Cluetrain

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Fred WilsonI’m bummed that I missed LeWeb, but I’m glad I got to see and hear Fred Wilson’s talk there, given on Tuesday. I can’t recommend it more highly. Go listen. It might be the most leveraged prophesy you’re ever going to hear.

I’m biased in that judgement, because the trends Fred visits are ones I’ve devoted my life to urging forward. You can read about them in Linux Journal (starting in 1996), The Cluetrain Manifesto (1999, 2000, 2011), this blog (starting in 1999), ProjectVRM (starting in 2006) and The Intention Economy (2012). (Bonus links: What I said at Le Web in 2007 on stage and in an interview.)

He unpacks three megatrends, with an additional focus on four sectors. Here are my notes from the talk. Some of it is quotage, but little of it is verbatim. If you want to quote Fred, go to the source and listen.

1) We are making a transition from bureaucratic hierarchies to technology-driven networks. The former is the way the world has been organized for the last two hundred years. Markets, government, businesses are all pyramids. Transaction and communication costs were so high in the industrial era that these pyramids were the best way to organize work and run systems. But now technology-driven networks are replacing bureaucracies. Examples…

Twitter. Replaces the newspaper. The old army of reporters that reported to divisional editors who chose what would appear in limited spaces and distribute through printing mills and trucked to your doorstep was slow moving and bureaucratic. Now all of us are reporters. The crowd determines what’s important. This is an example of a tech-driven network.

YouTube. TV was hierarchical. Now all of us are video creators.

SoundCloud. Anybody can create audio or music. No labels. No radio or music industry required.

We first saw this trend in media and entertainment. Now we’re seeing it in AirBnB, One Fine Stay. Creative industries like Kickstarter and VHX. Learning with Codecademy and DuoLingo for languages.

We are very early with all of these and more to come.

2) Unbundling. This has to do with the way services are packaged and taken to market. In the traditional world, you only got to buy the thing that had everything in it. Now tech is changing that. More focused, best of breed, delivered a la carte. Now on mobile and internet you get better everything. Best of sports, fashion, classified advertising.

Banking is being unbundled. Banks used to do everything. Now entrepreneurs are picking off services. Lending Club. Funding Circle. auxsmoney in Germany. Taking profitable lending franchises away. Working capital. c2fo. Management services. All new, all based on networks.

Education. It’s expensive to put a lot of students in a building with a professor up front of every class. You needed a library. Administration. Very inefficient, costly, pyramidal and centralized. Now you can get books instantly. Research is no longer as highly centralized and capital dependent. See Science Exchange: collaboration on an open public network.  All this too is also early.

Entertainment. Used to be that you’d get it all on cable. Now we get Netflix and YouTube on our phones. Hulu. A la carte. Airplay, Chromecast.

3) We are all now personally a node on the network. We are all now nodes on the network, connected all the time. Mobiles are key. If forced to make a choice between phone and desktop, we go with the phone. (About 80% of the LeWeb audience did, along with Fred.) In the larger world, Android is being adopted massively on cheap phones. Uber, Halo.

This change is profoundly impacting the world of transportation. Rental cars. Delivery. Payments. Venmo, Dwolla, Square. Peer to peer. You can send money to anybody. For dating there’s Tinder. Again, this is new. It’s early.

The four sectors…

a) Money. Not just Bitcoin. At its core Bitcoin is a protocol: the financial and transactoinal protocol for the Net. We haven’t had one until now. As of today it is becoming a layer of internet infrastructure, through a ledger called the blockchain that is global. All transactions are cleared publicly in the blockchain. Entrepreneurs will build tech and services on this. Payments and money will flow the way content now flows. No company will control it. Others’ lock on our money will be gone.

b) Health and wellness. Health care is regulated and expensive. Health and wellness is the opposite. It’s what keeps you out of the hospitals. (QS is here.) The biologies of our bodies will be visible to us and connected. Some communications will be personal and private, some networked, some with your doctor and so on. Small example: many people today gamify their weight loss.

c) Data leakage. When the industrial revolution came along, we had polluting. It took a century to even start dealing with it. In the information revolution, the pollution is data. It’s what allows Google, Facebook and the government spy on us when we don’t want them to. We have no control over that. Yet.

d) Trust and identity. We have allowed Google, Facebook, Amazon and Twitter to be our identity services. It’s very convenient, but we are giving them access to all we do. This isn’t good. Prediction: a bitcoin-like service, a protocol, that is distributed and global, not controlled by anybody, architected like the Internet, that will emerge, that will give us control over identity, trust and data. When that emerges I’ll let you know. I haven’t seen it yet.

Talk to me, Fred. :-)

John Havens has an excellent piece in Mashable titled “It’s Your Data — But Others Are Making Billions Off It.” In a Web overflowing with chaff, it’s a fine grain of wheat.

But it’s also camouflaged by chaff posing as wheat. I can tell, because I was interviewed for the piece, which  links back to this blog. Trackbacks appear in my comment queue, and I should see just one, if any: from the Mashable piece. But instead I see four, all from splogs—spam blogs—that took the Mashable piece and republished it as their own. I won’t link to them, but you can find them if you do a search on Google looking for the original. When I first tried that, the results yielded lots of false positives from splogs. Now the search correctly yields just this:

1 result (0.24 seconds)
Search Results

It’s Your Data — But Others Are Making Billions Off It – Mashable

mashable.com/2013/10/24/personal-data-monetization/

Oct 24, 2013 – “The entire advertising industry has been hugely corrupted by personalization and surveillance,” says Doc Searls, author of The Intention 

In order to show you the most relevant results, we have omitted some entries very similar to the 1 already displayed.
If you like, you can repeat the search with the omitted results included.

Do that and you’ll see those four splogs, plus many more.

To mix metaphors, splogs are worse than chaff. They are parasites. I also believe they are inevitable in the ad-driven monoculture that the commercial Web has become. Also somehow consistent with John’s original post.

silosThe Forrest of Silos problem I describe in the last post is exactly what Josh Marshall of TPM is dealing with when he says (correctly) ”there’s no single digital news publishing model” — and what Dave Winer also correctly talks about here.)

Every publisher requiring a login/password, or using ‘social logins’ such as those provided by Facebook and Twitter, is living in an administrative hell that burns no less because it’s normative in the extreme. That every pub has its own login/pw, subscription system and/or social login is a perfect example of centralized systems failing to solve the problems of centralization.

We need decentralized solutions: ones that work first at the personal level and after that at the social and organizational ones. Only by starting with the individual will we get:

  • One standard way that any one of us can subscribe, and manage subscriptions, for any number of publications, using tools and services that any variety of providers can offer, but any one of us can leave for other tools and providers.
  • One standard way that we can change our address, phone number, email, last name or other personal data, for every publication we deal with, at once. We can do that, for example,  in our own personal cloud — a standards-based one that’s ours alone, using open code at the base level. (A bonus link about that.)
  • One standard way we can advertise our own wants, needs and other intentions to the marketplace, securely, with minimized fear of surveillance or other offenses to our privacy.

None of that can be done with yet another centralized private service such as we get today from Apple, Google, Facebook and Twitter.

I’ve believed since long before I co-wrote Cluetrain that distributed and decentralized personal tools were the only way to solve the problems of centralization and create countless new opportunities for personal, social and economic growth in the world. It’s why I started ProjectVRM, and why we have a growing list of developers working to liberate individuals and prove that free customers are worth more than captive ones.

I believed in this work because we already see it proven in the world by personal computers, the Internet and its liberating standards and protocols. Those are decentralized too. All I’m talking about here is standing new solutions on top of those old shoulders.

This is not to knock anything social, by the way. Of course we are social beings. But we are also, as individuals, decentralized, except to ourselves. That’s what I (and others, such as Devon Loffreto) mean when we talk about (for example) sovereign identity.

None of us will solve the Forest of Silos problem by creating bigger and better silos, or by making them ore “centric” toward individuals.

In , opens with this sentence: “On any person who desires such queer prizes, New York will bestow the gift of loneliness and the gift of privacy.” Sixty-four years have passed since White wrote that, and it still makes perfect sense to me, hunched behind a desk in a back room of a Manhattan apartment.

That’s because privacy is mostly a settled issue in the physical world, and a grace of civilized life. Clothing, for example, is a privacy technology. So are walls, doors, windows and shades.

Private spaces in public settings are well understood in every healthy and mature culture. This is why no store on Main Street would plant a tracking beacon in the pants of a visiting customer, to report back on that customer’s activities — just so the store or some third party can “deliver” a better “experience” through advertising. Yet this kind of thing is beyond normative on the Web: it is a huge business.

Worse, the institution we look toward for protection from this kind of unwelcome surveillance — our government — spies on us too, and relies on private companies for help with activities that would be a crime if the  still meant what it says. ( more than two years ago.)

I see two reasons why privacy is now under extreme threat in the digital world — and the physical one too, as surveillance cameras bloom like flowers in public spaces, and as marketers and spooks together look toward the “Internet of Things” for ways to harvest an infinitude of personal data.

Reason #1

The was back-burnered when  (aka ) got baked into e-commerce in the late ’90s. In a single slide  summarizes what happened after that. It looks like this:

The History of E-commerce
1995: Invention of the cookie.
The end.

For a measure of how far we have drifted away from the early promise of networked life, re-read ‘s “Death From Above,” published in January 1995, and his “Declaration of the Independence of Cyberspace,” published one year later. The first argued against asymmetrical provisioning of the Net and the second expressed faith in the triumph of nerds over wannabe overlords.

Three years later  was no less utopian. While it is best known for its 95 Theses (which include “” and ““) its most encompassing clue came before of all those. Chris Locke wrote it, and here’s what it says, boldface, color and all:

if you only have time for one clue this year, this is the one to get…
we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.

Note the first and second person voices, and the possessive case. Our reach was everybody’s. Your grasp was companies’.

Fourteen years later, companies have won. Our reach has not exceeded their grasp. In fact, their grasp is stronger than ever.

Another irony: the overlords are nerds too. And  they lord over what Bruce Schneier calls a feudal system:

Some of us have pledged our allegiance to Google: We have Gmail accounts, we use Google Calendar and Google Docs, and we have Android phones. Others have pledged allegiance to Apple: We have Macintosh laptops, iPhones, and iPads; and we let iCloud automatically synchronize and back up everything. Still others of us let Microsoft do it all. Or we buy our music and e-books from Amazon, which keeps records of what we own and allows downloading to a Kindle, computer, or phone. Some of us have pretty much abandoned e-mail altogether … for Facebook.

These vendors are becoming our feudal lords, and we are becoming their vassals. We might refuse to pledge allegiance to all of them – or to a particular one we don’t like. Or we can spread our allegiance around. But either way, it’s becoming increasingly difficult to not pledge allegiance to at least one of them.

Reason #2

We have loosed three things into the digital world that we (by which I mean everybody) do not yet fully comprehend, much less deal with (through policy, tech or whatever). Those are:

  1. Ubiquitous computing power. In the old days only the big guys had it. Now we all do.
  2. Ubiquitous Internet access. This puts us all at zero virtual distance from each other, at costs that also veer toward zero as well.
  3. Unlimited ability to observe, copy and store data, which is the blood and flesh of the entire networked world.

In tech, what can be done will be done, sooner or later, especially if it’s possible to do it in secret — and if it helps make money, fight a war or both. This is why we have bad acting on a massive scale: from click farms gaming the digital advertising business, to the NSA doing what now know it does.

Last month I gave a keynote at an  event in New York. One of my topics was personal privacy, and how it might actually be good for the advertising business to respect it. Another speaker was , a “gentleman hacker” and CEO of WhiteOps, “an internet security company focused on the eradication of ad fraud.” He told of countless computers and browsers infected with bots committing click-fraud on a massive scale, mostly for Russian hackers shunting $billions from the flow of money down the online advertising river. The audience responded with polite applause. Privacy? Fraud? Why care? The money’s rolling in. Make hay while the power asymmetry shines.

Just today an executive with a giant company whose name we all know told me about visiting “click farms” in India, which he calls “just one example of fraud on a massive scale that nobody in the industry wants to talk about.” (Credit where due: the IAB wouldn’t have had us speaking there if its leaders didn’t care about the issues. But a .org by itself does not an industry make.)

Yet I’m not discouraged. In fact, I’m quite optimistic.

These last few months I’ve been visiting dozens of developers and policy folk from Europe to Australia, all grappling productively with privacy issues, working on the side of individuals, and doing their best to develop enlightened policy, products and services.

I can report that respect for privacy — the right to be left alone and to conceal what one wishes about one’s self and one’s data — is far more evolved elsewhere than it is in the U.S. So is recognition that individuals can do far more with their own data than can any big company (or organization) that has snarfed that data up. In some cases this respect takes the form of policy (e.g. the EU Data Protection Directive). In other cases it takes the form of advocacy, or of new businesses. In others it’s a combination of all of those and more.

Some examples:

 is a policy and code development movement led by Ann Cavoukian, the Information & Privacy Commissioner of Ontario. Many developers, enterprises and governments are now following her guidelines. (Which in turn leverage the work of Helen Nissenbaum.)

, the Fondation Internet Nouvelle Génération, is a think tank of leading French developers, scientists, academics and business folk, convened to guide digital transformation across many disciplines, anchored in respect for the individual and his or her full empowerment (including protection of privacy), and for collective action based on that respect.

 is a Fing project in which six large French companies — Orange, La Poste, Cap-Digital, Monoprix, Alcatel-Lucent and Societe Generale — are releasing to 300 customers personal data gathered about those customers, and inviting developers to help those customers do cool things on their own with that data.

The  in the UK is doing a similar thing, with twenty UK companies and thousands of customers.

Both Midata and Etalab in France are also working the government side, sharing with citizens data collected about them by government agencies. For more on the latter read Interview with Henri Verdier: Director of Etalab, Services of the French Prime Minister. Also see Open Data Institute and PublicData.eu.

In Australia,    and  are working on re-building markets from the customer side, starting with personal control and required respect for one’s privacy as a base principle.

In the U.S. and Europe, companies and open source development groups have been working on personal data “stores,” “lockers,” “vaults” and “clouds,” where individuals can harbor and use their own data in their own private ways. There is already an  and a language for “” and “pclouds” for everything you can name in the Internet of Things. I posted something recently at HBR about one implication for this. (Alas, it’s behind an annoying registration wall.)

On the legal front, Customer Commons is working with the  at the Berkman Center on terms and privacy requirements that individuals can assert in dealing with other entities in the world. This work dovetails with , the  and others.

I am also encouraged to see that the most popular browser add-ons and extensions are ones that block tracking, ads or both. AdblockPlus, Firefox’s Privowny and  are all in this game, and they are having real effects. In May 2012,  a 9.26% ad blocking rate in North America and Europe. Above that were Austria (22.5%), Hungary, Germany, Finland, Poland, Gibraltar, Estonia and France. The U.S. was just below that at 8.72%. The top blocking browser was Firefox (17.81%) and the bottom one was Explorer (3.86%). So it was no surprise to see Microsoft jump on the Do Not Track bandwagon with its latest browser version. In sum what we see here is the marketplace talking back to marketing, through developers whose first loyalties are to people.

(The above and many other companies are listed among developers here.)

More context: it’s still early. The Internet most of us know today is just eighteen years old. The PC is thirty-something. Pendulums swing. Tides come and go. Bubbles burst.

I can’t prove it, but I do believe we have passed Peak Surveillance. When Edward Snowden’s shit hit the fan in May, lots of people said the controversy would blow over. It hasn’t, and it won’t. Our frogs are not fully boiled, and we’re jumping out of the pot. New personal powers will be decentralized. And in cases where those powers are centralized, it will be in ways that are better aligned with individual and social power than the feudal systems of today. End-to-end principles are still there, and still apply.

Another reason for my optimism is metaphor, the main subject in the thread below. In , George Lakoff and Mark Johnson open with this assertion: The mind is inherently embodied. We think metaphorically, and our metaphorical frames arise from our bodily experience. Ideas, for example, may not be things in the physical sense, but we still talk of “forming,” “getting,” “catching” and “throwing out” ideas. Metaphorically, privacy is a possession. We speak of it in possessive terms, and as something valuable and important to protect — because this has been our experience with it for as long as we’ve had civilization.

“Possession is nine-tenths of the law” because it is nine-tenths of the three-year-old. She says “It’s mine!” because she has hands with thumbs that give her the power to grab. Possession begins with what we can hold.

There is also in our embodied nature a uniquely human capacity called indwelling. Through indwelling our senses extend outward through our clothes, our tools, our vehicles, to expand the boundaries of our capacities as experienced and capable beings in the world. When drivers speak of “my wheels” and pilots of “my wings,” it’s because their senses dwell in those things as extensions of their bodies.

This relates to privacy through exclusion: my privacy is what only I have.

The clothes we wear are exclusively ours. We may wear them to express ourselves, but their first purpose is to protect and conceal what is only ours. This sense of exclusivity also expands outward, even though our data.

 ”the Internet is a copy machine.” And it is. We send an email in a less literal sense than we copy it. Yet the most essential human experience is ambulation: movement. This is why we conceive life, and talk about it, in terms of travel, rather than in terms of biology. Birth is arrival, we say. Death is departure. Careers are paths. This is why, when we move data around, we expect its ownership to remain a private matter even if we’re not really moving any of it in the postal sense of a sending a letter.

The problem here is not that our bodily senses fail to respect the easily-copied nature of data on networks, but that we haven’t yet created social, technical and policy protocols for the digital world to match the ones we’ve long understood in the physical world. We still need to do that. As embodied beings, the physical world is not just our first home. It is the set of reference frames we will never shake off, because we can’t. And because we’ve had them for ten thousand years or more.

The evolutionary adaptation that needs to happen is within the digital world and how we govern it, not the physical one.

Our experience as healthy and mature human beings in the physical world is one of full agency over personal privacy. In building out our digital world — something we are still just beginning to do — we need to respect that agency. The biggest entities in the digital world don’t yet do that. But that doesn’t mean they can’t. Especially after we start leaving their castles in droves.

Tags: , , , ,

I’m on a list where the subject of patents is being discussed. While thinking about how I might contribute to the conversation, I remembered that I once cared a lot about the subject and wrote some stuff about it. So I did some spelunking through the archives and found the following, now more than twelve years old. It was written during Esther Dyson‘s PC Forum, and addressed via blog to those present there. So, rather than leave it languishing alone in the deep past, I decided to run it again here. I’m not sure if it contributes much to the patent debate, but it does surface a number of topics I’ve been gnawing on ever since. 

— Doc


I think I could turn and live awhile with the animals…
Not one is demented with the mania of owning things.

Walt Whitman


PC Forum 2000,
Phoenix, AZ. March 15, 2000.

Source Coders

Six years ago, at PC Forum 94, John Gage of Sun Microsystems stood on stage between a twitchy Macintosh Duo and a huge projection screen, and pushed the reset button on our lives.

He showed us the Web.

It was like he took us on a tour of the Milky Way — a strange, immense and almost completely alien space. With calm authority and the deep, warm voice of a Nova narrator, he led us from the home page of a student in Massachusetts to a Winter Olympics report archive in Japan, then to a page that showed everything useful piece of data about every broadcast satellite, compiled and published by a fanatic in North Carolina.

