Doc Searls Weblog

Just trying to make stuff happen

  • Way to die

    I just learned by Dave that Chris Gulker died on Wednesday. (Somehow I missed the news at first pass.) I barely knew Chris, I knew enough to get that he was terrific guy, citizen, friend, photographer, blogger and much more. I don’t think it’s possible to die more consciously and graciously than Chris did. Dave’s right that it’s wrong not to read Chris’s obituary in a mainstream paper. But there are plenty of good ones out there* where it matters most. Start with Scott Rosenberg’s.

    *And thank you, IceRocket, for still doing great blog search. It matters. Everybody, please do read the list of goodbyes that come up in a search for Chris.

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  • The Data Bubble II

    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.

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  • The longer view

    We have two iPhones in our family. Yesterday we traded in the older one — my wife’s first-generation model, bought in 2007 — at Radio Shack. They gave us $72.94 for the phone and charger, against $199 for a new 16Gb iPhone 4. We’ll probably trade our other iPhone, my second-generation 3g one, pretty soon too.

    Apple doesn’t have the same offer. I’m not sure who else does. I wouldn’t have known about it if I hadn’t stopped in a Radio Shack to buy an ethernet cable a few days ago, when the kid behind the counter told me about it. Turns out Radio Shack will take a lot of stuff in trade. Since my iPhone 3g is brand new (I replaced it at an Apple store last month for $79, before I knew about this deal), I can get $116.13 for it, according to the online appraisal system at that last link.

    Yes, it bothers me that we’re staying inside Apple and AT&T’s joint silo. It also bothers me that Fake Steve Jobs is right about Android fragmentation. I also see a serious risk that Real Steve Jobs might succeed at repositioning closed systems as “integrated”. Just because, well, he’s Steve. We’re all in his reality distortion field now.

    Speaking of which, Apple is now bigger than Microsoft, and the iPhone is now bigger than Rim.

    I still see this as a phase, and not a bad one. Apple and Google have together cracked open the unholy death grip that phone makers and carriers have long had on the mobile world. At some point those two halves will come completely apart.

    Until they do, we won’t have ambient connectivity, or what I call the Frankston Threshold.

    But we’ll get there. It’s inevitable.

    [Later…] If you do trade in an old iPhone, be sure to erase it before handing it over. Do that under Settings/General/Reset/Erase all content and settings.

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  • Food for re-thought

    The summary paragraph of a great column by Tom Friedman:

    A dysfunctional political system is one that knows the right answers but can’t even discuss them rationally, let alone act on them, and one that devotes vastly more attention to cable TV preachers than to recommendations by its best scientists and engineers.

    Here’s a link to Rising Above the Storm, the study Tom cites. There is a free download routine that requires giving ID information, though what you say is up to you.

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  • Summer in the Fall

    I took the picture above while I was crossing Harvard Yard yesterday. Pretty much captures the look and the mood of the region lately.

    It’s 72° on my back porch right now, 9 o’clock at night. It was another warm day here in eastern Massachusetts. While it’s snowing in Minnesota and raining everywhere else on the East Coast, it’s pretty damn nice here.

    In fact it’s so warm that I regret having taken the air conditioners out of the windows last week. Could have used them today, especially here in the attic, where I do most of my writing. Instead the windows are open. Outside, crickets and tree frogs sing. For them it’s still summer.

    Fall colors are peaking a bit more gradually than usual, thanks to the absence of frost so far this year. Whether or not the globe is warming, things are not cooling off much here.

    I love it. Reminds me of North Carolina. Fall  happens there too. It just comes later, lasts longer, and lacks a critical mass of maples.

    Of course in a month this will all be over for sure. In two months there will be frozen slush on the ground. But for now, it’s mighty sweet.

