The Father of All Business Models

First, read Dave‘s The Mother of all Business Models. The money grafs:

Want to get a message to Dave while he’s on the BART riding under SF? $5. Want to get a message to him while he’s walking the tradeshow at CES? That costs more.

If you’re important enough you shouldn’t even pay to use the mobile device. They’re going to make so much money from your attention. If you’re really important, thinking Warren Buffet, Bill Gates, Mike Arrington, they should pay you — a LOT — to use their device. Wow.

That got me excited. That’s what they have to be thinking at Google. And why not Twitter. Trying to think of a title for this post, I came up with The Mother of All Business Models. This is as far as I can see. A new economy. Nobodies pay, but important people are paid to use your brand cell phone/mobile device. I’m sure that’s the future. Might be horrible but we’re already almost there.

This is great stuff: a whole new frame for the sell side.

Now let’s look at the buy side, and how to keep the sellers from being horrible moms. What do we want there? Or what should we want there, if we knew we had the power, independent of advertisers and their media? I mean native power here: power that each of us has — not by grace of some company or government agency, and not limited to a company’s “platform”, which is almost always the floor of a silo or the lawn of a walled garden (and worth less or nothing outside of it).

We already have some of that power, thanks to protocols, formats and code that (essentially) nobody owns, everybody can use and anybody can improve. One of the most widespread of those, thanks to Dave, is RSS — Really Simple Syndication. Look up RSS on Google. You get 3,210,000,000 results, as of today. Much of that huge number owes to RSS’s nature as essential builing material for the Web that anybody can use, easily.

RSS is easy to make yours, personally, as your tool. Thanks to RSS (atop the Web’s and the Net’s other supportive standards, formats and protocols) anybody can produce, edit, update and syndicate pretty much whatever they like. You don’t have to go to Google or Twitter or Facebook. That independence is key, and has been there from the start, as a founding premise.

Now, what else can we create, to help assert our sides of commercial interactions and relationships — which is the central concern of the VRM (Vendor Relationship Management) community? In the Markets Are Relationships chapter of the 10th Anniversary edition of The Cluetrain Manifesto, I wrote this about the purposes of VRM efforts:

  1. Provide tools for individuals to manage relationships with organizations. These tools are personal. That is, they belong to the individual in the sense that they are under the individual’s control. They can also be social, in the sense that they can connect with others and support group formation and action. But they need to be personal first.
  2. Make individuals the collection centers for their own data, so that transaction histories, health records, membership details, service contracts, and other forms of personal data are no longer scattered throughout a forest of silos.
  3. Give individuals the ability to share data selectively, without disclosing more personal information than the individual allows.
  4. Give individuals the ability to control how their data is used by others, and for how long. At the individual’s discretion, this may include agreements requiring others to delete the individual’s data when the relationship ends.
  5. Give individuals the ability to assert their own terms of service, reducing or eliminating the need for organization-written terms of service that nobody reads and everybody has to “accept” anyway.
  6. Give individuals means for expressing demand in the open market, outside any organizational silo, without disclosing any unnecessary personal information.
  7. Make individuals platforms for business by opening the market to many kinds of third party services that serve buyers as well as sellers.
  8. Base relationship-managing tools on open standards, open APIs (application program interfaces), and open code. This will support a rising tide of activity that will lift an infinite variety of business boats, plus other social goods.
  9. The Intention Economy.

All these will also give rise to:

The latter is the title of the following section of the chapter, where I  explain that advertising is a bubble, and “so is the rest of the ‘attention economy’ that includes promotion, public relations, direct marketing, and other ways of pushing messages through media.” I then explain,

The attention economy will crash for three reasons. First, it has always been detached from the larger economy where actual goods and services are sold to actual customers. Second, it has always been inefficient and wasteful, flaws that could be rationalized only by the absence of anything better. Third, a better system will come along in which demand drives supply at least as well as supply drives demand. In other words, when the “intention economy” outperforms the attention economy.