We all knew it was fabulous, but why? How could you make money in a world of ends where nobody owns the means? How could you make sense of a network that is nobody’s product and everybody’s service? And where the hell did it come from?

  • Not Compuserve, AOL, Prodigy or any of the other online services
  • Not Novell, 3Com, Crisco, or any of the infrastructure companies
  • Not AT&T, MCI, Nortek or any of the phone companies.
  • Not Microsoft, Apple, Sun or any of the other platform companies.

Sure, it ran on all of them; but it belonged to none of them. And since they couldn’t own it, they never would have made it. So who the hell did make it?

In a word, Hackers. Programmers. Guys who were real good at writing code. Lots of those guys worked for companies, including the companies we just listed. Lots more worked in the public sector, for schools and government organizations. What they shared was a love of information, and of putting it to work. They put both passions into building the Net, working cooperatively in what Eric Raymond calls a “gift culture,” like Amish farmers raising a barn.

Hackers didn’t build the Net for business. They built it for research. They wanted to make it easy for people to inform each other, no matter who or where they were.

Several days ago Tim O’Reilly and I were talking about information, which is a noun derived from the verb to form. We use information, literally, toform each other. So, if we are in the market for information, we are asking to be formed by other people. In other words, we are authors of each other. It follows that the best information is the kind that changes us most. If we want to know something — if we are in the market for knowledge — we demand to be changed.

That change is growth. Our identity persists, yet who-we-are becomes larger, because we know more. And the more we know, the more valuable we become. This value isn’t a “brand” (a nasty word that comes to us from the cattle industry). It’s reputation.

What these hackers made was an extraordinarily vast and efficient market for knowledge — a wide-open marketspace for information — where everybody gets to participate, to contribute, to grow, and to increase the value of their own reputations.

Utopia

It turns out that the Net is also good for business, even though it was not written for business. In fact, “good” is too weak a word. The Net is a Utopia for business.Think about it. This is a place where —

  • The threshold of enterprise is approximately zero.
  • All you need to get millions of dollars is an idea that looks like it could be worth billions more.
  • You can create those billions of dollars in value just by impressing people with your idea.
  • The value of your idea can grow from zero to billions in a matter of hours.
  • You see investment as income, because you’re obligated to burn it, and you don’t need to hock your house or your car to get it.
  • Promise of reward far out-motivates fear of punishment, because there is no punishment.
  • Failure informs and therefore qualifies you for more money to fund your next idea, because both your knowledge and your reputation have grown in the process

To succeed in this world, your business only needs to be Utopia-compatible. That is, your people need to be in the market for information — or, in the parlance of The Cluetrain Manifesto — in the market for clues.

Yet many companies, especially traditional industrial ones, are not in the market for clues. They neither supply nor demand them. They put up a Web site, strictly as a pro forma measure. The corporate face is blank, the voice robotic. David Weinberger writes, “Companies that cannot speak in a human voice make sites that smell like death.”

The medium is the metaphor

Their problem is conceptual. They literally concieve markets — including the vast information market of the Net — in obsolete terms. They see them as real estate, as battlefields, as territories, as theaters, as animal forces. And none of those metaphors work for the Net.

Three years ago, at PC Forum 97, George Lakoff told us how metaphors work (a good source is his 1980 book, Metaphors We Live By). We were taught in school that metaphors were poetic constructions. In fact, metaphors scaffold our understanding of the world. Conceptual metaphors induce the vocabularies that describe every subject we know.

Take life. In a literal sense, life is a biological state. But that’s not how we know life. If we stop to look at the vocabulary we use to describe life, we find beneath it the conceptual metaphor life is a journey. We cannot talk about life without using the language of travel. Birth is arrival. Death is departure. Choices are crossroads. Troubles are potholes or speed bumps. Mistakes take us off the path or onto dead end streets.

Take time. Our primary conceptual metaphor for time is time is money. We save, spend, budget, waste, hoard and invest it.

Conceptual metaphors are equally ubiquitous and unconscious. They are the aquifers of meaning beneath the grounds of our consciousness. Think about how we turn what we mean into what we say. When we speak, we usually don’t know how we will finish the sentences we start, or how we started the sentences we finish. Think about how hard it is to remember exactly what somebody says, yet to know exactly what they mean. Conceptual metaphors are deeply involved in this paradox. They help us agree that we all understand a subject in the same metaphorical terms.

Now lets look at markets. This morning Steve Ballmer told us that Microsoft’s first principle was “to compete very hard, do your best job, study ideas, move forward aggressively.” What is the conceptual metaphor here? Easy: markets are battlefields. There are two sets of overlapping vocabularies induced by this metaphor: war and sports. So you can talk about “blowing away” competition and “level playing fields” in the same sentence. (Microsoft’s problems derive from a confusion between the war and sports metaphors. “All’s fair” in war, but not sports.)

There are related metaphors. One is markets are real estate. By this metaphor, companies can own market territory, or lease rights to it. To a large extent, both the battle and playing field metaphors derive from the real estate metaphor.

There are unrelated metaphors. One is markets are beings. The investment community describes markets as bullsbears, and invisible hands. They growand shrink. They have moods. They get nervouscalm or upset. Another is markets are theaters. Companies perform there, for audiences, who they would like to enjoy a good experience.Another is markets are environmentsIn The Death of Competition, James Moore speaks of markets as ecosystems where companies and categories evolvecompete in a habitat, for resources like plants and animals, and evolve or become extinct.

So what the hell is a market, really? The answer isn’t complicated when we subtract out all the modern metaphors.

Markets are markets

The first markets were markets. They were real places where people gathered to talk about subjects that mattered to them, and to do business. Supply and demand, selling and buying, production and consumption, vendor and customer —all those reciprocal roles and processes that describe market relationships — were a handshake apart. Our ancestors’ surnames — Smith, Hunter, Shoemaker, Weaver, Tanner, Butcher — derived from roles they played in marketplaces. They were literally defined by their crafts.

Yet the balance of power favored the buy side: the customers, buyers and consumers who were one and the same. The noun “market” comes from the Latin mercere, which means to buy. That’s why we call malls “shopping centers.” Not “selling centers.”

The industrial revolution changed everything. Our ancestors left their farms and shops and got jobs in the offices and factories of industry. On the sell side, they became labor, and on the buy side they became consumers. As the Industrial Age advanced, the distance between production and consumption grew so wide that we came to understand business itself in terms of a new metahor: business is shipping. Now we had content that we loaded into a distribution system or a channel, and addressed for delivery to an end user or a consumer. Eventually, industry came to treat market as a verb as well as a noun. Marketing became the job of moving products across the complex distribution deltas that grew between a few suppliers and vast “markets,” where demand was perceived categorically, rather than personally. Every categorical subject or population — consumer electronics, cosmetics, yachting, 18-34 year old men, drivers, surfers — were all “markets.”

My work as a journalist flanks twenty-two years in marketing, advertising and public relations. These are professions which, in spite of good advice of gurus from Theodore Levitt to Regis McKenna, conceived marketing as the military wing of industry’s shipping system. Marketing’s job was to develop “strategies” for “campaigns” to wage against “targets” with munitions called “mesages” which would succeed by “impact” and “penetration. Those targets were not customers, but “consumers,” “eyeballs” and “seats.” There was no demand by those people for messages, but that didn’t matter because those people were not paying for the messages we insisted on lobbing at them.

So, by the end of the Industrial Age, we had not only forgotten what a market really was, but we had developed new and often hostile meanings for both the noun and the verb. We also understood both in terms of conceptual metaphors that were far removed from markets as places and as activities that defined those places.

Around the turn of the 90s, I began to float a new metaphor: markets are conversations. I liked it for two reasons: 1) it worked as a synonmym (try substiting conversation for market everywhere the latter appears and you’ll see what I mean); and 2) every other metaphor — with the notable exception of markets are environments — insulted the true nature of markets, especiallly in a networked world built by a gift economy, where product categories and their competing occupants all grow, often at nobody’s expense.

The idea didn’t catch on until it was put to work as Thesis #1 in The Cluetrain Manifesto. Now it’s all over the place. But it also has a long way to go. Conceptual metaphors such as markets are battlefields are huge reservoirs of bad meaning. Even highly clueful e-businesses make constant use of them.

Which brings us to patents, which operate on the conceptual metaphor inventions are property. This metaphor worked, more or less, through the entire Industrial Age; but it runs into trouble with the Net. While patents and properties may have been involved in the development of the Net, we don’t see them among the credits. As Larry Lessig puts it, the Net grew in the context of regulation, but regulation that broaded access to the very limits of plausibility, essentially by making cyberspace a form of public property — or, more accurately, nobody’s property.

But when we frame the argument over patents in terms of property, we must use the conceptual metaphor on which patents depend, and which also that deny the nature of the Net. We will also argue in terms of market metaphors that employ property concepts: war, games, real estate, theater, and shipping. We will not talk in terms of knowledge, information and conversation.

The challenge

This is where we found ourselves today, when Larry Lessig spoke to us. He said,

“…In the context of patents, the passion to regulate rages. Some 40,000 software patents now float in the ether; a new industry of patent making was launched by a decision of the federal circuit in 1998 — the business method patent. Gaggles of lawyers, my students, now police the innovation process in Internet industry. 5 years ago, if you had a great idea, you coded it. Today, if you have a great idea, you call the lawyers to check its IP.

“This change is the product of regulation. And while in principle, I’m in favor of patents, we should not ignore the nature of the change that this creates. Unlike open access, the regulations of patent don’t decentralize the innovative process. They do the opposite. Unlike open access, the regulations of patent don’t increase the range of those who might compete; for the most part, they narrow it. Unlike open access, patents don’t broaden the architecture of innovation. They narrow it. They are part of an architecture — a legal architecture — that narrows innovation.” (You’ll find this and many other speeches at his site.)

A year ago I defected from marketing. I went over to the other side, joining markets in their fight against Business as Usual. That’s why I write for Linux Journal. It’s also why I co-wrote The Cluetrain Manifesto.

Linux is the Amish barn operating system. It was conceived and built on the same principles as the Net. Not surprisingly, much of what we see on the Net is served up by Linux and other software described as “open” and “free.”

Cluetrain insists that we start to understand the Net on its own terms. This means we have to go back to our founding hackers and look at the virtues embodied in the Utopia donated to business by the hackers’ gift culture.

I suggest we start with these three:

  • Nobody owns it
  • Everybody can use it
  • Anybody can improve it

Eric Raymond suggests many more. So do Bryan Pfaffenberger (who also writes for Linux Journal), Larry LessigRichard Stallman,Tim O’Reilly,James Gleick and Dave Winer, to name just a few.

Let’s start there.

If we start with the industrial world, we’ll stay there. And we can kiss Utopia good-bye.

Uninstalled is Michael O'Connor ClarkeMichael O’Connor Clarke’s blog — a title that always creeped me out a bit, kind of the way Warren Zevon‘s My Ride’s Here did, carrying more than a hint of prophesy. Though I think Michael meant something else with it. I forget, and now it doesn’t matter because he’s gone: uninstalled yesterday. Esophogeal cancer. A bad end for a good man.

All that matters, of course, is his life. Michael was smart and funny and loving and wise far beyond his years. We bonded as blogging buddies back when most blogs were journals and not shingles of “content” built for carrying payloads of advertising. Start to finish, he was a terrific writer. Enviable, even. He always wrote for the good it did and not the money it brought. (Which, in his case, like mine and most other friends in the ‘sphere, was squat.) I’ll honor that, his memory and many good causes at once by sharing most of one of his last blog posts:

Leaky Algorithmic Marketing Efforts or Why Social Advertising Sucks

Posted on May 9, 2012

A couple of days ago, the estimable JP Rangaswami posted a piece in response to a rather weird ad he saw pop up on Facebook. You should go read the full post for the context, but here’s the really quick version.

JP had posted a quick Facebook comment about reading some very entertainingly snarky Amazon.com reviews for absurdly over-priced speaker cables.

Something lurking deep in the dark heart of the giant, steam-belching, Heath Robinson contraption that powers Facebook’s social advertising engine took a shine to JP’s drive-by comment, snarfled it up, and spat it back out again with an advert attached. A rather… odd choice of “ad inventory unit”, to say the least. Here’s how it showed up on on of JP’s friends’ Facebook news feeds:

I saw JP post about this on Facebook and commented. The more I thought about the weirdness of this, the longer my comment became – to the point where I figured it deserved to spill over into a full-blown blog rant. Strap in… you have been warned.

I’ve seen a lot of this kind of thing happening in the past several months. Recently I’ve been tweeting and Facebooking my frustration with social sharing apps that behave in similar ways. You know the kind of thing – those ridiculous cluewalls implemented by Yahoo!, SocialCam, Viddy, and several big newspapers. You see an interesting link posted by one of your friends, click to read the article, and next thing you know you’re expected to grant permission to some rotten app to start spamming all your friends every time you read something online. Ack.

The brilliant Matthew Inman, genius behind The Oatmeal, had a very smart, beautifully simple take on all this social reader stupidity.

It’s the spread of this kind of leaky algorithmic marketing that is starting to really discourage me from sharing or, sometimes, even consuming content. And I’m a sharer by nature – I’ve been willingly sharing and participating in all this social bollocks for a heck of a long time now.

But now… well, I’m really starting to worry about the path we seem to be headed down. Or should I say, the path we’re being led down.

Apps that want me to hand over the keys to my FB account before I can read the news or watch another dopey cat video just make me uncomfortable. If I inadvertently click through an interesting link only to find that SocialCam or Viddy or somesuch malarkey wants me to accept its one-sided Terms of Service, then I nope the hell out of there pretty darn fast.

How can this be good for the Web? It denies content creators of traffic and views, and ensures that I *won’t* engage with their ideas, no matter how good they might be.

All these examples are bad cases of Leaky Algorithmic Marketing Efforts (or L.A.M.E. for short). It’s a case of developers trying to be smart in applying their algorithms to user-generated content – attempting to nail the sweet spot of personal recommendations by guessing what kind of ad inventory to attach to an individual comment, status update, or tweet.

It results in unsubtle, bloody-minded marketing leaking across into personal conversations. Kinda like the loud, drunken sales rep at the cocktail party, shoe-horning a pitch for education savings plans into a discussion about your choice of school for your kids.

Perhaps I wouldn’t mind so much if it wasn’t so awfully bloody cack-handed as a marketing tactic. I mean – take another look at the ad unit served up to run alongside JP’s status update. What the hell has an ad for motorbike holidays got to do with him linking to snarky reviews of fancyass (and possibly fictional) speaker cables? Where’s the contextual connection?

Mr. Marketer: your algorithm is bad, and you should feel bad.

As you see, Michael was one of those rare people who beat the shit out of marketing from the inside. Bless him for that. It’s not a welcome calling, and Lord knows marketing needs it, now more than ever.

Here are some memorial posts from other old friends. I’ll add to the list as I spot them.

And here is his Facebook page. Much to mull and say there too. Also at a new memorial page there.

It’s good, while it lasts, that our presences persist on Facebook after we’re gone. I still visit departed friends there: Gil Templeton, Ray Simone, R.L. “Bob” Morgan, Nick Givotovsky.SupportMichaelOCC.ca is still up, and should stay up, to help provide support for his family.

His Twitter stream lives here. Last tweet: 26 September. Here’s that conversation.

Markets are conversations, they say. So yesterday I had one with MRoth, head of product for , the company whose service changes the other day caused a roar of negative buzz, including some from me, here.

Users were baffled by complexities where simplicities used to be. Roger Ebert lamented an “incomprehensible and catastrophic redesign” and explained in his next tweet, “I want to shorten a link, tweet it, and see how many hits and retweets it got. That’s it. Bit.ly now makes it an ordeal.”

That was my complaint as well. And it was heard. A friend with Bitly connections made one between  and me, and good conversation followed for an hour.

We spent much of that time going over work flows. Turns out Roger’s and mine are not the only kind Bitly enables, or cares about, and that’s a challenge for the company. Compiling, curating and sharing bookmarks (which they now call “bitmarks”) is as important for some users as simply shortening URLs is for others. Bitly combined the two in this re-design, and obviously ran into problems. They are now working hard to solve those.

I won’t go into the particulars MRoth shared, because I didn’t take notes and don’t remember them well enough in any case. What matters is that it’s clear to me that Bitly is reaching out, listening, and doing their best to follow up with changes. “Always make new mistakes,” Esthr says, and they’re making them as fast and well as they can.

I will share something I suggested, however, and that’s to look at the work flows around writing, and not just tweeting and other forms of “social” sharing.

We need more and better tools for writing linky text on the Web. Much as I like and appreciate what WordPress and Drupal do, I’m not fond of either as writing systems, mostly because “content management” isn’t writing, and those are content management systems first, and writing systems second.

As an art and a practice, writing is no less a product of its instruments than are music and painting. We not only need pianos, drums and brushes, but Steinways, Ludwigs and Langnickels. Microsoft doesn’t cut it. (Word produces horrible html.) Adobe had a good early Web writing tool with GoLive, but killed it in favor of Dreamweaver, which is awful. There are plenty of fine text editors, including old standbys (e.g. vi and emacs) that work in command shells. Geeky wizards can do wonders with them, but there should be many other instruments for many other kinds of artists.

Far as I know, the only writer and programmer working on a portfolio of writing and publishing instruments today is , and he’s been on the case for thirty years or more. (I believe I first met Dave at the booth at Comdex in Atlanta in 1982, when the program was available only on the Apple II). One of these days, months or years, writers and publishers are going to appreciate Dave’s pioneering work with outlining, sharing linksflowing news and other arts. I’m sure they do to some extent today (where would we all be without RSS?), but what they see is exceeded by what they don’t. Yet.

The older I get, the earlier it seems. For artist-grade writing and publishing tools, it’s clear to me that we’re at the low narrow left end of the adoption curve: not far past the beginning. That spells opportunity for lots of new development projects and companies, including Bitly.

I think the main thing standing in everybody’s way right now is the belief that writing and publishing need to be “social,” as defined by Facebook and Twitter, rather than by society as a whole, which was plenty social before those companies came along. Also plenty personal. Remember personal computing? We hardly talk about that any more, because it’s a redundancy, like personal phoning, or personal texting. But personal, as an adjective, has taken a back seat while social drives.

Here’s a distinction that might help us get back in the driver’s seat: Publishing is social, but writing is personal. The latter is no less a greenfield today than it was in 1982. The difference is that it’s now as big as the Net.

Making the rounds is , a killer essay by in MIT Technology Review. The gist:

At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.

The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.

This is the first time I have read anything from a major media writer (and Michael is very much that — in fact I believe he is the best in the biz) that is in full agreement with The Advertising Bubble, my chapter on this very subject in The Intention Economy: When Customers Take Charge. A sample:

One might think all this personalized advertising must be pretty good, or it wouldn’t be such a hot new business category. But that’s only if one ignores the bubbly nature of the craze, or the negative demand on the receiving end for most of advertising’s goods.  In fact, the results of personalized advertising, so far, have been lousy for actual persons…

Tracking and “personalizing”—the current frontier of online advertising—probe the limits of tolerance. While harvesting mountains of data about individuals and signaling nothing obvious about their methods, tracking and personalizing together ditch one of the few noble virtues to which advertising at its best aspires: respect for the prospect’s privacy and integrity, which has long included a default assumption of anonymity.

