July 19, 2010

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EmanciPay

July 19, 2010 in Business, Future, Life, music, Technology, VRM | 8 comments

At ProjectVRM we call EmanciPay “a relationship management and voluntary payment framework in which buyers and sellers can present to each other the requirements and options by which they are willing to engage, or are already engaging”. These include preferences, policies and choices about what to pay and how. (Actual payment would be carried out by PayPal, Google Checkout or some other system built for the purpose.)

All of this is new stuff for buyers, and we’re not building it all out at once. In fact, we’re starting with a small piece of code for the seller’s side, so they can signal willingness to engage with buyers in the free and open marketplace, rather than only in the sellers’ own silos. If they want to signal that willingness (which we might call “VRM-friendliness”), they’ll include a bit of RDFa code in their Web pages. If that code is present, the seller’s r-button goes from a default gray to red. If the user already has a relationship (or has had some other interaction) with the seller, the buyer’s side r-button also turns red. So, in this mocked-up example —

— I can see that KQED is VRM-friendly, and that I already have had some kind of dealings with the station.

Right now the code for both sides is in the works, and is also a Google Summer of Code (GSoC) project. It builds to a large extent on Tipsy, described as a “a framework for voluntary donations to bloggers, musicians, and other content creators on the web”. Tipsy is the creation of Oshani Seneviratne and Adam Marcus, both grad students at the MIT Computer Science and Artificial Intelligence Laboratory (CSAIL), whom I got to know through David Karger, a professor at CSAIL, whom I got to know through Keith Hopper, who fathered ListenLog. Our GSoC programmer is Ahmad Bakhiet, a student at Kings College London.

When we’re through with the current stage, we’ll be ready to test out the seller’s side code with stations (or with anybody), which will include means for deciding what happens when the user clicks on the right-side r-button. What matters most at the first stage is the signal of VRM-friendliness, which is a huge state-change form the old silo’d business-as-usual. What it says is “I’m open to what you bring to the market space between us, and to a potential relationship.”

We have this in the real brick-and-mortar commercial world, but not in the e-commerce world, for the simple reason that we have lacked mechanisms for creating the open market spaces between buyers and sellers — the space in the middle here:

Phil Windley of Kynetx gives a perfect “History of E-Commerce” slide in his talks. It goes,

1995: Invention of the cookie.

The End.

Cookies are bits of code that sites put in your browser to help them remember stuff about you. These are handy in many ways, but they also put all responsibility in the hands of those sites — of the sellers.

And if you want to do serious shopping, you can’t just put down cash or a credit card, do your business and walk away. No, you have to register. And to do that you need to accept terms of service that are known in the legal trade as contracts of adhesion. These are usually not read by users for several reasons, the most important of which is that they are not negotiable. Whether or not they are unconscionable, or enforceable, is beside the point. If you want to do business, you have to agree.

Where contracts of adhesion apply, markets are not conversations.
Needing to accept these contracts is a big source of friction in the online marketplace. It’s one of those areas where things are slower online than off. It is also therefore one of those areas where the better model is the familiar offline brick-and-mortar one. (In fact, one could argue that loyalty cards bring to the brick-and-mortar world one of the more annoying inventions of online retailing.)

So that’s a big part of EmanciPay’s challenge, and something we’ve been working on at ProjectVRM. What we’re working to create is a two-sided approach to eliminating the need for users to accept one-sided contracts. We’re creating code with easily-understood wording and symbols, which can be read by lawyers, ordinary users, and machines (ideals first articulated by Creative Commons.) This code can be used for expressing preferences, policies and bases on which each side can trust the other. There’s much more that can go on both sides, but those are a start.

When you click on the seller’s r-button in EmanciPay, you might see a pop-down menu that looks like this:

The new item there is the symbol I’ve labeled “terms”. It’s one half of the iconic “scales of justice.” A similar one might be on the buyer’s drop-down menu as well. Also there might be preferences, standing requests for products or services, links to personal data stores, or whatever we feel like putting in there.

We see the r-buttons and their affordances as places where both the buyer and the seller (or the individual and any organization — this needn’t be limited to commercial settings) can offer, selectively, means of engagement and the data required.

