problems

You are currently browsing the archive for the problems category.

IQ and Caste

November 13, 2010 in Ideas, Journalism, Life, News, problems, Quote, School | 11 comments

Smart people SLEEP LATE yells the headline of this opinion piece in the Winnipeg Free Press. It begins,

Sleep is a fundamental component of animal biology. New evidence confirms that, in humans, its timing reflects intelligence. People with higher IQs (intelligence quotients) tend to be more active nocturnally, going to bed later, whereas those with lower IQs usually retire to bed sooner after nightfall.

Let’s stop right there and ask a few questions:

  • Does each of us actually have a “quotient” — a sum — of intelligence?
  • Is intelligence actually measurable as a sum?
  • Do you believe you have an IQ? Do you know what it is?
  • Would you be willing to share your IQ scores? Why? Or why not?

I took many IQ tests during my years in school. And since my mother taught in the public school I attended through the 9th grade, she had access to all my records. Between those and others I’ve seen, my known IQ scores have an eighty point range: from quite smart to quite dumb. Those scores are among the many facts that convinced me long ago that IQ testing is meant mostly for one thing: ranking people. It’s made to privilege some, to keep privileges from others, and to move the rest as a herd through school or some other system. It legitimizes the arbitrary sorting of human beings into castes based on poor measures of one quality that makes each of us very human, and therefore also very different from every other human being. In a cruel way, it seeks to measure the immeasurable, and to sort us out accordingly.

IQ testing became popular in an age when eugenics was still taken seriously: when it was assumed by privileged populations that races and ethnic groups differed by intelligence and other measures. Today we go out of our way to avoid that kind of thinking, at the official level. But the proclivity persists. Assuming that people have an IQ — intelligence measured as if by a thermometer — is still more than common, despite abundant evidence to the contrary. That’s what we see in reports like the quoted one above.

So here’s my advice to anybody writing about the topic: recognize that IQ is a one-time score on a test, not a true measure of the very human and highly arcane personal quality we call intelligence. Don’t say “Those with higher IQs.” Say “Those with higher IQ scores.” The difference is between humanity and that which seeks to replace it with a number. It should help to think about the harms caused by the latter.

Networds

November 8, 2010 in Berkman, Blogging, Business, Events, Ideas, infrastructure, Politics, problems, Technology | 6 comments

Live blogging Barbara van Schewick’s talk at Maxwell Dworkin here at Harvard. (That’s the building from which Mark Zuckerberg’s movie character stumbles through the snow in his jammies. Filmed elsewhere, by the way.)

All the text is what Barbara says, or as close as I can make it. My remarks are in parentheses. The talk should show up at the MediaBerkman site soon. When it does, go there for the verbatim version.

(In the early commercial Net, circa 1995 forward), the innovator doesn’t need to ask permission from the network provider to innovate on the network. Many different people can innovate. Individuals at the network’s ends are free to choose and to use. Obligation to produce a profit in the future isn’t required to cover development costs, because those costs are often cheap.

Innovators decide, users decide, low costs of innovation let a large and diverse group can participate.

The network is application-blind. That’s a virtue of end-to-end. (Sources Reed, Saltzer and End-to-End Arguments in System Design.)

Today the network operators are in a position to control execution of programs. “Imagine you have this great idea for a video application… that means you never have to go back to cable again. You know you have a fair chance at the marketplace…” In the old system. Not the current one. Now the network provider can stand in the way. They say they need to manage bandwidth, or whatever. Investors don’t invest in apps or innovators that threaten the carriers directly.

Let’s say Google ran the network when YouTube came along. Would YouTube win this time, like it did the first time? (Disregard the fact that Google bought YouTube. What matters is that YouTube was free to compete then in ways it probably would not now—so she suggests.)

In the early Net (1995+), many innovators decided, and users decided. There was little uncertainty about the supportive nature of the Internet.

User uncertainty or user heterogeneity? More and better innovation that better meets user needs. More ideas realized. (That’s her slide.)

With fewer or less diverse innovators, fewer ideas are realized.

Her book concentrates on innovators with little or no outside funding. (Like, ProjectVRM? It qualifies.)

One might ask, do we need low cost innovators now that there are so many billionaires and giants like Google and Yahoo? Yes. The potential of the early Web was realized by Netscape, not Microsoft. By Amazon, not by Barnes & Noble.

Established companies have different concerns and motivations than new innovators. Do we prefer innovation from large self-protecting paranoid companies or small aggressive upstarts?

Users decide vs. Network providers decide. That’s the choice. (The latter like to choose for us. They did it with telephony and they did it with cable TV.) In Europe some network providers prohibit Skype because it competes with their own services. Do we want them to pick winners and losers? (That’s what they want to do. Mostly they don’t want to be losers.)

Users’s interests: Innovators decide. Users decide Network can’t control Low costs of innovation, very large and diverse group of innovators. (Her slides are speaker’s notes, really.)

Network providers’ interests: They are not interested in customer or user innovation. In fact they oppose it. They change infrastructure to protect their interests. There is a gap between their private and public interests: what economists call a Market failure.

Do we need to regulate network providers? That’s what Network neutrality is about. But the high cost of regulation is a difficult question. Not saying we need to preserve the Net’s original architecture. We do need to protect the Net’s ability to support innovation.

Let’s pull apart network neutrality and quality of service (which the carriers say they care most about).

Best effort is part of the original design. Didn’t treat packets differently. Doing that is what we call Quality of Service (QoS).

Question: How to define discrimination? We need to ask questions. Such as, do we need a rule against blocking? Such as against Skype. One defining factor in all NN proposals is opposition to blocking. If Comcast slows down YouTube or something else from Google to favor it’s own video services (e.g. Xfinity), that’s discrimination.

Option 1: allow all discrimination…. or no rule against discrimination. That’s what the carriers want. Think of all the good things you could get in the future that you can’t now if we allow discrimination, they say. (Their promise is a smooth move of cable TV  to the Net, basically.)

Option 2: ban all discrimination … or treat every packet the same. This is what Susan Crawford and others argue for. Many engineers say “just increase capacity,'” in suipport of that. But that’s not the best solution either. It’s not the job of regulators to make technical decisions about the future.