Ask any celebrity about the price of fame and they’ll tell you: it’s anonymity. This wouldn’t be a Faustian bargain (or a bargain at all) if anonymity did not have real worth. Tracking, filtering and personalizing advertising all compromise our anonymity, even if no PII (Personally Identifiable Information) is collected.  Even if these systems don’t know us by name, their hands are still in our pants…

The distance between what tracking does and what users want, expect and intend is so extreme that backlash is inevitable. The only question is how much it will damage a business that is vulnerable in the first place.

The first section of the book opens with a retrospective view of the present from a some point in the near future — say, five or ten years out. A relevant sample:

After the social network crash of 2013, when it became clear that neither friendship nor sociability were adequately defined or managed through proprietary and contained systems (no matter how large they might be), individuals began to assert their independence, and to zero-base their social networking using their own tools, and asserting their own policies regarding engagement.

Customers now manage relationships in their own ways, using standardized tools that embrace the complexities of relationship—including needs for privacy (and, in some cases, anonymity). Thus loyalty to vendors now has genuine meaning, and goes as deep as either party cares to go. In some (perhaps most) cases this isn’t very deep, while in others it can get quite involved.

When I first wrote that, I said 2012. But I decided that was too aggressive, and went with the following year. Maybe I was right in the first place. Time will tell.

Meanwhile, here’s what Michael says about the utopian exhaust Facebook and its “ecosystem” are smoking:

Well, it does have all this data. The company knows so much about so many people that its executives are sure that the knowledge must have value (see “You Are the Ad,” by Robert D. Hof, May/June 2011).

If you’re inside the Facebook galaxy (a constellation that includes an ever-expanding cloud of associated ventures) there is endless chatter about a near-utopian (but often quasi-legal or demi-ethical) new medium of marketing. “If we just … if only … when we will …” goes the conversation. If, for instance, frequent-flyer programs and travel destinations actually knew when you were thinking about planning a trip. Really we know what people are thinking about—sometimes before they know! If a marketer could identify the person who has the most influence on you … If a marketer could introduce you to someone who would relay the marketer’s message … get it? No ads, just friends! My God!

But so far, the sweeping, basic, transformative, and simple way to connect buyer to seller and then get out of the way eludes Facebook.

The buyer is a person. That person does not require either a social network or absolutely-informed guesswork to know who she is or what she wants to buy. Obviously advertising can help. It always has. But totally personalized advertising is icky and oxymoronic. And, after half a decade or more at the business of making maximally-personalized ads, the main result is what Michael calls “the desultory ticky-tacky kind that litters the right side of people’s Facebook profiles.”

That’s one of mine on the right. It couldn’t be more wasted and wrong. Let’s take it from the top.

First, Robert Scoble is an old friend and a good guy. But I couldn’t disagree with him more on the subject of Facebook and the alleged virtues of the fully followed life. (Go to this Gillmor Gang, starting about an hour in, to see Robert and I go at it about this.) Clearly Facebook doesn’t know about that. Nor does any advertiser, I would bet. In any case, Robert likes so many things that his up-thumb has no value to me.

I have no interest in Social Referrals, and if Facebook followed what I’ve written on the subject of “social” (as defined by Facebook and its marketing cohorts), it wouldn’t imagine I would be interested in extole.com.

I’m 64, but married. “Boyfriend wanted” is a low-rent fail as well as an insult.

I get the old yearbook pitch every time I go on Facebook, which is as infrequently as I possibly can. (There are people I can only reach that way, which is why I bother.) I don’t even need to click on the the ad to discover that, as I suspected, 60s.yearbookarchives.com is a front for the scammy Classmates.com.

I’ve never been fly flishing, and haven’t fished since I was a kid, many decades ago.

And I don’t want more credit cards, of any kind, regardless of Scoble’s position on Capital One.

In a subchapter of  titled “A Bad Theory of You,”  calls both Facebook’s and Google’s data-based assumptions about us “pretty poor representations of who we are, in part because there is no one set of data that describes who we are.” He also says that at best they put us into the  — a “place where something is lifelike but not convincingly alive, and it gives people the creeps.” But what you see on the right isn’t the best, and it’s not uncanny. It’s typical, and it sucks, even if it does bring Facebook a few $billion per year in click-through-based revenues.

The amazing thing here is that business keeps trying to improve advertising — and always by making it more personal — as if that’s the only way we can get to Michael’s “sweeping, basic, transformative, and simple way to connect buyer to seller and then get out of the way.” Three problems here:

  1. By its nature advertising — especially “brand” advertising — is not personal.
  2. Making advertising personal changes it into something else that is often less welcome.
  3. There are better ways to get to achieve Michael’s objective — ways that start on the buyer’s side, rather than the seller’s.

Don Marti, former Editor-in-Chief of Linux Journal and a collaborator on the advertising chapters in my book, nails the first two problems in a pair of posts. In the first, Ad targeting – better is worse? he says,

Now, as targeting for online advertising gets more and more accurate, the signal is getting lost. On the web, how do you tell a massive campaign from a well-targeted campaign? And if you can’t spot the “waste,” how do you pick out the signal?

I’m thinking about this problem especially from an IT point of view. Much of the value of an IT product is network value, and economics of scale mean that a product with massive adoption can have much higher ROI than a niche product…. So, better targeting means that online advertising carries less signal. You could be part of the niche on which your vendor is dumping its last batch of a “boat anchor” product. This is kind of a paradox: the better online advertising is, the less valuable it is. Companies that want to send a signal are going to have to find a less fake-out-able medium.

In the second, Perfectly targeted advertising would be perfectly worthless, which he wrote in response to Michael’s essay, he adds this:

The more targeted that advertising is, the less effective that it is. Internet technology can be more efficient at targeting, but the closer it gets to perfectly tracking users, the less profitable it has to become.

The profits are in advertising that informs, entertains, or creates a spectacle—because that’s what sends a signal. Targeting is a dead end. Maybe “Do Not Track” will save online advertising from itself.

John Battelle, who is both a first-rate journalist and a leader in the online advertising industry, says this in Facebook’s real question: What’s the native model?:

Facebook makes 82% of its money by selling targeted display advertising – boxes on the top and right side of the site (it’s recently added ads at logout, and in newsfeeds). Not a particularly unique model on its face, but certainly unique underneath: Because Facebook knows so much about each person on its service, it can target in ways Google and others can only dream about. Over the years, Facebook has added new advertising products based on the unique identity, interest, and relationship data it owns: Advertisers can incorporate the fact that a friend of a friend “likes” a product, for example. Or they can incorporate their own marketing content into their ads, a practice known as “conversational marketing” that I’ve been on about for seven or so years (for more on that, see my post Conversational Marketing Is Hot – Again. Thanks Facebook!).

But as many have pointed out, Facebook’s approach to advertising has a problem: People don’t (yet) come to Facebook with the intention of consuming quality content (as they do with media sites), or finding an answer to a question (as they do at Google search). Yet Facebook’s ad system combines both those models – it employs a display ad unit (the foundation of brand-driven media sites) as well as a sophisticated ad-buying platform that’d be familiar to anyone who’s ever used Google AdWords.

I’m not sure how many advertisers use Facebook, but it’s probably a fair guess to say the number approaches or crosses the hundreds of thousands. That’s about how many used Overture and Google a decade ago. The big question is simply this: Do those Facebook ads work as well or better than other approaches? If the answer is yes, the question of valuation is rather moot. If the answer is no…Facebook’s got some work to do.

But Facebook isn’t the real issue here. Working only the sell side of the marketplace is the issue. It’s now time to work the buy side.

The simple fact is that we need to start equipping buyers with their own tools for connecting with sellers, and for engaging in respectful and productive ways. That is, to improve the ability of demand to drive supply, and not to constantly goose up supply to drive demand, and failing 99.x% of the time.

This is an old imperative.

In , which Chris Locke, David Weinberger, Rick Levine and I wrote in 1999, we laid into business — and marketing in particular — for failing to grok the fact that in networked markets, which the Internet gave us, individuals should lead, rather than just follow. So, since business failed to get Cluetrain’s message, I started in mid-2006 at Harvard’s Berkman Center. The idea was to foster development of tools that make customers both independent of vendors, and better able to engage with vendors. That is, for demand to drive supply, personally. (VRM stands for .)

Imagine being able to:

  • name your own terms of service
  • define for yourself what loyalty is, what stores you are loyal to, and how
  • be able to gather and examine your own data
  • advertise (or “intentcast”) your own needs in an anonymous and secure way
  • manage your own relationships with all the vendors and other organizations you deal with
  • … and to do all that either on your own or with the help of that work for you rather than for sellers (as most third parties do)

Today there are dozens of VRM developers working at all that stuff and more — to open floodgates of economic possibility when demand drives supply personally, rather than “socially” as part of some ad-funded Web giant’s wet dream. (And socially in the genuine sense, in which each of us knows who our friends, relatives and other associates really are, and in what contexts our actual social connections apply.) I report on those, and the huge implications of their work, in The Intention Economy.

Here’s the thing, and why now is the time to point this out: most of those developers have a hell of a time getting laid by VCs, which on the whole have their heads stuck in a of the Web, and can’t imagine a way to improve the marketplace that does not require breeding yet another cow, or creating yet another ranch for dependent customers. Maybe now that the bloom is off Facebook’s rose, and the Filter Bubble is ready to burst, they can start looking at possibilities over here on the demand side.

So this post is an appeal to investors. Start thinking outside the cow, and outside the ranch. If you truly believe in free markets, then start believing in free customers, and in the development projects that make them not only free, but able to drive sales at a 100% rate, and to form relationships that are worthy of the word.

Bonus links:

HT to John Salvador, for pointing to Life in the Vast Lane, where I kinda predicted some of the above in 2008.

Amazon is now shipping my new book, The Intention Economy. Yes, the Kindle version too. They even have the first chapter available for free. You can “look inside” as well.

Thanks to Amazon’s search, you can even find stuff that’s not in the index, such as the acknowledgements. Those include a lot of people, including everybody who has ever been active on the ProjectVRM list.

The book isn’t for me. It’s for customers. All customers, that is. Not just the ones buying the book. The first paragraph of the Introduction explains,

This book stands with the customer. This is out of necessity, not sympathy. Over the coming years customers will be emancipated from systems built to control them. They will become free and independent actors in the marketplace, equipped to tell vendors what they want, how they want it, where and when—even how much they’d like to pay—outside of any vendor’s system of customer control. Customers will be able to form and break relationships with vendors, on customers’ own terms, and not just on the take-it-or-leave-it terms that have been pro forma since Industry won the Industrial Revolution.

That’s what the VRM development community has been working toward since I launched ProjectVRM at the Berkman Center in 2006. Now that community is getting kinda large. Here at the European Identity and Cloud Conference (#EIC12) in Munich, I have met or learned about a bunch of VRM developers I hadn’t known  before. Pretty soon I won’t be able to keep up, and that’s a good thing.

The book has four main parts:

  1. Customer Captivity
  2. The Networked Marketplace
  3. The Liberated Customer
  4. The Liberated Vendor

In a way it follows up on work begun with The Cluetrain Manifesto. The subtitle there was The End of Business as Usual. The subhead for The Intention Economy is When Customers Take Charge. Hey, when one thing ends, another must begin. This is it.

We’re not there yet. If The Intention Economy speeds things up, it will do its job.

 

 

 

So I’m at Micah Sifry’s Politics of the Internet class at the Kennedy School, and risk live-blogging it (taxing my multitasking abilities…)

Some questions in the midst of dialog between Micah (@Mlsif) and the class (#pol-int)…

  • Was there a $trillion “internet dividend” over the old phone system, and was it a cost to the old system?
  • Did the Internet have to happen?
  • Is the IETF‘s “rough consensus and running code” still a prevailing ethos, or methodology?
  • Is it an accident that the rough consensus above is so similar to the #Occupy methods?
  • When you add value, do you also subtract value? (And did I — or David Weinberger and I) actually say that in World of Ends?)
  • Does this new un-owned decentralized medium cause or host culture?
  • How is the Internet used differently in different societies? (Assertion: it’s not monolithic.)
  • What is possible in a world where we assume connectivity?
  • What are the major disruptive effects?
  • What is the essence of the starting point in the early connection of computers? (What is the case for the Net, and how would you make it to, say, a legislator? Or you’re in an elevator with your boss, and you want to make the case against legislating how the internet is structured?)

Topics brought up:

  • Net-heads vs. bell-heads (the Net as its transcendant protocols vs. the Net as a collection of owned and controlled networks)
  • Commercialization
  • Authentic voice
  • Before and after (what if Compuserve and AOL had won?)
  • How can we speak of a giant zero when companies and governments are being “smart” (either through government censorship or carrier limitations, including the urge to bill everything, to pick a couple of examples)

My Linux Journal collection on the topic (from a lookup of “giant zero”):

Well, I wrote down nothing from my own talk, or the Q & A following. But there are clues in the tweet stream (there’s some funky html in the following… no time to fix it, though):

dskok David Skok
 An excellent read re: the battle @dsearls was referring to. I recommend @scrawford‘s @nytimes op-Ed: nytimes.com/2011/12/04/opi… #pol-int
NoreenBowden Noreen Bowden

 @dsearls! #pol-int Death From Above – 1995 essay by John Barlow on future of internet. w2.eff.org/Misc/Publicati…
dskok David Skok

 .@dcsearls reading list: Death from above by John Perry Barlow: w2.eff.org/Misc/Publicati… #pol-int
NoreenBowdenNoreen Bowden
Stanford prof leaves to start online university. allthingsd.com/20120125/watch… #pol-int
dsearls Doc Searls
My live blog from @mlsif‘s #pol-int class: hvrd.me/xd3Iki #politics #internet
NaparstekAaron Naparstek

 Tweet “+1″ if you think @MlSif should slide over 3 feet to his left or right so the classroom projector isn’t shining on his face. #pol-int
dskokDavid Skok

 Listening to @docsearls referring to the Internet Protocol Suite: en.wikipedia.org/wiki/Internet_… #pol-int
NaparstekAaron Naparstek

 ”Anyone can join it and work to improve it.” @Mlsif: Is it a coincidence that #OWS and the Internet are structured so similarly? #pol-int
NaparstekAaron Naparstek

 Testing live classroom Twitter feed @Mlsif‘s new @Kennedy_School course, “The Politics of the Internet.” #pol-int
dsearlsDoc Searls

 Fun to be sitting in on @Mlsif‘s #pol-int class, described here: hvrd.me/w3hCbI
 MlsifMicah Sifry
I hadn’t realized up til now just how much the IETF and its working groups resemble Occupy Wall St and its working groups. #pol-int

Enjoyed it. The class will be blogging. Look forward to reading those too.

Reality 2.0 was my original blog: a pile of stuff I wrote before there were blogs. All of it is old now, but some of it still rings new. Since Reality 2.0 is deep in the Searls.com basement, I’ve decided to surface some old pieces that might be interesting, for whatever reason. The one below was first written on April 16 1998, about a year before Chris Locke, Rick Levine, David Weinberger and I put up The Cluetrain Manifesto, and updated one year later to recognize Cluetrain’s successful launch on the Web that month. It was still nearly a year before Cluetrain appeared in book form, and a decade before the 10th Anniversary Edition.

Never mind that Lycos, HotBot, Tripod and WhoWhere are blasts from the past. Note instead that these are zombies that were once hot stuff, and led by CEOs that talked very much like the CEOs walking around today. Note also how little progress we’ve actually made toward Cluetrain’s ideals.

Here goes:

Listen up

“All I know is that first you’ve got to get mad. You’ve got to say, I’m a human being, goddammit! My life has value! So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window, open it, and stick your head out, and yell, ‘I’m as mad as hell, and I’m not going to take this anymore!’”

— Howard Beale, in Network, by Paddy Chayevsky


Bob Davis is the CEO of Lycos, Inc., whose growing portfolio of companies (excuse me, portals) now includes Lycos, Hotbot, WhoWhere and Tripod. I’m sure Bob is a great guy. And I’m sure Lycos is a great company. A lot of people seem to like them both. And you have to admire both his ambition and his success. To witness both, read his interview with PC Week, where he predicts that the Lycos Network (the sum of all its portals) will overtake Yahoo as “#1 on the Web.”

Lycos will win, Davis says, because “We have a collection of quality properties that are segmented into best-of-breed categories, and our reach has been catapulting.”

I can speak for Hotbot, which is still my first-choice search engine; but by a shrinking margin. I often test search engines by looking for strings of text buried deep in long documents on my own site. Hotbot always won in the past. But since Lycos bought it, Hotbot has become more of a portal and less of a search tool. Its page is now a baffling mass of ads and links. And its searches find less.

In today’s test, Infoseek won. Last week, Excite won. Both found pages that Hotbot seems to have forgotten.

Why? Bob Davis gives us a good answer.

“We’re a media company,” he says. “We make our money by delivering an audience that people want to pay for.”

Note the two different species here: audience and people. And look at their qualities. One is “delivered.” The other pays. In other words, one is cargo and the other is money.

Well, I don’t care if Lycos’ stock goes to the moon and splits three times along the way. The only #1 on the Web is the same as the only #1 on the phone: the people who use it. And the time will come when people will look at portals not as sources of “satisfying experiences” (another of Davis’ lines) but as useless intermediaries between supply and demand.

 Words of Walt

You there, impotent, loose in the knees,

open your scarfed chops till I blow grit within you.

Spread your palms and lift the flaps of your pockets.

I am not to be denied. I compel.

It is time to explain myself. Let us stand up.

I know I am solid and sound.

To me the converging objects of the universe perpetually flow.

I know that I am august,

I do not trouble my spirit to vindicate itself

or be understood.

I see that the elementary laws never apologize..

Walt Whitman, from Song of Myself

“Media company” guys like Davis are still in a seller’s market for wisdom that was BS even when only the TV guys spoke it — back when it literally required the movie “Network.” That market will dry up. Why? Because we’ve been mad as hell for about hundred years, and now we don’t have to take it anymore.

Three reasons.

  1. Humanity. This is what Walt Whitman reminded us about more than a hundred years ago. We are not impotent. Media companies may call us seats and eyeballs and targets, but that’s their problem. They don’t get who we are or what we can — and will — do. And the funny thing is, they don’t get that what makes us powerful is what they think makes them powerful: the Internet. It gives us choices. Millions of them. We don’t have to settle for “channels” any more. Or “portals” that offer views of the sky through their own little windows. Or “sticky” sites that are the moral equivalent of flypaper.
  2. Demand. There never was a demand for messages, and now it shows, big time. Because the Internet is a meteor that is smacking the world of business with more force than the rock that offed the dinosaurs, and it is pushing out a tsunami of demand like nothing supply has ever seen. Businesses that welcome the swell are in for some fun surfing. Businesses that don’t are going to drown in it.
  3. Obsolescence. Even the media guys are tired of their own B.S. and are finally in the market for clues.