But one of the first jobs here is to get the paranoid lawyers out of the room and the engagement-oriented ones in the room, to help describe new terms of engagement that yield little or nothing in real protection, while offering means for engagement that reduce or eliminate the frictions to which we have become too accustomed over the last fifteen years.

While we’re still baking EmanciPay, I want to visit some questions about what my actual or potential interactions with KQED, WBUR, WWOZ and other stations on my ListenLog might be. There are many possibilities here. One might be to take a budget that I pay down proportionately through time. Another might be to just throw some money now and then at sources of programs that I’ve found especially good — or that I like right now, for that matter. We can be real-time about this. Another might be to pledge money to stations where which I spend more than X amount of time. The list can go on.

I can also, at my discretion, also share some or all of my data with stations and other parties (such as program hosts or producers).

And I can also open myself to programmatic approaches, created by other parties, that work inside the EmanciPay framework. The possibilities are endless here, and suggestions are welcome.

At this stage we plan to test out and play with EmanciPay at first by using Tipsy‘s lottery model. In this one, listeners pay one source, on (say) a monthly basis, with the source being chosen as the winner of a lottery. In other words, if you look at the list of stations on my ListenLog, I would budget $X per month to pay out to some lucky public radio station. Code on the station’s side (the same code that lights up the seller’s r-button) would make them eligible for winning my monthly lottery. At the end of the month, the lucky station gets paid. Get enough listeners and stations involved, and we can have some fun with it.

But that’s just a small first step. The ones that follow will shake down richer and more symmetrical, involved and cross-informative relationships between stations and listeners — and then expand out into other territory, I hope starting with the music industry. From there we can move on to other content industries, and then to the broader marketplace in general.

If all goes according to plan, r-buttons will be commonly used and well-understood symbols. Of course, plans can change. Alternative ideas are sure to emerge, along with many improvements to this one, which is among many others in the VRM movement. It just happens to be the one I’ve been working on most.

Meanwhile, big thanks to to Vince Stehle (who has moved on from Surdna, but made the grant happen when we needed it most), to Keith Hopper and NPR, to Jake Shapiro and the crew at PRX, to many other friends in public radio (and to ones in free commercial radio as well, such as Bill Goldsmith of Radio Paradise), to Daniel Choi, Oshani Seneviratne, Adam Marcus, Ahmad Bakhiet and other helpful programmers, to the VRM community, and to the Berkman Center, which has kept faith with me and with ProjectVRM through the years required to get things off the ground.

We’re still getting started here. But we’ve come a long way too.

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ListenLog

July 19, 2010 in Berkman, Business, Ideas, infrastructure, Live Web, radio, Technology, VRM | 3 comments

In the last post we talked about price.

There’s a broad class of goods that either have no price, or that you can get for free whether they have prices or not. These include all digitized media goods. Most notoriously, these include music and videos, which can be uploaded and downloaded with little friction, even if doing so is illegal. This fact of early Internet life has presented an extreme challenge to “content” industries in general, and to the music industry in particular. You might say that the old container approach crashed, and most attempts since then on the industry side have consisted of creating new containers or raising costs to customers of violating the old ones — mostly by taking what the industry calls “pirates” to court.

At ProjectVRM we have plans for the music business, but first we’d rather work with a smaller industry that welcomes our participation, that hasn’t lost business to freeloaders (because giving the goods away is what they’ve done all along) and that has been working with ProjectVRM from the start. That industry is public radio.

The goods here are free for the taking but worth more than $0 — a claim substantiated by payments from listeners to stations for goods from NPR, PRI, American Public Media, PRX and other producers, as well as from the stations themselves. Business here isn’t bad. And public radio has embraced the Internet far more eagerly than most commercial content producers and distributors. Still, only about ten percent of listeners contribute, so there’s plenty of room for improvement.

So the challenge we’ve given ourselves is raising that percentage, while also starting to model the free and open marketplace described above. With help from the Surdna Foundation (working through PRX and the Berkman Center) we began developing two VRM tools that put functionality behind r-buttons. The first is ListenLog. The second is EmanciPay.