All or nothing doesn’t work. Nether allow all discrimination nor Ban all discrimination.

Application blindness is the answer.

Ban discrimination based on applicaitons. Ban discrimination based on applications or classes of aplicaitons.

Fancast vs. Hulu. YouTube vs. Hulu. Allow discrimination based on class of aplication… or like treatment. Treat internet telephony vs. email differently. But don’t favor Skype over Vonage. (This is hard to describe here. Forgive.)

Problem 1. Distorting competion. Capturing some value from gaming, for example, by favoring it as a class. Give it no-delay service while not doing that for VoIP. But both are affected by delays. In the Canadian network management proceding, we found that P2P is slowed down either all the time or during congestion time. That allows real-time to work well. But then real-time video came along. What class do they say that belongs to? We don’t really know what the Canadian carriers did, but we do visit the question of what they should do if they discriminate by class. Thus…

Probem 2. High cost of regulation. (Self-explanatory, so it saves me the effort to transcribe.)

Problem 3. User choice. Support from the network. The moment you require support from the network (as a user or app provider), you throttle innovation.

Constraints on Network Evolution allows quality of service: 1) Dfferent classes of service offered on a non-discriminatory basis; 2) Users able to choose wheter and when to use which class of service; 3) Net provider only allowed to charge its own Internet service sustomers for use of different classes of service*. So network providers don’t destroy competition any more. Users get to choose which quality of service to use. And the network provider doesn’t need to provide QoS except in a general way. They’re out of the market equation.

(Bob Frankston is across the aisle from me, and I can see the word balloon over his head: “Why constrain thinking with ‘services’ at all? Why not just start with connectivity? Services keeps us in the telecom bottle.”)

Constraints on network evolution. Cost of regulation.

MY SOLUTION: (not on screen long enough.. there was more on the slide)

Preserve factors that have fostered application innovation ≠ Preserve original archictecture of the internet.

Final question to talk about. Why care about application innovation?

Have you ever tried to explain to your partner’s grandmother why she should use the Internet? You don’t argue about sending packets back and forth. You talk about grandchildren pictures, and being able to talk for free. That comes from innovation at the ends, not the carriers.

We need to protect the sources of innovation.

Yochai: What do you do with Apple iPhone? Tremendous user adoption being driven precisely by a platform that reverses many of your assumptions smack in the middle othe most controversial boundary, regarding wireless. (Not verbatim, but as close as I could get.)

Barbara: People say, “Look, I’ve got a closed device supporting lots of innovation.” No, you need to think about this differently. Apple created a device with open interfaces that supported lots of innovation. So it moved us from a world where few could innovate and it was costly, to a world where many could and it was cheap. Proves my point. Now we have an experiment with iPhone vs. Android. Apple controls, Google doesn’t. Now we get to see how this plays out. We’re starting to see where lots of innovators are moving to Android as well. More are starting with the Android, experimenting and then moving to the iPhone. The cost of starting on the Android is less. So we have two shifts. I think we will se the platform with no control being more successful.

Every network neutrality proposal has a network management exception. Mine doesn’t.

Q from the audience; Some apps still need a lot of money, whether or not the network is neutral. Building a big data warehouse isn’t cheap. And why is innovation all that matters? What happens when it is actually hurtful to rich incumbents such as news channels?

Barbara: I agree. If you’re a rich company, your costs of entry are lower. Kids with rich parents have advantages too. To me the network itself is special because it is the fundamental point of entry into the marketplace. We want the impediments to be as low as possible. The cost of starting Facebook for Mark Zuckerberg was actually rather low. He scaled after getting VC money, but he got a significant number of users first, without a lot of costs. I do think this is very important. Innovation is often disruptive, sure. But that’s not a reason for messing with this fundamental infrastructure. If newspapers have a problem with the Net, fix the papers. Separate that problem from the infrastructure itself. As a general matter, one of the good things about the Net’s infrastructure is that it allows disruption.

Q: What about companies as users? (Can’t summarize the answer.)

Bob Frankston: If your grandmother is on a phone… (couldn’t get what Bob said or make sense of Barbara’s response… sorry).

Q: (What about subsidies? I think.) The theory of two-sided markets. With papers, subscibers and advertisers. With the Net, users and app providers. If you’re attached to one platform, the providers are likely to attach to one side. (I think that’s what she’s saying.) This gives the provider a way to monopolize. In Europe, where there is more competition, there are more trade-offs. I think what would happen if we forced the net to be neutral, would we solve the problem by charging a different way. Subsidies, tax breaks. Perhaps a solvable problem. Let’s say we allow the carriers to charge extra (for premium use?). We break the system at its core. It doesn’t make sense to give up the value of the Internet to solve a problem that can be solved a different way.

Q: A question about managed vs. unmanaged isochronous delivery. We should be thinking about what happens when the carriers start charging for better service. (But they already do, with service tiers, and business-grade service (with assigned IP addresses, unblocked ports, etc.). The Europeans give the regulators the ability to monitor quality and impose minimum standards. This has a whole bunch of problems What really are acceptable levels? for example. The Europeans think this is sufficient to discipline providers. Well, in the end there might be some apps that require strict guarantees.

Okay, it’s later now. Looking back over this, I have to say I’m not sure it was a great idea to live-blog it. There are others who are better at it. Within the Berkman fold, David Weinberger is one, and Ethan Zuckerman is another. Neither were in the room, so I thought I’d give it a try. Again, visit MediaBerkman for the actual talk. Or just go get her book, Internet Architecture and Innovation. I got one, and will start reading it shortly.

The picture above, by the way, is one of a set I shot at the talk.

