Back in 2002, Ross Mayfield co-founded Socialtext, a company that sells enterprise wikis to companies looking to collaborate on key projects and improve products and customer service.

True to form for a Silicon Valley start-up, Mayfield and his co-founders started the company with $5,000 cash and a $400 eMachine as the company's first server, which the 37-year-old president and chairman now uses as a stand for the monitor in his office at the company's headquarters in Palo Alto. Since its founding, Socialtext has taken a few healthy rounds of venture capital funding and claims the likes of such companies as Kodak, Dell, and Nokia on its customer list.

CIO's C.G. Lynch chatted with Mayfield to see what the Socialtext wiki is all about and what it might mean to companies with traditional IT systems.

CIO: Tell me about how you came up for the idea for Socialtext.

Mayfield: Back in 2002, I co-founded the company with three other people. What we saw were these new kinds of tools emerging in the middle of the first recession for the Valley. A lot of blogging took off solely because of the high rates of unemployment. We saw an opportunity with these tools, which were first arising for consumers, to adapt them for enterprise use. I wanted to start an enterprise blogging company but was smart enough to listen to my co-founder and CTO who showed me what a wiki was as well. We picked that as the starting point for this journey.

Ward Cunningham invented the wiki 11 years ago, initially as an open-source tool. The dominant use of wikis was a small engineering group using it for project communication and lightweight documentation and as a result accelerating project cycles. Then as we came on to the scene, one of the things we focused on was making these tools simpler and easier to use for regular business people. So the use case shifted, at least for us, to non-technical users using it as a general and simple collaboration tool.

CIO: Why wikis and other pieces of social software for the enterprise? What's wrong with current corporate systems?

Mayfield: The way organizations adapt, survive, and be productive is through the social interaction that happens outside the lines that we draw by hierarchy, process, and organizational structure. The first form of social software to really take off to facilitate these discussions was e-mail. The "reply all" feature was fantastic for forming groups, communicating, and getting some things done, but it's also been stretched thin. Because of its popularity, we use it for everything. It creates what the Gartner Group calls occupational spam, and it makes up 30 percent of e-mail. It's when you CC, BCC, or reply to all. Consistently, with our customer base, that 30 percent moves over to the wiki. So e-mail is a big part of it.

Traditional enterprise software is the other. If you think about traditional enterprise software, it's top down, highly structured, and is made for rigid business rules. The entire goal is automation of business process to drive down cost. But the net result is someone goes and buys SAP, implements the same 15,000 business processes that it comes with, and all they're doing is paying the ante to stay in the round. They don't gain any competitive advantage. Most employees don't spend their time executing business process. That's a myth. They spend most of their time handling exceptions to business process. That's what they're doing in their [e-mail] inbox for four hours a day. E-mail has become the great exception handler.

Unfortunately, what it means is all the learning disappears because it's hidden away in people's inbox. It's not searchable and discoverable or findable through tags and folksonomies. And so just simply moving some of that exception handling into a more transparent, searchable, and discoverable wiki means that you have the opportunity to gain a different kind of competitive advantage. John Seely Brown and John Hagel wrote this book recently called The Only Sustainable Edge, and there they suggest that the greatest source of sustainable innovation is how you're handling these exceptions to business process.

So at the edge of your organization, there are all kinds of exceptions that are happening. If you handle them appropriately, you can adapt to where the market is going. You can adapt to the problems you have in your existing structures. So I've always looked at it as we're doing the other half of enterprise software: Making this unstructured information transparent.