    Bonus sentiments, from the Bard himself:

    SONNET 73

    That time of year thou mayst in me behold
    When yellow leaves, or none, or few, do hang
    Upon those boughs which shake against the cold,
    Bare ruin’d choirs, where late the sweet birds sang.
    In me thou seest the twilight of such day
    As after sunset fadeth in the west,
    Which by and by black night doth take away,
    Death’s second self, that seals up all in rest.
    In me thou see’st the glowing of such fire
    That on the ashes of his youth doth lie,
    As the death-bed whereon it must expire
    Consumed with that which it was nourish’d by.
    This thou perceivest, which makes thy love more strong,
    To love that well which thou must leave ere long.

    And at my age Shakespeare was fifteen years dead already. Which is why I’m with Frost, who had “miles to go before I sleep.” Or George Burns, who explained his longevity in two words: “I’m booked.”

  • Portrait of the artist as a young non-CEO

    For folks interested in what makes Steve Jobs and Apple (same thing) tick, Being Steve Jobs’ Last Boss, in the current Bloomberg Businessweek, is helpful reading. It’s an interview of John Sculley by Leander Kahney of Cultofmac.com. Sculley had been a very successful president of Pepsico when he was recruited as CEO of Apple in 1983, essentially to serve as Steve Jobs’ adult supervisor. While Sculley oversaw much growth at Apple in the following decade, mistakes were made (including the ousting of Steve), and Sculley himself was ousted after a decade on the job.

    The encompassing statements:

    Steve had this perspective that always started with the user’s experience; and that industrial design was an incredibly important part of that user impression. He recruited me to Apple because he believed the computer was eventually going to become a consumer product. That was an outrageous idea back in the early 1980s. He felt the computer was going to change the world, and it was going to become what he called “the bicycle for the mind.”

    What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do, but the things you decide not to do. He’s a minimalist. I remember going into Steve’s house, and he had almost no furniture in it. He just had a picture of Einstein, whom he admired greatly, and he had a Tiffany lamp and a chair and a bed. He just didn’t believe in having lots of things around, but he was incredibly careful in what he selected.

    Everything at Apple can be best understood through the lens of designing. Whether it’s designing the look and feel of the user experience, or the industrial design, or the system design, and even things like how the boards were laid out. The boards had to be beautiful in Steve’s eyes when you looked at them, even though when he created the Macintosh he made it impossible for a consumer to get in the box, because he didn’t want people tampering with anything.

    And,

    The reason why I said it was a mistake to have hired me as CEO was Steve always wanted to be CEO. It would have been much more honest if the board had said, “Let’s figure out a way for him to be CEO.”

    As I wrote to Dave (in September 1997, after Steve came back to Apple),

    The simple fact is that Apple always was Steve’s company, even when he wasn’t there. The force that allowed Apple to survive more than a decade of bad leadership, cluelessness and constant mistakes was the legacy of Steve’s original Art. That legacy was not just an OS that was 10 years ahead of the rest of the world, but a Cause that induced a righteousness of purpose centered around a will to innovate — to perpetuate the original artistic achievements. And in Steve’s absence Apple did some righteous innovation too. Eventually, though, the flywheels lost mass and the engine wore out.

    In the end, by when too many of the innovative spirts first animated by Steve had moved on to WebTV and Microsoft, all that remained was that righteousness, and Apple looked and worked like what it was: a church wracked by petty politics and a pointless yet deeply felt spirituality.

    Now Steve is back, and gradually renovating his old company. He’ll do it his way, and it will once again express his Art.

    These things I can guarantee about whatever Apple makes from this point forward:

    1. It will be original.
    2. It will be innovative.
    3. It will be exclusive.
    4. It will be expensive.
    5. It’s aesthetics will be impeccable.
    6. The influence of developers, even influential developers like you, will be minimal. The influence of customers and users will be held in even higher contempt.

    And here we are.

    Bonus link.

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  • I was overheard to have said…

    Nice interview with Dan Levy of Sparksheet:

    From Part I:

    What opportunities does the widespread adoption of mobile smartphones present for VRM?

    This is the limitless sweet spot for VRM.

    Humans are mobile animals. We were not built only to sit at desks and type on machines, or even to drive cars. We were built to walk and talk before we did anything else.

    This is why mobile devices at their best serve as extensions of ourselves. They enlarge our abilities to deal with the world around us, with each other, and with the organizations we relate to. This especially applies to companies we do business with.