The Data Bubble II

October 31, 2010 in Business, Cluetrain, Events, Future, Journalism, Live Web, problems, VRM | 16 comments

In The Data Bubble, I told readers to mark the day: 31 July 2010. That’s when The Wall Street Journal published The Web’s Gold Mine: Your Secrets, subtitled A Journal investigation finds that one of the fastest-growing businesses on the Internet is the business of spying on consumers. First in a series. That same series is now nine stories long, not counting the introduction and a long list of related pieces. Here’s the current list:

  1. The Web’s Gold Mine: What They Know About You
  2. Microsoft Quashed Bid to Boost Web Privacy
  3. On the Web’s Cutting Edge: Anonymity in Name Only
  4. Stalking by Cell Phone
  5. Google Agonizes Over Privacy
  6. Kids Face Intensive Tracking on Web
  7. ‘Scrapers’ Dig Deep for Data on the Web
  8. Facebook in Privacy Breach
  9. A Web Pioneer Profiles Users By Name

Related pieces—

Two things I especially like about all this. First, Julia Angwin and her team are doing a terrific job of old-fashioned investigative journalism here. Kudos for that. Second, the whole series stands on the side of readers. The second person voice (you, your) is directed to individual persons—the same persons who do not sit at the tables of decision-makers in this crazy new hyper-personalized advertising business.

To measure the delta of change in that business, start with John Battelle‘s Conversational Marketing series (post 1, post 2, post 3) from early 2007, and then his post Identity and the Independent Web, from last week. In the former he writes about how the need for companies to converse directly with customers and prospects is both inevitable and transformative. He even kindly links to The Cluetrain Manifesto (behind the phrase “brands are conversations”).

In his latest he observes some changes in the Web itself:

Here’s one major architectural pattern I’ve noticed: the emergence of two distinct territories across the web landscape. One I’ll call the “Dependent Web,” the other is its converse: The “Independent Web.”

The Dependent Web is dominated by companies that deliver services, content and advertising based on who that service believes you to be: What you see on these sites “depends” on their proprietary model of your identity, including what you’ve done in the past, what you’re doing right now, what “cohorts” you might fall into based on third- or first-party data and algorithms, and any number of other robust signals.

The Independent Web, for the most part, does not shift its content or services based on who you are. However, in the past few years, a large group of these sites have begun to use Dependent Web algorithms and services to deliver advertising based on who you are.

A Shift In How The Web Works?

And therein lies the itch I’m looking to scratch: With Facebook’s push to export its version of the social graph across the Independent Web; Google’s efforts to personalize display via AdSense and Doubleclick; AOL, Yahoo and Demand building search-driven content farms, and the rise of data-driven ad exchanges and “Demand Side Platforms” to manage revenue for it all, it’s clear that we’re in the early phases of a major shift in the texture and experience of the web.

He goes on to talk about how “these services match their model of your identity to an extraordinary machinery of marketing dollars“, and how

When we’re “on” Facebook, Google, or Twitter, we’re plugged into an infrastructure (in the case of the latter two, it may be a distributed infrastructure) that locks onto us, serving us content and commerce in an automated but increasingly sophisticated fashion. Sure, we navigate around, in control of our experience, but the fact is, the choices provided to us as we navigate are increasingly driven by algorithms modeled on the service’s understanding of our identity.

And here is where we get to the deepest, most critical problem: Their understanding of our identity is not the same as our understanding of our identity. What they have are a bunch of derived assumptions that may or may not be correct; and even if they are, they are not ours. This is a difference in kind, not degree. It doesn’t matter how personalized anybody makes advertising targeted at us. Who we are is something we possess and control—or would at least like to think we do—no matter how well some of us (such as advertisers) rationalize the “socially derived” natures of our identities in the world.

It is standard for people in the ad business to equate assent with approval, and John’s take on this is a good example of that. Sez he,

We know this, and we’re cool with the deal.

In fact we don’t know, we’re not cool with it, and it isn’t a deal.

If we knew, the Wall Street Journal wouldn’t have a reason to clue us in at such length.

We’re cool with it only to the degree that we are uncomplaining about it—so far.

And it isn’t a “deal” because nothing was ever negotiated.

On that last point, our “deals” with vendors on the Web are agreements in name only. Specifically, they are a breed of assent called contracts of adhesion. Also called standard form or boilerplate contracts, they are what you get when a dominant party sets all the terms, there is no room for negotiation, and the submissive party has a choice only to accept the terms or walk away. The term “adhesion” refers to the nailed-down nature of the submissive party’s position, while the dominant party is free to change the terms any time it wishes. Next time you “agree” to terms you haven’t read, go read them and see where it says the other party reserves the right to change the terms.

There is a good reason why we have had these kinds of agreements since the dawn of e-commerce. It’s because that’s the way the Web was built. Only one party—the one with the servers and the services—was in a position to say what was what. It’s still that way. The best slide I’ve seen in the last several years is one of Phil Windley‘s. It says,

HISTORY OF E-COMMERCE

1995: Invention of the Cookie.

The End.

About all we’ve done since 1995 on the sell side is improve the cookie-based system of “relating” to users. This is a one-way take-it-or-leave-it system that has become lame and pernicious in the extreme. We can and should do better than that.

Phil’s own company, Kynetx, has come up with a whole new schema. Besides clients and servers (which don’t go away), you’ve got end points, events, rules and rules engines to execute the rules. David Siegel’s excellent book, The Power of Pull, describes how the Semantic Web also offers a rich and far more flexible and useful alternative to the Web’s old skool model. His post yesterday is a perfect example of liberated thinking and planning that transcends the old cookie-limited world. The man is on fire. Dig his first paragraph:

Monday I talked about the social networking bubble. Marketers are getting sucked into the social-networking vortex and can’t find their way out. The problem is that most companies are trying small tactical improvements, hoping to improve sales a bit and trying tactical savings programs, hoping to improve margins a bit. Yet there’s a whole new curve of efficiency waiting in the world of pull. It’s time to start talking about savingtrillions, not millions. Companies should think in terms of big, strategic, double-digit improvements, new markets, and new ways to cooperate. Here is a road map

Read on. (I love that he calls social networking a “bubble”. I’m with that.)

