism has had its day. We’ve now got too much ‘stuff’ in the world and we can stop now. Freegans, for example, aim to live without money at all. They ‘dumpster dive’ for food, clothing and other goods; they walk and bicycle rather than spend money on transport they see as ecologically disastrous; they indulge in what they call ‘urban foraging’ for the almost-new rejects of this overly padded society.

They have “freemeets” and fair days called “really, really free markets” (to highlight the inequalities of the so-called ‘free market’ of capitalism) where everything is given away.

That dream might take a while, but in the meantime, organisations like Freecycle have taken the idea to an organised, global level.

“Capital markets have a bad time of measuring the environmental impact of our items just being thrown away rather than being reused,” says Beal. “Currently there is no number being placed on how much CO2 is in the environment as far as the monetary damage being done there. I like to think that the ultimate goal of Freecycle is to complement the capital markets and capital economy with a gift economy that enables reduction in impact on the environment while capturing things that still have functional reuse rather than monetary use.”

William McDonough, a designer/architect and co-author of Cradle to Cradle: Remaking the Way we Make Things, goes so far as to call waste a design flaw.

“If everyone were to consume the way [Americans] do we would need five planets to provide all the raw materials and that’s just not sustainable,” says Beal. “At some point we will have to start rethinking how we are doing things. Once we are able to start producing things by reusing materials and not using materials that permanently degrade the environment we will start thinking in cycles of production and reuse rather than a linear model of extraction from the environment to production to consumption to disposal or waste of the item in landfills.”

Sidebar: Deron Beal, Freecycle
Deron Beal, 41, started Freecycle in Tucson, Arizona after his job with a recycling non-profit kept turning up items that weren’t recyclable but needed homes. Now, the organisation has more than 5.3 million members in more than 85 countries and has just topped the 100,000 member mark in Australia. He is interviewed by Rosanne Bersten.

NETT: How did you come up with the idea of Freecycle?

DB: I was working at RISE and I would go out with the recycling crews and occasionally would see an old desk or computer or whatever sitting next to the bin that we were picking up. We filled up an entire warehouse full of non-recyclable but still good stuff. It just took off from there. I sent out the first email on May 1st 2003 and it went to about thirty or forty friends and a handful of non-profits. Within a month we had 600-800 members which ironically at the time I thought was much too large to possibly succeed.

[Then] we got an article in a national magazine here called Utne Reader and we suddenly had probably fifteen or twenty cities applying to join all at once. We knew it was coming so we set up the website in a way that would instruct them how to join. Some of the earlier groups included Portland, Seattle, Kansas City, pretty much all in the US.

NETT: You want Freecycle to be about recycling and participating rather than some sort of grab-bag for the greedy.

DB: People join for the recycling benefit and to keep good stuff out of landfills. The second benefit was totally unanticipated: the community building element. Unlike putting something on the curb where it just disappears, you actually get to pick who receives your item with Freecycle. Maybe it is a single mother or someone who is going off to college or a local non-profit organisation, it is up to you. Eventually you meet that person face to face when they pick the item up from you.

There are a lot of related stories about different non-profits who got set up using Freecycle in times of disaster. [During] Hurricane Katrina, people pulled together to help each other using Freecycle; the beauty is you don’t get a bunch of winter coats for Hurricane Katrina but rather one person asks for exactly what they need and another person can give them exactly what they are asking for.

NETT: Despite the name, there must be some costs…

DB: Technically there is one full time staff — that is, me — but there are three other people that we pay on a contractor basis to do different elements like the web master, the fellow that is doing our new website coding and someone else who is our volunteer co-ordinator. We have 10,000 volunteers worldwide so that is a big job.

We are a charitable non-profit organisation, which means we are tax deductable and we survive on grants underwriting the public support and it is always very tight. We are having to pay for between six and 10 very large servers at any given time which can be quite expensive. We have had to cut lots of corners and for example all our local groups are Yahoo groups which means we don’t have the expense of [hosting them]. We have between one and two million unique site visitors per month on our website and anywhere between 10 and 15 million unique site visitors that are visiting the local groups in Yahoo Groups.

We are designing email functionality for our new website which means you wouldn’t have to go to Yahoo Groups. I think it was a hundred gigs a day that would be required to handle the email functionality, just some outrageously large number. When you get to this scale it is pretty amazing. In fact on yahoo.com they do a rating each year of the most searched terms by category. Most searched term last year for conservation or environment was recycling, number two was global warming and number three was Freecycle. That is pretty incredible. Al Gore came after us.

NETT: That is pretty flattering. Do you think that this is possible because we are living in a more charitable era?

DB: I think originally what fuelled our growth was the environmental aspect of what we are doing. What you see internationally is this really strong [sense] kicking in that we need to get our acts together and start to be more aware of our consumptive behaviour.

I think more short term depending on the country we are definitely seeing an economic aspect with the financial credit crisis that seems to be having impact on world markets. We are definitely seeing short-term increased growth numbers in regard to that as well.

NETT: Is there just too much stuff in the world?

DB: My take is, there is enough stuff in the world. We just need to get it out in circulation.

NETT: I love the vision of a world where we just stop producing things because we’ve got enough and we just keep swapping it and repairing it.

DB: Yeah and it doesn’t seem like it is that far fetched when you think about [it]. If you are making something new, make it out of recycled materials, right?

We are keeping over five tones a day out of land fills through Freecycle. Five times the height of Mount Everest in the past year alone has been reused via Freecycle so that is a big pile of stuff.

NETT: Any advice?