    Right now we are at what I call the “too many apps” stage of doing this. Every store, every radio station, every newspaper and magazine wants to build its own app. At this early stage in the history of mobile development we need lots and lots of experimenting and prototyping, so having so many apps (where in lots of cases one would do) is fine.

    But as time goes on we’re going to want fewer apps and better ways of dealing with multiple entities. For example, we’ll want one easy way to issue a personal RFP, or to store and selectively share personal data on an as-needed basis.

    We won’t want our health data in five different clouds, each with its own app. We may have it in one cloud, for example, much as most of us currently have our money in one bank. But we’ll also need for that data to be portable, and the services substitutable.

    From Part II:

    I want to ask you about privacy, which is an important part of the VRM discussion. We want businesses to recognize our past interactions and treat us in a personalized way, but we’re also a little creeped out when it happens. So how do you see people using VRM tools to navigate that line in a way that makes us feel safe and well served?

    We need our own tools for controlling the way our data and other personal information is used. Some of these tools will be technical. Others will be legal. That means we will have tools for engagement that say right up front how we want our data used and respected. We can do this without changing any laws at all – just the way we engage.

    As I said in The Data Bubble, the tide began to turn with the Wall Street Journal article series titled “What They Know,” which is about how companies gather and use data about us. More and more of us are going to be creeped out by assumptions made by marketers about what we might want.

    This is also part of what I believe is an advertising bubble. Our tolerance of too much advertising is like the proverbial frog, boiling slowly. The difference is that the frog dies, while we’re going to jump out. Everything has its limits, and we will discover how much advertising we’re willing to suffer, especially as more of it gets too personal.

    The holy grail of advertising for many decades has been personalization. If we know enough about a person, the theory goes, we can make perfect bull’s-eye messages for them. But this goal has several problems.

    The first problem is that personal advertising is kind of an oxymoron. Advertising has always been something you do for populations, not individuals, even if ads show up in searches by individuals, and advertisers are looking for individual responses.

    From the individual’s side, advertising shouldn’t be any more personal than a floor tile. You don’t want the floor tile in a public bathroom to speak into your pants.

    In fact, we’ve never liked personalized advertising of the old conventional sort, such as direct mail. We see our name on the envelope and then toss it anyway, most of the time.

    The second problem is the belief that it’s actually possible to have perfect information about somebody. It’s not. And where it gets close it gets creepy.

    The third problem is that advertising is still guesswork.

    We need it, to let lots of customers know what we’ve got. But there should also be more efficient ways for supply and demand to meet and get acquainted – ways in which, for example, individual customers eliminate guesswork by telling vendors exactly what they want. VRM is one answer to that need.

    These and other topics will be subjects of a panel I’m on this morning at Slush in Helsinki. Ted Shelton of OpenFirst is moderating.

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  • KCET’s brave move

    I just learned by Craig Smith that KCET, the flagship PBS TV station in Los Angeles, is “going rogue.” Specifically, Craig says, “KCET will be dropping its PBS affiliation at the end of the year. That means if you live in Santa Barbara and want to watch the PBS NewsHour, Tavis Smiley, Charlie Rose, Antiques Roadshow or even Sesame Street, you may be out of luck starting at the beginning of next year.”

    KCET is a Los Angeles station that puts no signal at all into Santa Barbara (except though a translator on Gibraltar Peak). But it’s the nearest PBS affiliate and is therefore on the local cable system (Cox), thanks to must-carry rules.

    Here’s the LA Times story. Here’s another one. Both rake KCET over the coals. They’re abandoning viewers, paying their general manager too much, yada yada.

    As all those pieces point out, KCET isn’t the only source of PBS programming in the LA area. KOCE, licensed to Huntington Beach in Orange County, is another long-time PBS affiliate and promises to at least help pick up the slack. And it’s in a good position to do that. Where KOCE used to radiate from a local site in Orange County, it now also broadcasts from Mt. Wilson, which overlooks Los Angeles and is home to nearly all the area’s TV and FM stations. In fact, KOCE is actually putting out a signal that maxes at one million watts, while KCET is currently at 190,000 watts with a construction permit for 106,000 watts. This means that technically, at least, KOCE is now a bigger station. At 162,000 watts, so isKLCS, another PBS station in Los Angeles.