This week at IIW in Mountain View, we’re going to be talking about, and working on, improving markets from the buyers’ side. (Through VRM and other means.) On the table will be whole new ways of relating, starting with systems by which users and customers can offer their own terms of engagement, their own policies, their own preferences (even their own prices and payment options)—and by which sellers and site operators can signal their openness to those terms (even if they’re not yet ready to accept them). The idea here is to get buyers out of their shells and sellers out of their silos, so they can meet and deal for real in a truly open marketplace. (This doesn’t have to be complicated. A lot of it can be automated. And, if we do it right, we can skip a lot of the pointless one-sided agreement-clicking friction we now take for granted.)

Right now it’s hard to argue against all the money being spent (and therefore made) in the personalized advertising business—just like it was hard to argue against the bubble in tech stock prices in 1999 and in home prices in 2004. But we need to come to our senses here, and develop new and better systems by which demand and supply can meet and deal with each other as equally powerful parties in the open marketplace. Some of the tech we need for that is coming into being right now. That’s what we should be following. Not just whether Google, Facebook or Twitter will do the best job of putting crosshairs on our backs.

John’s right that the split is between dependence and independence. But the split that matters most is between yesterday’s dependence and tomorrow’s independence—for ourselves. If we want a truly conversational economy, we’re going to need individuals who are independent and self-empowered. Once we have that, the level of economic activity that follows will be a lot higher, and a lot more productive, than we’re getting now just by improving the world’s biggest guesswork business.

Tags: , , , , , , ,

The escape key

September 22, 2010 in Future, problems, Technology | 3 comments

I love this from Dave:

The why of it: I want to create, out of RSS, something like Twitter, but not locked up on one company’s servers. Call me an opensorcerer or a rastafarian, but I like networks that aren’t controlled by one company. Esp not a tech company.

Doing what needs to be done. Yesss.

Let’s kill Interruptive ads

September 19, 2010 in Business, Journalism, problems | 28 comments

The Web is not television, and I would like online advertisers and publications to stop treating the Web like it is. Interruptive ads such as this one at Salon…

… are meant to get 100% click-through rates, I suppose. But in too many cases — namely mine, repeatedly — they get 100% of multiple clicks that fail to go through. I don’t know why clicking on the X next to “Close and enter Salon” doesn’t work for me (on three different browsers), but it doesn’t, and that causes me to be very annoyed, mostly at Salon.

I got to that blanked-out Salon page by following this Jay Rosen tweet. Earlier today I ran across the same thing when I followed this Phil Windley tweet to this page at Freeman. There I was greeted with the same kind of interruption, this time a self-promo for the pub’s email newsletter. Clicking on that X got me through, but I didn’t like having to do that, and frankly don’t remember what I read, because I arrived annoyed. (And I’m new to that pub, which makes the interruption even more rude.)

Here’s what I believe: It doesn’t matter how much money interruptive ads make for publications on the Web. They sap the readers’ tolerance and good will, and any unnecessary amount of that is too high a price to pay. (Videos? Okay, we’re used to that on TV. But serious text-based pubs like Salon and Freeman should chill.)

Tags: , , , , ,

Keeping relationship humanized

September 17, 2010 in Business, Call center hell, News, problems, VRM | 13 comments

Ten years ago this month, on the morning after I gave this speech in Lucerne, my wife and I were walking through the restaurant at our hotel across the lake when a friendly American gentleman having breakfast buttonholed me to say he liked what I said in my talk. I thanked him and asked if he’d be at the conference again that day. He said yes, and that it would be nice to talk later.

Turns out he was the first speaker that morning. His name was , and he was the CEO of Wal-Mart. Later at lunch, which consisted of boxed food you could take out to tables by the lake, he came over to the table where my wife and I were sitting and asked if he could join us. I said sure, and we got to talking. One of the questions I asked him was why K-Mart had failed while Wal-Mart succeeded. He compressed his reply to one word: coupons. K-Mart had hooked its customers on coupons and couldn’t get them un-hooked. This tended to produce too many of the wrong kinds of customers, buying for the wrong reasons. Way too much of K-Mart’s overhead went into printing what was in essence a kind of currency — one that reduced the value of both the merchandise and the motives for buying it. By contrast Wal-Mart kept to old Sam Walton’s original guidelines, which minimized advertising and promotion, and simply promising “everyday low prices.” This saved money and helped build loyalty.

Lee’s lesson comes to mind when I read  at the . It’s too hard to compress the story, so here it is:

There’s a fascinating essay on Facebook just now from the owner of the lovely , about how Groupon nearly bankrupted her business.

The coffeeshop proprietor, Jessie Burke, was shocked at how much money the daily deals site charged to run the promotion. Groupon sold consumers a $13 Posie’s credit for $6, and then sought to keep the entire $6. Eventually, Posie’s and Groupon agreed on a 50% cut: Groupon would get $3 and Posie’s would get $3. Groupon’s $3 was almost pure profit,  but the cafe had to use its remaining $3 to cover the costs of $13 worth of cookies and coffee.

Is it any surprise the promotion was a smash? Over 1,000 customers used the promotion, but the cost imposed by those customers resulted in disastrous losses:

After three months of Groupons coming through the door, I started to see the results really hurting us financially. There came a time when we literally couldn’t not make payroll because at that point in time we had lost nearly $8,000 with our Groupon campaign. We literally had to take $8,000 out of our personal savings to cover payroll and rent that month. It was sickening, especially after our sales had been rising.

The losses would have been worthwhile if the Groupon customers had become loyal, profitable patrons but many only cared about a discount, not about what made the cafe special:

Over the six months that the Groupon is valid, we met many, many wonderful new customers, and were so happy to have them join the Posies family. At the same time we met many, many terrible Groupon customers… customers that didn’t follow the Groupon rules and used multiple Groupons for single transactions, and argued with you about it with disgusted looks on their faces or who tipped based on what they owed.

And here is Jessie Burke’s original post on the matter, at Posie’s blog.

To be fair, the bad customers were neither “Groupons” (as Jessie calls them) nor “Groupon customers” (since they didn’t buy anything from Groupon — in fact Posie’s was the real Groupon customer). They were coupon shoppers. Promotion hunters. Nothing wrong with that, of course. Most of us play that role some of the time. The problem for Posie’s is one of the oldest in retailing: promotions are good for causing traffic, but lousy for causing loyalty. And making constant promotion part of your business changes your business, literally by cheapening it.