DB: Empower individuals to do what they enjoy rather than trying to find ways of doing it for them. That is a big part of why Freecycle has been successful. We didn’t try to centrally own or command Freecycle, rather we tried to develop tools centrally that people could get excited about and use directly themselves. I think you see a lot of that happening on the Internet these days where there is shareware or Firefox and things of this nature where it’s not a requirement to have a major multi-national structure to get something new going. If you have a good idea and you are able to channel that in the right way there is a lot of potential there for development and growth.

The US sub-prime loan crisis was big news. Banks, notorious already for their profit-driven tactics, raised interest rates and refused to loan even to people with relatively solid credit ratings. Although peer-to-peer or social lending is only nascent, its long term ramifications are the same for the big banks as peer-to-peer file sharing has been for the record labels. If they don’t get in on the act themselves, they’ll fall by the wayside.

Barter meets banking

One of the biggest complaints about banks is that they charge inordinate fees and high interest rates on loans while returning pathetic rates on most investment. Peer-to-peer lending solves that. Lenders and borrowers engage in a form of haggling over interest rates. It’s a little like bidding: the borrower can select a lender with the lowest interest rate and lenders can bid as low as they’re willing to go to get someone’s custom.

The gap between bank loan and return rates is significant. Because the lenders are looking for a return that’s better than they were getting from the bank, they won’t mind bidding lower than the bank was offering for borrowers. That means everybody wins in the peer-to-peer scenario: lower rates for borrowers and higher rates for lenders. It corrects an inefficiency in banking that is perceived to stem from banker greed and has been called a “virtuous cycle”.

Peer-to-peer lending is hardly new. After all, banks themselves are fairly recent, in a grander historical sense, while lending is mentioned in the Bible (negatively, it must be admitted, but it clearly existed). Borrowing a few dollars from your mates or a larger sum from parents for a house deposit is fairly common; it only works if your mates or parents are flush with cash they don’t need themselves.

The Internet not only removes the banks from the picture, it removes the potential embarrassment of begging from people you know. The Internet can also perform another trick: it can aggregate funds and spread the risk. I might only be able to loan $25, but if 100 people can do the same, together we create a $2,500 loan. Defaulters impact in smaller ways when microfinance is in play.

Model bank

Prosper (www.prosper.com) was the first US social lending site. The UK had Zopa (uk.zopa.com), which has since expanded into the US, and hard on its heels has followed Lending Club and PeerMint, which has US, Canadian and soon Australian operations.

There are also variations on the theme: Kiva (www.kiva.org) is probably the most well-known — where most sites try to match peers (University graduates with University graduates, for example) Kiva uses peer-to-peer lending to help wealthier first-worlders finance micro-loans to entrepreneurs in third-world countries while US p2p site CircleLending —  bought out by and completely rebranded as Richard Branson’s Virgin Money (www.virginmoneyus.com/) — formalised loans between people who already knew each other rather than relying on strangers.

Branson isn’t the only one paying attention to the sector: eBay has recently bought MicroPlace (www.microplace.com), another ‘end poverty through microloans’ site.

Closer to home

Part of the reason the idea has been slow to take off here is our regulatory environment. In the US, most people have a credit rating which is a number out of 850, and it’s easily verified, for a fee. Here, the two major credit reporting bureaux, Dun & Bradstreet and Baycorp Average, keep negative credit information only — so not everyone has a rating — and there are restrictions on who they can share that with. What’s more, in Australia, applying for a loan, whether you’re successful or not, will be noted on your file.

In Australia, October 2007 saw the first peer-to-peer site to open its virtual doors: iGrin (www.igrin.com.au), a contraction of internet Group Investment Network. Phil Hopper left his position as an Executive Manager at the Commonwealth Bank of Australia to become CEO of the new financial service. With that experience behind him, he’s aware of the regulations. Technically, iGrin is the official lender on all the loans. The actual lenders — that they call funders — are buying the right to the proceeds.

iGrin uses Veda Advantage to get credit data and assigns risk ratings to the borrowers.

iGrin charges borrowers 1-2% establishment fee and charges funders 0.5-1% of the current principal as a servicing fee. iGrin has so far loaned a total of $170,000. That’s a drop in the ocean compared to the $150 billion currently outstanding in the Australian personal and credit card loan market.

iGrin offers both models for lending: the bidding model outlined above; and the ‘family and friends’ idea where you already know your lender and simply want to formalise the loan without the expense and stress of a lawyer. Direct loans like this attract lower fees too. “I think one of the attractions of the site is the personal story of it all,” says Geoff Kelly, credit and compliance officer at iGrin. “Borrowing from a bank is very internal and concealed, where social lending exposes it to a very public process.

And it’s there for anyone to participate in.” Loans are limited to $10,000.

Second off the ranks seems to be Fosik (www.fosik.com.au), a very smoothly designed site currently in beta testing which feels friendly and simple to use. Right up front, Fosik compares the rates you can get on a p2p loan (around 7.37% at the time of writing) with the big banks — NAB comes in at 12.4%, ANZ at 12.99%  and St George at 13.7%. Why would anyone go anywhere else? Like iGrin, Fosik doesn’t mind if you already know your lender or you want to borrow from their pool of generous strangers. While that service isn’t currently available to the public — launch is expected by the end of the year — documenting a loan between known parties is happening now. Fosik also distributes a DIY loan kit to newsagents but of course, online makes it all so much more straightforward. A basic loan documentation through the site will set you back a measly $19 or you can sign up for the  premium service including your very own online loan manager for $49.

