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Innovator of the Year: Joshua Schachter, 32

How tags exploit the self-interest of individuals to organize the Web for everyone.

In 2001, a wonky Wall Street quantitative analyst named Joshua Schachter had a problem. In the late 1990s, he’d started a website called Memepool, which was a simple collection of Web links that he had found interesting, useful, or both. Over time, as Memepool’s users began sending in links they thought the site should feature, Schachter’s personal list of bookmarked Web pages grew to more than 20,000 entries, far more than any folder system could handle. To bring some order to the chaos, Schachter wrote an application called Muxway, which allowed him to manage his links by giving each a short label, or tag–enabling him to call up all the pages that were tagged, say, “Wi-Fi” or “math.”

People continued to view Schachter’s list of interesting links; but now, because of Muxway, those links were organized around tags. Pretty soon, about ten thousand people every day were stopping by. Schachter realized that even with (or perhaps because of) the deluge of information available on the Web, people were still hungry for good links, and they were interested in finding out what others thought was interesting. He also figured that if tagging was helpful to him, it could make storing and finding bookmarks easier for everyone else. So with that in mind, he rewrote Muxway, and in 2003 he launched it as a website called Within a couple of years, hundreds of thousands of people were using, and it had metamorphosed into a system for organizing not just individuals information but the whole Web. Today it exemplifies the promise of what’s often called Web 2.0–websites and online applications that rely on user participation to achieve their greatest value.

At its core, is a bookmarking system: a place to store all those links that don’t fit in a “Favorites” folder. But it took off because it offers everyone what Muxway had offered Schachter: a way not just to collect links in one place but also to organize them. As people trawled the Web, they could tag interesting pages using whatever words they wanted, and would keep track of them all.

“You bookmark for one of two reasons: either you think you’re going to need that page again somewhere down the road, or you don’t have time to read it now, but you want to read it later,” Schachter says. “The challenge is, once you’ve got all these bookmarks, how do you manage them? The problem were really dealing with is memory and recall, and using technology to make your memory more scalable.”

Schachter deliberately avoided imposing any rules about how people could use tags. He knew it wouldn’t work: “If I went in there and said, Hey, you’re using that tag wrong, people would just tell me to fuck off,” he says. He also knew that letting people use their own tags–instead of choosing them from a menu he provided–would make more likely to be genuinely useful. Each person who uses is effectively coming up with an idiosyncratic system for classifying the Web: an article about, say, Dallas Mavericks owner Mark Cuban might be tagged “Mavericks” by one person, “crazy” by another, and “Mavericks” <i>and</i> “crazy” by a third. ( allows users to pin as many tags on a page as they want.) “If you’re trying to tag a page in a way that’ll get you back there someday, you want to use your vocabulary, not someone else’s,” he says.

Though has become a way for users to collectively organize information across the Web, it did not begin as anything so grand. Rather, it emerged as a way to help individuals manage their own information. “For a system to be successful, the users of the system have to perceive that it’s directly valuable to them,” Schachter says. “If you need scale in order to create value, it’s hard to get scale, because there’s little incentive for the first people to use the product. Ideally, the system should be useful for user number one.” This makes different from systems that rely on what economists call “network externalities”–meaning they’re valuable only if lots of people use them. It was hard to get the first person to buy a fax machine, because a fax machine is useless if you’re the only one who has one. But even for the first person to use–Schachter–it worked.
As it happens, lots of people found valuable right from the start, making it a proverbial grassroots hit. Schachter did no advertising, no marketing. But the site was so successful that in 2005 he quit his day job at Morgan Stanley, raised some money from outside investors, and launched as a regular business. Less than a year later, Schachter sold to Yahoo, where he now works in the Groups business, running the site full time.