What’s clear about Posie’s is that it’s a business built on human contact, on conversation and relationship. Not just on transactions — and least of all on discounted ones.

Relationship is personal. Even at the biggest companies, success and failure ride on personal behavior, and personal connections. “Trust breaks down first over money,” David Hodskins (my business partner of many years and a very wise dude) observes. Throwing coupons into a personal relationships, especially business ones, is a recipe for trouble.

Since the dawn of the Industrial Age, businesses large and small have also looked at individual relationships with customers as a kind of cost — one that can be reduced or eliminated, often by avoiding or de-humanizing conversations with customers. Promotions like Posie’s with Groupon are just one example of how cheapening gimmicks can actually damage a business that depends on personal relationships between a company’s people and its customers. There are many more examples, especially at larger companies, which too often turn customer support conversations into reverse : making humans sound like machines.

Making relationships work has always been both the foundation and the frontier of business. Ideally, technology should help relationships. And to some degree it does. Telephony and other “social” technologies certainly do help us stay in touch. But there are many other technologies, and uses — including some in the “social” space — that prevent or pervert relationships.

Earlier today, when I went looking for Bermuda tweeters, I went down the list of nearly (and now more than) 500 followers of @BDASun (the Bermuda Sun newspaper). A large percentage of followers are just there to promote something. On a day like today, when a hurricane is bearing down on that tiny country, you can tell the wheat from the chaff. The wheat is dealing with the hurricane (or stays quietly hunkered down). The chaff just promotes.

This has me wondering how much of “social media” today is devoted to being social in the old-fashioned literal sense, and how much is about marketing and promotion. Because I think there is a huge split between the two: a split as sharp as the one between Posie’s good and bad customers.

Turning the Tracking Tables

September 4, 2010 in Business, Ideas, infrastructure, problems, Technology, VRM | 1 comment

‘s @WhatTheyKnow tweet stream is still going strong, but we haven’t seen anything new in the series since Google Agonizes on Privacy as Ad World Vaults Ahead, on August 10. That was “fifth in a series” that had many more than five items in it. Dunno whassup with that, but my favorite follow-ups so far are from Don Marti, whose two posts on the matter are Framing discussions of web privacy and Privacy tweaks for browsers? Both put the onus on the user, rather than the websites.

Interesting angle. Go dig it.

Beyond caveat emptor

August 30, 2010 in Books, Business, Events, Ideas, Photography, problems, Quote, Technology, VRM | 7 comments

First, three posts by:

His bottom line in the last of those: “… people are saying the web dumbs us down. This is wrong. The web can dumb us down, but only if we choose to let it.” Much substance leads up to that, including many comments to the first two posts.

In the first post, JP says, “For information to have power, it needs to be held asymmetrically. Preferably very very asymmetrically. Someone who knows something that others do not know can do something potentially useful and profitable with that information.” He adds,

So when people create walled-garden paid apps, others will create unpaid apps that get to the same material. It’s only a matter of time. Because every attempt at building dams and filters on the internet is seen as pollution by the volunteers. It’s not about the money, it’s about the principle. No pollutants.

Which brings me to the reason for this post. There’s been a lot of talk about the web and the internet making us dumber.

I think it’s more serious than that. What the web does is reduce the capacity for asymmetry in education. Which in turn undermines the exalted status of the expert.

The web makes experts “dumb”. By reducing the privileged nature of their expertise.

Every artificial scarcity will be met by an equal and opposite artificial abundance. And, over time, the abundance will win. There will always be more people choosing to find ways to undo DRM than people employed in the DRM-implementing sector. Always.

Joe Andrieu responds with Asmmetry by choice.  After giving some examples, Joe adds,

These types of voluntary acceptance of asymmetry in information are the fabric of relationships. We trust people with sensitive information when we believe they will respect our privacy.

I don’t see abundance undoing that. Either the untrustworthy recipient develops a reputation for indescretion and is cut off, or the entire system would have to preclude any privacy at all. In that latter scenario, it would became impossible to share our thoughts and ideas, our dreams and passions, without divulging it to the world. We would stop sharing and shut down those thoughts altogether rather than allow ourselves to become vulnerable to passing strangers and the powers that be. Such a world would of totalitarian omniscience would be unbearable and unsustainable. Human beings need to be able to trust one another.  Friends need to be able to talk to friends without broadcasting to the world. Otherwise, we are just cogs in a vast social order over which we have almost no control.

Asymmetry-by-choice, whether formalized in an NDA, regulated by law, or just understood between close friends, is part of the weft and weave of modern society.

The power of asymmetry-by-choice is the power of relationships. When we can trust someone else with our secrets, we gain. When we can’t, we are limited to just whatever we can do with that information in isolation.

This is a core part of what we are doing with and the . Vendor Relationship Management (VRM) is about helping users get the most out of their relationships with vendors. And those relationships depend on Vendors respecting the directives of their customers, especially around asymmetric information. The Information Sharing Work Group (ISWG) is developing scenarios and legal agreements that enable individuals to share information with service providers on their own terms. The notion of a is predicated on providing privileged information to service providers, dynamically, with full assurance and the backing of the law. The receiving service providers can then provide enhanced, customized services based on the content of that data store… and individuals can rest assured that law abiding service providers will respect the terms they’ve requested.

I think the value of this asymmetry-by-choice is about artificial scarcity, in that it is constructed through voluntary agreement rather than the mechanics/electronics of the situation, but it is also about voluntary relationships, and that is why it is so powerful and essential.

I’ll let both arguments stand for now (and I think if the two of them were talking here right now they’d come to some kind of agreement… maybe they will in comments here or on their own blogs), while I lever both their points toward the issue of privacy, which will continue to heat up as more people become aware of liberties taken with personal information by Web companies, especially those in the advertising business. I hadn’t thought about this in terms of asymmetry before, but maybe it helps.