    At least one of those others is sure to show up on cable systems in outlying areas such as Santa Barbara, bringing familiar shows to PBS audiences there. (The bihg question for KOCE is whether it can still be an Orange County station, and not morph into National/Southern California one.)

    But the real story here is the death of TV as we knew it, and the birth of whatever follows.

    Relatively few people actually watch TV from antennas any more. KCET, KOCE and KLCS are cable stations now. That means they’re just data streams with channel numbers, arriving at flat screens served by cable systems required to carry them.

    What makes a TV station local is now content and culture, not transmitter location and power. In fact, a station won’t even need a “channel” or “channels” after the next digital transition is done. That’s the transition from cable to Internet, at the end of which all video will be either a data stream or a file transfer, as with a podcast.

    All that keeps cable coherent today is the continuing perception, substantiated only by combination of regulation and set-top box design, that “TV” still exists, and choices there are limited to “channels” and program schedules. All of those are anachronisms. Living fossils. And very doomed.

    KCET bailed on PBS because it didn’t want to pay whatever it took to stay affiliated with that program source. This means KCET has some faith — or at least a good idea — that Whatever Comes Next will be good enough for lots of people to watch. If we’re lucky, what’s liberated will also be liberating.

    I sure hope so. Dumping PBS was a brave move by KCET. They deserve congratulations for it.

    [Later…] Please read John Proffitt’s comment below. He lays out a scenario so likely yet easily denied that it has the ring of prophesy. TV is still TV, and KCET and its competitors are all TV stations. The next digital transition for the likes of KCET will indeed give us more more kinds of Ken Burns. The one that follows will bring us whatever we bring ourselves. Yes, there will still be big heads and long tails, but the game won’t be a closed one, or assume a sphinctered distribution system (which TV still is—and will still be if everything still has to run through regulated BigCos). More in my own responses and others that follow in the comments.

    For bonus links, check out what KETC (not a typo and no relation), the landmark PBS station in St. Louis has been up to lately. There is lots of co-thinking out loud, including this stuff, facilitated by Robert Paterson—

    (For some reason the text here keeps reverting to an earlier version, then back to a later one, each time I edit it. Very strange. In fact, I just discovered that half this post disappeared somehow. I just restored it from Google search cache. I hope.)

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  • Loose Links

    So here are a bunch of tabs I just cleared off my browsers:

    I’d rather find them here than in a bookmark folder I’ll never look at again.

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  • On trees that don’t grow to the sky

    You could build a shallow history of computing by looking only at which company looked like it was taking over the world at any given moment. First there was IBM, then Microsoft, then Google, and now there’s Facebook. None of them ever did take over the world, and no one company ever will.

    It was with that perspective in mind that I wrote Waving Goodbye to Facebook in the August issue of Linux Journal, which is now on the Web. The pull-grafs:

    Responding in his own Newsweek blog, Barrett Sheridan called Zuckerberg’s plans a “Play to Take Over the Entire Internet“. In TechCrunch, MG Siegler’s headline read, “I Think Facebook Just Seized Control Of The Internet“. Whether or not Facebook is that ambitious, it won’t succeed at anything other than enlarging itself. The limits to that are those of any private architecture. It can get big, but not bigger than the planet. What Facebook has built is The Great Indoors. A lot of people like going there, just like a lot of people like going to shopping malls. But Facebook is a building, not geology.

    The Web is geology. It is a wide open public space on which private and public structures can be built in boundless variety. Linux is probably the most widely used building material below and within those structures. Calculating its value is pointless, because — as Eric S. Raymond made clear long ago — Linux has use value more than sale value. As useful stuff, its leverage is boundless and therefore incalculable. It will also last as long as it remains useful.