CEO Pat Hammond has extensive experience as a “traditional funds manager” now turned entrepreneur. His last employer was Lichtenstein Global Trust, the bank of the Prince of Lichtenstein in the US. “There’s a lot of compliance if you’re going into a business like this,” he says. “We’ve got all that in place, APRA licensing for payments and so on. By the time [our full service] launches, we will have all the regulations for that covered too.”

Another Australian contender is PeerMint (www.peermint.com.au), the brainchild of sibling Scott, Ryan and Shelley Rigby who will head up the Australia, Canadian and New Zealand branches respectively. Scott is currently based in Brisbane working for wotif.com.au, the hotel and bookings service. Originally hoping to launch late last year, PeerMint ran into regulatory hurdles and is in the process of applying for an Australian financial services licence.

More hopefuls are LendingHub (www.lendinghub.com.au) and arbols (www.arbols.com.au) which boldly calls themselves “Australia’s first community focused social lending and borrowing site” and “Australia’s first per-to-peer finance community” respectively, even though they’re both still listed as ‘coming soon’ and iGrin has already contracted its first loan. Judging by the dates on the initial LendingHub posts (2006) it has also run into regulatory delays.

Despite the barriers to entry, peer-to-peer lending in Australia is inevitable. Prosper’s slogan is “let’s bank on each other” and in a world that’s increasingly suspicious on the one hand and increasingly trusting on the other, social and community banking seems to be the next space where the multitudes are turning away from big business and levelling the playing field themselves.

CASE STUDY
Chris is a 29-year-old high school teacher from Brisbane. He’s never met Toby, a 32-year-old archaeologist-turned-IT worker, but that doesn’t matter to either of them. Chris wanted to start a small business on the side, with a financial bent, and he needed an injection of cash — around $2,500. Toby is one of the 20 or so investors who have loaned Chris around $100–$200 each. For Toby, Chris is one of seven loans, ranging from $100 to a fair bit more, which spreads his risk. Altogether, Toby has loaned around $2000 through iGrin with rates varying from 11% per annum all the way up to 30%. He averages 14–15% which he acknowledges is “very good in today’s market”.

“Typically, I’ll only lend more than $100 to someone with an AA or a B credit rating — they’re the people who default less than half a percent of the time,” he says. “Other people I tend to look at their debt-to-income ratio. That’s really good about iGrin, because they verify the income for me. I’ve given to a couple of HRs — high risk borrowers — but it’s basically charity: if I get my money back, I get my money back. Anyone who’s an HR is giving a very high rate of return, though, so $100 is something I’m willing to risk with them.”

As for Chris, his credit rating started off as a C. He’s getting an interest rate on his loan of 11.84% which for him “isn’t spectacular” but he says part of the reason he’s in the system is to improve his credit rating. “I’m very positive about the whole process,” he says. His minimum repayments are $83.20 a month and he’s been paying back around $100 more than that each time. He’s paid back nearly half of his loan already.

Is it going to change the way people do banking? “Absolutely,” says Chris. “I think it’s a real cultural shift. When you first buy something on eBay, you’re really worried about it but now it’s just routine. iGrin goes through a lot of processes to enrol you as a client so I would expect it to be a lot more trustworthy.”

Even though they haven’t met, both men like the personal nature of the transaction. “I do like that people get the chance to borrow money for a good rate of return for something they’re passionate about,” says Toby. “And it all comes back to help me.” Eighty per cent of the time, he doesn’t really look at what the money is for, but “someone remodelling their home for a new baby or a business plan they were really passionate about” might catch his attention. From Chris’s side, the loan validates his business plan in a way that a bank loan wouldn’t. “You can’t actually just go to the bank and have someone be interested in your business. You’re reading through [the profiles] and making real value judgement on whether someone’s idea is a good idea. You know the other people who are there wanting that money as well, so people must think my idea is worthwhile.”

And it can only get better in time. According to Chris, “because it’s so young, it was quite difficult to get the whole loan. There are not enough lenders yet. There are people wanting to borrow with quite good reasons but it hasn’t hit that critical mass yet. So you get a little bit anxious waiting, hoping you’re going to get the loan through.”

“If you go to prosper.com, it’s so much more established,” says Toby. “We’re just waiting for ours to become a self-sustaining community.”

Rosanne Bersten visits the SuperHappyDevHouse, where geeks prove the benefits of togetherness and tinker with the future. Download published version: The Happy Household (PDF)

Chained to a desk, day in, day out, the creative mind starves. System and process, production and efficiency may be the keys to getting material out the door but they do not feed genius. Inside a company, there may not be a critical mass of creatives for true brainstorming to occur and hobnobbing with the competition is frowned upon. Most of the time.

For the children of Silicon Valley’s Home Brew Computer Club era, the tinkerer in the garage has become  an urban legend in which any kid smart enough can become the next Bill Gates or Steve Jobs. For that matter, it wasn’t that long ago that David Filo and Jerry Yang were PhD candidates who turned their campus idea into Yahoo. Now everyone is on the lookout for the next Facebook or Google-killer.

Post-dotcom cynicism is rife in many places. It’s hard to get VC investment without a working model or a beta test of what you’re offering. The Googles of the world run innovation camps where the prize for the winner is VC funding. Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison co-sponsor the California Clean Tech Competition, whose prize is $US50,000. For the true entrepreneur, though, the idea that one of those big companies will have a finger in their pie is anathema.

But modern complexity means it’s rare for one person to be able to develop the next big thing on their own. That’s where SuperHappyDevHouse comes in.