Some context:

The attention economy will not go away. There will still be a need for vendors to promote their offerings. But that promotion will have a new context: the ability of customers to communicate what they need and want—and to maintain or terminate relationships. Thus the R in CRM will cease to be a euphemism. This will happen when we have standard protocols for all three forms of market activity: transaction, conversation, and relationship.

Transaction we already have. Conversation we are only beginning to develop. (Email, text messaging, and other standard and open protocols help here, but they are still just early steps—even in in 2009, ten years after we said “markets are conversations” in The Cluetrain Manifesto.) Relationship is the wild frontier. Closed “social” environments like MySpace and Facebook are good places to experiment with some of what we’ll need, but as of today they’re still silos. Think of them as AOL 2.0.

Now, what do we need to create The Intention Economy? (That link goes to a piece by that name written almost four years ago.) What’s already there, like RSS and its relatives, that we can put to use? What new protocols, formats, tools and code do we need to create?

Improving selling is a good thing. Improving buying is a better thing. And improving how buyers and sellers relate is better than both. Those last two are what VRM is about. (And the last one is what CRM has always been about, though it hasn’t had any reciprocating system on the buy side, which is what VRM will provide.)

If you want to see some of what we’re up to, or to contribute to it, here’s the wiki. And here’s the list.

Meanwhile, I’m working on a book titled The Intention Economy: What Happens When Customers Get Real Power. If you’re interested in pointing me to helpful scholorship, research and stories for the book, feel free to weigh in with those too.

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14 comments

  1. Dave Winer’s avatar

    At dinner last night with Steve Hanselman, my book agent, I predicted you would do exactly this — flip it around from the customer perspective. Bravo!

  2. Jon Husband’s avatar

    I second Dave W’s “bravo”. He deserves one too.

    Both of you, nicely done. The two post taken together flesh out core (and inevitable) issues. I am sure your book will deliver even more insight

  3. Alexander Ainslie (@AAinslie)’s avatar

    Doc, This is great, groundbreaking, stuff.

  4. Mark Essel’s avatar

    This is primo grade A awesome. Thanks Doc and Dave for pointing his Twitter (not middle) finger here.

    I need some time to digest all the personalized, user owned goodness of this post when not at work. Bookmarked for later inspiration.

  5. Bart Stevens’s avatar

    Doc,

    When is your deadline for submitting stories for your book, or is “done and dusted”?
    We have some good stories from the field (based on almost 2 years VRM 0.1 in Europe with iChoosr.

    Cheers,

    Bart

  6. Doc Searls’s avatar

    No deadline yet, Bart. Still early, but I’m hunkering down this month and next.

  7. Drummond Reed’s avatar

    Doc, this rocks. I can hardly wait for the book.

    As you know, XDI the protocol we are designing for you. It many ways it’s “semantic RSS”. It’s a long road but I think this year we’ll start to see the first XDI applications implementing your VRM vision.

    I hope it’s 20/20 insight.

    =Drummond

  8. Nick Garner’s avatar

    awesome….ive followed cluetrain for a long time and i even have the paper based book.

    I work in online marketing, so i know a lot about the attention / disruption model of marketing. I think the idea of intention economy so make sense and explains why the great shifts in online marketing are happening i.e. advertising not working, facebook not working for advertisers and why google adwords IS working (users seeking what they want when they want it i.e. the intention economy in play “Improving selling is a good thing. Improving buying is a better thing. And improving how buyers and sellers relate is better than both.”

    thanks for gelling these ideas

  9. Rotkapchen’s avatar

    Great stuff, loving the whole Intent vs. Attention thing.

    And I hope this is the lead to your book if not a chapter — it clearly carries the ‘power’ statement: “Improving selling is a good thing. Improving buying is a better thing. And improving how buyers and sellers relate is better than both.”

    Businesses have a lot to begin to embrace to make this switch…a different perspective on what they look at and why — their own ‘attention’ model : ) I only ‘dip’ into the topic barely, here: http://www.fastforwardblog.com/2009/07/31/the-context-of-intent/

  10. Jerry’s avatar

    I don’t know about anyone else, but I’m all for public domain. We get what we give back, I’m not for any currency model, but hey, what do I know. :)

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