Alvin Toffler had it right in The Third Wave. Industry (The Second Wave) “violently split apart two aspects of our lives that had always been one… production and consumption… In so doing, it drove a giant invisible wedge into our economy, our psyches … it ripped apart the underlying unity of society, creating a way of life filled with economic tension.” Today all of us play producer roles in our professions and consumer roles in our everyday lives. This chart shows the difference (and tension) between these radically different points of view — both of which all of us hold:

Producer view
Consumer view
Metaphor Business is shipping (“loading the channel,” “moving products,” “delivering messages”) Business is shopping (“browsing,” “looking,” “bargaining,” “buying”)
Orientation Business is about moving goods from one to many (producers to consumers) Business is about buying and selling, one to one
Markets Markets are shooting ranges: consumers are “targets” Markets are markets: places to shop, buy stuff and talk to people
Relationships Primary relationshiphs are with customers, which are more often distributors & retailers rather than consumers Primary relationships are with vendors, and with other customers

These are all just clues, which are easily deniable facts. Hence a line once spoken of Apple: “the clue train stopped there four times a day for ten years and they never took delivery.” But Apple was just an obvious offender. All of marketing itself remains clueless so long as it continues to treat customers as “eyeballs,” “targets,” “seats” and “consumers.”

For the past several months, I have been working with Rick Levine, David Weinberger and Chris Locke on a new railroad for clues: a ClueTrain.

Our goal is to burn down Marketing As Usual. Here is the logic behind the ambition:

Markets are conversations

Conversations are fire

Marketing is arson

The result is here — in what The Wall Street Journal calls “presumptuous, arrogant, and absolutely brilliant.”

Take a ride. If you like it, sign up. Feel free to set fires with it, add a few of your own, or flame the ones you don’t agree with. What matters is the conversation. We want everybody talking about this stuff. If they do, MAU is toast.

Here is my own short form of the Manifesto (inspired by Martin Luther, the long version has 95 Theses). Feel free to commit arson with (or to) any of these points as well.


Ten facts about highly effective markets:

  1. Markets are conversations. None of the other metaphors for markets — bulls, bears, battlefields, arenas, streets or invisible hands — does full justice to the social nature of markets. Real market conversations are social. They happen between human beings. Not between senders and receivers, shooters and targets, advertisers and demographics.
  2. The first markets were markets. They were real places that thrived at the crossroads of cultures. They didn’t need a market model, because they were the model market. More than religion, war or family, markets were real places where communities came together. They weren’t just where sellers did business with buyers. They were the place where everybody got together to hang out, talk, tell stories and learn interesting stuff about each other and the larger world.
  3. Markets are more about demand than supply. The term “market” comes from the latin mercere, which means “to buy.” Even a modern market is called a “shopping center” rather than a “selling center.” Bottom line: every market has more buyers than sellers. And the buyers have the money.
  4. Human voices trump robotic ones. Real voices are honest, open, natural, uncontrived. Every identity that speaks has a voice. We know each other by how we sound. That goes for companies and markets as well as people. When a voice is full of shit, we all know it — whether the voice tells us “your call is important to us” or that a Buick is better than a Mercedes.
  5. The real market leaders are people whose minds and hands are worn by the work they do. And it has been that way ever since our ancestors’ authority was expressed by surnames that labeled their occupations — names like Hunter, Weaver, Fisher and Smith. In modern parlance, the most knowledge and the best expertise is found at the “point of practice:” That’s where most of the work gets done.
  6. Markets are made by real people. Not by surreal abstractions that insult customers by calling them “targets,” “seats,” “audiences,” “demographics” and “eyeballs” — all synonyms for consumers, which Jerry Michalski of Sociate calls “brainless gullets who live only to gulp products and expel cash.”
  7. Business is not a conveyor belt that runs from production to consumption. Our goods are more than “content” that we “package” and “move” by “loading” them into a “channel” and “address” for “delivery.” The business that matters most is about shopping, not shipping. And the people who run it are the customers and the people who talk to them.
  8. Mass markets have the same intelligence as germ populations. Their virtues are appetite and reproduction. They grow by contagion. Which is why nobody wants to admit belonging to one.
  9. There is no demand for messages. To get what this means, imagine what would happen if mute buttons on remote controls delivered “we don’t want to hear this” messages directly back to advertisers.
  10. Most advertising is unaccountable. Or worse, it’s useless. An old advertising saying goes, “I know half my advertising is wasted. I just don’t know which half.” But even this is a lie. Nearly all advertising is wasted. Even the most accountable form of advertising — the junk mail we euphemistically call “direct marketing” — counts a 3% response rate as a success. No wonder most of us sort our mail over the trash can. Fairfax Cone, who co-founded Foote Cone & Belding many decades ago, said “Advertising is what you do when you can’t go see somebody. That’s all it is.” With the Net you cango see somebody. More importantly, they can see you. More importantly than that, you can both talk to each other. And make real markets again.

I got to know Judith Burton when she was still Judith Clarke and Senior VP Corporate Marketing for Novell, in 1987. Novell had just bought a company called CXI, which had been a client of Hodskins Simone & Searls, the Palo Alto advertising agency in which I was a partner. By that time HS&S had come to specialize in communications technology clients, and the chance to do something with Novell as well seemed more than opportune, since it was clear that Novell was smarter about comms than just about anybody at that time.

So David Hodskins came up with the idea of putting together a “connectivity consortium” made up of Novell and several other HS&S clients. In seeing connectivity as a hot topic on the horizon, David was way ahead of everybody’s time. But that made it perfect for the two most forward-thinking minds at Novell: Judith and Craig Burton, who would later become her husband.

I didn’t know Craig before I pitched Judith on the connectivity consortium idea — and she took the bait. She brought Craig to our first meeting, and the two of them together blew my mind. Judith saw no boundaries to what could be done with marketing, and Craig saw the Big Picture of connectivity better than anybody I had ever met, before or since.

In the short term, over subsequent conversations and meetings, I saw how it was that Novell changed the networking conversation so quickly and completely. It was during these learnings that I came up with the “markets are conversations” line that became the first thesis of The Cluetrain Manifesto, more than a decade later. Because Novell was busy proving it, more than any other company in technology at that time.

Just a few years earlier, the network conversation was mostly about “pipes and protocols.” Data Communications and Communications Week were the leading trade pubs in the space, fat with stories and ads that pushed and compared the virtues of Ethernet vs. Token Ring and bus vs. ring vs. star topologies. Every vendor sold whole networks from the wires on up, including everything that ran on those wires, file servers, network interface cards in the backs of PCs, and applications. If you bought a Sytek or a Corvus network, you couldn’t use anybody else’s hardware, software or wiring. Every vendor had its own silo (or, in some cases, such as IBM’s, an assortment of silos). And it occurred to almost nobody that there should be a choice other than silos and lock-ins.

It was Craig Burton’s idea make Novell’s NetWare a “Network Operating System” (NOS) that could run on everybody’s hardware and wiring. NetWare thus became a new platform for network services that could run everywhere, starting with group file storage (the first local “cloud,” you might say), and printing.

But nobody talked about networking on Novell’s terms until Judith Clarke literally invented whole new venues for network conversations. These included a magazine (LAN Times), a trade show (NetWorld), a reseller channel and a class of networking professionals (Certified Netware Engineers, or CNEs). By the end of the Eighties the world talked about networking in terms of capabilities and services rather than of pipes and protocols.

One move that stands out for me was Novell’s decision to drop its grandfathered position at the center of the Comdex show floor (this was when Comdex was one of the biggest trade shows on Earth) and rent ballroom space next door on the ground floor of the Las Vegas Hilton. So rather than show stuff off on the floor with everybody else, Novell set up a storefront and business meeting space right where the traffic was thickest. And it worked.

As Craig put it to me a few days ago, ”She changed the industry in the way she approached people and ideas, taking a podunk company in Provo and making it look like it owned the planet — which, in many ways, it did. And she unselfishly gave credit to everybody else all along the way.”

Novell began to slide after Judith and Craig left the company, in 1989. With the Burtons gone, Novell forgot where it came from. While Judith and Craig liked to zig where Microsoft zagged, and to embrace Microsoft’s — and everybody else’s — platforms and technologies, Novell CEO Ray Noorda preferred to attack Microsoft head-on, by acquiring already-lame competitors (remember WordPerfect?) and failing over and over to make a dent in Microsoft’s hull. It was sad to watch.

For reasons I forget, the connectivity consortium didn’t happen, but I got to be close friends of both Judith and Craig, and have remained so ever since. I also consulted the couple after they left Novell to co-found The Burton Group with Jamie Lewis, another brilliant Novell veteran.

A few years later Judith and Craig moved on to consulting on their own. (Under Jamie’s continued leadership The Burton Group was sold to Gartner a couple years ago.) Craig especially has been a steady source of original thinking on countless subjects. Judith sometimes participated in projects with Craig, but mostly focused on philanthropic and civic projects, and time with family. (Here is her Linkedin profile.)

On Tuesday of this week she collapsed at her home, and died later in the hospital. Her death is a shock to everybody. Even though she hit a few medical bumps this past year, she seemed to be doing better. And she was just 66. Being 64 myself, I consider that age way too young for life’s end.

My heart aches for Craig, and for Judith’s kids and grandkids, whom she adored. In my own memory, her amazing blue eyes, bright smile and sweet voice persist. She was a beautiful woman, as well as a smart, creative and loving one. The picture above gives just a hint toward all of that.

It does bother me a bit that her death has not made bigger news. If she had passed during her heyday at Novell, the news would have been huge. But then, the news ain’t what it used to be, and will continue to evolve away from the old top-down few-to-many systems. The Internet is everybody’s connectivity consortium now.

We didn’t end up needing Data Communications, Comms Week, LAN Times, NetWorld, Comdex or countless other once-sturdy institutions that were obsoleted by something Craig and Judith both saw coming long before it arrived: the ability of anybody to connect with anybody, outside of any one company’s system for trapping customers and users.

Judith’s work back in the decade helped make the future in which we now all live and thrive. We’ll miss her, but we won’t miss each other. To Judith, all of us were the people networks were for. And now we have that, regardless of how hard any company or government works to lock us back into silos or limit what we can do in them. Had she been less loving, I doubt she would have seen that, or worked so well at what she did for all of us.

[Later...] Here is an email from Jamie Lewis that fell through the cracks when it arrived (apologies for that):

I first met Judith in 1984, when I was working for a publication for PC retailers. I was writing about PC networking, so I inevitably met both her and Craig in my coverage of Novell. I started getting to know Judith in 1985, when the magazine I was working for folded, and Novell offered me a job in the corporate marketing department.

As many people know, there’s a very long list of things Judith did in making Novell the company it was in its hey day. She founded the LAN Times, a corporate newspaper devoted to networking. (Yes, it sounds obvious today. But in 1983, not so much. And there are more than a few technology writers still working today that earned their chops writing for the LAN Times.) She created the NetWorld tradeshow. (Again, obvious or even antiquated in today’s context, but then, it was the first of its kind.) She built a PR and marketing machine, complete with relentless press tours, events, and other efforts to get the NetWare word out.

The list goes on. But that list is just that—a list. While most, if not all, of the stuff on that list was important, innovative, and impactful, it really doesn’t do the woman justice to simply enumerate things on a list. She was more than the sum of the items on that list.

If you look the word “dynamic” up in the dictionary, you’ll find Judith’s picture there. When she walked into the room, the room changed. She commanded attention. She ran the show. She exuded authority and confidence. This could rub some people the wrong way, but it is what made her successful. That she accomplished what she did in a time and place that wasn’t exactly ideal for a career-oriented woman says a lot about her resolve.

And that gets to the most important thing I learned from her, something that I think was at the heart of why Novell did so well during her tenure. Simply put, it’s this: Have the balls to act like who or what you want to become. If you wait until you are that to start acting like that, you’ll never be that.

It’s clear how this approach worked so well for Novell. When I joined, Novell had about 250 employees. Its revenues were microscopic in comparison to the “big guys” – IBM, Digital Equipment and, later, Microsoft – that it was challenging while simultaneously doing battle with a host of similarly sized companies on the other.

But I can’t tell you how many times I heard people say, “Wow, I thought Novell was a lot bigger than that,” when they heard how many employees we had, or what annual revenues were at the time. Novell in every way looked and behaved like it belonged in the big leagues—like a much bigger company—due in large part to Judith’s skills in marketing and communications. It’s a mistake to underestimate how important this was to Novell’s success.

The fact that NetWare was a great product certainly helped. But we all know that the information technology market is littered with the corpses of companies that had great technology but didn’t know how to market it or sell it. Judith’s ability to position Novell played no small part in ensuring the success of what was a very good product. Because Novell acted like it belonged in the big leagues, it did belong. This raised the customers’ comfort level, making it easier for them to bet on a small company for such an important product. It also forced much larger companies, such as DEC and IBM, to treat Novell as a peer.

I can distinctly remember when I realized how important this was. We were in final competition with DEC for a very large deal with a very large company. A Fortune 200 company. If we got the business, it would be a major win, a win at the “corporate standard” level, the kind of win that would be a major milestone. During the final stages of the competition, DEC issued a 30-page white paper that we later subtitled “why NetWare causes cancer in rats”. The sales person on the account phoned me in an absolute panic. The paper was full of misinformation, she said, and she was afraid the customer was going to believe it. I told her that we first needed to thank DEC for establishing Novell as a legitimate competitor in the eyes of the customer. We would respond to the paper, I said, but would be careful not to spoil the big favor DEC had just done for us. We did respond, but in the high road fashion that Judith (and Craig) established as our modus operandi, the approach that drove my initial answer to the call. And we won the business.

That positioning also made Novell look superior in comparison to the companies that were much closer to it in size and revenue. 3Com was our nemesis, the one company that everyone in our company loved to hate. Yes, 3Com was hardware to Novell’s software, which is why NetWare prevailed. But NetWare also succeeded because Judith was so good at positioning Novell, establishing software as the issue in the market and forcing 3Com (and later Microsoft and IBM) to fight on Novell’s terms.

There were, of course, a very large number of people responsible for making Novell what it was. It’s also nice to be on the right side of the issue, and there’s no question that Novell and NetWare were in the right place at the right time. But the attitude, the positioning, and the messaging that was Novell’s essence during that amazing run in the 80s and early 90s, that was all Judith. Novell wouldn’t have been the same company without her efforts. That win over DEC, for example, wouldn’t have happened without the months and years of relentless and effective marketing that preceded it. And I don’t think the correlation between Judith’s personality and Novell’s was any coincidence. Novell had the audacity to act like it belonged because Judith did.

Years later, at Burton Group, whenever I heard people say they thought we were bigger than we actually were, I never failed to think of Judith. We carried that same attitude, a willingness to believe and act like we belonged. I learned a great deal from Judith, but it’s that lesson that had the biggest impact. She and Craig took a chance on a journalism major that had never written a line of code, and for that I will be forever grateful. She inspired and drove those around her to be better, to be what they aspired to be. I think I can speak for all of the people who knew and worked with her when I say she’ll be missed, and that we appreciate what she did for us, and for the industry she played such a large part in creating.

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I just ran across some research I did in December 2008, while working on the 10th Anniversary edition of The Cluetrain Manifesto:

  • Google Book Search results for cluetrain — 666[1]
  • Google Book Search results for markets are conversations — 2610
  • Google Web Search results for cluetrain — 394,000
  • Results for Web searches for markets are conversations — 626,000

[1] Increasing at more than one per day. The numbers were 647 on November 15, 2008 and 666 on December 1, 2008. Results passed 600 on September 30, 2008.

Here are the results today:

I added two more, with quotes, because I’m not sure if I used quotes the first time or not, for that phrase. I would like to have the exact URLs for the earlier searches too, but I don’t. To get useful, non-crufty URLs this time, I needed to fire up a virgin browser and scrape out everything not tied to the search itself (e.g. the browser name, prior searches, other context-related jive irrelevant to this post).

Of course, Google guesses about most of this stuff. (Though possibly not for the first item: a word in a book). Not sure how much any of it matters. I just thought it was interesting to share before I wander off and forget where I found these few bits of sort-of-historical data.

Bonus link (found via a Twitter search for #cluetrain): Jonathan Levi‘s The Cluetrain Manifesto — Manifested Today.

Bookmarking the past

I’ve been digging around for stuff I blogged (or wrote somewhere on the Web) way back when. After finding two items I thought might be lost, I decided to point to them here, which (if search engines still work the Old Way) might make them somewhat easier to find again later.

One is Rebuilding the software industry, one word at a time, in Kuro5hin. (And cool to see that Kuro5hin is still trucking along.) The other is Cluetrain requires conversation. Both are from early 2001, more than ten years ago. A sample from the former:

I went through my own head-scratching epiphany right after the Web got hot and I found my profession had changed from writer to “content provider.” What was that about? Were my words going to be shrink-wrapped, strapped on a skid and sold in bulk at Costco?

No, “content” was just a handy way to label anything you could “package” and “deliver” through the “vehicle” of this wonderful new “medium.” Marketers were salivating at the chance to “target,” “capture” and “penetrate” ever-more-narrow “audiences” with ever-more-narrow “messages.” Never mind that there was zero demand at the receiving end for any of it. (If you doubt the math, ask what you’d be willing to pay to see an ad on the Web. Or anywhere.)

Soon I began to wonder what had happened to markets, which for thousands of years were social places where people got together to buy and sell stuff, and to make civilization. By the end of the Industrial Age, every category you could name was a “market.” So was every region and every demographic wedge where there was money to be spent. Worse, these were all too often conceived as “arenas” and “battlefields,” even though no growing category could be fully described in the zero-sum terms of sports and war metaphors.

And from the latter:

Cluetrain talks far less about what markets need that about what they are. The first thesis says Markets are conversations. Not markets need to be conversations. Or people need the right message. In fact, we make the point that there is no market for messages. If you want to see how little people want messages, look at the MUTE button on your TV’s remote control. Sum up all marketing sentiment on the receiving end and you’ll find negative demand for it.

There’s nothing conversational about a message. I submit that if a message turns into a conversation, it isn’t a message at all. It’s a topic.

Not many people noticed (including me, until Jakob Nielsen pointed it out) that The Cluetrain Manifesto was written in first and second person plural voices, and was addressed not by marketers to markets, but by markets to marketers. It said —

if you only have time for one clue this year, this is the one to get…

Chris Locke wrote that in early 1999. Marketing still doesn’t get it. Maybe it can’t.

And, because marketing (and the rest of business) didn’t get it, I started ProjectVRM, and am now finishing a book about customer liberation and why free customers will prove more valuable than captive ones.

This stuff seems to be taking awhile. But hey, it’s fun.

