Category: News (page 3 of 4)

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?

Is VRM radical?

In this post at ReadWriteWeb, Bernard Lumm interviews Richard de Silva of Highland Capital Partners (a neighbor of ours here in the Boston metro’s northwest quarter). It’s about advertising, primarily. Richard and Bernard both agree that advertising is moving more toward “performance-based” models. “Closer to the sale.”

It’s a sell-side conversation, framed by the need to sell goods, move inventory, do branding, and all that. Which is good. Advertising needs all the help it can get, and both Bernard and Richard are clearly ahead of the curve on the topic.

I’m less comfortable with these remarks in Bernard’s post:

Some recent blog chatter says that online advertising is doomed. The best reasoned case for this is made by Doc Searls (of ClueTrain Manifesto fame), who is touting his radical Vendor Relationship Management (VRM) as an alternative. Searls is an academic (Harvard Berkman Center). Another academic, Eric Clemons, Professor of Operations and Information Management at the Wharton School of the University of Pennsylvania, kicked up a storm with his guest post on TechCrunch titled “Why Advertising Is Failing on the Internet.”

Academics are often right, if you don’t mind waiting an eon or two for their pronouncements to be realized. In business, you need a more pragmatic view.

First, I didn’t say that advertising is doomed. I said it was a bubble, and has been for a long time. I explained that in After the Advertising Bubble Bursts, and among the comments below it. (As well as in many prior posts, to which I linked in that one.)

Second, while I’m flattered to be called an academic, technically speaking I’m a fellow at two university centers. What got me those fellowships was my work as a writer and a tech activist, not as an academic (by any definition). For most of my adult life I’ve worked in the private sector, including many years in the advertising business. From the mid-80s to the late 90s, Hodskins Simone & Searls was one of the top tech advertising agencies in Silicon Valley, much of that time occupying a whole building in downtown Palo Alto. So I know a few things about the topic.

Third, and most importantly, if VRM is radical, it’s not in an oppositional way. It’s not against advertising, or CRM. It’s merely an effort to equip customers with better tools for expressing their wants and needs, and for engaging with sellers. I think VRM can eliminate the need for much guesswork in the marketplace, and — as I said in my post — most advertising is guesswork. But that doesn’t mean guesswork, or advertising, goes away. But it does change. If you don’t believe me, listen to Bob Garfield of Advertising Age:

There is no longer a need to warn of a gathering Chaos Scenario, in which the yin of media and yang of marketing fly apart, symbiotic no more. There is no need to seed doubt about the internet’s prospects as an advertising medium, nor otherwise be a prophet of doom.

Chicken Little, don your hardhat. Nudged by recession, doom has arrived.

The toll will be so vast — and the institutions of media and marketing are so central to our economy, our culture, our democracy and our very selves — that it’s easy to fantasize about some miraculous preserver of “reach” dangling just out of reach. We need “mass,” so mass, therefore, must survive. Alas, economies are unsentimental and denial unproductive. The post-advertising age is under way.

This isn’t about the end of commerce or the end of marketing or news or entertainment. All of the above are finding new expressions online, and in time will flourish thanks to the very digital revolution that is now ravaging them. The future is bright. But the present is apocalyptic. Any hope for a seamless transition — or any transition at all — from mass media and marketing to micro media and marketing are absurd.

The sky is falling, the frog in the pot has come to a boil and, oh yeah, we are, most of us, exquisitely, irretrievably fucked.

ReadWriteWeb is a micro medium. So is Digg, in which Highland is an investor. They may be big on the Web, but they’re micro next to the giants of mass marketing that have kept Madison Avenue in business.

What keeps ReadWriteWeb and Digg in business isn’t Madison Avenue. It’s Highway 101.

My point: VRM is also about Highway 101. It’s one more stage in the not-very-seamless transition to whatever succeeds mass marketing.

What Bernard misses here is that VRM is also pragmatic. This is why I’m very insistent that VRM be built on strong open source foundations. Open source work is always pragmatic. That’s its nature.

