The Pirate’s Dilemma tells the story of how youth culture drives innovation and is changing the way the world works. It offers understanding and insight for a time when piracy is just another business model, the remix is our most powerful marketing tool and anyone with a computer is capable of reaching more people than a multi-national corporation.

Kevin Rose announced that Digg recently changed their algorithm to make it harder to use a cabal of friends to get your content on the front page. If you have no idea what Digg is, it’s very popular website where users submit and vote on stories and the most voted stories make the front page.

The algorithm changed the way stories get to the front page. Now, they require more “diversity” of member votes, so a group of people can’t guarantee that their story will make the front page just because they all voted.

There’s a real problem with small cabals of people getting their content too often on the home page of Digg. About half of the front page stories are submitted by the top 100 Digg members. You only have to watch Digg for a week or two to see that groups with pet causes constantly get front page status. Look, I think Ron Paul is a sharp guy and Ubuntu Linux is really neat. But too many stories about the same subjects make reading Digg boring.

Marketers are freaking out. Some even went so far as to say that if the marketers leave Digg, it runs the risk of withering. Are you kidding? That’s absolute nonsense. Digg never needed marketers to try and use the system to get attention for their customers.

I use Digg both as a user and to share stuff that I work on, like our recent ConceptShare V2 launch. We made the front page of Digg for that story, not only because we asked our friends to vote for it. I only submit stories that I think will be interesting to the Digg community, and I took a lot of care to write the title and description in a way that would be interesting to them. Most importantly for me, I’m always transparent. Those things all add up.

It’s an open secret that Digg is for sale. I’m guessing here, but I’d venture to say that a key reason Digg hasn’t been acquired yet is their community. The Digg community is notoriously young, male and has all the charming qualities that go with being 13 and anonymous. They even had a standoff with the company (and won) over wanting to post the key to decrypt HD-DVDs, exposing Digg to considerable legal risk.

Digg needs to prove to potential acquirers that it can adapt to outsmart people gaming the system, intentionally or not. The service itself needs to encourage good behavior and discourage bad behavior, because the latter can easily ruin the experience for everyone. If that makes it a little harder for me to get a story I submit to the front page, well so be it.

I’ll be presenting a case study at Case Camp Toronto 6 next Tuesday, November 20th. My topic will be “Building compelling identity in social media spaces” where I will present my online identity as a case study for how to build audience and brand awareness.

This is a bit different than the average Case Camp presentation because I’ll be talking about how my personal brand mixes with my personal life online. The trick will be to make it relevant for the business audience, and I’ve got a few ideas. I’ll also post my slides up here after the presentation. If anyone in attendance will be taping, please let me know and I’d love to post it here also.

Telling the truth to your community is very, very important. Otherwise, something like this will happen:

Why did I delete my JPG Magazine account? Cofounders Derek Powazek and Heather Champ have been booted out because they didn’t want to lie.

In one evening, Paul removed issues 1-6 from the JPG website, removed Heather from the About page, and deleted the “Letter from the Editors” that had lived on the site since day one. Paul informed me that we were inventing a new story about how JPG came to be that was all about 8020. He told me not to speak of that walk in Buena Vista, my wife, or anything that came before 8020.

Here’s where the whole “not lying” thing comes in. I just could not agree to this new story. It didn’t, and still doesn’t, make any business sense to me. Good publishing companies embrace their founding editors and community, not erase them. Besides, we’d published six issues with participation from thousands of people. There’s no good reason to be anything but proud of that.

JPG Magazine has now lost its reputation, its much loved cofounders and people are starting to leave and be public about it. Think about that the next time you’re tempted to tell a lie to your community.