I first heard about the “World Live Web” when my son Allen dropped the phrase casually in conversation, back in 2003. His case was simple: the Web we had then was underdeveloped and inadequate. dnaSpecifically, it was static. Yes, it changed over time, but not in a real-time way. For example, we could search in real time, but search engine indexes were essentially archives, no matter how often they were updated. So it was common for Google’s indexes, even of blogs, to be a day or more old. , PubSub and other live RSS-fed search engines came along to address that issue, as did  as well. But they mostly covered blogs and sites with RSS feeds. (Which made sense, since blogs were the most live part of the Web back then. And RSS is still a Live Web thing.)

At the time Allen had a company that made live connections between people with questions and people with answers — an ancestor of  and @Replyz, basically. The Web wasn’t ready for his idea then, even if the Net was.

The difference between the Web and the Net is still an important one — not only because the Web isn’t fully built out (and never will be), but because our concept of the Web remains locked inside the conceptual framework of static things called sites, each with its own servers and services.

We do have live workarounds , for example with APIs, which are good for knitting together sites, services and data. But we’re still stuck inside the client-server world of requests and responses, where we — the users — play submissive roles. The dominant roles are played by the sites and site owners. To clarify this, consider your position in a relationship with a site when you click on one of these:

Your position is, literally, submissive. You know, like this:

But rather than dwell on client-server design issues, I’d rather look at ways we can break out of the submissive-dominant mold, which I believe we have to do in order for the Live Web to get built out for real. That means not inside anybody’s silo or walled garden.

I’ve written about the Live Web a number of times over the years. This Linux Journal piece in 2005 still does the best job, I think, of positioning the Live Web:

There’s a split in the Web. It’s been there from the beginning, like an elm grown from a seed that carried the promise of a trunk that forks twenty feet up toward the sky.

The main trunk is the static Web. We understand and describe the static Web in terms of real estate. It has “sites” with “addresses” and “locations” in “domains” we “develop” with the help of “architects”, “designers” and “builders”. Like homes and office buildings, our sites have “visitors” unless, of course, they are “under construction”.

One layer down, we describe the Net in terms of shipping. “Transport” protocols govern the “routing” of “packets” between end points where unpacked data resides in “storage”. Back when we still spoke of the Net as an “information highway”, we used “information” to label the goods we stored on our hard drives and Web sites. Today “information” has become passé. Instead we call it “content”.

Publishers, broadcasters and educators are now all in the business of “delivering content”. Many Web sites are now organized by “content management systems”.

The word content connotes substance. It’s a material that can be made, shaped, bought, sold, shipped, stored and combined with other material. “Content” is less human than “information” and less technical than “data”, and more handy than either. Like “solution” or the blank tiles in Scrabble, you can use it anywhere, though it adds no other value.

I’ve often written about the problems that arise when we reduce human expression to cargo, but that’s not where I’m going this time. Instead I’m making the simple point that large portions of the Web are either static or conveniently understood in static terms that reduce everything within it to a form that is easily managed, easily searched, easily understood: sites, transport, content.

The static Web hasn’t changed much since the first browsers and search engines showed up. Yes, the “content” we make and ship is far more varied and complex than the “pages” we “authored” in 1996, when we were still guided by Tim Berners-Lee’s original vision of the Web: a world of documents connected by hyperlinks. But the way we value hyperlinks hasn’t changed much at all. In fact, it was Sergey Brin’s and Larry Page’s insights about the meaning of links that led them to build Google: a search engine that finds what we want by giving maximal weighting to sites with the most inbound links from other sites that have the most inbound links. Although Google’s PageRank algorithm now includes many dozens of variables, its founding insight has proven extremely valid and durable. Links have value. More than anything else, this accounts for the success of Google and the search engines modeled on it.

Among the unchanging characteristics of the static Web is its nature as a haystack. The Web does have a rudimentary directory with the Domain Name Service (DNS), but beyond that, everything to the right of the first single slash is a big “whatever”. UNIX paths (/whatever/whatever/whatever/) make order a local option of each domain. Of all the ways there are to organize things—chronologically, alphabetically, categorically, spatially, geographically, numerically—none prevails in the static Web. Organization is left entirely up to whoever manages the content inside a domain. Outside those domains, the sum is a chaotic mass beyond human (and perhaps even machine) comprehension.

Although the Web isn’t organized, it can be searched as it is in the countless conditional hierarchies implied by links. These hierarchies, most of them small, are what allow search engines to find needles in the World Wide Haystack. In fact, search engines do this so well that we hardly pause to contemplate the casually miraculous nature of what they do. I assume that when I look up linux journal diy-it (no boolean operators, no quotes, no tricks, just those three words), any of the big search engines will lead me to the columns I wrote on that subject for the January and February 2004 issues of Linux Journal. In fact, they probably do a better job of finding old editorial than our own internal searchware. “You can look it up on Google” is the most common excuse for not providing a search facility for a domain’s own haystack.

I bring this up because one effect of the search engines’ success has been to concretize our understanding of the Web as a static kind of place, not unlike a public library. The fact that the static Web’s library lacks anything resembling a card catalog doesn’t matter a bit. The search engines are virtual librarians who take your order and retrieve documents from the stacks in less time than it takes your browser to load the next page.

In the midst of that library, however, there are forms of activity that are too new, too volatile, too unpredictable for conventional Web search to understand fully. These compose the live Web that’s now branching off the static one.

The live Web is defined by standards and practices that were nowhere in sight when Tim Berners-Lee was thinking up the Web, when the “browser war” broke out between Netscape and Microsoft, or even when Google began its march toward Web search domination. The standards include XML, RSS, OPML and a growing pile of others, most of which are coming from small and independent developers, rather than from big companies. The practices are blogging and syndication. Lately podcasting (with OPML-organized directories) has come into the mix as well.

These standards and practices are about time and people, rather than about sites and content. Of course blogs still look like sites and content to the static Web search engines, but to see blogs in static terms is to miss something fundamentally different about them: they are alive. Their live nature, and their humanity, defines the liveWeb.

This was before  not only made the Web live, but did it in part by tying it to SMS on mobile phones. After all, phones work in the real live world.

Since then we’ve come to expect real-time performance out of websites and services. Search not only needs to be up-to-date, but up-to-now. APIs need to perform in real time. And many do. But that’s not enough. And people get that.

For example, has a piece titled Life in 2020: Your smartphone will do your laundry. It’s a good future-oriented piece, but it has two problems that go back to a Static Web view of the world. The first problem is that it sees the future being built by big companies: Ericsson, IBM, Facebook, IBM, Microsoft and Qualcomm. The second problem is that it sees the Web, ideally, as a private thing. There’s no other way to interpret this:

“What we’re doing is creating the Facebook of devices,” said IBM Director of Consumer Electronics Scott Burnett. “Everything wants to be its friend, and then it’s connected to the network of your other device. For instance, your electric car will want to ‘friend’ your electric meter, which will ‘friend’ the electric company.”

Gag me with one of these:

This social shit is going way too far. We don’t need the “Facebook” of anything besides Facebook. In fact, not all of us need it, and that’s how the world should be.

gagged on this too. In A Completely Connected World Depends on Loosely Coupled Architectures, he writes,

This is how these articles always are: “everything will have a network connection” and then they stop. News flash: giving something a network connection isn’t sufficient to make this network of things useful. I’ll admit the “Facebook of things” comment points to a strategy. IBM, or Qualcomm, or ATT, or someone else would love to build a big site that all our things connect to. Imagine being at the center of that. While it might be some IBM product manager’s idea of heaven, it sounds like distopian dyspepsia to me.

Ths reminds me of a May 2001 Scientific American article on the Semantic Web where Tim Berners-Lee, James Hendler, and Ora Lassila give the following scenario:

“The entertainment system was belting out the Beatles’ ‘We Can Work It Out’ when the phone rang. When Pete answered, his phone turned the sound down by sending a message to all the other local devices that had a volume control. His sister, Lucy, was on the line from the doctor’s office: …”

Sound familiar? How does the phone know what devices have volume controls? How does the phone know you want the volume to turn down? Why would you program your phone to turn down the volume on your stereo? Isn’t the more natural place to do that on the stereo? While I love the vision, the implementation and user experience is a nightmare.

The problem with the idea of a big Facebook of Things kind of site is the tight coupling that it implies. I have to take charge of my devices. I have to “friend” them. And remember, these are devices, so I’m going to be doing the work of managing them. I’m going to have to tell my stereo about my phone. I’m going to have to make sure I buy a stereo system that understands the “mute the sound” command that my phone sends. I’m going to have to tell my phone that it should send “mute the sound” commands to the phone and “pause the movie” commands to my DVR and “turn up the lights” to my home lighting system. No thanks.

The reason these visions fall short and end up sounding like nightmares instead of Disneyland is that we have a tough time breaking out of the request-response pattern of distributed devices that we’re all too familiar and comfortable with.

tried to get us uncomfortable early in the last decade, with his book Small Pieces Loosely Joined. One of its points: “The Web is doing more than just speeding up our interactions and communications. It’s threading and weaving our time, and giving us more control over it.” Says Phil,

…the only way these visions will come to pass is with a new model that supports more loosely coupled modes of interaction between the thousands of things I’m likely to have connected.

Consider the preceding scenario from Sir Tim modified slightly.

“The entertainment system was belting out the Beatles’ ‘We Can Work It Out’ when the phone rang. When Pete answered, his phone broadcasts a message to all local devices indicating it has received a call. His stereo responded by turning down the volume. His DVR responded by pausing the program he was watching. His sister, Lucy, …”

In the second scenario, the phone doesn’t have to know anything about other local devices. The phone need only indicate that it has received a call. Each device can interpret that message however it sees fit or ignore it altogether. This significantly reduces the complexity of the overall system because individual devices are loosely coupled. The phone software is much simpler and the infrastructure to pass messages between devices is much less complex than an infrastructure that supports semantic discovery of capabilities and commands.

Events, the messages about things that have happened are the key to this simple, loosely coupled scenario. If we can build an open, ubiquitous eventing protocol similar to the open, ubiquitous request protocol we have in HTTP, the vision of a network of things can come to pass in a way that doesn’t require constant tweaking of connections and doesn’t give any one silo (company) control it. We’ve done this before with the Web. It’s time to do it again with the network of things. We don’t need a Facebook of Things. We need an Internet of Things.

I call this vision “The Live Web.” The term was first coined by Doc Searls’ son Allen to describe a Web where timeliness and context matter as much as relevance. I’m in the middle (literally half done) with a book I’m calling The Live Web: Putting Cloud Computing to Work for People . The book describes how events and event-based systems can more easily create the Internet of Things than the traditional request-response-style of building Web sites. Im excited for it to be done. Look for a summer ublishing date. In the meantime, if you’re interested I’d be happy to get your feedback on what I’ve got so far.

Again, Phil’s whole post is here.

I compiled a list of other posts that deal with various VRM issues, including Live Web ones, at the ProjectVRM blog.

If you know about other Live Web developments, list them below. Here’s the key: They can’t depend on any one company’s server or services. That is, the user — you — have to be the driver, and to be independent. This is not to say there can’t be dependencies. It is to say that we need to build out the Web that David Weinberger describes in Small Pieces. As Dave Winer says in The Internet is for Revolution, think decentralization.

Time to start living. Not just submitting.

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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Ten years ago this month, I gave the opening keynote for the International Retail Conference of the Gottlieb Duttweiler Instutut, in Lucerne, Switzerland. The venue was the amazing Culture and Congress Centre, which had opened just two years earlier. Designed by the architect Jean Nouvel and esteemed for its acoustics, it was the most flattering jewell box into which the stone of my rough self has ever been placed as a speaker. My warm up act was a symphony orchestra. While they played I whispered to my wife, “Not one of those musicians has played a wrong note in years. How many seconds will pass before I flub a line?”

Less than ten, it turned out. But somehow that relaxed me, and the rest of the talk went without a hitch, even though many in the audience were wearing headphones, so they could hear me translated to another language, and their reactions (some nodding, some laughing, some shaking their heads) came several seconds after I said whatever it was they were reacting to. It was weird.

I had mostly forgotten the talk, and wasn’t even sure I had put it up online anywhere. But in fact I had, right here.  Since that’s inside a site that’s not indexed by search engines (my choice, so far back that I’ve only recently re-discovered that fact, explaining why nothing there ever shows up), and I don’t plan on fixing it soon (I’ve got other stuff there I really would rather not get indexed), I’ve decided to post the whole thing here in the blog. As one might expect, it was right about some things, wrong about others, set in a context that has long since changed, addressed to an audience that has mostly moved on, and with arcana that may in some cases no longer make sense. Yet I think it still says some worthwhile things that invite probing and discussion. So here goes:

Why Markets Will Once Again Consist of People
(and why this is good news for Retailing)

This speech was given on the Gala Evening/50th Anniversary Celebration of the Gottlieb Dutteiler Institute, in the Kultur- und Kongresszentrum Luzern – Konzertsaal, Lucerne, Switzerland.

The subheads were put there mostly to make it easy for me to keep my extemporizing close to the text, and to make live translation a little bit easier.

25 September, 2000

By Doc Searls


Opening

People ask me why The Cluetrain Manifesto has 95 Theses. The reason is that Martin Luther did our market testing for us. It seemed to work for him, so we figured it would work for us.

But lately I’ve been wondering why he chose 95. I think the answer is that he was really a retailer at heart.

I figure he had 100 theses, but then decided more people would buy it if he knocked off 5 theses and offered 95 as a discount. It was kind of a sale price. Worked pretty well.

The priest

Speaking of priests, I have a friend, an Irish priest who for many years did missionary work in East Africa. After he read The Cluetrain Manifesto, he called me up and said “I love your book. Especially that first thesis: markets are conversations. It’s brilliant.”

I was the original author of that thesis, so this was fun to hear. But the brilliance he praised was his, not mine.

Village market story

This became clear when he told me the story of a visiting friend he once took to a traditional African village market. His friend wanted to buy a rug displayed in one of the merchant’s stalls. With the priest serving as an interpreter, the customer asked for the price. When merchant responded, the customer said, “That’s too much,” and began to walk away.

The priest then explained to his friend that he had insulted the merchant. So they turned around and went back. The customer then indicated that he wanted to go ahead and buy the rug for the stated price. Now the merchant became upset.

The priest now told to his friend that he had insulted the merchant twice – first by refusing to discuss the value of the rug, and second by offering to pay full price. The customer was completely confused. Clearly he didn’t know how to buy a rug in this town.

Then the priest said to his friend, “What do you think the rug is worth?” The friend responded with a number, and a conversation between the three parties followed.

After a while the customer arrived at both an education about the rug and a price everybody agreed was fair.

The point: markets really are conversations

Now this, the priest told me, is an example of how markets really are conversations. In traditional markets like this one, the only way for a seller and a buyer to discover the true value of the seller’s goods is together – by talking about them and coming to an agreement.

In other words, all value is discovered inside a conversation.

This is why the idea of a fixed price set by a merchant is as silly as talking to oneself. It makes no sense. In traditional markets like this one, conversation starts with the merchant’s asking price. It doesn’t end there.

Tech exec conversation

A few days later I shared this story with a group of government technology executives. After my talk, one guy came up to me and offered another insight. He said that here in the industrial world we do negotiate prices, but only for the most expensive goods and services, such as automobiles, houses and large service contracts.

Then he added another observation. We can only negotiate when there’s a balance of power between supply and demand – when neither side has enough advantage to name the price and end the conversation.

We don’t have that situation in mass markets, including the retail world that is familiar to all of us. In that environment, the supply side has been in control for a very long time.

Learning more about prices

So I began to wonder: when did the idea of fixed prices, set by the supply side, take root and became standard?

Sure enough, in another conversation, I learned that the price tag was invented in the late 1800s in Philadelphia. The inventor was John Wanamaker, the man who opened the first department store in the U.S.

History of retailing

This increased my interest in the history of retailing. Since then I have learned that department stores were pioneers in the use of all kinds of technologies, including –

  • telegraph
  • electric lights
  • telephones
  • radio

Retailing was also the first industry to provide employee benefits, such as health care and paid vacation time.

It was also the first industry to take orders by telephone and to offer customer refunds.

In fact, the whole concept of “customer service” comes from the retailing industry.

Adding value to the conversation idea

You see, what’s happening here – for me, and for all these people I talked to – is that we all added meaning to this one idea – that markets are conversations.

What is it about this idea that attracts so much interest? Why does it make people think about the deeper ways that markets really work?

Finding the answers is a discovery process – something that we do together, as I’ve just shown.

I want to continue that process here, tonight.

The four clues

To start, I will share four insights – let’s call them clues – that have come out of conversations we’ve had since The Cluetrain Manifesto came out in January. I choose these because I think each is especially relevant to retailing.

The first clue is that metaphors matter. If conversation is the best metaphor for markets, what’s wrong with the other ones, and why?

The second clue is that the companies we least expected to get our clues are the ones that seem to be doing the most with them. This is a very relevant surprise.

The third clue is that the Internet, like a real market, is a place, not just a medium.

The fourth clue is that there really is not a new economy. Instead there is a new dynamic in the investment economy, where a river of money flowing from venture capitalists into new companies. This is extremely distracting, and I’ll tell you why.

Finally I will talk about how all four of these clues bring us to the subject of this speech: that markets consist of people – and why this is good news for retailing.

Language warning

A brief warning. I am going to be talking about language here. Unfortunately, I am fluent only in English.

  • Ich habe drei Jahren auf Deutch im Shule lehrt, aber… I took two of them twice – and I gave them all back when I was done.
  • I have worked in France, but not long enough to learn any more French than it takes to apologize for mangling that beautiful language. Pardon moi pour vous derenger. Je nes comprend pas le Francais.
  • I also know a tiny bit of Spanish – though far less than my own three-year-old son.

So forgive my lack of multilingual skills.

I trust that what I tell you will still be relevant, not because technology is forcing far too much English into better languages, but because all expression arises from unconscious sources. And those sources are what I’m here to talk about.

Clue #1

My first clue is that metaphors matter.

In English we have an expression: “in terms of.” In fact, we are always speaking in terms of one metaphor or another. Metaphors supply the words we use when we talk about a subject. When we speak in terms of a metaphor, we bring in a box of words from that metaphor, and speak in terms we find in that box.

To demonstrate what I mean, I’ll start by asking a question about life. When we talk about life, what metaphor do we talk in terms of? In other words, what box of words do we use when we talk about life? Again, the answer is not obvious, because it’s almost totally unconscious.

In a word, the answer is travel. When we think and speak about life, we are inside a big box of travel words.

Birth is arrival. Death is departure. Choices are crossroads. Goals are horizons. Careers are paths. Ambitious people move ahead, or move into the fast lane. Lazy people fall behind. Confused people get lost in the woods. Drunkards fall off the wagon. Saintly people follow the straight and narrow path. Sinners stray.

The travel metaphor – this concept that life is a journey –is so deep, so common, so unconscious and so powerful that we almost never think about it. Yet it is nearly impossible to speak about life without using our handy box of travel words.

One more example. Let’s look at the main metaphor for time, which is money. We budget, spend, waste, lose, gain and invest time. We literally think of time in terms of money.

Metaphors for business

Now: let’s look at business. What’s our favorite metaphor for business? What do we think about business in terms of?