Held every other month at one of two rambling mansions in Los Gatos, California, SuperHappyDevHouse at first appears to be an enormous party with a preponderance of men and far too many laptops. It is designed to be a space for the exchange of ideas and rapid prototyping of projects among the cream of Silicon Valley’s young and young-at-heart developers.

The atmosphere is invigorating, inspiring, intense. This is essentially play. Asheesh Laroia is 21 with a day job at new intellectual property darling Creative Commons. He’s sitting with “TV”, 30 and they’re laughing every five minutes. They are, in many ways, the heart of SHDH. For both of them, it’s the first time here. They met each other for the first time about four hours ago. Now they’re working together on “three projects, maybe four”.

“It’s more about trading what we’ve already done,” says TV. “Like the anti-spam thing.”

Asheesh says, “It’s handy because he can tell me it’s impossible.” They fall back into talking with each other.

“It’s always fun to be asked to write something but it’s sad to say ‘you’re doomed’,” says TV.

“It’s something I’ve been thinking about for ages. And now you’ve told me why it won’t work. Using all the same arguments I would have given myself if only I had the knowledge, which is a bitch,” responds Asheesh.

“The interesting things about gatherings like this is the backgrounds are different but the interests are the same. You have combined intellectual strength that doesn’t exist otherwise,” says TV. “The reason I came here is because there’s a bunch of people I knew online and wanted to meet them in real life but I also met others.” He turns to Asheesh again. “I saw on the wiki that you were from CC so that’s why I hunted you down.”

The hope is that this playful exchange will result in real-world benefits, but that takes time. In the 28 months it’s been running, there’s only one project everyone knows about that’s on its way to reality, assuming that’s defined as funding and measurable outcomes.

David Weekly, who was there at the beginning, had a start up company already but brought a side project to the first event. “He bought a domain that night, finished it that night, and a few days later had 1000 users,” says co-founder Jeff Lindsay, 21.

“Supposedly it’s now the biggest PBWiki collaborative site on the net. He recently raised a lot of money from a VC firm that now funds this party.”

There’s a semblance of structure to the 12-hour party. As people arrive, they mill around networking. To make this easier, guests are issued with name tags on entry and coloured spots to indicate which programming language they work in, black for Perl, blue for Python, green for PHP, red for the trendy newcomer Ruby on Rails.

After a while, they get down to business. The myriad rooms of the house have been completely reorganised: rows of tables are festooned with power boards; whiteboards adorn most walls (they start out with “use me!” emblazoned on them but by the end of the night, someone has altered this to “abuse me”). The living room has people on all three couches and on the floors, intently working on projects.

Later on, there will be lightning talks, five-minute presentations on a variety of cutting-edge topics on the lawn.

One of the talks is a demonstration by Sigurd Magnusson, visiting from SuperHappyDevHouse New Zealand. His company, SilverStripe, produces extremely simple-to-operate, open-source content management systems that are now being used by the New Zealand government. For him, being here is the ultimate networking opportunity.

“I was in the USA specifically to get the right people interested in our open-source project,” he says. “San Francisco has a concentration of influential programmers, and I couldn’t ask for a better means for getting on a level playing field with them. I can showcase what we’re doing with SilverStripe and have them on board as a peer or friend, rather than some pesky sales person making a cold call.”

For Sigurd, SuperHappyDevHouse was better than an introduction. “We were sharing ideas, technical knowledge, and demonstrating stuff for technical merit rather than asking people to buy my product.”

The result, he hopes, is wider than just a single sale. It’s viral marketing: other influential geeks will blog about the company, or “at least recall us so when we do some more great stuff, they are receptive to our achievements and will boast about it to their friends, colleagues, etc,” says Sigurd. He’s looking forward to returning — all the way from Wellington — for the next one, where, he says, the plan is to “actually work on some neat technology, wherein I have 50% of the skills and idea, and someone else will have the other half.”

There is a critical mass of developers in Silicon Valley. Geeks have crossed the country to be part of the mythos. By the height of the party, around 9pm, there are more than 145 attendees. Co-founder Tom Harrison, 25, doesn’t think there’s anywhere else you could get more than 100 people every six weeks to a party like this “that don’t all work at your company”.

The co-founders, young as they are, are very aware of their heritage. Tom’s uncle was a member of the famous Homebrew Computer Club of Cupertino in the 70s. His father, whose house we’re in now, was the founder of Quantum, the hard drive company. Tom went to high school with Steve Wozniak’s kids.

“One of the earliest things about Silicon Valley was [that] the early hackers came from a communalistic hippie mentality: the early 60s and 70s, the Homebrew Computer Club,” says Jeff Lindsay. “People would be very cooperative. That’s what bootstrapped Silicon Valley into being a tech bleeding edge area. I think DevHouse contributes to that and keeps Silicon Valley healthy.”

“People move here because of stuff like this event,” says Tom.

‘Stuff like this event’ is permission to step outside the boundaries of the everyday. It’s outside the rules of the sales book or even, temporarily, the bottom line. It’s the new collaborative garage.

Eric Tiedemann, a 41 year old with grey-streaked hair working on an entirely new programming language, sums it up. He speaks quietly but intensely about what it means to design. He quotes Nassim Nicholas Taleb — discovery doesn’t come through design, it comes through tinkering.

“Go forth and tinker, SuperHappyDevHouse,” he says, quietly.