    The same cannot be said of Facebook, whose value is quite calculable, and which will thrive only as long as its revenue model and its investors’ patience holds out. Both of those will be shortened by the dissatisfaction of users, which Facebook has been risking increasingly over the years.

    Of course, Facebook has little choice in that matter. To rephrase The Social Network‘s poster copy, you can’t make a billion friends without making a few million enemies. And, of course, following Facebook right now is kinda necessary. A few links I just moved here from tabs on my browser:

    But then there is this, by Paul Boutin in the New York Times‘ Gadgetwise blog: Facebook Now Lets You Take Your Data With You. Thanks, Mark.

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  • Happy 42 Day

    It’s 101010 today. In binary, that’s 42. It’s also the Answer to the Ultimate Question of Life, the Universe and Everything.

    And, as it happens, our son’s 14th birthday. You can imagine how very cool that is.

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  • The Business Movie

    Went to see The Social Network last night, and thought it was terrific. Even though most of the scenes set at Harvard and Silicon Valley were shot elsewhere, the versimilitude was high. And,while it was strange to see the recent past treated as history, the story actually works, and carries truth, even if it doesn’t ring true for the living subjects of the story. (I’ve haven’t met any of the movie’s characters, but I thought Justin Timberlake’s portrayal of the Sean Parker character was drawn straight from Jason Calacanis.)

    The story that matters, at least to me, is about the making of a Silicon Valley success. In The Business-Movie Business, The New Yorker‘s James Surowiecki unpacks Hollywood’s small and mostly poor assortment of movies about business. His summary statement is “Movies’ mistrust of capitalism is almost as old as the medium itself.” Here’s how he puts “The Social Network” in that context:

    Watching “Wall Street,” you’d think that business is a Hollywood obsession. But it’s really Hollywood’s biggest blind spot.

    For that reason, the fall’s most important business film—indeed, the most important business film in ages—is not the second “Wall Street” but, rather, “The Social Network,” David Fincher’s film about Facebook. The film represents a rare attempt to take business seriously, and to interrogate the blend of insight, ruthlessness, creativity, and hubris required to start a successful company. Hollywood has made good films about money, loyalty, trust, and organization before—but most of them have been about gangsters. “The Social Network” suggests that it could also start making good films about businesspeople who don’t carry guns.

    Henry Blodget’s blog post title sums up his own take: No Wonder Everyone Loves The Facebook Movie: It’s The American Dream. He begins,

    True, it paints Harvard as a stuffy cartoon-scape. True, it treats women as as video-game props, sex tools, and platforms for coke-snorting. And, true, Mark Zuckerberg’s character comes off as a bit of an asshole. (But based on the other evidence I’ve seen, this would seem to be a fair representation of the reality at the time. And, thanks to Aaron Sorkin’s writing and Jesse Eisenberg’s delivery, even the assholishness is charming.)

    But all this is secondary to the main message of the movie, which is a celebration of what makes a vibrant corner of our economy–and our country–great.

    What’s the Facebook movie really about?

    It’s about a college sophomore who says “fuck you” to authority, follows his passion, and creates something great. In so doing, he works ridiculously hard, inspires his colleagues, blows past the comfortable establishment, and becomes rich beyond belief.

    In other words, the Facebook movie is the latest incarnation of the American Dream.

    Ah, but we wake up from our dreams. And Hollywood knows how to make that movie too.

    Mark Zuckerberg is clearly an extremely bright and prescient dude, and Facebook could hardly be a bigger success story. But that story isn’t over. In fact, it’s just begun.

    (An aside… Both The New Yorker and BusinessInsider, from which I lifted the quotes above, do something I hate. They give me more than I intend to copy, putting on my clipboard a “Read more” and the URL of the piece. So, when I paste the passage, I get bonus jive. Sometimes this is handy, but it smacks of pure promotion, and its annoying.)

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  • Montana in terms of North Dakota

    Back in the 1920s my grandparents, Erick and Caroline Oman, took their four kids on the family’s one and only trip west from their home in Napoleon, North Dakota, which is about as far out in the prairrie as you can get. When the Rockies came in sight, Grandpa turned to Grandma and said, “See, Mama: It’s just like home, only different and more of it.”