There’s war, of course. And sports. We speak of other companies in our business as competitors. We battle them for territory that we try to penetrate, defend, capture, dominate or control. But war and sports are obvious metaphors – we are conscious of them. What’s the biggest unconscious metaphor for business?

In a word, shipping. We often think and speak about business in shipping terms. We call our goods content that we package and move through a distribution system that we also call a channel.

We often talk about delivering products and services that we address to consumers or end users. Both those consumers and end users are positioned at the far ends of the shipping system we call business.

Marketing also uses shipping language when it talks about addressing, sending and delivering messages through media which are also conceived and described in transport terms.

How long have we been talking about business in shipping terms?

The age of industry

The answer is about 200 years – ever since Industry won the Industrial Revolution.

Starting about two hundred years ago, when we began to build the great textile, mining, manufacturing and transportation industries, we also built an enormous distance between production on one hand and consumption on the other.

We spanned this distance with “value chains,” most of which fanned out from a small number of producers to a large number of consumers. And we began to use that label – consumers – for the first time.

Every business had a place somewhere along one of these chains, where it would “add value” to goods the way parts are added to a car on an assembly line.

This distance between production and consumption – and the power enjoyed by producers over consumers – made it easy to think of markets not as places full of real human beings, but as distant abstractions.

Abstractions for markets

Today, two hundred years after the Industrial Revolution, we use the term “market” to mean five completely different kinds of things, none of which derive from what markets were in the first place. Lets go over the list –

1) Markets are product categories. We speak of automobiles, cosmetics and home electronics as “markets.”

2) Markets are geographical areas such as Stuttgart, Philadelphia and China. It’s amazing to me that in the U.S. we can talk about “penetrating” the Chinese “market.” As if we were throwing spears at a map, rather than selling goods to a quarter of the world’s population.

3) Markets are demographic populations. Men, 25-44. Middle-class women. Volvo drivers. Wine conoisseurs. We call each of these “markets” too.

4) Market is a synonym for demand. This is what we mean when we say there is a “market” for Italian wines, parabolic skis, or impolite books like The Cluetrain Manifesto.

5) Market is also a verb we use to label the pushing of goods from supply to demand. This verb “market” is the root word for the noun marketing. Not surprisingly, marketing is concerned almost entirely with the first four abstractions I just talked about

Ancient markets

Now let’s go back and look at the original meaning of markets.

The first markets were places in the middle of town. People gathered in the marketplace to make culture and do business. These places were the hearts of their cultures. Civilization began in the marketplace. Philosophy, mathematics and democracy are all Greek words born in the agora – the Greek marketplace.

In markets like the agora, all the economic relationships we know so well – supply and demand, production and consumption, vendor and customer – were a handshake apart. In these market places, people who sold goods usually also made them.

Names

In fact, people were often named after what they made, or sold. Many of our surnames are fossil remnants of the roles our ancestors played in their marketplaces. Names like Smith, Hunter, Shoemaker, Farmer, Weaver, Tanner, Butcher…. Lehrer, Jäger, Weber, Schuhmacher, Drucker, Händler… Fermier, Marchand.

The noun “market” – which differs little in German, French, Italian and Spanish – derives from the Latin word mercere, which means to buy. In the Roman marketplace, there were no “consumers,” only customers, who came there to shop. Even today in America we call malls “shopping centers.” Not “selling centers.”

Restoring the handshake

In The Cluetrain Manifesto we said the Industrial Age was a long interruption in our understanding of markets as places where people gather to sell their goods, to shop, to talk, and to enjoy public culture.

The Internet ends that interruption by putting everybody within one handshake of everybody else. First sources and final customers are now one mouse click apart.

The Internet restores an even balance of power between supply and demand.

Consumers are customers again. They are people with names, faces, tastes and rich personal histories.

Retailers have known this since Day One, but many companies farther back in the old value chains are beginning to witness this for the first time.

Smart markets

What they witness is markets – conversations – that are becoming smarter and more powerful by informing themselves. And those markets consist of everybody who wants to contribute to the conversation..

Clue #2

This brings me to our second clue. What kinds of companies want to talk about the issues Cluetrain brought up?

Would it be the dot-com start-ups, which were supposed to be changing the world, and putting these big old industrial companies out of business?

No, it was the big old industrial companies. Those were the ones looking hardest for clues. Companies with names like Procter & Gamble, Coca-Cola, Omnicom, Johnson & Johnson, Citicorp, Conoco, Rohm & Haas, Prudential, IBM and Migros.

The Coke example

Recently I’ve been talking with an executive with Coca-Cola who has the unlikely title of Chief Innovation Officer. In fact, the two of us were recently scheduled to serve on a panel where he would explain how Cluetrain is transforming his company.

Before this event was scheduled, I didn’t know Coca-Cola was subject to any kind of outside influence. They seemed to be more a force of nature than a company in the usual sense. The formula for Coke seemed to be on the periodic table of elements.

Why could the #1 brand in the entire world find guidance in a book that attacks the whole concept of branding?

I found that the answer is simple: Coca-Cola knows it can’t tell customers what they want any more.

However, Coca-Cola also knows it has a long-standing relationship with its customers – because it has led the conversation about soft drinks for more than one hundred years. That’s an advantage.

Procter & Gamble

Not long after the Cluetrain book came out, one of my co-authors, David Weinberger, got a call from Procter & Gamble. They wanted him to talk about Cluetrain with them at their headquarters in Cincinnati.

We were amazed. Procter & Gamble was the company that invented branding – a concept it borrowed from the cattle industry more than seventy years ago.

It quickly became clear that P&G was at least starting to get the clues. They knew branding wasn’t what it used to be. They knew this was no longer a world where one company could put one kind of soap in seven different boxes and sing about the difference.

Today, just four months later, P&G has a new CEO and – at least in some cases – an approach to rolling out new products that starts with the Internet.

We see this with a new hair styling product called Physique. In the past, Procter & Gamble might have spent 90% of its new product promotion budget on television advertising. For Physique they’re spending 30% on TV and the rest on the Web. The Web site says “Welcome to the Physique Stylezone: select your country. Underneath that it says, in French, choisessez votre pays. It’s an international campaign.

In the United States alone, more than half a million people (nearly all women) have signed up – on the Web – for free samples and membership in the Physique Club.

The campaign was developed by Saatchi & Saatchi, a global advertising agency headed by Kevin Roberts – a gentleman from New Zealand. Recently Mr. Roberts bragged about Physique’s results. He said, “The average time people spend on the Web site is 11 minutes… We’ve got the consumers. We’re talking to them, they’re talking to us.”

The retailing advantage

So here we have two of the top marketing companies in the world – Coke and Procter & Gamble – that are not only discovering that markets how conversations, but putting that idea to use, perhaps for the first time.

This is easier said than done. Jack Welch, the legendary CEO of General Electric, has a Net-based internal campaign called “destroy your business.” It isn’t much of an exaggeration. These are fundamental changes.

But some businesses will have less to destroy than others, because they already know what it means to be in conversation with their customers.

This is why I believe that the industry with the biggest conversational advantage is retailing. For retailers, customers are real. There is a limit to how much a retailer can treat a customer as an abstraction. For a retailer, a customer is more than a consumer, a seat, an eyeball, or an end user. Customers are real people.

As retailers, we know customers by name. They shop in our stores, eat in our restaurants, trust us with their credit cards and return to shop again because they know who we are too. In fact, they probably know us better than we know them.

This is no small matter. This is a huge advantage. But what is the relevance of the Internet to that advantage.

This brings me to my third clue

Clue #3

The Internet, like a market, is a place, not just a medium. We go to it, not just through it.

When the Internet came along, it was easy to see it as yet another mass medium – as a vehicle (there’s another shipping term) for delivering messages to consumers.

Mulitple metaphpors

Like a newspaper, the Web has pages that we write or author or publish.

Like telephone directories, which are also publications, it gives us ways to look up stores, services, and each other.

Like radio and television we can “deliver content” in the form of audio and video files and streams.

Sometimes we also use theatrical metaphors at the same time. That’s what Web page designers do when they talk about delivering an experience to an audience.

Places

Now let’s look at this the other way around. To us – to people sitting at their computers – the Internet is more like the telephone than any other medium.

Like the telephone, the Internet is profoundly personal. When we are on the phone, we are in a personal, private space, which is why telephones are a lousy medium for commercial messages.

The messages we want on the Net aren’t the ones that “deliver an experience.” They are the ones that come by email, from people we know.

In other words, what matters most is what we hear from each other. What matters most is conversation.

Even our Web pages have a private, personal quality about them. That’s why we call our main pages “home.”

Home is a place.

By that same metaphor, we also speak about that place as a site that we put up on the Net and call a location. We also call that location an address.

The virtues

Now: who built this place? It’s interesting that the Net was not built by or for business. It was built by computer programmers, who did it not just for themselves, but for all of us. A perfect example is the World Wide Web, which was invented here in Switzerland by Tim Berners-Lee: an Englishman who had little interest in business at all.

What was it that made this place so appealing? What were the core virtues that these programmers built into the Net when they created it. There were three:

  1. Nobody owns it
  2. Everybody can use it
  3. Anybody can improve it

You won’t hear those virtues advertised by any of the big technology suppliers. If it were up to them, the Net would never have happened. All of them would have wanted to own it, to restrict access to it, and to improve it only by themselves.

But it didn’t happen that way. Because nobody owns it, everybody can use it, and anybody can improve it, the Net is much like a commons, a plaza, a town square, for the whole world.

This is our world. We have help from the technology suppliers, but they cannot command the way we build it out.

Back in 1955, Gottlieb Duttweiler said “What is happening is the higher valuation of the man in the street as a power in business life, and more, important, as a human being.

By more than forty years, he anticipated a remarkable development:

The most important market place in the history of civilization is designed to value the man on the street. The individual human being.

The new world

One of the greatest thinkers on the subject of the Internet is my friend Craig Burton, who was responsible for much of the success enjoyed by a networking company called Novell, in the 80s. Craig Burton’s thinking has always been many years ahead of his time.

Recently he described the Internet as a sphere, like a bubble, that constantly expands as more people are added to it.

In fact, he suggests we think of the Net as a bubble comprised entirely of people, all looking inward and all visible to each other across the empty space in the middle.

At the speed of light, the distance between any two points – any two people – is zero. And it’s true: in practical terms, it takes me no longer to send an email to Prague than to a co-worker in the next room. A Web page in Milan usually comes up just as fast in my browser as one from Miami, Singapore, or an office down the street.

Craig Burton says the Internet is the first world we have created entirely on our own, as a species. In fact, he believes that the Net is the biggest social, cultural and scientific transformation since the Renaissance, and that it is just beginning.

In this new world, our most fundamental resource is each other – and the conversations by which together we know more than we can know alone.

Clue #4

The fourth clue is that there is no “new” economy. There is only a well-funded distraction from the real economy, which is the economy of conversation we call the marketplace – an economy that has been with us for thousands of years.

To illustrate the problem, let me tell you one final story.

Not long ago I was at a party in San Francisco. There I talked with a young man who was already a veteran of several start-ups. When I asked him what his new company did, he said “we’re an arms merchant to the portals industry.” I had no idea what he meant.

But he answered every one of my questions with more buzzwords. They were “networking eyeball paradigms,” “portalizing B2B solutions,” “scaling strategic synergies” and so on. Finally I asked a rude question: how are sales?

He said, “They’re great. We just closed our second round of financing.”

Two kinds of markets

Suddenly it became clear to me that every company has two kinds of markets: one for its goods and services and one for itself. In other words, it is in two conversations: one with its community of customers, and the other with its community of investors.

In Silicon Valley, we have confused the second one with the first. We have made a “new” economy out of selling huge promises to investors, rather than goods and services to customers.

The best wisdom on this subject comes from Stewart Brand, who says form follows funding.

One reason nobody owns the Net is that it was originally funded by governments and universities. But this is not a well-funded story.

The best-funded story is the one being told by every company whose category begins with an E or whose name ends in a.com or .co.

Nearly every one of those companies was funded by venture capital.

Now, venture capital is not a bad thing. In fact, it is a very good thing. But it is also a very influential and distracting thing, which is why I want to talk about it.

Looking at size

Let’s look at the size of this distraction.

Last year venture capitalists invested around fourteen billion dollars in Silicon Valley alone. This year they are headed toward investing twice that much. The amount of money we’re talking about here is staggering. I have been told that more than half the countries in the world have a smaller gross domestic product.

This money continues to flow like a river. Even when demand for dot-com stocks began to falter early this year, this money river continued to flow through new dot-com start-ups – not only in Silicon Valley, but around the world. Last week Bertelsmann set up a billion-dollar venture capital fund.

Burning money

Where is this money going?

Much of it goes into building staffs, offices and developing technology. But a huge percentage of it goes into marketing, mostly through advertising in every media you can name.

This both attracts and funds enormous amounts of media attention. Magazine displays in the U.S. are being crushed under the weight of fat new business publications. Their very existence testifies to a “new” economy at work. It’s a lot of smoke, suggesting a very big fire.

But what’s burning is money. We don’t have a new economy here. We have a flood of combustible money – a kind of petrol – that is made to be burned.

Dot-com start-ups are very different kinds of businesses from the ones we’ve been building for thousands of years. They don’t have “overhead” or “expenses” in the usual sense. They have “burn rates.” And burn is exactly the term that they use. In this economy – if you can call it that – spending is a good thing. Burning is a good thing.

Perspective

But again, it’s a distracting thing, because most of the time it talks about itself. For a long time, it also disparaged traditional businesses.

So: how can we keep from being distracted by these huge fires and all their smoke?

With some perspective.

The new conversation – about burning money and huge payoffs when these companies go public – is only a few years old.

The old conversation – about vendors and customers selling and buying goods and services – is as old as civilization itself.

In fact, it is civilization.

And we are not in civilization just for the money.

This is what we are learning from companies like Procter & Gamble, Johnson & Johnson, Nortel Networks and. The surprise – and it shouldn’t be one – is that people don’t work at these companies just for the money.

I am amazed at how many people I meet at these companies are not interested in getting rich at dot-com start-ups. Instead they are looking deeply at why they want to work where they do.

I believe we are finding that these companies have souls. They have human purposes that transcend mere economics. These purposes have little to do with short-term opportunities, and nothing to do with cashing out or starting another business.

I believe retailing has more soul than of any other industry. I say this because retailing is deeply involved in culture itself: the culture of the marketplace. Retailing was here for thousands of years before the industrial age. And it will be here for thousands of years afterwards.

Retailers are not just here to sell. They are here to serve.

Gottlieb Duttweiler said, “The constant will to serve has something irresistible about it – conveying mysterious powers over one’s fellow human beings and making interrelationships visible which would otherwise remain hidden.”

He would have loved the Internet.

Conclusion

Clearly, he loved people. Because he also said, “Whoever forgets that people are the dominating factor in business and politics and thinks only in old-style dollars and francs has got his calculation wrong.”

Herr Duttweiler had it right. Retailing is about people. Markets are about people. The Internet is about people.

For Herr Duttweiler, it took extraordinary insight and courage to state this principle so simply when there was no Internet, deep in that long interruption we call the Industrial Age.

What he said was no less true then than it is today. But today a new age has begun: one that belongs to Herr Duttweiler’s dominating factor: people. Now customers and retailers together can finally agree that this is our world, these are our markets, and we are going to make them together – for ourselves, and for each other.

What can we do to improve this new world that nobody owns, everybody can use, and anybody can improve?’

I look forward to hearing the answer – from you.

Thank you very much.

Marketing Needs To Stop Its BS and Wake Up, the headline says.

True.

The bottom line: “At the end of the day, audiences have moved on and their expectations have changed. The next five years will see drastic changes in the way organizations engage with their audiences. It’s not a choice anymore. These are the ‘cluetrain’ years.”

Yes, but what will change most is how ‘audiences’ engage with companies.

r-buttonFor r-buttonone thing, we’re not ‘audiences’ any more. And we’re not here for the show. We’ll have our own ways of engaging, and they won’t just be through “social media” that are privately owned and we don’t control. In fact, those ways might include the symbols you see here. You’re on the left, and the company you’re engaging with is on the right. If that company believes a free customer is more valuable than a captive one, the symbol appears, or turns from gray to red.

For more on all that, go to Cooperation vs. Coercion, which I posted on the ProjectVRM blog this morning. Also see three other posts on this blog from a couple days ago. Pointers to those are here.

If you’re a marketer, and you want some fresh clues about how the tide is turning, take the time to read through those. They’re not gospel, just some blog posts. But they point in a direction, and it’s not toward marketing as usual, even if that marketing is called “social”.

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The sign above points to the toilets of the cafeteria at the Musée de l’Armée in Paris. The Kid and I were at the museum a couple days ago, and he spotted the sign, insisting I shoot it. So I did, and here we are.

Now, lest you think that “consumers” is bad Franglish for “customers,” here’s the same sign in French:

Looks to me like a literal translation.

And, it also seems to me, the term “consumer” is far more deeply embedded in Europe than it is in the U.S. Here (I’m back now) I can ask people to say “customer” instead of “consumer,” and they don’t have much trouble with switching. In Europe (especially in the U.K.) it’s harder. I don’t know why.

Still, I think the literal meaning of the word is an issue, and has been for some time. Here’s John Perry Barlow, in Death From Above, his March, 1995 Electronic Frontier column for Communications of the ACM:

Over the last 30 years, the American CEO Corps has included an astonishingly large percentage of men who piloted bombers during World War II. For some reason not so difficult to guess, dropping explosives on people from commanding heights served as a great place to develop a world view compatible with the management of a large post-war corporation.

It was an experience particularly suited to the style of broadcast media. Aerial bombardment is clearly a one-to-many, half-duplex medium, offering the bomber a commanding position over his “market” and terrific economies of scale.

Now, most of these jut-jawed former flyboys are out to pasture on various golf courses, but just as they left their legacy in the still thriving Cold War machinery of the National Security State, so their cultural perspective remains deeply, perhaps permanently, embedded in the corporate institutions they led for so long, whether in media or manufacturing. America remains a place where companies produce and consumers consume in an economic relationship which is still as asymmetrical as that of bomber to bombee.

Eating isn’t a bad metaphor for what we do with the products we buy. But it’s not all we do. For example, I’m writing this on a computer. Is “consuming” all I did with that computer when I bought it? And what about the writing I’m doing now? Writing is production, not consumption. In fact, much of what we do with our electronic devices involves producing information rather than consuming it.

And is information something we consume? Or is it something else? Here’s what I wrote for my chapter of Open Sources 2.0:

Several years ago I was talking with Tim O’Reilly about the discomfort we both felt about treating information as a commodity. It seemed to us that information was something more than, and quite different from, the communicable form of knowledge. It was not a commodity, exactly, and was insulted by the generality we call “content.”[1]

Information, we observed, is derived from the verb inform, which is related to the verb form. To inform is not to “deliver information,” but rather, to form the other party. If you tell me something I didn’t know before, I am changed by that. If I believe you and value what you say, I have granted you authority, meaning I have given you the right to author what I know. Therefore, we are all authors of each other. This is a profoundly human condition in any case, but it is an especially important aspect of the open source value system. By forming each other, as we also form useful software, we are making the world, not merely changing it.