Profiles
Kirrily Robert, 32
Lives: Melbourne, Australia
Regular job: Just quit working at realestate.com.au
SHDH status: first timer
Working on: Perl programmer interested in a variety of development. Looking to move to the Bay Area, so interested in networking and making contacts. Currently installing an instance of Lambda Moo for two friends as a training exercise, because she’s “gratifying a whim”. “It’s retro Second Life,” she says.
Reactions:

Robert S, 26
Lives: San Francisco, California
Regular job: Declined to say
SHDH status: first timer
Working on: Trying to integrate Java and Bluetooth.
Reactions: It’s been a frustrating day, because I’m working on something that isn’t really working out. But I’ve learned a lot. The event was great, fantastic. I just needed information on what I want to do. It’s something that’s not well documented online because it’s usually done by companies.
Lot of interesting ideas floating around. People working on anything and everything.

Meredith L Patterson, 30
Lives: San Jose, California
Regular job: CTO of her own company, Osogato
SHDH status: Old hand (5th time here)
Working on: Showing people the Defon badge she and her friends hacked at this year’s Defcon Conference. There was a contest for hacking the badge. “We hacked the badge so it was a line level meter for a song playing through an iPod. It ended up being really simple: only one input we needed to find and constantly update.”
Reactions: The idea of repurposing stuff is just fun for me. I like doing things that people just wouldn’t come up with. There’s always somebody [at SHDH] with some project I’ve never heard of before and it expands my knowledge for what can be done. Before Defcon, I’d never hacked a micro-controller before. I end up meeting new people and finding out what they’re doing and finding out how their projects have synergy with what I’m working on.

Mike Lewis is 21. He’s rake thin, with dark hair, an eyebrow piercing and a winning smile. We’re in a large beautiful home in Los Altos, near San Jose, California. There are more than a hundred people here, drinking and partying. Mike bounces over to our photographer. “Do you work with film?” he asks. “I want to show you something!” He’s pulls out his own camera, a Canon Powershot A710. He’s hacked it so it works as a light meter.

This is definitely not your ordinary party. This is SuperHappyDevHouse. Every second person has a laptop in front of them. One room is filled with couches and people sprawl on the floor in between. Another has rows of tables with power strips and coders typing intently.

It’s Mike’s first time here. He works in a new trendy programming language called Ruby-on-Rails, so his name tag has a red spot on it. He’s here to meet other creative people and that’ll help him find like-minded programmers at the party. Different spots indicate other programming languages. Green is PHP, Blue is Python, Black is Perl.

The parties evolved out of the ashes of another scene that got too big. “David Weekly used to have huge parties called SuperHappyFunHouse in this small mansion,” says Jeff Lindsay, 21, one of the co-founders of SHDH. “The last one the FBI was on high alert.”

“It was a SWOT team,” chimes in Tom Harrison.

“He lived there with like five people,” Lindsay continues. “They had full on DJs, bar tenders.”

Instead, Weekly started to host slightly lower-key movie nights. “And I said, what if we bring our laptops and work on stuff?” says Lindsay. “Finally I got him to try it and we got like 20 people. That old crowd was people in high places, and it kind of bootstrapped into the success of this.”

“I started wondering if this could scale. Could we do this with a lot of people? But I didn’t have a venue.” Jeff knew Tom had all that infrastructure from the LAN party days.

The house belongs to Tom’s Dad, Joel, founder of Quantum Corporation and a self-confessed “start-up junkie”, but as his name badge attests, he’s just ‘The Dad’. “Throughout high school, Tom was involved with hosting LAN parties. He could accommodate 100 people. It evolved into this,” says Harrison Senior.

That was 2005. Now the parties attract more than 150 programmers and friends over their 11-hour duration and switch monthly between two houses.

The founders are keenly aware of Silicon Valley’s DIY heritage. Tom was the same age as some of Steve Wozniak’s kids at Los Gatos High School. Woz used to work the audio for some of the school plays. It’s a small community.

“One of the earliest things about Silicon Valley was the early hackers came from a communalistic hippy mentality. You know, the early 60s and 70s, the Homebrew Computer Club,” says Jeff. “People would be very cooperative. That’s what bootstrapped Silicon Valley into being a tech bleeding edge area. I think DevHouse contributes to that and keeps Silicon Valley healthy.”
The walls of the house are covered in Barbara Harrison’s gorgeous quilts and adorned with large white boards emblazoned “use me!” Of course, someone has changed one to “abuse me”.

Out on the porch there’s more chatter but just as many laptops. Robert, 26, sits with his bright green hair trying to work out some bugs in a Java program he’s developing. On the table between him and Amit (“Why should I tell you my age?) is primary-coloured Lego blocks bound up with green logic boards and chips, a USB cord snaking back to Amit’s PC.

So, Amit, what are you working on? “I don’t know. I just bought all these parts and now I’m trying to learn from them,” he says. “The site is makingthings.com — they have a controller kit and then a bunch of random accessories. The computer is reading the sensors. It sends information back to the motors. That’s about it. It doesn’t do much yet. I don’t have any hopes for it yet.”

It’s 6.15pm. We still have six hours to go. In the family room, Kirrily Robert, 32, Liz Henry, 38, and Danny O’Brien, 38 are currently installing Lambda Moo, an old-style virtual world. “I’m gratifying a whim,” says Robert. “It’s retro Second Life”.
“If you can work out how to run it in a Cheroot jail, that’d be hot,” says Danny.

What?

“The ReadMe recommends that,” he says. Liz has purple hair, an eyebrow piercing and bare feet, along with half the rest of the patrons. Danny has a sweet English accent and a T-Shirt declaring his support for privacy and free speech.