ListenLog is the brainchild of Keith Hopper, who works with NPR. Keith and I saw two goals for the program. One was to enable self-tracking as something individuals do for themselves (rather than having some organization do it for them). The other was to give listeners a way to know what they value, find their way back to it, and otherwise do whatever they like with it — including making decisions about what to pay for the goods themselves. (For more about self-tracking, read Self-trackKevin Kelly and Gary Wolf of The Quantified Self.)

As it happened a number of public radio institutions were working together on a free public radio player (originally called a tuner), for the iPhone. To make a long story short, the first generation ListenLog is now included with the Public Radio Player, which lets you tune in hundreds of different stations, plus “on demand” programs (basically podcasts stored in the cloud). ListenLog keeps track of your listening through all of them, and provides three different views:

  1. Current ongoing log
  2. Stream Listening Summary
  3. Program Listening Summary

— along with ways to export and delete data.

ListenLog is open source, and we’d love to see it used alongside other apps on other devices, and to model logging of all kinds of stuff (such as music).

So far the Public Radio Player has had more than 2.5 million downloads, which means there’s some chance you already have it, if you’re an iPhone user. If you don’t, and you listen to public radio, get one, check out ListenLog and offer feedback and suggestions below. Or, if you’re an open source developer, help us out.

Once you have the app, go into Settings, activate logging, and follow the results. You do that by clicking “more” on the bottom right tab of the Player, which goes to the page on the right.

Below are three screen shots of my own logs. These bring up questions that EmanciPay can help answer.

First, my current log:

Second, my Total Listening Time Per Stream:

Third, my Total Listening Time Per Program:

As logging applications go, this one is primitive. In fact, that’s one of the ideas behind it. We want others to take and improve on the ideas (and/or the code)_ behind it, and to put it to new uses.

This is where EmanciPay comes in. That’s the subject of our next piece, the third in this series.

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R-Buttons and the Open Marketplace

July 19, 2010 in Future, Ideas, Life, Live Web, Technology, VRM | 8 comments

Three things happen in a marketplace. One is transaction, another is conversation and the third is relationship. Let’s talk about what you, as a customer (not just a consumer), can do with each.

Transaction

Let’s start with price. Here in the industrialized world, price has been something that sellers have set, and buyers have paid, ever since John Wanamaker invented the price tag in the late 1800s. In some cases buyers have had room to haggle (such as with buying a horse or a car), but on the whole we customers pay what sellers ask. Or we move on.

A price is a signal. So is buying something. So, in a less direct way, is not buying. But those aren’t the only signals that matter. A lot can happen between the point where you start shopping and any seller’s bottom line, on both the seller’s part and yours.

Take the signaling system called advertising, which is becoming a half $trillion business, worldwide. Most advertising is, almost by definition, wasted. Wanamaker’s famous quote — ”Half my advertising is wasted. I just don’t know which half. — was off by nearly fifty percent. The amount of advertising that does nothing for customers is usually close to one hundred percent. Sure, advertisers try to minimize waste; and in many cases (such as Google’s AdSense and AdWords), advertisers only pay for clicks. And advertising pays for many good things in the world. But there is a limit to what it can do for you, as an individual buyer, and that limit is set by who does the signaling.

What if you were able to signal your interest in an umbrealla, some binoculars, size 9EEEE running shoes, or a stroller for twins, in the next half hour — and to do that in a secure way that doesn’t reveal to potential sellers any more than they require to respond, and doesn’t put you into any marketer’s pitch mill? What if you could name the price you’d pay for whatever — and not have to do that inside any company’s closed and private marketplace?

Conversation

The first thesis of The Cluetrain Manifesto is “Markets are conversations.” We meant several things by that. One, as we explained in the book, was

The first markets were markets. Not bulls, bears, or invisible hands. Not battlefields, targets, or arenas. Not demographics, eyeballs, or seats. Most of all, not consumers.

Another was this:

For thousands of years, we knew exactly what markets were: conversations between people who sought out others who shared the same interests. Buyers had as much to say as sellers. They spoke directly to each other without the filter of media, the artifice of positioning statements, the arrogance of advertising, or the shading of public relations.