    That’s the only quote I know that survives from a grandfather who was gone before I was born. Right now I’m in Baltimore with my grandkids, telling old family stories. Fun stuff.

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  • The escape key

    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.

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  • Some research questions

    Here’s some what I’m looking for right now. Any help is welcome.

    Topic 1: Advertising

    1. Size of the advertising industry, both in the U.S. and worldwide.
    2. Sums of advertising of various types to which individuals are exposed every day.
    3. Breakouts and growth rates of advertising sectors. Online and mobile especially.
    4. Weaknesses and/or declines in advertising sectors.
    5. Hard numbers on click-through rates on various advertising types, and ratios to impressions. Trends as well.
    6. Successes and failures of coupons and other forms of promotion.
    7. Overhead in the production of advertising. (Paper, electricity, server cycles, etc.)
    8. Size of the whole marketing category, including salaries for marketers.

    Topic 2: History

    1. Need amounts invested, through the dot-com era (1996-2000), in start-ups. Especially interested in break-outs by business models of those funded. Regional break-outs would be good too.
    2. Success rates of investments. I want more than stock and sale prices for the companies. If possible, I want totaled revenues for those companies, by sector if possible.

    There’s more, but that’s enough for now. Thanks.

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  • Would you move to Chatanooga for Internet speed?

    So , the Chatanooga power (and now high speed Internet) utility, is now offering Internet speeds up up to 1Gbps over fiber optic connections to homes. (A U.S. record, far as I know.) If you ignore EPB “triple play” offerings of TV and telephony alongside Internet connectivity and just go for the Internet connection, your prices are these (I’ve rounded up from the posted prices):

    • $58 for 30Mbps
    • $70 for 50Mbps
    • $140 for 100Mbps and $350 for 1Gbps.

    Let’s assume you get one or more IP addresses with this, and no blocked ports. In other words, a full native Internet connection. Answer these:

    • Does that make you think about moving there?
    • If not, would you get it if you lived in Chatanooga?
    • And if your answer to that is yes, how would you recommend EPB improve its offering, either in its deployment or its characterization in marketing?

    Just wondering.

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  • Playing the organs

    I’m at a fascinating luncheon talk by Al Roth at CRCS with the irresistable title, “Kidney Exchange.” This can’t help but call to mind “Anonymous Philanthopist Donates 200 Kidneys“, in . which I hope Al has in this talk or puts in his next one.

    So I’m taking notes here. Lots of good fodder for the Markets chapter of the book I’m wrirting.,,

    Market Design is Al’s summary and collection of works on that subject, including Kidney Exchange. See his “Efficient Kidney Exchange” paper In the American Economic Review. Market design is around patient-donor pairs (usually relatives), even though one half the pair will not be donating a kidney to the other half of the pair. The two surgeries: transplants and nephrectomies. The latter is the removal of a kidney.

    NEAD: Non-simultaneous, Extended Altruistic-Donor Chain. These can add up. Al shows how ten transplants came out of one donor starting the chain. In cost/benefit terms, this is also good. This is now cited in both the New England Journal of Medicine and People magazine.

    There are currently ~86,000 people on the waiting list now. There is a question on the floor about calculations based on 100% of Americans on the donors list. Nor feasible, but one wonders if a much larger percentage could be recruited. Al calls these “non-directed donors.”

    Wondering what kind of matches we might classify with personal RFPs. (Al is talking here about pairwise ones, because that’s how kidney donorship works.) Other considerations: “Markets must be thick, uncongested and safe.” Need to look at the long and short side of a market. Also matching efficiencies…

    Interesting point: relationships between hospitals and surgeons are a context. Also that we are starting to see pairs withheld, meaning that a hospital or two may not inform other hospitals about donor candidates. Arcanum: strategyproof industry rational (IR) mechanism.

    (I’m surprised that all this stuff, most of which is new to me, does not hurt my brain.)