Funnily enough, in the other room is Erik Ostrom, who ran the original Lambda Moo for a number of years. He is somewhat bemused about Kirrily’s enthusiasm for the old space and doesn’t tell her who he is. He’s quiet and unobstrusive, just another programmer with a laptop. “There’s something strange about being famous amongst a very limited number of people,” he says.

Not every body is playing with software. Downstairs by the pool is Nick Papadakis, 44, who’s playing with models of DNA and has virus models that have been printed out using a 3D colour printer. He enthusiastically explains all about helices and crossover bindings to anyone who stops by. “It’s a research project I was doing at CalTech a couple of years ago, to use DNA as a structural material to make very tiny objects. Then my friend Paul Rothemund had a breakthrough and made it much easier to think about making arbitrary patterns. He realised he could use multiple crossovers to hold a single piece of DNA into any shape.” Paul’s the one who made the cover of Nature with a smiley face made out of DNA. Nick is looking for collaborators and funding. But what has this got to do with SHDH?

“I have no idea. This is an anti-computer thing,” he says, holding up the model of DNA molecules. “This is mostly just to talk to people. It doesn’t hurt that one of my friends invented 3D printing.”

At 8.33pm, Zack G, 19, exclaims “Omigod!” He turns to the people next to him. “The Facebook sourcecode has been leaked!” He types it immediately through to the irc channel being broadcast on the wall.  “Facebook sourcecode leaked. Facebooksecrets.blogspot.com.”

At 9.45pm, on the front lawn, we’re treated to five-minute lighting talks by a bevvy of hacker brains. One is from SuperHappyDevHouse New Zealand, where SilverStripe is creating software used by the New Zealand government.

The most exciting of these talks is from Meredith L Patterson, 30, CTO of Osogato. She and her husband Len Sassaman, 27 — with a little help from some friends — won the challenge to hack their visitor badge from the recent hacker conference, Defcon. The badge had originally had scrolling red text down the face of it that also spelled DEFCON if you waved it in the air. The DEFCON program contained a lengthy poem by the badge’s creator about its inner workings.

“The idea of just repurposing stuff is just fun for me,” says Patterson. “I like doing things that people just wouldn’t come up with.” She and Sassaman turned the badge into a line meter, soldered an iPod shuffle to it and then their friend “Tongan” found them a rapper via a World of Warcraft buddy. The rapper just happened to be in the studio somewhere in Michigan and recorded the poem against music. Their hack won and the track was played — through the iPod — at the DEFCON awards ceremony.

“It had 16kb of flash and 512 bytes of RAM and I realised we couldn’t do a Fourier transform in that space. Initially we thought we’d need to find an analog to digital transformer chip but there was one on board. It ended up being really simple: there was only one input we needed to find and constantly update.”

It’s her fifth SuperHappyDevHouse. Even though she’s a star this time with a cluster of impressed kids around, she’s modest. She’s here for collaboration and synergy. “There’s always somebody with some project I’ve never heard of before and it expands my knowledge for what can be done. Before Defcon, I’d never hacked a micro-controller before.”

The atmosphere is invigorating, inspiring, intense but unrealistic. This is essentially play. Asheesh Laroia is 21 and works for Creative Commons. He’s sitting with “TV”, 30 and they’re laughing every five minutes. They are, in many ways, the heart of SHDH. For both of them, it’s the first time here. They met each other for the first time about four hours ago. Now they’re working together on “three projects, maybe four”.

“It’s more about trading what we’ve already done,” says TV. “Like the anti-spam thing.”

Asheesh says, “It’s handy because he can tell me it’s impossible.” They fall back into talking with each other.

TV: It’s always fun to be asked to write something but it’s sad to say “you’re doomed”.

A: It’s something I’ve been thinking about for ages. And now you’ve told me why it won’t work. Using all the same arguments I would have given myself if only I had the knowledge, which is a bitch.

“The interesting things about gatherings like this is the backgrounds are different but the interests are the same. You have combined intellectual strength that doesn’t exist otherwise,” says TV. “The reason I came here is because there’s a bunch of people I knew online and wanted to meet them in real life but I also met others.” He turns to Asheesh again. “I saw on the wiki that you were from CC so that’s why I hunted you down.”

If this playful exchange results in real-world benefits, then fine, but that’s not the outcome for most. In the 28 months it’s been running, there’s only one project that’s on its way to reality, assuming that’s defined as funding and measurable outcomes.

David Weekly, who was there at the beginning had a start up company but brought a side project to the first event. “He bought a domain that night, finished it that night, and a few days later had 1000 users,” says Linsday. “Supposedly it’s now the biggest PBWiki collaborative site on the net. He recently raised a lot of money from a VC firm that now funds this party.”

It’s hard not to be aware that the house is enormous, built from one man’s good fortune, in a world where “any boy can be President” but in reality, only one out of 380 million people can actually hold that title. Towards 1am in the hot tub, one young man talks about dropping out of his computing degree, moving here to California to chase the dream, and how different his life was growing up. The lights of the upper storey shine into the darkness.

Eric Tiedemann, a 41 year old with grey-streaked hair sums it up. He speaks quietly but intensely about what it means to design. He quotes Nassim Nicholas Taleb — discovery doesn’t come through design, it comes through tinkering.

“Go forth and tinker, SuperHappyDevHouse,” he says, quietly.

By Rosanne Bersten

1985. For two years running, the International Symposium on Organization Transformation has had incredibly dull, very traditional conferences where nothing much got done, except, oddly, when the conference wasn’t officially happening. People start to ask, “how come the best part of the conference is the coffee break? How do we make this one continual coffee break?”

