Tag: customers

2018: When Customers Finally Take Charge

In Spring of 2012, Harvard Business Review Press published The Intention Economy: When Customers Take Charge. Not long after that, word came from  The Wall Street Journal that Robert James Thomson, then Managing Editor of the paper, wanted to use the opening  chapter of the book as a cover essay for the paper’s Review section.  Amazon at the time was already giving that chapter away as a teaser for book sales, so I ended up compressing the whole book to a single 2000-word piece.  Here’s how the cover looked:

I thought, “Holy shit, that looks like the cover of Dianetics or something.” Also, “I never would have used that headline.”

But that’s why they pay big bucks to headline writers. That one proved so terrific that I want to use it as the title of my next book, to follow up on The Intention Economy now that it’s finally about to happen.

The timing is right because tectonic shifts now shaking business were twelve years in the future when I started ProjectVRM (in Fall of 2006) and six years in the future when The Intention Economy came out.

Let’s frame those shifts with a pair of graphics from Larry Lessig‘s 1999 book Code and Other Laws of Cyberspace, and its successor in 2005, Code v2. The first is this dot, representing the individual:

The second is this graphic, representing four constraints on the individual:

Each of those four ovals, Larry wrote, constrain or regulate what the individual can do in the networked world.

With ProjectVRM, our work is about turning around those arrows, empowering individuals to exert influence—or agency (the power to operate with full effect)—in all four directions:

In other words, to be a god.

In Code, Larry explains the four constraints with the example of smoking:

If you want to smoke, what constraints do you face? What factors regulate your decision to smoke or not?

One constraint is legal. In some places at least, laws regulate smoking—if you are under eighteen, the law says that cigarettes cannot be sold to you…

But laws are not the most significant constraints on smoking. Smokers in the United States certainly feel their freedom regulated… Norms say that one doesn’t light a cigarette in a private car without first asking permission of the other passengers…

The market is also a constraint. The price of cigarettes is a constraint on your ability to smoke —change the price, and you change this constraint…

Finally, there are the constraints created by the technology of cigarettes, or by the technologies affecting their supply… How the cigarette is, how it is designed, how it is built —in a word, its architecture—affects the constraints faced by a smoker.

Thus, four constraints regulate this pathetic dot—the law, social norms, the market, and architecture—and the “regulation” of this dot is the sum of these four constraints. Changes in any one will affect the regulation of the whole… A complete view, therefore, must consider these four modalities together.

But the Internet was not designed for pathetic dots. By specifying little more than how data is addressed and moved between any two points in the world, across any variety of networks, the Internet gave every conscious entity on that world a lever so huge  Archimedes could only imagine it. I explain this in How tools for customers have more leverage than tools for business alone:

Archimedes said “Give me a place to stand and a lever long enough and I can move the world.”

Alas, Archimedes didn’t have that place. Now all of us do. It’s called the Internet.

Before the Internet, the best way to improve business was with better tools and services for businesses, or with new businesses to disrupt or compete with existing ones.

With the Internet, we can improve customers. In fact, that’s where we started when the Internet showed up in its current form, on 30 April 1995. (That’s when the Net could start supporting all forms of data traffic, including the commercial kind.) The three biggest tools giving customers leverage back then (and still today) were browsers, email and the ability to do anything any company could, starting with publishing.

But then we did what came most easily to business back in the Industrial Age: create new businesses and improve old ones. Nothing wrong with that, of course. Just something inadequate.

Worse, we created giant businesses that only gave customers leverage inside their walled gardens. By now we’ve lived so long inside Google, Apple, Facebook and Amazon (called GAFA in Europe) that we can hardly think outside their boxes.

But if we do, we can see again what the promise of the Net was in the first place: Archimedes-grade power for everybody. And there are a lot more customers than companies in that population.

This is why a bunch of us have been working, through ProjectVRM, on tools that make customers both independent and better able to engage with business.