    When creating the large exchange, respect the small exchanges that operated independenly before. “Mechanisms that give priority to internally matachable pairs have good incentive and efficiency properties in large markets. Theorem for k=2 (pairwise exchange), full participation is an E (the Greek letter epsilon) equilibrium for E(n) = 0(1/n).

    “It could be that some regulation in order.” e.g., “If you participate, you must show us all our patients.”

    Why do we have laws against simply buying and selling kidneys? The same reason we have the Ontario Dwarf Tossing Prevention Ban Act of 2003. The answer is, because it’s repugnant.(At least to lawmakers.) X may not be repugnant, but X+$ is repugnant — n some conditions, anyway, such when selling kidneys. Or kids. (Hmm… kidney sounds like a diminutive term for a kid. Or a kid part.)

    Three repugnancies: Objectification, Coercion and Slippery Slope. (Hmm, don’t we have that in lots of business settings already? Such as excessive gathering user data online?)

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  • Let’s kill Interruptive ads

    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.)

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  • Cookies for Kiddies

    Back on July 31 I posted The Data Bubble in response to the first of The Wall Street Journal‘s landmark series of articles and Web postings on the topic of unwelcome (and, to their targets, mostly unknown) user tracking.

    A couple days ago I began to get concerned about how much time had passed since the last posting, on August 12. So I tweeted, Hey @whattheyknow, is your Wall Street Journal series done? If not, when are we going to see more entries? Last I saw was >1 month ago.

    Then yesterday @WhatTheyKnow tweeted back, @dsearls: Ask and ye shall receive: http://on.wsj.com/9DTpdP. Nice!

    The piece is titled On the Web, Children Face Intensive Tracking, by Steve Stecklow, and it’s a good one indeed. To start,

    The Journal examined 50 sites popular with U.S. teens and children to see what tracking tools they installed on a test computer. As a group, the sites placed 4,123 “cookies,” “beacons” and other pieces of tracking technology. That is 30% more than were found in an analysis of the 50 most popular U.S. sites overall, which are generally aimed at adults.

    The most prolific site: Snazzyspace.com, which helps teens customize their social-networking pages, installed 248 tracking tools. Its operator described the site as a “hobby” and said the tracking tools come from advertisers.

    Should we call cookies for kids “candy”? Hey, why not?

    Once again we see the beginning of the end of fettered user tracking. Such as right here:

    Many kids’ sites are heavily dependent on advertising, which likely explains the presence of so many tracking tools. Research has shown children influence hundreds of billions of dollars in annual family purchases.

    Google Inc. placed the most tracking files overall on the 50 sites examined. A Google spokesman said “a small proportion” of the files may be used to determine computer users’ interests. He also said Google doesn’t include “topics solely of interest to children” in its profiles.

    Still, Google’s Ads Preferences page displays what Google has determined about web users’ interests. There, Google accurately identified a dozen pastimes of 10-year-old Jenna Maas—including pets, photography, “virtual worlds” and “online goodies” such as little animated graphics to decorate a website.

    “It is a real eye opener,” said Jenna’s mother, Kate Maas, a schoolteacher in Charleston, S.C., viewing that data.

    Jenna, now in fifth grade, said: “I don’t like everyone knowing what I’m doing and stuff.”

    A Google spokesman said its preference lists are “based on anonymous browser activity. We don’t know if it’s one user or four using a particular browser, or who those users are.” He said users can adjust the privacy settings on their browser or use the Ads Preferences page to limit data collection.

    I went and checked my own Ads Preferences page (http://www.google.com/ads/preferences) and found that I had opted out of Google’s interest-based advertising sometime in the past. I barely remember doing that, but I’m not surprised I did. On the whole I think most people would opt to turn that kind of stuff off, just to get a small measure of shelter amidst the advertising blizzard that the commercial Web has become.

    Finding Google’s opt-out control box without a flashlight, however, is a bit of a chore. Worse, Google is just one company. The average user has to deal with dozens or hundreds of other (forgive me) cookie monsters, each with its own opt-out/in control boxes (or lack of them). And I suspect that most of those others are far less disclosing about their practices (and respectful of users) than Google is.