But VRM is also unproven. People can knock it all they want and not be wrong. Yet.

Our job is to make the pudding that proves our ideas. I beg the patience of Bernard and others while we do that. I promise it won’t take eons.

Loose links

Lots of VRM Hub action. Here’s the page for the one coming up on 30 March. Be sure not to miss the related VRM Labs. Here’s a review there of chi.mpVRM Hub last night and this post by Graham Sadd both report on the latest. So does Jake at omelette.es.

Nic Brisbourne sources Joe Andrieu in If You Love Your Customer, Set Her Free. Joe also sees $300 million in the One night stand use case.

Also in London, The Mine! Project has a developer meeting coming up next week. In a parallel way, other VRMers, including Iain Henderson (coming over from the London hotbed) will be coming to SXSW in Austin, where we plan to bring VRM up at a Barcamp there.

Jeff Jarvis brings up VRM in his end of a volley with Richard Edelman. (I had posted a long response here, but half of it got lost and I yanked it off the blog. Maybe I’ll give it another try soon.)

Live From Gartner CRM Summit UK: Customers Take Ownership. No VRM, but “social CRM” and “customer managed relationships.” Via Graham Hill. Geoff finds no VRM here, either.

Get ready for “fourth party” services. An intro to user-driven services. A new category driven by customers. Brings up PayChoice. So does Echovar.

Here’s a podcast of a call in which I explain VRM to skeptics.

The new business of journalism, cont’d

writes Why I dislike micropayments, don’t mind charity, but really have a better idea. He mentions VRM and his idea is VRM-like, in the sense that it involves relationships between the buyers and sellers of journalism, in which buyers are — at least to some degree (as I understand it) — in charge of their own side of the thing. An excerpt:

…let’s sum it up. Shifting the news relationship from reader-newspaper to user-creator increases potential trust, an economic good, and unlocks value, which people may pay for. But even the strongest value proposition does not a business model equal.

So let’s move to the concrete: the business model. How do we monetize this theoretical value tucked away in user-creator relationships?

You do it with an idea I’ve been flogging the past couple weeks. You do it with , in which users pay creators for “added convenience or increased interaction.” Note the elegant fit: increased interaction between one person and another is what fosters relationships and trust. Giving paying users otherwise exclusive twitter access to the creator could work. SMS updates could work, as could a permission only room on friendfeed. Even something as simple as a gold star on paying users’ comments—a symbol that they support the creator financially—would provide incentive for the creator to reply. Tiers of stars—bronze, silver, gold—are possible too.

Sounds to me like journals-as-clubs. Anyway, see whatcha think.

EmanciPay for Newspapers. And everything else that’s free.

I got a note saying that Walter Isaacson‘s latest Time Magazine piece — How To Save Newspapers — cries out for VRM. I agree. Here’s the exciting text amongst his closing paragraphs:

Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day’s full edition or $2 for a month’s worth of Web access. Some surfers would balk, but I suspect most would merrily click through if it were cheap and easy enough.

The system could be used for all forms of media: magazines and blogs, games and apps, TV newscasts and amateur videos, porn pictures and policy monographs, the reports of citizen journalists, recipes of great cooks and songs of garage bands. This would not only offer a lifeline to traditional media outlets but also nourish citizen journalists and bloggers…

…The need to be valued by readers — serving them first and foremost rather than relying solely on advertising revenue — will allow the media once again to set their compass true to what journalism should always be about.

EmanciPay is what he’s calling for here. It’s not a micropayment system. Instead call it a microaccounting sysem. It will start with something essential that we don’t yet have: accounting for actual uses, including reading, listening and watching. Journalism, music and other currently free stuff is worth more than $zero. How much more? We need to be able to say.