The result is a conference with no agenda, no organising committee, and surprisingly, almost no stress. Harrison Owen writes a book about it — Open Space Technology: A User’s Guide — and these theories later lead to an enormous variety of people trying the method for their needs.

Unlike other conferences where everything is set in stone and there are set times where a group of people are forced to listen to an “expert” who does nothing but talk, open spaces involve the participants at every step.

X marks the spot

Brendan Harkin, who has been running the x|media|lab (pronounced cross-media lab) since 2003, uses open space methodology to run creative incubators for new media projects.

Small teams book in for consultation meetings with mentors over a couple of days or a long weekend. There are also plenary sessions where everyone gets together to share ideas and present progress so far.

It’s this combination of structure and absolute freedom to brainstorm, along with up-close access to successful mentors that feeds the “anything is possible” atmosphere.

Despite having run 10 labs now, Harkin is still hugely excited about the process. “It’s self-organising and self-selecting,” he says. “The teams have a chance to see all the mentors speaking at the conference day, so they can sort out who they want to work with. Then it’s completely up to project teams to program their own lab. No-one is managing that other than them.”
Harkin says that the organisers first let a theme arise that is topical and relevant. Then they find “the best people around the world” to act as mentors. “The x is cross-discipline, cross-media, cross-platform, cross-cultural. We don’t just assume that the cream of the industry is in San Francisco.”

They announce the theme and mentors and let projects nominate themselves. Teams pay a nominal amount to participate — most of the funding is from major sponsor Nokia and government funding. Organisers select teams based on how much value the mentors can add to the project and most likely project to succeed. After that, organisers stand back and let it happen. Harkin says it’s a “really joyful experience”.

x|media|lab is just one creative incubator. Founded almost ten years ago, the American Film Institute runs a Digital Content Lab that director Suzanne Stefanac says “echoes the dual precepts that guide all AFI’s educational efforts: Learn by doing, and study with the masters.”

DCL also chooses projects for prototyping that “promise true innovation with broad applicability” and brings together teams of “first-tier volunteer mentors drawn from the worlds of design, production, technology, strategy, and business”.

Imagining the future

An open space like this is something outside of day-to-day experience; the idea is to kickstart thinking processes that aren’t normally “allowed” to exist. If the aim is creativity and innovation, knocking out stultifying drudgery is step one.

Step two is removing expectations, developing trust and getting back to a sense of play, according to Professor Lizbeth Goodman, Director of the SMARTlab Digital Media Institute at the University of East London. She does this using theatre games and voice work: shouting, singing and laughing. “People remember some previous version of themselves that hadn’t yet been taught to think in boxes. When you free up someone’s body movement, you free up their mind.”

The space has to be safe — nobody has a personal stake, no one is going to lose kudos with their boss. And participants have to be open to what’s about to happen. “In a truly collaborative atmosphere, you have to come to it deciding that you don’t know everything. Someone else may have a more interesting answer than you,” says Martha Ladly, associate professor of design at the Ontario College of Art and Design.

Some people in the lab would be actively discouraged from interacting in normal circumstances. “The AFI [puts] together people who would normally be separated because of competition,” says Dale Herigstad, Chief Creative Officer at Schematic TV who has mentored at x|media|lab, the AFI’s DCL and another lab called Crossover. In fact, he says, DCL has an unofficial motto: “Leave the guns at the door”.

During the incubator, the variety of people makes for fascinating conversation. Marc Weiss was a documentary maker who got involved with the first Crossover lab in the US. For him, cross-disciplinary collaboration opens up opportunities in entirely new directions. “As a new media artist understood what tools an independent film maker used to create stories, they started thinking in new ways about what they’d done before. It was like a third category. Separately they couldn’t imagine it, but once in the room together that third category wasn’t such a huge step to take,” he says.

The speed of information exchange is important too. “From what I’ve experienced [at x|media|lab|, there’s a certain quickness that needs to happen in order to engage creatively with the group,” says Herigstad. “We’ve got an hour to move around with somebody. I’m not unfamiliar with them because each has already given a presentation, but there’s a certain pressure to figure this out fast. I’m freshly confronted with a set of challenges from a group.”

The rapidity of interaction forces intuition, something Goodman thinks is vital. Blink and you miss it. Blink. You know what’s going to happen next. “When you’re forced to trust in a very quick way, you do. Intuition is how you know when it’s safe to move or think differently. In the creative, dynamic land of innovation, we need to reclaim intuition and trust ourselves.”

The conversations that occur in this context are animated and intense. “You’re talking about what you’re doing. There’s a point to your conversation. You’ve got one hour,” says Harkin. At the same time, it’s brainstorming, “unstructured thinking out loud with people who are interested, who will participate in that thinking with you.”

“I think intensive conversational mentoring is a very valuable way of learning, both for a person and a project,” says Andrew Lowenthal, co-founder of the engagemedia project that went through x|media|lab in 2005.

Watching those rapid conversations occur is like watching a professional form of speed dating.

The way Harkin describes it, it’s pretty close. “You’ll meet 30 or 40 people who know all about you, you form relationships and then you’ll know them for ever.”

You’re also getting access to a level of person you normally would not be able to reach: CEOs, creative directors, high-level producers. “There’s such a wonderful spirit to it. You’re almost becoming friends with them. Six months later, they’re sending me e-mail and asking advice,” says Herigstad.

Of course, participants also keep in touch with their peers in a lab. Lowenthal feels that the speed-dating format leaves little time for inter-project learning and that projects can also mentor each other and share mutual challenges.