The Web has always embodied the design asymmetry of . Sites have servers. Visitors have clients (your computing device and its browser). To help keep track of visitors’ relationships, the server gives them . These are small text files that help the server recall logins, passwords, contact history and other helpful information. Cookies have been normative in the extreme since they were first used in the mid-nineties.

Today advertising on the Web is also normative to an extreme that is beginning to feel . In efforts to improve advertising, “beacons” and flash cookies have been added to the HTTP variety, and all are now also used to track users on the Web. The Wall Street Journal has been following this in its series, and you can find out more there. Improvement, in the new advertising business, is now about personalization. “It is a sea change in the way the industry works,” Omar Tawakol, CEO of BlueKai, told the Wall Street Journal. “Advertisers want to buy access to people, not Web pages.”

Talk about asymmetry. You are no longer just a client to a server. You are a target with crosshairs on your wallet.

Trying to make advertising more helpful is a good thing. Within a trusted relationship, it can be a better thing. The problem with all this tracking is that it does not involve trusted relationships. Advertisers and site owners may assume or infer some degree of conscious assent by users. But, as the Journal series makes clear, most of us have no idea how much unwelcome tracking is really going on. (Hell, they didn’t know until they started digging.)

So let’s say we can construct trusted relationships with sellers. By we I mean you and me, as individuals. How about if we have our own terms of engagement with sellers—ones that express our intentions, and not just theirs? What might we say? How about,

  • You will put nothing on my computer or browser other than what we need for our  relationship.
  • Any data you collect in the course of our relationship can be shared with me.
  • You can combine my data with other data and share it outside our relatinship, provided it is not PII (Personally Identifiable Information).
  • If we cease our relationship, you can keep my data but not associate any PII with that data.
  • You will also not follow my behavior or accumulate data about me for the purposes of promotion or advertising unless I opt into that. Nor will your affiliates or partners.

I’m not a lawyer, and I’m not saying any of the points above are either legal or in legal language. But they are the kinds of things we might like to say within a relationship that is symmetrical in nature yet includes the kind of asymmetry-by-choice that Joe talks about: the kind based on real trust and real agreement and not just passive assent.

The idea here isn’t to make buyers more powerful than sellers. It’s to frame up standard mechanisms by which understandings can be established by both parties. Joe mentioned some of the work going on there. I also mention some in Cooperation vs. Coercion, on the . Here’s a long excerpt:

What we need now is for vendors to discover that free customers are more valuable than captive ones. For that we need to equip customers with better ways to enjoy and express their freedom, including ways of engaging that work consistently for many vendors, rather than in as many different ways ways as there are vendors — which is the “system” (that isn’t) we have now.

There are lots of VRM development efforts working on both the customer and vendor sides of this challenge. In this post I want to draw attention to the symbols that represent those two sides, which we call r-buttons, two of which appear above. Yours is the left one. The vendor’s is the right one. They face each other like magnets, and are open on the facing ends.

These are designed to support what calls , which he started talking about back in 2005 or so. I paid some respect to gestures (though I didn’t yet understand what he meant) in The Intention Economy, a piece I wrote for in 2006. (That same title is also the one for book I’m writing for . The subtitle is What happens when customers get real power.) On the sell side, in a browser environment, the vendor puts some RDFa in its HTML that says “We welcome free customers.” That can mean many things, but the most important is this: Free customers bring their own means of engagement. It also means they bring their own terms of engagement.

Being open to free customers doesn’t mean that a vendor has to accept the customer’s terms. It does mean that the vendor doesn’t believe it has to provide all those terms itself, through the currently defaulted contracts of adhesion that most of us click “accept” for, almost daily. We have those because from the dawn of e-commerce sellers have assumed that they alone have full responsibility for relationships with customers. Maybe now that dawn has passed, we can get some daylight on other ways of getting along in a free and open marketplace.

The gesture shown here —

— is the vendor (in this case the public radio station , which I’m just using as an example here) expressing openness to the user, through that RDFa code in its HTML. Without that code, the right-side r-button would be gray. The red color on the left side shows that the user has his or her own code for engagement, ready to go. (I unpack some of this stuff here.)

Putting in that RDFa would be trivial for a CRM system. Or even for a CMS (content management system). Next step: (I have Craig Burton leading me on this… he’s on the phone with me right now…) RESTful APIs for customer data. Check slide 69 here. Also slides 98 and 99. And 122, 124, 133 and 153.

If I’m not mistaken, a little bit of RDFa can populate a pop-down menu on the site’s side that might look like this:

All the lower stuff is typical “here are our social links” jive. The important new one is that item at the top. It’s the new place for “legal” (the symbol is one side of a “scale of justice”) but it doesn’t say “these are our non-negotiable terms of service (or privacy policies, or other contracts of adhesion). Just by appearing there it says “We’re open to what you bring to the table. Click here to see how.” This in turn opens the door to a whole new way for buyers and sellers to relate: one that doesn’t need to start with the buyer (or the user) just “accepting” terms he or she doesn’t bother to read because they give all advantages to the seller and are not negotiable. Instead it is an open door like one in a store. Much can be implicit, casual and free of obligation. No new law is required here. Just new practice. This worked for (which neither offered nor required new copyright law), and it can work for r-commerce (a term I just made up). As with Creative Commons, what happens behind that symbol can be machine, lawyer or human-readable. You don’t have to click on it. If your policy as a buyer is that you don’t want to to be tracked by advertisers, you can specify that, and the site can hear and respond to it. The system is, as Renee Lloyd puts it, the difference between a handcuff and a handshake.