PayChoice would also —

  1. Provide a single way and easy way that consumers of “content” can become customers of it — rather than the multiple (and often difficult) ways that the producers are currently coming up with. (I’ve never been able to pay for public radio on a station website in less than three minutes. That’s too much friction.)
  2. Provide ways for customers to look back through their media usage histories, inform themselves about what they have been enjoying, and how much of it — and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with “rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller” — language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated.  The rates they came up with peaked at $.0001 per “performance” (a song or recording), per listener. PayChoice creates the “willing buyer” that the DRPA thought wouldn’t exist. And I can tell you, as a lover of music and radio, I am willing to pay far more than that rate. That’s why I came up with the EmanciPay idea. I want to be a customer of otherwise free stuff. And I believe the buy side can come up with that system — one that works the same way for all content providers — a helluva lot better (and faster) than the providers can. Hell, we came up with tipping. In the networked world we can do a lot better than that.
  3. Stigmatize non-payment for worthwhile media goods. This is where “social” will finally come to be something more than yet another tech buzzmodifier.

So, stay tuned.

EmanciPay: a new business model for newspapers

Rex Hammock is right to gripe about the newspaper turtles pulling their heads in their shells and complaining that readers aren’t paying for the goods papers offer for free online. In that post he runs down some of the drumbeats he’s been hearing:

Here’s the problem with all of those systems: they’ll all be different, silo’d, inconsistent with each other. And doomed to fail for all those reasons.

Here’s the solution: One new system that makes it as easy as possible for readers to pay for the goods, but voluntarily, on their own terms. This new system would turn consumers into customers by giving them the pricing gun. And here’s what’s also cool about it: We’re already working on it at ProjectVRM. It’s called EmanciPay. (Note: when this was written, it was still called “PayChoice”. DS – 1 September 2009)

It’s still early. But it will get a lot less early if some of these pubs stop complaining and put their shoulders (and their wallets) behind work that’s already going on.

The architecture of scaffolding

We’ve had a lot of discussion, both online and off, about the V in VRM. It speaks one kind of relating, in the economic sphere. Which is just one sphere.

Britt Blaser has spoken often of the kind of RM that begins with a G — GRM for Government Relationship Management.

We’ve also talked about why we start with the individual in our work with VRM. Why not start with groups, and group empowerment? Especially since “social” is such a hot theme?

The answer is that relating starts with individuals. Even though it always involves more. One’s relationship with one’s self may be interesting to a shrink, but it’s too small for building a society, an economy, a politiy.

Erik Cecil, a friend and freshly minted blogger, almost poetically captures something about relating in this paragraph from his latest post:

IntERdependence is the engine of democracy; it creates the nanostructures of new economies.  People lined 137 miles of railroad track, therefore, not to see some new Hercules.   They came to see in their new President a reflection of their individual importance reflected back to them in the President they just elected.   He not only moved the power of democracy to the edge, but opened the path back to the middle.   Reverberating throughout the crowds was the music of interdependence.  Let the new freedom ring.

We’re in new territory here — one we’re just beginning to make for ourselves.

VRM in 2009

This blog is #19 and Chris Carfi’s Social Customer Manifesto is #7 on Chris Bucholtz’s Best CRM Blogs of 2008, at Inside CRM. About this blog, Chris wrote,

The bumpy economy has perhaps been unkind to forward-looking philosophies like vendor relationship management, but that has not curtailed Searls’ explorations of what will be when the business world finally understands that the customer is now running the show. He makes a convincing argument that companies are leaving dollars on the table already by refusing to admit that this is a consumer-driven world. As Searls wrote, “I’d rather have ‘-driven’ than ‘-centric.’ Because being ‘-centric’ doesn’t require you to relate. Being driven does.”

I never thought about this as a CRM blog, but to the degree that CRM and VRM will work together, it makes sense.

It will be interesting to see which CRM companies realize that customers are driving with VRM. Some are already waiting to see VRM tools show up in customer hands. At a recent ProjectVRM committee meeting, one of the attendees from a CRM company reported that the top honcho at his outfit said “Whoever wins at VRM wins at CRM.” That’s good to hear. VRM will give CRM much more to engage with.