Now let’s look at one changed constraint: Law.

The tectonic shift happening there is the General Data Protection Regulation, or GDPR. It was created by the European Union to constrain what  Shoshana Zuboff calls surveillance capitalism. Nearly all that surveillance is for the purpose of providing ways to aim ads at tracked eyeballs wherever they go. The GDPR forbids doing that, and imposes potentially massive fines for violations—up to 4% of global revenues over the prior year. I am sure Google, Facebook and lesser purveyors of advertising online will find less icky ways to stay in business; but it is becoming clear that next May 25, when the GDPR goes into full effect, will be an extinction-level event for tracking-based advertising (aka adtech) as a business model.

But there is a silver lining for advertising in the GDPR’s mushroom cloud, in the form of the oldest form of law in the world: contracts. These are agreements that any two parties can form with each other.

So, if an individual proffers a term to a publisher that says,

—and that publisher agrees to it, that publisher is compliant with the GDPR, plain and simple. (I unpack how this works in Good news for publishers and advertisers fearing the GDPR and in many other pieces in the People vs. Adtech series.)

Those terms will live at Customer Commons, a non-profit spin-off of ProjectVRM. “CuCo” was created to do for personal terms what Creative Commons did, and still does, for personal copyright. (Creative Commons was a brainchild of Larry Lessig when he was a fellow at the Berkman Klein Center. We steal from the best.)

Our goal is to have our first agreement—the one two paragraphs up—working for both readers and publishers before the GDPR deadline in May. We have help toward that from the Cyberlaw Clinic at Harvard Law School and the Berkman Klein Center, from other friendly legal folk, and from equally friendly techies, such as those behind the JLINC protocol.

If publishers accept this olive branch from individuals (who are no longer mere “consumers” or “users”), it will demonstrate how existing law and a simple new architecture can alter both markets and norms in ways that make the world better for everybody.

In October 2016, I announced  the end of ProjectVRM’s Phase One and the start of Phase Two.

Making VRM happen in 2018  will complete Phase Two. At the end of it our original thesis—that free customers are more valuable than captive ones—will either prove out or wait for other projects to do the job. Either way we’ll be done. All projects need an end, and this will be ours.

I believe free customers will prove more valuable than captive ones—to themselves, and to everyone else—for two reasons. One is that the Internet was designed to prove it in the first place (and no amount of screwage by governments or service providers can stuff that genie back in the bottle). The other is what I just tweeted here:

Services providing countless different ways for countless different businesses to provide good “customer experiences” () can’t answer the customer’s need for one way to deal with all of them. In fact, they only make things worse with every new login and “loyalty” program.

In other words, we need #customertech. Simple as that. That’s the lever that makes each of us an Archimedes. We’ll get it, from one or more of the projects and companies already on our developments list—and from others who will come along to answer a need that has been in the market since long before the Internet showed up.

So consider this is a recruitment post. We have a lot of work to do in a very short time.

 

 

Dawn of the Living Infrastructure

So how do we get out of this place?

infrastructure_of_living_dead

Let’s face it. Mike Arrington’s problem with the iPhone, Om Malik’s problem with AT&T, the FCC’s problem with Apple + AT&T together, my own problems with Cox, Dish Network and Sprint, David Pogue’s problem with the whole freaking cell phone industry … all of these are a great big WAAAH! in the wilderness of industrial oblivity to what customers want. We’re in the graveyard of what Umair Haque calls the zombieconomy. We’re living in Night of the Living Dead and complaining that the zombies want to eat us alive.

What they really want is to strap us down while they bleed us for small change—tiny amounts of ARPU. They do this, for example, by forcing us to sit through “The … number … you … have … dialed … eight … zero … five … seven …” until a small ka-ching happens somewhere deep in their billing system, so you get bled whether or not you’ve left (or received) a message. David Pogue:

Is 15 seconds here and there that big a deal? Well, Verizon has 70 million customers. If each customer leaves one message and checks voicemail once a day, Verizon rakes in — are you sitting down? — $850 million a year. That’s right: $850 million, just from making us sit through those 15-second airtime-eating instructions.