Renee is a lawyer and self-described “shark trainer” who has done much in the community to help us think about agreements in ways that are legal without being complicated. For example, when you walk into a store, you are surrounded by laws of many kinds, yet you have an understanding with that store that you will behave as a proper guest. (And many stores, such as Target, refer by policy to their customers as “guests.”) You don’t have accept “terms of service” that look like this:

You agree we are not liable for annoying interruptions caused by you; or a third party, buildings, hills, network congestion, rye whiskey falling sickness or unexpected acts of God or man, and will save harmless rotary lyrfmstrdl detections of bargas overload prevention, or if Elvis leaves the building, living or dead. Unattended overseas submissions in saved mail hazard functions will be subject to bad weather or sneeze funneling through contractor felch reform blister pack truncation, or for the duration of the remaining unintended contractual subsequent lost or expired obligations, except in the state of Arizona at night. We also save ourselves and close relatives harmless from anything we don’t control; including clear weather and oddball acts of random gods. You also agree we are not liable for missed garments, body parts, electronic communications or musical instruments, even if you have saved them. Nothing we say or mumble here is trustworthy or true, or meant for any purpose other than to sphincter the fears of our legal department, which has no other reason to live. Everything here does not hold if we become lost, damaged or sold to some other company. Whether for reasons of drugs, hormones, gas or mood, we may also terminate or change this agreement with cheerful impunity.

[   ]  Accept.

And for that you get a cookie. Yum.

gives a great talk in which he reduces History of E-Commerce to one slide. It looks like this:

1995: Invention of the Cookie.

The End.

Not content with that, Phil has moved history forward a step by writing KRL, the , which he describes in this post here. The bottom line for our purpose in this post is that you can write your own rules. Terms of engagement are not among them yet, but why not? It’s early. At last Friday, showed how easy it is to program a relationship—or just your side of one—with KRL. What blew my mind was that the show was over and it was past time to leave, on a Friday, and people hung out to see how this was done. (Here’s a gallery of photos from the workshop.)

And those are just some of the efforts going on in the VRM (and soon, we trust, the CRM) community. What we’re trusting (we’re beyond just hoping at this point) is that tools for users wishing to manage relationships with organizations of all kinds (and not just vendors) will continue to find their way into the marketplace. And the result will be voluntary relationships that employ asymmetry by choice—in which the choice is made freely by all the parties involved.

Tags: , , ,

The Data Bubble

July 31, 2010 in Berkman, Business, Journalism, problems, Technology | 52 comments

The tide turned today. Mark it: 31 July 2010. bubble

That’s when The Wall Street Journal published The Web’s Gold Mine: Your Secrets, subtitled A Journal investigation finds that one of the fastest-growing businesses on the Internet is the business of spying on consumers. First in a series. It has ten links to other sections of today’s report.

It’s pretty freaking amazing — and amazingly freaky when you dig down to the business assumptions behind it. Here is the rest of the list (sans one that goes to a link-proof Flash thing):

Here’s the gist:

The Journal conducted a comprehensive study that assesses and analyzes the broad array of cookies and other surveillance technology that companies are deploying on Internet users. It reveals that the tracking of consumers has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.

It gets worse:

In between the Internet user and the advertiser, the Journal identified more than 100 middlemen—tracking companies, data brokers and advertising networks—competing to meet the growing demand for data on individual behavior and interests.The data on Ms. Hayes-Beaty’s film-watching habits, for instance, is being offered to advertisers on BlueKai Inc., one of the new data exchanges. “It is a sea change in the way the industry works,” says Omar Tawakol, CEO of BlueKai. “Advertisers want to buy access to people, not Web pages.” The Journal examined the 50 most popular U.S. websites, which account for about 40% of the Web pages viewed by Americans. (The Journal also tested its own site, WSJ.com.) It then analyzed the tracking files and programs these sites downloaded onto a test computer. As a group, the top 50 sites placed 3,180 tracking files in total on the Journal’s test computer. Nearly a third of these were innocuous, deployed to remember the password to a favorite site or tally most-popular articles. But over two-thirds—2,224—were installed by 131 companies, many of which are in the business of tracking Web users to create rich databases of consumer profiles that can be sold.

Here’s what’s delusional about all this: There is no demand for tracking by individual customers. All the demand comes from advertisers — or from companies selling to advertisers. For now.

Here is the difference between an advertiser and an ordinary company just trying to sell stuff to customers: nothing. If a better way to sell stuff comes along — especially if customers like it better than this crap the Journal is reporting on — advertising is in trouble.

Here is the difference between an active customer who wants to buy stuff and a consumer targeted by secretive tracking bullshit: everything.

Two things are going to happen here. One is that we’ll stop putting up with it. The other is that we’ll find better ways for demand and supply to meet — ways that don’t involve tracking or the guesswork called advertising.

Improving a pain in the ass doesn’t make it a kiss. The frontier here is on the demand side, not the supply side.

Advertising may pay for lots of great stuff (such as search) that we take for granted, but advertising even at its best is guesswork. It flourishes in the absence of more efficient and direct demand-supply interactions.

The idea of making advertising perfectly personal has been a holy grail of the business since Day Alpha. Now that Day Omega is approaching, thanks to creepy shit like this, the advertising business is going to crash up against a harsh fact: “consumers” are real people, and most real people are creeped out by this stuff.

Rough impersonal guesswork is tolerable. Totally personalized guesswork is not.

Trust me, if I had exposed every possible action in my life this past week, including every word I wrote, every click I made, everything I ate and smelled and heard and looked at, the guesswork engine has not been built that can tell any seller the next thing I’ll actually want. (Even Amazon, widely regarded as the best at this stuff, sucks to some degree.)

Meanwhile, I have money ready to spend on about eight things, right now, that I’d be glad to let the right sellers know, provided that information is confined to my relationship with those sellers, and that it doesn’t feed into anybody’s guesswork mill. I’m ready to share that information on exactly those conditions.

Tools to do that will be far more leveraged in the ready-to-spend economy than any guesswork system. (And we’re working on those tools.) Chris Locke put it best in Cluetrain eleven years ago. He said, if you only have time for one clue this year, this is the one to get… A picture named not.gif

Thanks to the Wall Street Journal, that dealing may finally come in 2010.

To get started, I highly recommend installing TACO, the Targeted Advertising Cookie Opt-Out, or its fork, Beef TACO. There are other approaches, but these work for me.

What matters is that they show you at least some of the tracking activity that’s going on. And a little knowledge is better than none. (You can also block tracking as well.)

Meanwhile, this gives us more to talk about (and work on) at VRM+CRM 2010. Bonus barf. I don’t think we need legislation here (it’s too early and sure to have bad unintended consequences), but I also don’t think the Internet Advertising Bureau is operating in Reality.