Anyway, Larry Dignan seconds Paul Greenberg’s expectation that 2009 will be VRM’s breakout year. He adds this:

Simply put, a VRM tool would be something customers use to relate and manage multiple vendors. Greenberg thinks that 2009 will be the year in which VRM becomes more than just a concept. What’s ironic is that vendors that have the most tentacles into companies (Oracle, for instance) may become players. Just imagine the following: here’s a VRM tool from a big vendor so you can better manage it.

Well, if the tool only helps you manage one vendor, it’s not a VRM tool. But the irony risk is not small. That’s why I’m still not eager to promote VRM before we have working code and ways of demonstrating how VRM tools make you both independent of vendors and better able to engage with them.

May the best customers win.

Answering tweeted questions about VRM

So, with the help of vangeest and Twitter Search for #vrmevent, I’m addressing questions tweeted from the virtual floor here at the VRM Event in Amsterdam. Here goes…

vangeest: @dsearls: retweet @vangeest: #vrmevent: what is the relationship between the good old B2B marketplaces like Ariba and VRM?

As an idea VRM owes something to B2B, for the simple reason that B2B relationships tend to be between equals. Thus they can be rich and complex as well. B2C tend to be simplified on the B side, mostly so maximum numbers of templated Cs can be “managed”. Iain Henderson has talked about how there are thousands of variables involved in B2B VRM, while only a handful with CRM, which is B2C.

VRM essentially turns B2C into a breed of B2B — to the degree that both terms no longer apply. VRM equips individuals to express their demand in ways that B2C never allowed, and B2B never included.

But VRM is not a site, or a marketplace. That makes it different from Ariba, eBay, or online marketplaces. VRM may happen inside of those places, but VRM is not about those places.

Most importantly, VRM is not something that companies give to customers. It’s something customers bring to companies.

zantinghbozic: #vrmevent ichoosr: vrm is socialism 2.0 – http://mobypicture.com/?pcg0qr

This reports a provocative tease by Bart Stevens of iChoosr in his opening slide. I don’t agree with the statement, but his deeper point rings true: it involves a shift in power in the marketplace, from producers to consumers. Except I wouldn’t use the word consumers. I’ll explain that later.

It’s VRM Weeks on the West Coasts

… of both Europe and the U.S., that is.

Got up at 5am this morning in Mountain View, Pacific Time. It was easy because my body is still partly on East Coast time (8am) and GMT (noon). That’s because I’m still fresh from London, and more VRM conversations than I can count — in addition to the excellent VRM Hub event (part of Unlocking the See-Saw*) held at Sun’s facility there, which got started for me when I walked out of the Monument tube station and stright into Geoff Jones, with whom I promptly went off to a pub. Alec Muffett shot video of the whole thing. More at Peter’s post, and  here.

It all continues starting this afternoon at IIW2008b, at the Computer History Museum (Shoreline &101). There are more meetings before and after, then a Public Media BarCamp in Santa Cruz from Friday to Sunday. VRM will be in play there too.

THEN, I’m off next week to Amsterdam for the VRM Event there.

Meanwhile, here are VRM posts by Peter Parkes, Jonathan MacDonald, Richard Muscat and Graham Saad. There are more, but no time to find them right now.

Meanwhile, a nice paragraph from Steve Bowbrick of the BBC:

User data is a valuable asset but it’s one that belongs to its subject – that’s you. Without wishing to wander too far off topic, Mark’s plan also hooks in nicely with the wider trend away from old-fashioned CRM (‘Customer Relationship Management’) to its much groovier, network-native successor VRM (‘Vendor Relationship Management’). In a VRM world your personal data is your own and you share it only with those you trust: VRM systems will allow you to rent your data to businesses who want to sell you stuff and withdraw it whenever you feel like it. It’s appropriate for the BBC to build a user-centric, VRM-style data infrastructure.

* Adriana explains more about the UK events in her comment below.

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