The comparison approach, leveraging new behavioral science, is proving to be a startling effective way to convince people to take small steps to be more like their efficient neighbors.

To effect energy savings, Opower targets 2 areas:

• Small changes with immediate impact:  Modification to daily habits, such as turning off the lights when leaving the room or adjusting the thermostat.
• Big changes with long-term impact:  Structural, one-time activities, such as insulating the home or installing EnergyStar appliances.

But by knowing you and your energy habits, it makes targeted recommendations that you are more likely to follow. For example, it won't recommend a large structural change such as insulating your home if you are a renter. This targeting leads partner utilities to broad customer engagement; Opower claims that 85% of customers exposed to the platform take some type of direct action.

I love this type of behavioral approach because unlike efficiency regulations forced by the government, change with Opower is effected by citizens armed with greater knowledge about their own consumption patterns and habits who consciously choose to adjust their behavior. The collective impact is meaningful and it is organic, positive, and self-sustaining.

So, @sarahcuda and the TechCrunch team, next time you talk about DC and its tech scene, let's not look to 1990's AOL but 2010's Opower, a leader in innovative energy efficiency, on track to post $35 million in profits this year.

Luckily, Allie is amazing and this request is credibly reluctant, but still, it is undeniably cheesy, ugly, and has exactly the same look as such requests did 5 years ago. Worst of all for the cause, it is kind of a pain for the reader to go through the PayPal process. As cute buttons have been developed across the web, it's surprising that PayPal hasn't decided to innovate a bit upon their peer-to-peer processing to make micropayments for web content a bit easier.

But this is why I'm glad to see the launch of Flattr, a social micro-payment platform that makes it extremely easy for consumers of the web to not only "Like" content, but actually show some financial appreciation for it. What I love about their model is that participants choose a set budget for each month for their online web consumption, and that amount is divided equally among all of the authors/sites that they choose to "Flattr". So I can commit $10/month for all the ad hoc web content that I consume and if I Flattr 10 articles, then each author will get a dollar. It's a small but tangible way to say, "your content is valuable enough that it deserves more than just to be further shared."

For bloggers, aesthetically, the benefit is that Flattr is an unobtrusive button that you can put next to your Twitter or Facebook buttons without looking desparate for cash. Your readers can simply click without being taken to any other site to confirm the transaction, reducing the barriers to participation. It still remains anonymous and at the time, the reader isn't committing to any set value, so even if by the end of the month I end up Flattring 50 articles and each one only gets $0.20, I don't feel cheap at the time, which may otherwise prevent me from participating at all (for more on this phenomenon, see here).

I see Flattr as a great step forward for content creators and consumers. People deserved to be compensated for good work and consumers are willing to pay to keep the things the value going.

While the Pentagon is still investigating the source of the leaks, media outlets are speculating that they originated on interagency information sharing portals. Wired writes that PFC Bradley Manning, who is already charged with leaking classified documents to a blogger and is under investigation for the Afghanistan leakage, obtained 150,000 State Department cables through a program known as Net-Centric Diplomacy. CBS News is now suggesting that this latest batch of documents may have come from Intellipedia.

It may seem hard to believe, but the type of open sharing of information between government agencies on platforms like Intellipedia is a relatively new phenomenon. The public may gripe that too many documents are classified Secret, but even within government, issues around "need to know" and fear by some officials that sharing information outside their department will lead them to lose control of it has lead to closed information policies. Intellipedia is a small example of the movement to break down knowledge barriers and share information between government agencies (and beyond) in order to effect better outcomes in the field.

The public wants to know more about the decision making behind Afghanistan and WikiLeaks provides a rare direct from the field account (I've griped before that the field reporting from Afghanistan is dominated by contractors rather than Soldiers and Marines due to DoD policies). Some people may argue that WikiLeaks has provided value in this way, but we should consider the collateral damage.

The public also wants their government leaders and those in the field to have the best information available, whether that comes from State, Defense, Commerce, or elsewhere. In this case, a Department of Defense employee may have leaked Department of State classified cables that he was able to access online thanks to open policies. Information security officers across government are probably thinking twice about new initatives to share information both with each other and with non-traditional partners like trusted NGOs and foreign partners. A really bad outcome from today's WikiLeaks news would be a step backwards in inter- and intra-governmental transparency. Our success in Afghanistan depends on open information sharing.