The footnote goes to this:

I had the same kind of trouble when I first started hearing everything one could communicate referred to as “content.” I was a writer for most of my adult life, and suddenly I was a “content” provider. This seemed ludicrous to me. No writer was ever motivated by the thought that they were “producing content.” Their products were articles, books, essays, columns, or (if we needed to be a bit more general), editorial. “I didn’t start hearing about `content’ until the container business felt threatened,” John Perry Barlow said.

“Consumer” is the noun form of the verb to consume. Here’s what Dictionary.com says consume means:

con·sume

–verb (used with object)

1. to destroy or expend by use; use up.
to eat or drink up; devour.
3. to destroy, as by decomposition or burning: Fire consumedthe forest.
4. to spend (money, time, etc.) wastefully.
5. to absorb; engross: consumed with curiosity.

–verb (used without object)

6. to undergo destruction; waste away.
7. to use or use up consumer goods.

So what does #7 say? That there is a class of goods meant to be destroyed or expended by use? Well, yeah.

Are we past that? I hope so. We certainly have more reason to be.

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Let’s start by asking this question:

Is Google becoming the world’s biggest SEO company?

That question popped into my mind after reading The Google Algorithm, an editorial in Wednesday’s New York Times. It begins,

Google handles nearly two-thirds of Internet search queries worldwide. Analysts reckon that most Web sites rely on the search engine for half of their traffic. When Google engineers tweak its supersecret algorithm — as they do hundreds of times a year — they can break the business of a Web site that is pushed down the rankings.

— and then goes on about the company’s “pecuniary incentives to favor its own over rivals” and how “the potential impact of Google’s algorithm on the Internet economy is such that it is worth exploring ways to ensure that the editorial policy guiding Google’s tweaks is solely intended to improve the quality of the results and not to help Google’s other businesses.”

The framing here is business. That is, the Times is wringing its  hands about Google’s influence over businesses on the Web. That’s fine, but is business all the Web is about? Is the “Internet economy” limited to businesses with Web sites? Is it limited to the Web at all? What about email and all the other stuff supported by Internet protocols? Have the Internet and the Web, both creations of non-commercial entities and purposes, turned entirely into commercial places? The Times seems to think so.

Google’s dominance of the search business is an interesting problem, but it’s also something of a red herring. Seems to me the bigger problem is what the search business — which consists entirely of advertising — is doing to the Web.

Ever since Google invented AdSense, making it possible for advertising to appear on websites of all kinds, there has been a rush to riches, or at least toward making a few bucks, by grabbing some of that click-through money. That’s what SEO (Search Engine Optimization) is mostly about. As a result the number of websites that exist mostly — or entirely — to make advertising money, has grown. I’ve been looking for numbers on this and can’t find any, but I’ll bet that the non-commercial slice of the Web’s total pie has been shrinking, and the portion paid for by advertising (or just looking to make money on advertising) has been growing.

Thus it makes sense that Google will care more about that growing slice of the Web’s pie, and less about the non-commercial stuff. I’m not saying that’s the case. It just seems to me that the Web is more about advertising than ever, and a lot more of that gets in the way of what we might be looking for — especially if what we want isn’t advertised.

So that’s one thing. Here’s another: Adam Rifkin‘s Pandas and Lobsters: Why Google Cannot Build Social Applications. Very insightful and interesting piece. Not sure I agree with all of it, but it does make me think — about malls.

Remember back when e-commerce was new, in the mid-90s? Seemed like all the big guys and wannabes wanted to build malls on the Web. It was wacky, because the Web isn’t a farm on the edge of town that you can pave and put a bunch of stores on. It’s a wide open space. But an interesting thing has happened here, fifteen years later. “Social” sites are malls. They’re places people go to hang out and buy stuff. They’re enclosed, separate. Big and accomodating. Fun to be in. But private. Here’s a long quote from Adam:

Facebook is a lobster trap and your friends are the bait. On social networks we are all lobsters, and lobsters just wanna have fun. Every time a friend shares a status, a link, a like, a comment, or a photo, Facebook has more bait to lure me back. Facebook is literally filled with master baiters: Whenever I return to Facebook I am barraged with information about many friends, to encourage me to stick around and click around. Every time I react with a like or comment, or put a piece of content in, I’m serving as Facebook bait myself. Facebook keeps our friends as hostages, so although we can check out of Hotel Facebook any time we like, we can never leave. So we linger. And we lurk. And we luxuriate. The illogical extreme of content-as-bait are the Facebook games where the content is virtual bullshit. Social apps are lobster traps; Google apps do not bait users with their friends.

Quora is restaurant that serves huge quantities of bacn and toast. Quora is a dozen people running dozens of experiments in how to optimally use bacn to get people to return to Quora, and how to use toast to keep them there. Bacn is email you want but not right now, and Quora has 40 flavors of it that you can order. Quora’s main use of Bacn is to sizzle with something delicious (a new answer to a question you follow, a new Facebook friend has been caught in the Quora lobster trap, etc.) to entice you to come back to Quora. Then, once you’re there, the toast starts popping. Quora shifts the content to things you care about and hides things you don’t care about in real-time, and subtly pops up notifications while you’re playing, to entice you to keep sticking around and clicking around. Some toast is so subtle it doesn’t even look like a pop-up notification — it just looks like a link embedded in the page with some breadcrumbs that appear in real-time to take you to some place on Quora it knows you’ll find irresistible. For every user’s action, bacn’s and toast’s fly out to others in search of reactions. (Aside: if I were Twitter, I would be worried. Real-time user interfaces are more addictive than pseudo-real-time interfaces; what if Quora took all of its technology and decided to use it to build a better Twitter?) Social apps are action-reaction interaction loops; Google apps are designed just for action.

I really don’t care that Google sucks at social apps (if that’s true, and I’m not sure it is… not totally, anyway). What I care about is that all this social stuff happens in private spaces. Maybe there’s a better metaphor than malls, but I can’t think of one.

Oh, and how do these malls make their money? Advertising. Not entirely, but to a large extent.

The problem with that is what it has always been. Advertising is guesswork, and most advertising is wasted, even when advertisers only pay for click-throughs. The misses far outnumber the hits, and that’s a lot of waste — of server cycles, of bandwidth, of time, of pixels, and of rods and cones in the backs of our eyes. Ad folks calls the misses “impressions,” but who’s impressed?

It helps to remember what the Web  was in the first place — and what the Web is still for. Nobody has ever explained that better than David Weinberger, in a Cluetrain Manifesto chapter called The Longing. David wrote that in 1999. Like other fine antiques, it only gets more valuable with age. And with the degree to which modern forms depart from old and better ideals.

[Later...] There’s always a bigger picture, of course. I love this one from Ethan Zuckerman, whose has been spreading my horizons for a long time and keeps getting batter at it.

How’s this for coincidence: I’m sitting here readingcover-small Cory Doctorow‘s book Content: Selected Essays on Technology, Creativity, copyright and the Future of the Future when I pause to check Twitter for a message I’m expecting, and see a tweet pointing to Cory’s review in BoingBoing of the 10th Anniversary Edition of The Cluetrain Manifesto. Small karras.

Of course, he nails it:

Cluetrain influenced an entire generation of net-heads (as generations are reckoned in what we called “Internet time” back in the paleolithic era), for better and for worse. Better: entrepreneurs, social entrepreneurs, and accidental entrepreneurs who discovered that talking with people in the normal, recognizable, human voice was both possible and superior to the old third-person/passive-voice corporatespeak. Worse: the floodtide of marketing jerks who mouthed “Markets are conversations” even as they infiltrated blogs and other social spaces with badly disguised corporate communications beamed in from marcom central.

Yep.

The long gist:

First things first: the original, core material stands up remarkably well. Depressingly, the best-weathered stuff is that which describes all the ways that big companies get the net wrong. They’re still making the same mistakes. Some of the more optimistic material dated a little faster. There’s a lesson in there: it’s easier to predict stupidity than cleverness.

The supplementary material is very good as well. The original authors take a very hard look at their original material and do a great job of explaining what went wrong, what went right, and where it’s likely to go now. I was especially taken with Chris Locke’s “Obedient Poodles for God and Country,” a scathing critique of the market itself, asking big questions that the first Manifesto dared not raise — strangely, I was least taken by Locke’s original piece in the Manifesto, which says something about Locke, or me, or both. Searls’s new piece has an inspiring — if utopian — look at how business might yet reorganize itself on humane principles using the net; and Weinberger’s philosophical look at the threats facing the net and analysis of the utopian, realist and distopian views on the net’s future play against one another is an instant classic.

The afterwords by the new contributors are likewise extremely engaging stuff, as you might expect. McKee is extremely blunt in recounting the mistakes Lego made with the net early on, and the story of how they turned things around is a true inspiration. Gillmor’s ideas on the net and news and media are a neat and concise and compelling version of his extremely important message. Rangaswami’s piece is characteristic of his deadpan, mischievous boardroom subversion, and has to be read to be believed.

As updates go, Cluetrain 2.0 is a very fine effort. If you didn’t read the first edition, this is your chance. If you did read the first edition, it’s time to go back to the source material again. You’ll be glad you did.

So, in the best spirit of logrolling, I suggest you do the same with Content. Hardly a page goes by when my brain doesn’t hiss Yesss!! Here, for example, with the closing lines of a 2006 piece for Forbes titled “Giving it Away“:

There has never been a time when more people were reading more words by more authors. The Internet is a literary world of written words. What a fine thing that is for writers.

Indeed. If you had told me in 1980 that thirty years hence anybody could write whatever they pleased, with ease, and publish it through a worldwide system that nobody owned, everybody could use and anybody could improve… and that this writing could be read on phones or lightweight personal displays, anywhere in the world, at little cost, by anybody… and that far more money would be made because of this new system than any company would make with it (including the phone and cable TV companies whose wiring this new system employed)… I’d call that a utopia. Especially if you also told me that I’d become a familiar writer in this new space, starting after the age of fifty.

I’d also want to fight to keep it open and free. Which is why I second what John Perry Barlow says in his forward to Content:

Had it been left to the stewardship of the usual suspects, there would scarcely be a word or a note online that you didn’t have to pay to experience. There would be increasingly little free speech or any consequence, since free speech is not something anyone can own.

Fortunately there were countervailing forces of all sorts, beginning with the wise folks who designed the Internet in the first place. Then there was something called the Electronic Frontier Foundation which I co-founded, along with Mitch Kapor and John Gilmore, back in 1990. Dedicated to the free exchange of useful information in cyberspace, it seemed at times that I had been right in suggesting then that practically every institution of the Industrial Period would try to crush, or at least own, the Internet. That’s a lot of lawyers to have stacked against your cause.

But we had Cory Doctorow.

Had nature not provided us with a Cory Doctorow when we needed one, it would have been necessary for us to invent a time machine and go into the future to fetch another like him. That would be about the only place I can imagine finding such a creature. Cory, as you will learn from his various rants “contained” herein was perfectly suited to the task of subduing the dinosaurs of content.

He’s a little like the guerilla plumber Tuttle in the movie Brazil. Armed with a utility belt of improbable gizmos, a wildly over-clocked mind, a keyboard he uses like a verbal machine gun, and, best of all, a dark sense of humor, he’d go forth against massive industrial forces and return grinning, if a little beat up.

Indeed, many of the essays collected under this dubious title are not only memoirs of his various campaigns but are themselves the very weapons he used in them.

And this is the thing. Cory not only fights knaves, but shares his sharpened weapons with the rest of us. For years I’ve looked to Cory to serve as our Alpha Sense-Maker whenever some big dumb .com, .org or .gov makes a hostile and clueless move against the rest of us. Take a chapter called “Facebook’s Faceplant“, which I recall as “How Your Creepy Ex-Co-Workers Will Kill Facebook” in the November 26, 2007 edition of InformationWeek. This came out right after Facebook made public its much-anticipated monetization plans, which nobody liked but which Cory contextualized best:

Facebook is no paragon of virtue. It bears the hallmarks of the kind of pump-and-dump service that sees us as sticky, monetizable eyeballs in need of pimping. The clue is in the steady stream of emails you get from Facebook: “So-and-so has sent you a message.” Yeah, what is it? Facebook isn’t telling — you have to visit Facebook to find out, generate a banner impression, and read and write your messages using the halt-and-lame Facebook interface, which lags even end-of-lifed email clients like Eudora for composing, reading, filtering, archiving and searching. Emails from Facebook aren’t helpful messages, they’re eyeball bait, intended to send you off to the Facebook site, only to discover that Fred wrote “Hi again!” on your “wall.” Like other “social” apps (cough eVite cough), Facebook has all the social graces of a nose-picking, hyperactive six-year-old, standing at the threshold of your attention and chanting, “I know something, I know something, I know something, won’t tell you what it is!”

If there was any doubt about Facebook’s lack of qualification to displace the Internet with a benevolent dictatorship/walled garden, it was removed when Facebook unveiled its new advertising campaign. Now, Facebook will allow its advertisers use the profile pictures of Facebook users to advertise their products, without permission or compensation. Even if you’re the kind of person who likes the sound of a “benevolent dictatorship,” this clearly isn’t one.

The short version of what followed is that Facebook grew up. The emails I get forwarded from Facebook today are now full text, and the company has long since dropped its creepy advertising plan. WIPO, the RIAA and the U.S. Congress are less likely to get the clues, of course. But at least we still have Cory sharpening them, for all of us.

It takes time to make the best future. That’s why the original subtitle for this blog, back when it started in the fall of 1999 (thanks to the kind insistence and assistance of Dave Winer), is also the title of this post.

Markets are Headlocks

Where Markets are Not Conversations is my latest post over at the ProjectVRM blog. It was inspired by the “experience” of taking a fun little personality test at SignalPatterns, followed by SP’s refusal to share the results unless I submitted to a personal data shakedown.

Bottom lines:

  1. I’d rather track myself than have somebody else track me, thank you very much.
  2. This kind of marketing is about as conversational as a prison PA system — and calling any of it “social” makes it not one syllable less so.

There’s a lot to talk about here. Or there. Meanwhile, I’m off to see Avatar a second time with my son, this time in IMAX 3D. Have a fun weekend, kids.

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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Consider the possibility that “social media” is a crock.

Or at least bear with that thought through Defrag, which takes place in Denver over today and Thursday, and for which the word “social” appears seventeen times in the agenda. (Perspective: “cloud” appears three times, and “leverage” twice.)

What prompts the crock metaphor is this survey, to which I was pointed by this tweet from Howard Rheingold. (I don’t know if the survey is by students of Howard’s Digital Journalism Workspace class, though I assume so.)

While the survey is fine for its purposes (mostly probing Twitter-based social media marketing) and I don’t mean to give it a hard time, it brings up a framing issue for social media that has bothered me for some time. You can see it in the survey’s first two questions: What Social Media platforms do you use? and How often are you on social media sites?

The frame here is real estate. Or, more precisely, private real estate. Later questions in the survey assume is that social media is something that happens on private platforms, Twitter in particular. This is a legitimate assumption, of course, and that’s why I have a problem with it. That tweeting it is a private breed of microblogging verges on irrelevance. Twitter is now as necessary to tweeting as Google is to search. It’s a public activity under private control.

Missing in action is credit to what goes below private platforms like Twitter, MySpace and Facebook — namely the Net, the Web, and the growing portfolio of standards that comprise the deep infrastructure, the geology, that makes social media (and everything else they support) possible.

Look at four other social things you can do on the Net (along with the standards and protocols that support them): email (SMTP, POP3, IMAP, MIME); blogging (HTTP, XML, RSS, Atom); podcasting (RSS); and instant messaging (IRC, XMPP, SIP/SIMPLE). Unlike private social media platforms, these are NEA: Nobody owns them, Everybody can use them and Anybody can improve them. That’s what makes them infrastructural and generative. (Even in cases where protocols were owned, such as by Dave Winer with RSS, efforts were made to remove ownership as an issue.)

Tweeting today is in many ways like instant messaging was when the only way you could do it with AOL, Microsoft, Yahoo, Apple and ICQ. All were silos, with little if any interoperabiity. Some still are. Check out this list of instant messaging protocols. It’s a mess. That’s because so many of the commonly-used platforms of ten years ago are still, in 2009, private silos. There’s a degree of interoperability, thanks mostly to Google’s adoption of XMPP (aka Jabber) as an IM protocol (Apple and Facebook have too). But it’s going slow because AOL, MSN and Yahoo remain isolated in their own silos. Or, as Walt Whitman put it, “demented with the mania of owning things”. With tweeting we do have interop, and that’s why tweeting has taken off while IM stays stagnant. But we don’t have NEA with Twitter, and that’s why tweeting is starting to stagnate, and developers like Dave are working on getting past it.

Here’s my other problem with “social media” (as it shows up in too many of the 103 million results it currently brings up on Google): as a concept (if not as a practice) it subordinates the personal.

Computers are personal now. So are phones. So, fundamentally, is everything each of us does. It took decades to pry computing out of central control and make it personal. We’re in the middle of doing the same with telephony — and everything else we can do on a hand-held device.

Personal and social go hand-in-hand, but the latter builds on the former.

Today in the digital world we still have very few personal tools that work only for us, are under personal control, are NEA, and are not provided as a grace of some company or other. (If you can only get it from somebody site, it ain’t personal.) That’s why I bring up email, blogging, podcasting and instant messaging. Yes, there are plenty of impersonal services involved in all of them, but those services don’t own the category. We can swap them out. They are, as the economists say, substitutable.

But we’re not looking at the personal frontier because the social one gets all the attention — and the investment money as well.

Markets are built on the individuals we call customers. They’re where the ideas, the conversations, the intentions (to buy, to converse, to relate) and the money all start. Each of us, as individuals, are the natural points of integration of our own data — and of origination about what gets done with it.

Individually-empowered customers are the ultimate greenfield for business and culture. Starting with the social keeps us from working on empowering individuals natively. That most of the social action is in silos and pipes of hot and/or giant companies slows things down even more. They may look impressive now, but they are a drag on the future.

Defrag wraps tomorrow with a joint keynote titled “Cluetrain at 10″. On stage will be JP Rangaswami, Chris Locke, Rick Levine and yours truly, representing four out of the seven contributors to the new 10th Anniversary Edition of The Cluetrain Manifesto. We don’t have plans for the panel yet, but I want it to be personal as well as social, and a conversation with the rest of the crowd there. Among other things I want to probe what we’re not doing because “social” everything is such a bubble of buzz right now.

See some of ya there. And the rest of you on the backchannels.

amazon_items_to_consider

So I just went to look up Debora Spar’s Ruling the Waves, on Amazon, and was greeted by the above. Never mind that I wasn’t looking for what they said I just looked at. Consider instead the strangeness of having something with my name on it, as an author, and that I can reasonably be presumed to own recommended to me as a purchase. (As it happens I also own the third item. Dunno if I bought it from Amazon or not.)

For what it’s worth, can I find anywhere in my Amazon account info a place where I can let them know I’m an author and not just a customer.

