A Brief Overview: Technology + Entertainment + Design
The brainchild of architect and graphic designer Richard Saul Wurman, TED was born in 1984 as a one-time conference dedicated to the convergence of technology, entertainment and design. Since then, it has grown under the helm of new media entrepreneur Chris Anderson into a global set of conferences and other events that seek to cultivate the exchange and spread of interdisciplinary ideas, broadening from its original three themes into cultural, scientific, academic and other topics. The organization is non-profit and run by the private Sapling Foundation, and is supported by 140 employees based in New York.
At the heart of TED is its main annual conference, previously held in Long Beach, California, and now held in Vancouver, Canada. Over four days, “leading thinkers and doers” are given a maximum of 18 minutes to present “the talk of their lives” in the most compelling way they can through innovative storytelling, with the goal of generating awareness and inspiring action from participants and viewers.
TED Talk from HBS Professor Amy Cuddy
Aligning Operating + Business Models to Cultivate “Ideas Worth Spreading”
We talk a lot these days about network effects, and although TED is a non-profit, it is, in many ways, a perfect example of a massive network with highly engaged users that drive its growth. Its talks have been viewed more than a billion times, and with the help of a volunteer project to subtitle talks, have been translated by more than 38,000 volunteers into more than 100 languages. It is accessible to anyone in the world with an internet connection. From the perspective of its operating model, TED is distinct in several ways that can be distilled down to its brand, its distribution and its community.
TED’s brand in fact starts with its business model: it is non-profit and non-partisan. This allows it to operate independent of any corporate, political, religious or other influences. TED generates revenues ($45 million in 2013) through charging participants upwards of $7,500 to attend its invite-only main conference, screening for prominent thought leaders and influencers in their fields who can support and spread the ideas they see on stage. TED also solicits sponsorships from companies such as Google, Coca Cola and GE, allowing them to host, for example, pre-event activities or social spaces during the conference while maintaining strict separation of church and state to ensure sponsors have no influence on content. A portion of its funding also comes from video advertising, licensing fees and book sales. This funding strategy gives TED the financial capability and reputational prestige to attract exceptional speakers – a la Bill Clinton, Jane Goodall, Bill Gates and Bono – for free (as a policy, TED never pays any of its speakers). This, in turn, draws highly interested and engaged participants, feeding the cycle.
Let’s consider the next two aspects – TED’s distribution and its community – together, as they’re closely intertwined. As a disclaimer, I am a big personal fan of TED, helped launch the inaugural TEDx conference at Penn during my undergrad years and am active in the TED New York community. Yet I’ve never attended an actual TED conference (although I have attended TEDActive, a live simulcast that happens in parallel with “big” TED). Much of what I’ve learned from TED happens not on-site, but online – and that integration of online and offline communities through an open distribution format is at the core of its growth. In 2006, TED decided to offer all of its talks online for free, something that was viewed as extremely radical at the time. This contrasted sharply with TED’s early years, during which participants had to sign NDAs to prevent public discussion of conference ideas. The following year, it began to allow independent “TEDx” events to be organized by anyone who obtains a license and follows a set of guidelines, a move that was considered similarly bold. In 2013, it leveraged that community aspect one step further by crowd-sourcing its conference speakers through a global talent search.
Such structural decisions have allowed TED to become incredibly effective at building a global base by decentralizing a community that would have cost millions to create through traditional methods (e.g., marketing). More than 10,000 TEDx conferences have been organized to date. As another proof point, take the example of Khan Academy, the online educational video platform – after its founder Salman Khan gave a TED Talk, the company’s site traffic skyrocketed, pushing its total views from fewer than seven million to more than 140 million.
“Conventional business logic would tell you that in a community like TED you have to keep your commodity scarce and expensive to retain brand value,” noted TED.com pioneer June Cohen in an interview with The New York Times. “But the same year we started releasing most of our content for free we raised our conference price by nearly 50 percent and still sold out in 12 days.”
If we think about TED as a network, then, its brand allowed it to establish credibility and obtain critical mass, and its distribution and community have allowed it to subsequently scale beyond the limited audience of its annual in-person conferences. All three advance TED’s business model of facilitating ideas to change attitudes, lives and the world.
The Wisdom – and Danger – of Crowds
As fascinating as TED’s success is the lessons it has experienced to get there. With success comes criticism, and TED has received its fair share of negative feedback. Three of the most common critiques are that it is too elitist, too simplified and too open. One manifestation occurred during a controversial episode in 2012, in which a scientific TEDx Talk from 2010 that received tremendous applause was later revealed to be largely gibberish and jargon. Widespread outcry among TED’s online community ensured after the discovery, and surfaced the question of whether too much openness (due to the TEDx format) and “dumbing down” of ideas (18 minutes is a relatively short time to convey a groundbreaking idea, particularly if it is technical) were hampering its business model.
Responding to Backlash and the Path Forward
TED’s online community managers, however, slowly rebuilt the trust of the public, showing that you cannot “manage” a crowd – or a community – through transactional exchanges or economic incentives (as there were none here). You need something stronger – a shared purpose by the community. Ultimately, TED can’t control every single talk – some will be brilliant and hilarious and moving, and others will be flat or, even worse, inaccurate. But it is also up to the same community that comprises TED to guide the organization in the direction it desires. Some uncertainty will remain, of course. But that is precisely where the opportunity exists for spontaneity and creativity to occur and spark the ideas that will be worth spreading.