A longer process allows for a deeper development of the projects. At the AFI lab, for example, teams meet over a six-month period. “The AFI lab was good because there was a long period of time, going from rough to finished prototype,” says Herigstad.

After the thrill

engagemedia went into the lab with a fairly developed concept, a small amount of funding and a basic spec.
What they got out of it was a refining process for their concept. “Each person drilled us on it in a different way. It made us more up-front about what we were doing; we hadn’t been pushing the political aspect. At the end the people were convincing us of the project’s value. That was a real confidence booster.”

After the lab, the serious work begins. There’s a danger that a lab can be a “back-slapping operation” where every one is so chuffed at how bright and creative everyone else is that it becomes a cannibalistic feast of self-congratulation. The engagemedia project, for example, needed funding and a serious level of technology development the team hadn’t been expecting. “I walked out the door feeling good and confident but I don’t think I thought ‘OK, this project’s going to take off now’ because the problem of funding was still very present and no one offered us money during the workshop!” says Lowenthal. Engagemedia launched its open-source video distribution software platform Plumi in July this year and is now set to get back to its original aim of being a video-sharing site for activist video.

Ladly is very familiar with this effect and notes that “you do have to take things to the field and test it out and then bring it back to the lab”. When there’s no room in the lab for this sort of iterative design, she recommends creating “quick and dirty demos” so you can test your assumptions.

Rule of the elite

While the process of an incubator lab is inspiring, thrilling and seemingly innocuous when it’s creative folks wanting to translate a film narrative into a mobile phone game, it sounds less so when applied to “top level professionals from across the biopharmaceutical, FMCG, petrochemical and chemical industries”. Throw in the folks who run governments and control water supplies and it resembles something out of Ben Elton’s Stark.

SmartLab Exchange, held in February this year in London, brought together exactly those people, at an elite, invitation-only do where “each delegate design[ed] their own agenda of interactive workshops, personal meetings, networking sessions and keynote presentations”.

The format can be applied in a number of ways. The same high-level brainstorming and rapid prototyping applied to non-government organisations meeting with key infrastructure providers could kick-start changes in war-torn areas thanks to lateral solutions that otherwise wouldn’t have occurred to those involved. Then, just like every other dream that comes out of a highly-charged, mind-altering, adrenalin-filled brainstorming retreat, it’s just a teensy weensy matter of translating it into reality.

While there, she also wrote the following articles:

• Tulse Luper Suitcases (preview, 64, October 2006)
• Riverdance (Earthcore 2006) (64, October 2006)
• Party against Poverty (64, November 2006)
• A Scanner Darkly (film review, 64, November 2006)
• Big Mouth shortcuts (64, November 2006)
• Drink of the month: Champagne cocktails (64, November 2006)
• My Eyes! They Lie! (64, November 2006)
• The Music Genome Project (64, November 2006)
• Drive-by Dolphins (64, December 2006)
• Rooftop Cinema review (64, December 2006)
• Volver (film review, 64, December 2006)

• Drama Queens of the Damned (The Age, 05/12/00, archived version from fan site)
• Lots of sauce, hold the ambulance (Regular column, Next, SMH, 29/03/02)
• Paperless Office (Regular column, Next, SMH, 16/04/02)
• Time to rescue the Everquest addicts (Regular column, Next, The Age, 23/04/02)
• Playing Smart (Lego Mindstorms, SMH, 16/08/02)
• Oracles of Invention (Science Fiction and Inventors, The Age, 18/07/02)
• All torque and no action (High tech tools, The Age, 30/08/02)
• Dead Fashionable (20 years of goth, The Age, 13/09/02)
• Torture in the Asia-Pacific (Amnesty International Human Rights Defender, 08/04/04)
• Exercising the Ghost in the Machine (The Dues, 02/05)
• Transcript of Golan Levin/Paul Miller interview (12/09/03)
• Singing a Stream of Floating Images (Ars Electronica, The Australian, 28/10/03)
• Blogging from Baghdad (rebelcoyote profile, The Age, 01/12/03)
• The prize of their convictions (Opera House activists, The Age, 14/12/03)
• Universal Harmony (Sheva profile, The Age, 14/01/04)
• Proudly Indie Amid the Pop and Glitter (Ember Swift profile, 21/01/04)
• Nasty substance at the bottom of the hit list (GHB overdoses, The Age, 08/03/02, additional work only)
• Earthcore review (Music review, The Age Online, 10/03/04)
• Game for Anything (Cover Feature, Livewire, The Age, 10/03/04)
• Angst of Hybrid Lives (Homi Bhabha profile, The Age, 13/05/04)
• Transcript of Homi Bhabha interview
• Tulse Luper Suitcases (preview, 64, October 2006)
• Riverdance (Earthcore 2006) (64, October 2006)
• Party against Poverty (64, November 2006)
• A Scanner Darkly (film review, 64, November 2006)
• Big Mouth shortcuts (64, November 2006)
• Drink of the month: Champagne cocktails (64, November 2006)
• My Eyes! They Lie! (64, November 2006)
• The Music Genome Project (64, November 2006)
• Drive-by Dolphins (64, December 2006)
• Rooftop Cinema review (64, December 2006)
• Volver (film review, 64, December 2006)
• Deco Delight (11°south, December 2006)
• Get Folked (11°south, December 2006)
• The Happy Household (SuperHappyDevHouse feature, FastThinking, Summer 2007, pdf)
• Hatching an idea (Creative incubators feature, FastThinking, Summer 2007, pdf)