It was JP Rangaswami (disclosure: I consult JP and his company, BT) who first pointed out to me that the primary competence of phone companies isn’t technical. It’s financial. They’re billing machines. That’s their core competency. And it was r0ml who pointed out, way back when he was with AT&T Wireless (before it became Cingular, and then the AT&T we all know and hate today), that phone companies arrived at the holy grail of micropayments decades ago. They don’t charge small amounts, but they know how to add them up, and round piles of microminutes into billions of dollars.

A better movie metaphor is The Matrix. We’re all wet cell batteries inside giant phone company billing systems. The machines took over a long time ago, and they’re still running the world.

Not that acting like machines does them much good in the long run. Umair Haque:

Profit through economic harm to others results in what I’ve termed “thin value.” Thin value is an economic illusion: profit that is economically meaningless, because it leaves others worse off, or, at best, no one better off. When you have to spend an extra 30 seconds for no reason, mobile operators win — but you lose time, money, and productivity. Mobile networks’ marginal profits are simply counterbalanced by your marginal losses. That marginal profit doesn’t reflect, often, the creation of authentic, meaningful value.

He adds,

The fundamental challenge for 21st Century businesses — and economies — is learning to create thick value. We’re seeing the endgame of a global economy built to create thin value: collapse. Why? Simple: thin value is a mirage — and like all mirages, it ultimately evaporates. In the 21st Century, we’ve got to reconceive value creation.

Constructive Capitalists are disrupting their rivals by creating thicker value. Thick value is sustainable, meaningful value — and a new generation of radical innovators is wielding it like a strategic superweapon.

Rick Segal thinks Mike Arrington‘s CrunchPad is one of those superweapons. Here’s what the Crunchies say will look like:

crunchpad-near-final-design

Sez Rick,

No, this probably isn’t the next Apple or Motion Computing, but here’s the secret.

Let’s assume there are just 1000 people out of all the TechCrunch people in the world that want this device.  If this device gets made and sold to 1000 happy people and the result is a manufacturing world and process which can now do these “one off” type devices, the game changes.

That’s why I want this device to get made. It begins a high profile (and positive) disruption at the point of manufacture and that can mean exciting things to you.

One way to blow up silos and walled gardens is de-verticalize industry itself. Not by making it horizontal (that’s too abstract), but by making it personal. Rick’s angle here is to go all the way to the source, and make manufacturing personal.

That’s what Rick thinks Mike & Co. are doing here. I also think the Crunchpad is compliant with what Dave says in this post here:

I’ve been through this loop many times, this is Mike’s first. The only platform that really works is a platform with no platform vendor, and that’s the Internet.

Right. The Crunchpad, as I understand it (and the Crunchies have explained it) is a Net-native device. Standards-based. Commodity parts. Full of open source stuff. The platform is the Net. The vendor is TechCrunch, but trapping users isn’t their game. They’d rather have thick value than thin.

So how do we contribute, besides paying cash for goods? By being constructive customers, rather than passive consumers. That’s what Rick is calling for here, and why we, as free and independent customers, can choose to support something that uses the Net as the platform, and is built to be user-driven.

Think about it. Is the Crunchpad crippled by any deals with a major vendor of any kind? Is it locked into any phone company’s billing and application approval systems? Is it locked into any one industry’s Business-as-Usual? No.

So who is in the best position to contribute to its continued improvement, besides the Crunchies themselves?

You. Me. Users. Customers.

We can drive this thing. Even if what Dan Frommer says is right, and Apple comes out with the world’s most beautiful pad ever, and pwns the whole category, there’s more vroom for improvement in the Crunchpad, because Apple’s device will be closed and the Crunchpad will be open. Or should be.

You listening, Mike?

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