Sadly, not a joke

Square will revolutionalize merchant payments. But for peer-to-peer paybacks, I'm excited about Venmo, a 100% free way for individuals to text each other payments. Users can deposit money directly into their Venmo account or have it pull from their bank. So instead of writing I O U $2.50, I can text Venmo "send Anita $2.50". We're immediately settled up and transactions costs are 0. Lovely.

Upon reflection, I also wonder if the people who participated in the pay-what-you-want with half-to-charity scenario now deduct that amount from their total giving by, for example, deciding against buying a chocolate bar from high school fundraisers. The researcher examined whether net spending in the amusement park was offset by the photo purchases (which it wasn't), but I would be interested to see a survey of the charitable pay-what-you-want participants to see if they offset their future charitable contributions based on that purchase. In that case, the bottom line to charity remains the same - the researcher just found the subset of people (about 5%) interested in charitable giving.

Ayelet Gneezy from the University of California, San Diego ran a study at an amusement park where vistors were offered the ability to purchase a picture of themselves taken on a rollercoaster ride. She analyzed purchasing habits across four different pricing options. First, she tested the results from offering the photos first for a flat fee and secondly under a pay-what-you-want model. Not surprisingly, significantly more people chose the photo in the second model, but they also offered considerably less money for the photo.

But the next test is more interesting. Gneezy first modified her flat fee offer by noting that 50% of the proceeds would go to charity. The result was a neglible increase in interest. But by instead modifying the pay-what-you-want model in the same way, interest increased significantly and the price went way up from what people "wanted" to pay before.

A summary of the results:

The impact? Both the amusement park stands to makes more money than it did before and a charity is able to receive a generous donation if this model is adopted.

What human decison making is at work here? I can think of a few reasons:

• $1 feels about right for what a photo is worth, but giving 50 cents to charity seems so little as to be embarrassing, so people give more to fall more in line with what a reasonable charitable contribution might look like ($2.66, or about the cost of a box of Girl Scout Cookies).
• A pay-what-you-want scheme seems more in line with a traditional charitable donation construct. Giving half of an amont that a for-profit company set, on the other hand, seems manipulative.

I do wonder about how well these results transfer to other domains that are not using as a base item something (a lame amusement park photo) that most people value at about 0. Pay-what-you-want works much better, I think, for things like theater performances where you might not be able to afford the flat price, but you would go if you could pay just a bit less. I wonder if you valued a show at $15, thus paid that when asked to pay-what-you-can, if you would add to that total if you were then told that half the money would go to charity. I doubt it.

The full story can be found here.

Flickr credit: Rudloff

Much like online prediction markets, eToro makes trading easy and fun, with leaderboards, discussion threads, and neat visualizations, but the truth is that the FX market is not fun and games. Participants are not betting with fake cash on who will win the World Cup in the pursuit of prizes, but rather are speculating on the currencies of real countries. The FX market serves a very important purpose: to facilitate transactions worldwide in all currencies. A collapse in currency can have very a real impact on individuals who never have even heard of the FX market and certainly never chose to gamble their future on it (ask the people of Malaysia or Thailand in 1997).

Admittedly, the concept behind eToro is brilliant: providing access to the largest financial market in the world that has largely been the domain of large financial institutions.  Even better, the market is entirely over-the-counter with no regulation or central oversight. So you can short at will, there is no up-tick rule, it operates 24 hours a day during the week, and the concept of insider trading doesn't exist. But herein lies the danger. Already, most trades are purely speculative (a full 80% where no currency ever actually changes hands) and while this influx of cash daily gives the market tremendous liquidity which is good for trade, it also puts the fate of countries' economic well-being in the hands of bankers. Adding in novice traders allured by what investor Howard Lindzon described as "Zynga for real men" would seem to make the market more volatile, not stable.