Schachter’s original focus on the individual user has never wavered, and it remains essential to the way works. But as more and more people started to use the site, something interesting happened: when aggregated, all those individual tags created a useful system for categorizing Web pages. On the surface, doesn’t seem designed to do this, since each person makes his or her own tags, and there’s no overarching authority to maintain order. But even with no one in charge, the product of all the individual decisions of’s users is surprisingly well organized–and surprisingly intelligent. That is, if you do a search on for all the pages that are tagged with a particular word, you’re likely to come up with a remarkably good–and well-rounded–selection of related Web sources. In other words, although didn’t need lots of users to be useful, once it had lots of users, it became valuable in an entirely new way. Almost accidentally, it became an excellent tool for making sense of the Web.

What’s users were creating–without necessarily knowing they were doing so–was what technology blogger Thomas Vander Wal has dubbed a “folksonomy,” a flexible system of organization that emerges organically from the choices users make. We’re all familiar with the alternative, the kind of rule-bound, top-down classification scheme that Internet theorist Clay Shirky calls “ontological” in nature. The Dewey decimal system is an example: every object is assigned its place in a hierarchical system of organization, and every object is defined as, ultimately, one thing: a book goes in one place in the library and nowhere else. In a folksonomy, by contrast, definitions are fuzzier. With, the same Web page has many different tags, which often aren’t even related to one another, and no explicit rules are being followed. Web pages are therefore listed not in one place but in many places, and sometimes pages aren’t quite where you might expect them to be. So folksonomies are messier than “ontologies” are.

What has shown, though, is that folksonomies’ imperfections are outweighed by their benefits. In the first place, folksonomies are dynamic rather than static. A Web folksonomy thus allows us to reclassify content according to our changing interests. An academic paper that’s interesting today might be equally interesting a decade from now–but why it’s interesting, why people care about it, might be very different. A traditional categorization system has a hard time dealing with this: once the essence of an object is defined, it’s supposed to be defined for good. In a folksonomy, the reclassification happens almost automatically–as people start tagging the paper with new, more relevant tags, for example. Web folksonomies are also better at capturing the multiple meanings and uses that a given site has, rather than constraining the possible range of meanings. It’s useful, after all, to learn that many people have tagged stories about Mark Cuban “crazy,” in addition to indicating everything else that’s important about him. Finally, folksonomies are cheap. Imagine the labor and the time it would take to construct a traditional organizing system for all the pages on the Web, and then to maintain and update it. Then recognize that is producing a ceaselessly revised organizing system–at almost no cost.

The real magic of folksonomies–and the reason sites like can create so much value with so little hired labor–is that they require no effort from users beyond their local work of tagging pages for themselves. It just happens that the by-product of that work is a very useful system for organizing information. This distinguishes from other high-profile Web 2.0 sites like Wikipedia and Digg, which people contribute to without reaping any obvious personal benefit.

Schachter thinks the fact that does not rely on the selflessness of its users makes it more robust than it might otherwise be. “Im not a big believer in expecting a large number of people to act in an altruistic fashion,” he says. “You want to rely on people to do what they do.” The echoes of Adam Smith are unmistakable: is a system that, like a healthy market, turns individual self-interest into collective good. now has more than 300,000 registered users, and it generates as much traffic in a single day as it did in its entire first year. But even as tagging has become an industry buzzword that businesses are straining to associate themselves with, Schachter is confronting the fact that the vast majority of people on the Web don’t tag at all–and probably have never even heard of tagging. So how does he expand his sites audience? “You have to solve a problem that people actually have,” Schachter says. “But it’s not always a problem that they know they have, so that’s tricky.” He remains more focused on the site’s value to the individual than on its folksonomic aspects, because to him, helping individuals store and recall information is far more important than classifying the Web. And it may well be individual value that’s most likely to keep growing.

Regardless of what happens, Schachter has already shown that out of the seeming chaos of hundreds of thousands of independent and eccentric judgments, order and wisdom can emerge. And if you think about in terms of his idea of making memory scalable, he’s also helped create a rather remarkable social memory system, in which all of us are able to find more and better information than we would on our own. As Schachter puts it, “The one who stashes a page doesn’t have to be the one who ends up recalling it. is a storer of one’s own attention. But it also means you can share it with others.” And that ability will only become more valuable over time. “The better you understand the world, the better you’ll do,” Schachter says. “I really think that in the end, more understanding wins.”

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