These were the kinds of conversations people have been having since they started to talk. Social. Based on intersecting interests. Open to many resolutions. Essentially unpredictable. Spoken from the center of the self. “Markets were conversations” doesn’t mean “markets were noisy.” It means markets were places where people met to see and talk about each other’s work.

Conversation is a profound act of humanity. So once were markets.

Marketing got the message, and conversation of the literal sort is now part of the marketing canon. But marketing reform didn’t stop there. Marketing is now all gaga over “social media” as well, in part because many believe that Cluetrain was all about “social” markets. I don’t remember thinking about it that way at the time, but I can see why people think so. Regardless of that, there is a big delta between social activity in markets and “social media” as they are understood today. Here are the first two paragraphs of Wikipedia’s social media entry (since it will be revised, here is the version I’m quoting:

Social media are media for social interaction, using highly accessible and scalable publishing techniques. Social media use web-based technologies to transform and broadcast media monologues into social media dialogues. They support the democratization of knowledge and information and transform people from content consumers to content producers. Andreas Kaplan and Michael Haenlein define social media as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.”[1] Businesses also refer to social media as user-generated content (UGC) or consumer-generated media (CGM). Social media utilization is believed to be a driving force in defining the current period as the Attention Age. A common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value.

Social media have been modernized to reach consumers through the internet. Social media have become appealing to big and small businesses. Credible brands are utilizing social media to reach customers and to build or maintain reputation. As social media continue to grow, the ability to reach more consumers globally has also increased. Twitter, for example, has expanded its global reach to Japan, Indonesia, and Mexico, among others. This means that brands are now able to advertise in multiple languages and therefore reach a broader range of consumers. Social media have become the new “tool” for effective business marketing and sales.[2] Popular networking sites including Myspace, Facebook and Twitter are social media most commonly used for socialization and connecting friends, relatives, and employees.

Wisely, Wikipedia has the entry flagged for “multiple issues.” Here are mine:

  1. The “social media” named above are corporate entities, not personal ones. Blogging, instant messaging, texting, emailing, voice and other equally (or more) social and conversational technologies — ones that are not owned by anybody, most of which rely on the Net’s agnostic protocols — are ignored.
  2. “Social media” is for marketing. In other words, something that exists mostly to serve sellers, not buyers.

Forgotten or ignored by the writers, and by marketing in general, is Cluetrain’s prime clue: one that comes before all ninety-five theses:

Social media, as described by that Wikipedia entry, are about extending marketers’ grasp. Not about extending the reach of human beings.

The Cluetrain hasn’t jumped the tracks here. But a lot of marketers sure have.

Relationships

Companies care about relationships with customers, of course. They manage those relationships many ways, including customer relationship managment (CRM) systems. While not nearly as big as advertising, CRM is still a huge industry. In “CRM: Then and Now”, Josh Weinberger of CRM Magazine writes,

According to figures from AMR Research (now part of industry-analysis giant Gartner), annual sales of CRM software exploded from $762 million in 1997 to $14 billion in 2007—nearly a 20-fold increase in just a decade.

Over on your side — the customer side — we have VRM, for Vendor Relationship Management. Thanks to Josh and other good folks at CRM Magazine, VRM is on the CRM radar. (Here’s the table of contents for the May edition of the magazine, with a series of VRM — and Cluetrain — related articles. And here’s what I wrote about those on the ProjectVRM blog.) Right now VRM is a $0 billion business. But then, so was the Internet at one point. (At a base level, it still is, even though it supports $trillions in business activity.) So, while VRM is still pre-natal, the Internet isn’t much older. If we date the commercial Web from the start of e-commerce in 1995, it’s a sophomore in high school. If the slate of economics in the Internet Age has a near-infinite height and width, most of it is still clean.

The informational environment supported by the Internet’s growing protocol suite is already much larger and more thick with possibilities than could ever be contemplated in the old brick-and-mortar retail world. This new environment also encompasses and enlarges the scope of brick-and-mortar business far beyond their old physical dimensions. The Net also invites the development of tools for doing just about anything that can be imagined when every connected entity is at a functional distance of zero from every other entity. That’s why the Net’s protocol suite has grown over the years, and will continue to grow. It seems only reasonable that some new tools coming down the pike will help buyers manage relationships with sellers at least as well as sellers manage relationships with buyers.