[Later…] Jeff Jarvis thinks the Journal is being silly. I love Jeff, and I agree that the Journal may be blurring some concerns, off-base on some of the tech (see comments below) and even a bit breathless; but I also think they’re on to something, and I’m glad they’re on it.

Most people don’t know how much they’re being followed, and I think what the Journal’s doing here really does mark a turning point.

I also think, as I said, that the deeper story is the market for advertising, which is actually threatened by absolute personalization. (The future market for real engagement, however, is enormous. But that’s a different business than advertising — and it’s no less thick with data… just data that’s voluntarily shared with trusted limits to use by others.)

[Later still…] TechCrunch had some fun throwing Eric Clemons and Danny Sullivan together. Steel Cage Debate On The Future Of Online Advertising: Danny Sullivan Vs. Eric Clemons, says the headline. Eric’s original is Why Advertising is Failing on the Internet. Danny’s reply is at that first link. As you might guess, I lean toward Eric on this one. But this post is a kind of corollary to Eric’s case, which is compressed here (at the first link again):

I stand by my earlier points:

  • Users don’t trust ads
  • Users don’t want to view ads
  • Users don’t need ads
  • Ads cannot be the sole source of funding for the internet
  • Ad revenue will diminish because of brutal competition brought on by an oversupply of inventory, and it will be replaced in many instances by micropayments and subscription payments for content.
  • There are numerous other business models that will work on the net, that will be tried, and that will succeed.

The last point, actually, seemed to be the most important.  It was really the intent of the article, and the original title was “Business Models for Monetizing the Internet:  Surely There Must Be Something Other Than Advertising.”  This point got lost in the fury over the title of the article and in rage over the idea that online advertising might lose its importance.

My case is that advertisers themselves will tire of the guesswork business when something better comes along. Whether or not that “something better” funds Web sites and services is beside the points I am making, though it could hardly be a more important topic.

For what it’s worth, I believe that the Googles of the world are well positioned to take advantage of a new economy in which demand drives supply at least as well as supply drives demand. So, in fact, are some of those back-end data companies. (Disclosure: I currently consult one of them.)

Look at it this way…

  • What if all that collected data were yours and not just theirs?
  • What if you could improve that data voluntarily?
  • What if there were standard ways you could get that data back, and use it in your own ways?
  • What if those same companies were in the business of helping you buy stuff, and not just helping sellers target you?

Those questions are all on the table now.

Tags:

Informal vs. Illegal

July 30, 2010 in history, Ideas, Places, Politics, problems | 6 comments

Immigrants and Crime: Time for a Sensible Debate is a Wall Street Journal op-ed by Francis Fukuyama with the subhead, The gardeners and maids who cross the border illegally are very different from the tattooed Salvatrucha gang member who lives by extortion and drug-dealing.

Here’s the gist:

There is indeed a huge problem of crime originating in Latin America and spilling into the United States. This is almost wholly driven by the enormous demand for drugs from the U.S. There are many things we can and should do to mitigate this problem, but it will persist as long as that demand remains high.

But the problem of gangs and drug violence should not be confounded with the behavior of the vast majority of illegal immigrants to the U.S., who by and large are seeking the same thing that every immigrant to America has wanted since the time of the Mayflower: to better their condition and that of their families. They are not criminals in the sense of people who make a living by breaking the law. They would be happy to live legally, but they come from societies in which legal rules were never quite extended to them. They are therefore better described as “informal” rather than “illegal.”

Understanding this distinction requires knowing something about the social order in Latin America or, for that matter, in many other developing countries. These societies are often characterized by sharp class distinctions between a relatively small, well-educated elite and a much broader and poorer population.

Note how this re-framings the problem.

Fukuyama goes on to unpack what he means by “informal”:

The rule of law exists in places like Mexico, Colombia and El Salvador; the problem is that access to the legal system tends to be a privilege of the well-to-do. The vast majority of illegal immigrants to the U.S. come from poor rural areas, or shantytowns in large cities, where the state — in the form of courts, government agencies and the like — is often absent. Registering a small business, or seeking help from the police, or negotiating a contract requires money, time and political influence that the poor do not possess. In many Latin American countries, as much as 70%-80% of the population lives and works in the informal sector.

The lack of legal access does not make everyone in these regions criminals. It simply means that they get by as best they can through informal institutions they themselves create. The Peruvian economist Hernando de Soto has written extensively about the lack of formal property rights, not just in his own country but throughout the developing world. The poor do not hold legal title to their homes, despite having lived in them for years, because of the insuperable barriers the system throws up to formal registration. So they squat in their homes, constantly insecure and unable to use their property as collateral.

The poor are entrepreneurial and form businesses like restaurants and bus companies, but they are unlicensed and don’t conform to official safety rules. They and everyone else would be much better off if they could be brought into the formal legal system, but it is a dysfunctional political system that prevents that from happening.

This is a beautiful linguistic hack, right out of the George Lakoff rulebook. Fukuyama pays respect to bedrock concepts of conservative thinking: rule of law, property rights, entrepreneurship, self-reliance… and disdain for dysfunctional political systems. But he also borrows another rightward concept — formal (a cousin to law), and pulls all wannabe law-abiding imigrants into that frame, but as informal. Subtract the in and your problem is solved.

This artful play by Fukuhama is especially interesting to me, because I think we have been having the wrong debates about the Internet and how to improve it. Carriers vs. Neutralists only amps up the politics. Hand-wringing about lack of rural broadband only plays on the left. The idea of re-classifying the Net as a breed of telecom is a clever regulatory hack by the FCC, but it has shifted debate back into lobby politics, which the agency’s friends and enemies of the moment — Google and the carriers — are good at playing. Jonathan Zittrain’s arguments favoring generativity are good ones, and he’s right that hope lies with users; but the pro-business case isn’t quite there.

I want to make that case. This piece by Francis Fukuyama is a good model for How It’s Done.

Now what I want to see is if his strategy works. If we’re talking about “informal immigrants” in a year, the answer will be yes.

Bonus link.

« Older entries § Newer entries »