Of course, eToro's influence on the market is negligible. While $100 billion already traded on the platform is some nice volume, FX trading accounts for nearly $4 trillion daily. So novice traders can have fun and muse publicly on the geopolitical factors that will cause X country's currency to depreciate, raising their individual stature on an eToro leaderboard and maybe getting new followers to mimic their trading habits. Michael Arrington describes this all as very fun and as it goes more social, increasingly "funner".

Yet let's remember that foreign exchange trading has a real impact on lives and is not just a game. Of course, there is no reason to think that institutional investors take this into consideration, but as an individual, I can choose differently. That is why I invest in Lending Club, a platform that is also fun, but also transparent about risks, returns, and the impact on the people participating (and without the potentially devastating externalities to people outside of the market altogether).

Addendum: Hacker News has a great comment thread on this post.

“The citrus are like children, they are very fragile, very thin and they need lots of attention and effort. But the olive tree is a tough thing, it survives by its own strength.”

Photo by Moises Saman for the New York TimesI was moved today by the NYT article on severed olive and orange trees in groves across Afghanistan and the commitment of the local farmers to re-grow them. The article paints a picture of the grove's successes and trials that reflect a broader Afghan picture - massive (and competing) investments by the Americans and the Soviets in the 1980s, followed by devastation during the Taliban years, and now, the seeds of rebirth funded by American military support.

Rebuilding the groves is a worthy undertaking - with the potential to employ tens of thousands of young Afghans, this is the type of investment that will reap benefits for years to come. But the approach seems too strangely reminiscent of that of the 1980s: an initial $1.8 million gift from the U.S. military Provincial Reconstruction Team (PRT) and the expectation of years of additional governrment money to come. Indeed,

Mr. Hakim estimates that he will need foreign support for at least five more years to get the farms on track to be fully productive again. The Agriculture Ministry has begun sending modest amounts of money, but is expected to increase the budget as millions of dollars in foreign donor funds become available.

The U.S. money to kick-start the project is understandable, but in a country where corruption is rampant, is funneling future funds through the Agriculture Ministry the way to reach Gul Abbas and farmers like him for this endeavor? When the initial projects were top-down designed by the Americans in the 1980s, there were no local champions with the expertise to guide them.  But now, there is Mr. Abbas, who possesses both the knowledge and the passion - can he be reached directly?

There are microfinance institutions (MFIs) operating in Afghanistan, coordinated by the Microfinance Investment and Support Facility, Afghanistan (MISFA), but none of platforms that enable you and I to contribute - such as Kiva and Microplace - work with Afghan partners. In the Kiva model - where individual faces and stories are presented to encourage donations to MFIs - the life and future of people like Mr. Abbas are compelling.

I would love to see an Afghanistan version of Lend For Peace, a platform to lend directly to entrepreneurs in the West Bank in the belief that creating economic opportunity will reduce social sorrow. Would Americans donate directly to Afghan entrepreneurs given the opportunity? Could this be seen as a small way for average Americans to contribute to building a nation and improving the chances that the military effort will be successful?

And for Mr. Abbas and others like him upon whom rests the future of a prosperous Afghanistan, access to loans, rather than handouts from the Americans and skimmed grants from the government, may offer a more sustainable way to build a market economy.

But if you're willing to add more stress and uncertainty to your travel planning, check out Off & Away, a Swoopo-like platform to auction off luxury hotel rooms at bargain pricing. As in Swoopo, the hook comes in the form of costly bids. In order to raise the price of the room by $0.10, you need to place a "bid" which costs you $1.00. As the clock winds down, each additional bid raises the countdown by 30 seconds, so theoretically it could go on forever, in reality, the last couple of minutes take about 45 minutes, from what I've seen.

I've discussed my opinion (hint: it's negative) of Swoopo before and most of that analysis applies here. While I generally love online markets that open up new buying/selling opportunities, the Swoopo and Off & Away model is market distortion, not market efficiency. Bidding is more of a game of luck of getting in at the exact moment than a mechanism to determine true market value.

Here is an interesting statistic: only one of the top 10 government IT contractors was founded after the 1960, and that is Dell, who provides the computers, not the software.