Right now there are many tools, services and other stuff in the VRM pipeline. In the next two posts I’m giong to show you a couple of those tools. The first is ListenLog, which provides a way for online listeners to log their own activities, and to better understand which stations ane programs matter to them, and how. The second is EmanciPay, which does two things. One is provide a way for customers to signal the amounts they are willing to pay, and for what. The other is to signal the customer’s own terms of engagement, as an alternative to the current seller-provided terms, which by default —

  1. are based on distrust,
  2. almost nobody reads,
  3. give all advantages to the seller,
  4. have hardly changed since 1995, and
  5. don’t exist in the everyday brick-and-mortar world, where you don’t have to become a “member “of a store just to buy a shirt or shoes there.

Borrowing the argot of economics, we’re looking here to reduce or eliminate information asymmetry, and to apply the Internet’s end-to-end principle to buyer-seller interactions. Our goal is not to create a whole new kind of marketplace, but rather to return the ones we have to what markets were like before industry won the Industrial Revolution: places where buyers and sellers met, talked, came to know one another — and otherwise engaged in a system that was not limited to choices provided only by sellers.

It helps consider the matter of context. That is, your context. Right now, as a customer, your context is usually comprised of many retailers, each with many products. The way the industrial retailing system works today, most sellers want to control their relationship with you, inside their CRM system, or whatever other systems they use. In the tech world, we call each of these a silo. The mental model looks like the image on the left.

Retail silos are controlled and contained spaces, each standing on the seller’s own foundation: its rules for interacting with customers. All the seller’s goods are in there. So are its employees, its legal stuff, its products, its R&D, its trade secrets — and its data about you. That data includes whatever you’ve shared with them, knowingly or nor not, in the course of doing business with them, or simply moving about in the world, leaving a crumb-trail of information about yourself and what you’ve done. In many cases your relationship is formalized with a “loyalty card” (like the ones on the right) or some other form of membership.

Each of these is your membership in a seller’s silo. Thus the pile of cards shown on the right can also be represented this way:

Your relationships in this environment are all separate, requiring that you operate within each retailer’s container. Your personal data, preferences and buying history with one company are not easy to move or duplicate into another. Nor are they meant to be. The way this system works, the sellers make all the rules. And each seller has its own rules. By this system, a free market is your choice of silo.

You too have a container as well. That container is what you consider private and yours alone, even if some of it is shared, selectively, with other parties. This information might include your relationships, your finances, your weight, your diet, your travels, your health. True, much of that data (for example, with health) is out of your hands. But you still have a sense of what’s private and yours alone.

For a look at how much your own silo matters, do a search for “privacy“. The one I just did brought up 1,390,000,000 results. That’s more than the results for “face” and “hand” put together. Privacy is a big deal in these early Internet years because you’re not in control of it. All those silos out there — the ones with your personal data — have far more control over your data than you do.

Markets, in both their literal and metaphorical meanings, are middle grounds. They are places where we are selectively open to society, and especially to sellers — and where they are open to us. One way to represent that is to turn our silos on their sides and open them up, so we each have a representation of containment, but also of openness, and even of attraction. So, instead of having silos, we have magnets, like this:

You are on the left. The seller is on the right. And the market is in the middle.

The VRM community is working on building this out. (As we said above, the CRM community has begun to join the effort as well.) We are doing this by creating ways of relating in which both sides are open to the other, but neither contains the other. The two can have attractions toward each other, but engagement is optional. Think of the result as a market that’s far more free than the your-choice-of-silo model.

We call these two shapes “r-buttons“. The “r” is for relationship. We use the color red, at least some of the time, because that was the color I used when I first drew r-buttons on a whiteboard when I was describing to PRX techies how VRM worked. At the time I was just talking about buyers and sellers, not designing graphic representations of anything. But the casual illustration worked, so we’ve run with it. (My wife just suggested that the two buttons together might be “our-buttons”. I like that.)

Next: ListenLog.

After that: EmanciPay.