Am I wrong about that? Is there a way I can let them know that? Is it worthwhile to either of us?

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Had a great time mixing it up with the BlogTalkRadio folks a couple nights ago, talking Cluetrain after 10 years. Here’s the show. Big thanks to Allan Hoving for lining up and co-hosting it with Janet Fouts and Jim Love. Janet tweeted it live. Afterwards Jim put up a very interesting follow-up post, in the midst of which is this:

The message in Cluetrain is as fresh today as it was 10 years ago. ” We are not clicks or eyeballs, we are people ….deal with it.”

For those of you who missed it, the book started as a website, with 95 Theses splashed on a web page, in tribute, homage or just a scandalous rip off of Martin Luther’s famous set of 95 Theses.  If you don’t know about the original, shame on you.  Martin Luther was the renegade priest who started the Protestant Reformation by nailing 95 Theses to the door of a church.  Equally important but often ignored, he translated the bible from latin to the language of the people (in his case, German) and opened it up for all to read.  He also got married — remember he was a priest.  To some he was a heretic.  To others, he was a reformer who democratized an autocratic organization.

Whatever you think of him, he changed history.  Not on his own.  He didn’t invent the movable type that made it possible to print those bibles and distribute them widely.  He wasn’t the only figure questioning the institution — there was, at the time, a growing movement that were dissatisfied with what they felt was corruption and a lack of integrity in the church at the time.  It related to practices like the selling of indulgences — the ability to buy your way out of sin.  A number of people saw the church as a decaying, archaic and for some, even a corrupt institution.  They’d lost faith in it — literally.

Luther had the courage to say what he did.  In a world where the Catholic church was all powerful, this took a lot of guts.  But that doesn’t explain the power of what he accomplished.  No, he hit the zeitgeist of his era, he was a man of courage at the right place in history.  His ideas took off like a brush fire and the world was never the same.

It’s important to note, however, that this is the view from 500 years later.  It’s all compressed now and we can look back and see Luther’s document as a turning point.

The older I get, the earlier it seems. It’s funny that we chose 95 theses because that worked for Luther, but basically that’s why. (We also called it a manifesto because that worked for Marx. Karl, not Groucho, though the latter was much funnier. I also went to a Lutheran high school. Coincidence?) I don’t think any of us was taking the long-term perspective, though. We just wanted to say what we thought was true and nobody else seemed to be talking about.

But I’m thinking now that it will take many more years. Perhaps decades, before some of what we said will sink in the rest of the way.

Some marketers got it. Jim is clearly one of them. The Cluetrain Manifesto is required reading in the course he teaches. But the future is unevenly distributed. As David Weinberger likes to say, it’s lumpy. Cluetrain’s subtitle is “The End of Business as Usual.” I think that end will take a long time. We’re trying to hasten it with VRM, but that will take awhile too.

The short of it is that Business as Usual is insulting to customers. Take for example the form of Business as Usual that Bob Frankston (more about him here) calls the regulatorium. You get one of those when a big business category and its regulators become captive of each other.  For example, it was in revolt against a tea market regulatorium that citizens of the Massachusetts colony threw the East India Tea Company’s tea in the harbor. The colonists succesfully revolted against England, but customers still haven’t had a proper revolt against the belief by many companies that captive customers are more valuable than free ones. If Mona Shaw and her hammer are the best we can do, we’ve hardly begun.

The liberating impulse is independence, just as it was in 1773. Thanks to the Net, free customers are more valuable than captive ones. To themselves, to sellers, to the economy. We won’t learn that until we become fully equipped, as customers, to act on our independence.

At the end of the show Jim said he thought liberation would be a group thing. Customers getting power in aggregate. While I don’t disagree, I believe it is essential to equip individual customers with tools of both independence and engagememt. By that I mean tools that are as personal as wallets and purses, and just as handy and easy to use. We don’t have those yet.

But we will. And once we do, things will change radically. Count on it.

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Over in Fast Company, Tim Beyers nicely threads quotable pearls from Cluetrain‘s four authors, including yours truly, in Twitter’s Investors Missed the Cluetrain – Here’s Why. The context of the story is continued investment in Twitter at a reported $1 billion valuation of the company. (Fast indeed.)

Now that the piece is up, I thought I’d add a few more thoughts of my own.

First, while valuation is unavoidably interesting, value is avoidably important. In other words, it doesn’t get much respect. Not if it’s not being sold.

For example, RSS (currently getting more than 3 billion results on Google). It’s extremely useful. We would hardly have blogging or online journalism without it. But Dave Winer, to his enormous credit, decided not to make RSS itself a business. Instead he decided to release it into the world so countless uses could be made of it, and countless businesses could be built on top of those uses. He made RSS open infrastructure, just as Linus Torvalds did with Linux, and countless other geeks have done with their own contributions to the virtual lumberyard of free building material we use to make the online world. Open building material is valuable beyond calculation, because it has use value rather than sale value. (Eric Raymond explains the difference here.) The leverage of use value on sale value can be very high indeed. Where would Google and Amazon be without Linux and Apache? Where would any of us be without SMTP, IMAP and other email protocols — or, for that matter, the suite of free and open protocols on which the Net itself runs?

Twitter’s creators have chosen to make it a commercial form of infrastructure. This is not a bad thing. In terms of investment valuation (especially at this point in time) it’s a smart thing. But we should not mistake Twitter itself, or even its API, for the kind of true (free and open) infrastructure that comprise the Net and the Web. Nor, for that matter, should we consider Twitter the last word in the category it pioneered and now dominates. At this point in history, Twitter soaks up nearly all the oxygen the microblogging room. Thus there is no widely adopted open infrastructure for microblogging. (Identi.ca and the OpenMicroBlogger folks have worked hard on that, but adoption so far is relatively small.)

But, given time, something will take. I’d place a bet Dave’s RSS Cloud. It’s live, or real-time. It’s open infrastructure. And, as Dave put it here, it has no fail whale. (And now TechCrunch is Cloud-enabled.)

This relates to Cluetrain in respect to what a market is, and what a market does. Markets by nature are open. They are not “your choice of captor.” Cluetrain, at least for me, was a brief against captors, a case for open marketplaces. So, while Twitter may provide means for conversation out the wazoo, it still falls short of what are, for me, more important Cluetrain ideals. I await the fulfillment of those with growing patience.

If you had told me in 1999 that the two hottest names on the Web in 2009 — Facebook and Twitter — would both be silos, I’d have been disappointed. I’d have figured that by now most folks would understand the infrastructural nature of open code, open protocols, open formats. (For more on those expectations, see Making a New World, written a few years back but still relevant as ever.)

With time comes perspective. It is helpful to note that the Web as we know it is barely old enough for high school. (The first popular browser appeared in 1995.) As an environment supporting new forms of business life — ones thriving in an environment of ubiquitous and cheap worldwide connectivity that each participant is in a position to improve — we are at a paleozoic stage in which even the innovative companies continue to follow familiar industrial age models of command and control. That’s why they trap users, customers and whole markets in walled gardens that are value-subtracted simulacra of the whole Net. In the best cases (such as Twitter’s, Facebook’s and Apple’s) they create new markets around new inventions and new ways of doing things, but at the expense of isolation for themselves and all their walled-in dependents. So, even when they embrace (though never completely) openness and other forms of goodness at the engineering level, they remain Old Skool at the corporate level where equally Old Skool investors still place their bets. And, while they speed things up in the early stages — when they are still new and original — they slow things down after their walled markets become large enough to become industrial farms, harvesting income from trapped inhabitants.

The longer that walled farming remains a prevailing business practice, the longer the Industrial Age persists in the midst of the one that succeeds it, and the farther we are from arriving at the Net’s mesozoic: it’s dinoaur age. That age will be characterized, as it was for sentient reptiles, by greater liberty for individuals and greater autonomy for families, tribes and other groups of individuals.

Many of us have long seen that liberation coming — and implicit in the nature of the Net itself. The Cluetrain Manifesto announced it in early 1999 with “we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.” Chris Locke wrote that, and it galvanized the rest of us by giving voice to the liberating nature of the Net itself. Yes, the Net supports silos, but it is not itself a silo. It provides a base infrastructure for freedom, independence and empowerment. It creates wide open spaces for the social and business constructions we call markets. True, the urge by companies to build walled gardens in these wide open spaces persists undiminished. But in time companies will discover how much more value can be created by contributing to open infrastructure, and by offering original products and services based on that infrastructure, than by trapping customers in closed spaces and operating their own private marketplaces. (As, for example, Apple does with its iTunes store, and other phone makers and companies are now copying. This is very paleozoic stuff.)

We are now caught up in “social” everything. Cluetrain’s opening thesis, “markets are conversations,” is often credited for predicting, if not inaugurating, the “social web”. Overlooked in the midst, however, is what I think is a far more important thesis, coined by David Weinberger: “Hyperlinks subvert hierarchy“. Ask yourself, How well do links work in Twitter? Better question: What happens when bit.ly goes down — or out of business? URL shortening needs to be part of the Net’s infrastructure too. Today it isn’t. For more on that, look up Dave Winer and URL shortening: Dave has a history of not being listened to by Google, Twitter and other giants. But he’s right about URL shortening. And about how Twitter can help de-silo it. Single-source commercial URL shorteners are handy and all, but they weaken hyperlinks by making them vulnerable to the failure of one company, or one authority. I am sure Twitter doesn’t mean to weaken hyperlinks (but rather strengthen them, in a way), but that’s what it does by relying on a commercial silo for shortened links. Weakening hyperlinks, at least to me, makes Twitter less valuable, no matter how much investors think it’s worth on some future stock market.

Dave Winer has long advised, “Ask not what the Web can do for you, ask what you can do for the Web”. Answering that generously in the long run will result in maximum value — and valuations in alignment with a more open and value-producing future.

Here, here, here, here, here and here.

For the form of life we call business, we are at a boundary between eras. For biological forms of life, the most recent of these is the K-T boundary between the  and the Eras. The Mezozoic Era ended when Earth was struck by an object that left a crater 110 miles wide and a world-wide layer of iridium-rich crud. Below that layer lies the Age of Dinosaurs, completed. Above that layer accumulate the fossils of life forms that survived the change, and took advantage of it. Notable among these is a branch of theropod dinosaurs we call birds.

In business we have the I-I boundary: the one between the Industrial and Information ages (which Alvin Toffler first observed in The Third Wave, published in 1980).  Below that boundary we find a communications environment dominated by telecom and cablecom. Above it we find a radically different communications environment that still supports voice and video, but as just two among an endless variety of other applications. We call that environment the Internet.

At this moment in history most of us know the Internet as a tertiary service of telephone and cable companies, which still make most of their money selling telephone service and cable TV. Since those are highly regulated businesses, the Internet is subject to degrees of regulatory capture. Some of that capture is legal, but much of it is conceptual, for example when we see the Internet as a grace of telecom and cablecom — rather than as something that subsumes and obsoletes both of those Industrial Age frames.

Such is the risk with “broadband” — a term inherited by the Internet from both telecom and cablecom, and which is a subject of interest for both Congress and the FCC. In April of this year the FCC announced the development of a national broadband plan, subtitled “Seeks Public Input on Plan to Ensure Every American has Access to Broadband Capability”. In July the commission announced that Harvard’s Berkman Center would conduct “an independent review of broadband studies” to assist the FCC. Then yesterday the center put up a notice that it “is looking for a smart, effective fellow to join our broadband research team”. (This is more than close to home for me, since I am a fellow at Berkman. So I need to say that the broadband studies review is not my project — mine is this one — and that I am not speaking for the Berkman Center here, or even in my capacity as a fellow.)

The challenge here for everybody is to frame our understanding of the Net, and of research concerning the Net, in terms that are as native to the Net as possible, and not just those inherited from the Industrial Age businesses to which it presents both threats and promise — the former more obvioius than the latter. This will be very hard, because the Internet conversation is still mostly a telecom and cablecom conversation. (It’s also an entertainment industry conversation, to the degree that streaming and sharing of audio and video files are captive to regulations driven by the recording and movie industries.)

This is the case especially for legislators and regulators, too few of which are technologists. Some years ago Michael Powell, addressing folks pushing for network neutrality legislation, said that he had met with nearly every member of Congress during his tour of duty as FCC chairman, and that he could report that nearly all of them knew very little about two subjects. “One is technology, and the other is economics,” he said. “Now proceed.”

Here is what I am hoping for, as we proceed both within this study and beyond it to a greater understanding of the Internet and the new Age it brings on:

  • That “broadband” comes to mean the full scope of the Internet’s capabilities, and not just data speeds.
  • That we develop a native understanding of what the Internet really is, including the realization that what we know of it today is just an early iteration.
  • That telecom and cablecom companies not only see the writing on the wall for their old business models, but embrace other advantages of incumbency, including countless new uses and businesses that can flourish in an environment of wide-open and minimally encumbered connectivity — which they have a privileged ability to facilitate.
  • That the Net’s capacities are not only those provided from the inside out by “backbone” and other big “carriers”, but from the outside in by individuals, small and mid-size businesses (including other Internet service providers, such as WISPs) and municipalities.

That last item is important because carriers are the theropods of our time. To survive, and thrive, they need to adapt. The hardest challenge for them is to recognize that the money they leave on the shrinking Industrial Age table is peanuts next to the money that will appear on the Information Age table they are in a privileged position to help build.

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In the mid-1990s, when I couldn’t find anybody to publish my essays (I didn’t want to cover what I still call “vendor sports”, which eliminated most of the tech magazine market ), I followed Dave Winer‘s footsteps and published my own on the Web. One was The Web and the New Reality, written in raw HTML with formatting borrowed from Netscape’s white papers of the time, complete with all-caps H2 headlines and first letters enlarged with +3 font sizes. Funny how mannered that looks now. Like the skull-and-wings on 18th century headstones.

I stumbled over The Web and the New Reality when I went trudging through the nether pages of Google search results, hoping to find more about the disagreements between Jefferson and Franklin over patents and copyrights. I still haven’t found exactly what I was looking for (though Chapter 2 of James Boyle’s The Public Domain gets me off to an excellent start), but did pause to note in my now-ancient essay a list of prophesies that hold up pretty well, especially since the scope of some embraces futures that still aren’t here but also haven’t been disproven in the years that have already passed. It is certainly utopian, and in that mood outlines some of the ideas we expanded in The Cluetrain Manifesto four (and now fourteen) years later. Here is how it begins:

Reality 2.0

The import of the Internet is so obvious and extreme that it actually defies valuation: witness the stock market, which values Netscape so far above that company’s real assets and earnings that its P/E ratio verges on the infinite.

Whatever we’re driving toward, it is very different from anchoring certainties that have grounded us for generations, if not for the duration of our species. It seems we are on the cusp of a new and radically different reality. Let’s call it Reality 2.0.

The label has a millenial quality, and a technical one as well. If Reality 2.0 is Reality 2.000, this month we’re in Reality 1.995.12.

With only a few revisions left before Reality 2.0 arrives, we’re in a good position to start seeing what awaits. Here are just a few of the things this writer is starting to see…

  1. As more customers come into direct contact with suppliers, markets for suppliers will change from target populations to conversations.
  2. Travel, ticket, advertising and PR agencies will all find new ways to add value, or they will be subtracted from market relationships that no longer require them.
  3. Within companies, marketing communications will change from peripheral activities to core competencies.New media will flourish on the Web, and old media will learn to live with the Web and take advantage of it.
  4. Retail space will complement cyber space. Customer and technical service will change dramatically, as 800 numbers yield to URLs and hard copy documents yield to soft copy versions of the same thing… but in browsable, searchable forms.
  5. Shipping services of all kinds will bloom. So will fulfillment services. So will ticket and entertainment sales services.
  6. The web’s search engines will become the new yellow pages for the whole world. Your fingers will still do the walking, but they won’t get stained with ink. Same goes for the white pages. Also the blue ones.
  7. The scope of the first person plural will enlarge to include the whole world. “We” may mean everybody on the globe, or any coherent group that inhabits it, regardless of location. Each of us will swing from group to group like monkeys through trees.
  8. National borders will change from barricades and toll booths into speed bumps and welcome mats.
  9. The game will be over for what teacher John Taylor Gatto labels “the narcotic we call television.” Also for the industrial relic of compulsory education. Both will be as dead as the mainframe business. In other words: still trucking, but not as the anchoring norms they used to be.
  10. Big Business will become as anachronistic as Big Government, because institutional mass will lose leverage without losing inertia.Domination will fail where partnering succeeds, simply because partners with positive sums will combine to outproduce winners and losers with zero sums.
  11. Right will make might.
  12. And might will be mighty different.

The last two sections, titled How It All Adds Up and The Plus Paradigm, are the ones that see a future in which the economics of abundance plainly outperform those of scarcity.

If Paul Saffo is right when he says we overestimate in the short term and underestimate in the long, my out-there prophesies might still be safe. But in our current short run I remain impressed at how little some of our institutions — especially those of journalism — grok how abundance works.

Last week I sat on two panels at the huge 92nd Annual Convention of the Association for Education inJournalism and Mass Communication in Boston. While much of what was talked about there was clueful in the extreme, there was no shortage of top-down stuff like “corporate strategies and consumer responses” — and very little push-back against the apparent decision by many newspapers and magazines to turn like a flock of fish toward the “strategy” of locking their “content” behind paywalls. Again. They clearly aren’t following Chris Anderson’s advice or example.

On the whole Google used to ignore the paywalled stuff, because it couldn’t be indexed, but now the pubs are leaving teasers out there (or maybe Google now has ways of searching archives anyway), and the result for the reader is clunking into registration and subscription doors that are all different and all annoying — especially when one is already a subscriber to the publication in question and can’t remember the login/password required (as is the case for me with The New Yorker, among other pubs).

So the “plus paradigm” ain’t here yet. But that doesn’t stop me from trying to make it happen anyway. There are worse goals than taking care of Jefferson’s unfinished business.

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… customers are so empowered that they don’t feel especially empowered. The new normal is that we expect businesses to listen to us. The companies that don’t are now perceived as Dinosaurs. — David Weinberger, from the new Introduction to 10th Anniversary edition of The Cluetrain Manifesto.

That’s from the first of eight new chapters. Since a lot of people don’t seem to know that the new Cluetrain is a lot bigger and better than the original, I thought it would be cool to start quoting some of the new stuff.

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Cluefest

cluetrain10_berkman

In the month since it hit the streets (at least here in the U.S.), I’ve been surprised at how little those who like Cluetrain know about the new, 10th anniversary edition of the book. Many assume that it’s a fancy new edition of the same old thing. That’s true to the degree that it comes with a hard cover and a nice design. But there are also five new chapters by the four original authors, plus three additional chapters: one each by Dan Gillmor, Jake McKee and JP Rangaswami. In other words, it’s a lot thicker and more substantial than the original.

So yeah, I’m promoting it a bit. I’ve done approximately none of that, and it deserves any plug it gets. A lot of good work went into it.

The shot above is from a Berkman YouTube video of a Cluetrain discussion at Harvard Law School, led by Jonathan Zittrain, and featuring Dr. Weinberger and myself.

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