The value of the network: Metcalfe’s omissions.

ARTWORK:

Title: Initiation ceremony in Viennese Masonic Lodge, during reign of Joseph II
Artist: Ignaz Unterberger (1748-1797)
Medium: Oil on Canvas
Location: Wien Museum, Vienna, Austria
Time: circa 1786

Last week I was discussing with a very dear friend of mine on the value of modern networks. He is a mystic, a philosopher and a Freemason, and the discussion, although started from the famous Metcalfe’s aphorism of N-squared, grew fast to the point of discussing how social networks start from a selected elite and fast become the tools to be used by the hoi polloi. And as the discussion was flowing fueled by a very nice Cabernet from Chile, and after we discussed the modern market anomalies like facebook, it hit us: Metcalfe’s N-squared is a very old fashioned approximation to the value of a network, and sadly is no longer applicable. In the modern large-scale social and economic systems this equation for sure must take new forms.

Now this is very important for me to understand. Our company, Biotronics3D, wishes to become eventually a community facilitator, and not just a product provider. And although our community is that of doctors, and it is rather elitistic and not accessible to the public, still it is one that has the potential to grow fast to a very large size. Monitoring and measuring the value of our 3Dnet community is paramount to us, as it defines our compass of innovation and growth. For sure it cannot be as simple as N-squared. I am very sorry Mr. Metcalfe, but I think you have ignored a very important dimension of modern networks:

And this is the value of the network related to the Information flowing across it.

My friend’s insights on the subject were invaluable as information (or the secure exchange of it) became an important asset on early Masonic networks.

Based on our company’s experience of facilitating and fostering doctors’ networks, but also my friend’s philosophical insights, we had a go in trying to improve Metcalfe’s equation and this is what we came with:

The personbyte

Doctors need to form networks because of one important consideration: the limited ability of humans to embody knowledge and know-how. To fight their individual limitations, they need to collaborate. Thus they form networks that allow them to embody more clinical knowledge and know-how. Those networks are essential to manage complex diseases that require knowledge and know-how that cannot be embodied in one individual. A new term was introduced recently to signify the maximum personal capacity to hold knowledge: the personbyte. What we have here is the concept of the clinical personbyte.

The concept of clinical personbyte suggests a relationship between the complexity of the activity (for example the complexity of the disease to be managed) and the size of the network to be executed (directly related to the N-squared aphorism).  Activities that require more clinical personbytes need to be executed by larger clinical networks (like for example large academic NHS Trusts). Thus if our theory is right then the value of a clinical network must take into consideration that:

1. Simple clinical activities will be more ubiquitous (thus the value of a network with those activities is diminished)
2. Diversified clinical networks will be the ones capable of executing complex disease management activities (thus the value of a network is increased the more multi-disciplinary in nature it is, with varied clinical personbytes across the network).
3. Over the long run, the value of our clinical network will approach the complexity of the accumulated knowledge.

All those predictions were empirically testable and consistent with all the data we had from our customers. Interesting enough, they became important also in the growth of Masonic lodges in the 20^th century.

And as, me and my friend were opening a new bottle of wine, we concluded that as life goes on, and entropy continues to increase, our society continues its rebellious path marked by pockets rich in information; pockets that Erwin Schrodinger (of the feline paradox reputation) used to call the out-of-equilibrium corners of the networks. We constantly form and cull social and personal relationships, make professional alliances, beget children, and of course laugh and cry. This is what Metcalfe saw and tried to measure. But what he didn’t see was the beauty of information on the network. And this is what modern networks are all about: owning the responsibility of perpetuating this godless creation.

I missed you K and I hope we have the opportunities to share our wine more often.