    (But I have no research to back that up—yet. If anybody does, please let me have it. There’s a whole chapter in a book I’m writing that’s all about this kind of stuff.)

    Meanwhile, says the Journal,

    Parents hoping to let their kids use the Internet, while protecting them from snooping, are in a bind. That’s because many sites put the onus on visitors to figure out how data companies use the information they collect.

    Exactly. And what are we to do? Depend on the site owners and their partners? Not in the absence of help, that’s for sure. The Journal again:

    Gaiaonline.com—where teens hang out together in a virtual world—says in its privacy policy that it “cannot control the activities” of other companies that install tracking files on its users’ computers. It suggests that users consult the privacy policies of 11 different companies.

    In a statement, gaiaonline.com said, “It is standard industry practice that advertisers and ad networks are bound by their own privacy policy, which is why we recommend that our users review those.” The Journal’s examination found that gaiaonline.com installed 131 tracking files from third parties, such as ad networks.

    An executive at a company that installed several of those 131 files, eXelate Media Ltd., said in an email that his firm wasn’t collecting or selling teen-related data. “We currently are not specifically capturing or promoting any ‘teen’ oriented segments for marketing purposes,” wrote Mark S. Zagorski, eXelate’s chief revenue officer.

    But the Journal found that eXelate was offering data for sale on 5.9 million people it described as “Age: 13-17.” In a later interview, Mr. Zagorski confirmed eXelate was selling teen data. He said it was a small part of its business and didn’t include personal details such as names.

    BlueKai Inc., which auctions data on Internet users, also said it wasn’t offering for sale data on minors. “We are not selling data on kids,” chief executive Omar Tawakol wrote in an email. “Let there be no doubt on what we do.”

    However, another data-collecting company, Lotame Solutions Inc., told the Journal that it was selling what it labeled “teeny bopper” data on kids age 13 to 19 via BlueKai’s auctions. “If you log into BlueKai, you’ll see ‘teeny boppers’ available for sale,” said Eric L. Porres, Lotame’s chief marketing officer.

    Mr. Tawakol of BlueKai later confirmed the “teeny bopper” data had been for sale on BlueKai’s exchange but no one had ever bought it. He said as a result of the Journal’s inquiries, BlueKai had removed it.

    The FTC is reviewing the only federal law that limits data collection about kids, the Children’s Online Privacy Protection Act, or Coppa. That law requires sites aimed at children under 13 to obtain parental permission before collecting, using or disclosing a child’s “personal information” such as name, home or email address, and phone and Social Security number. The law also applies to general-audience sites that knowingly collect personal information from kids.

    So we have pots and kettles calling each other black while copping out of responsibility in any case—and then, naturally, turning toward government for help.

    My own advice: let’s not be so fast with that. Let’s continue to expose bad practices, but let’s also fix the problem on the users’ end. Because what we really need here are tools by which individuals (including parents) can issue their own global preferences, their own terms of engagement,  their own controls, and their own ends of relationships with companies that serve them.

    These tools need to be be based on open standards, code and protocols, and independent of any seller. Where they require trusted intermediaries, those parties should be substitutable, so individuals are not locked in again.

    And guess what? We’re working on those. Here’s what I wrote last month in Cooperation vs. Coercion:

    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 [in the example below]. 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 Steve Gillmor calls gestures, 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 Linux Journal in 2006. (That same title is also the one for book I’m writing for Harvard Business Press. 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 KQED, 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 Creative Commons (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.

    Giving customers means for showing up in the marketplace with their own terms of engagement is a core job right now for VRM. Being ready to deal with customers who bring their own terms is equally important for CRM. What I wrote here goes into some of the progress being made for both. Much more is going on as well. (I’m writing about this stuff because these are the development projects I’m involved with personally. There are many others.)

    You can check out some of those others here.

    Bonus link: Tracking the Companies that Track You Online. That’s a Fresh Air interview by Dave Davies of Julia Angwin, senior technology editor of The Wall Street Journal and the lead reporter on the What They Know series.

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  • Keeping relationship humanized

    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.

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