Category: Companies (page 1 of 9)

@Capgemini on #VRM: well done!

Just learned about these two new videos by @Capgemini:

The introductory copy says,

Both Customer Relationship Management and Vendor Relationship Management want to improve customer relationships but they approach this differently. Find out what are the three main factors that separate them.

Both videos not only explain VRM nicely, but illustrate it on a whiteboard:

Screen Shot 2014-10-23 at 1.03.24 PM

Screen Shot 2014-10-23 at 1.04.48 PM

Big thanks to @LarrySCohen, @NielsvdLinden, @rickmans, Nick Gill and all the other @Capgemini people behind this. (Though not mentioned in the above links, I also want to throw thanks to @VINTLabs and @Sogeti, both also of Capgemini, and who I suspect are involved too.)

And it would be great if some could come to VRM Day and IIW next week. We’ll set the stage with these videos.

State of the VRooM, 2014

As of today, ProjectVRM is eight years old.

So now seems like a good time for a comprehensive (or at least long) report on what we’ve been doing all this time, how we’ve been doing it, and what we’ve been learning along the way.

ProjectVRM has always been both a group effort and provisional in its outlook and methods. So look at everything below as a draft requiring improvement, and send me edits, either by email (dsearls at cyber dot law dot harvard dot edu) or by commenting below.

Summary

After eight years of encouraging development of tools and services that make individuals both independent and better able to engage, ProjectVRM (VRM stands for vendor relationship management) is experiencing success in many places; most coherently in France, the UK and Oceania (Australia and New Zealand). There are now dozens of VRM developers (though many descriptors besides VRM are used), and investor interest is shifting from the “push” to the “pull” side of the marketplace. Government encouragement of VRM is strongest in the UK and Australia.  ProjectVRM and its community are focused currently on “first person” technologies, privacy, trust, identity (including anonymity), relationship (including experience co-creation), substituability of services and the Internet of Things. Verticals are personal information management, relationship (VRM+CRM), identity, on-demand services, payments, messaging (e.g. secure email), health, automotive and real estate.  There are many possibilities for research, possibly starting with the effects on business of individuals being in full control of their sides of agreements with companies.

Here are shortcuts to each section:

  1. History
  2. Development
  3. Community
  4. Influence
  5. Issues
  6. Verticals
  7. Investment
  8. Research
  9. Questions

1. History

ProjectVRM is one of many research projects at the Berkman Center for Internet and Society at Harvard University. It started when I began a four-year fellowship at Berkman in September, 2006. In those days Berkman fellows were encouraged to work on a project. I had lots of guidance from Berkman staff and other veterans; but what best focused my purpose was something Terry Fisher said at one of the orientation talks. He said Berkman did its best to be neutral about the subjects it studies, but also that “we do look for effects.”

The effect-generating work for which I was best known at the time was The Cluetrain Manifesto, which I co-authored seven years earlier with Chris Locke, David Weinberger and Rick Levine. By most measures Cluetrain was a huge success. The original website launched a meme that won’t quit, and the book that followed was a bestseller.(It still sells well today). But I felt that its alpha clue, written by Chris Locke, still wasn’t true. It said,

we are not seats or eyeballs or end users or consumers.
we are human beings and our reach exceeds your grasp. deal with it.

There is a theory in there that says the Internet gives human beings (the first person we) the reach they need to exceed the grasp of marketers (the second person your).

So either the theory wasn’t true, or the Internet was a necessary but insufficient condition for the theory to prove out. I went with the latter and decided to to work on the missing stuff.

That stuff couldn’t come from marketers, because they were on the second person side. In legal terms, they were the second party, not the first. This is why their embrace  of  Cluetrain’s “markets are conversations” couldn’t do the job. Demand needed help that Supply couldn’t provide. What we needed, as individuals, were first party solutions — ones that worked for us.

The more I thought about the absence of first party solutions, the more I realized that this was a huge hole in the marketplace: one that was hard to see from the client-server perspective, always drawn like this:

468px-Client-server-model.svg

While handy and normative, client-server is also retro. Here’s a graphic from Virtual Teams: People Working Across Boundaries with Technology (Jessical Lipnack and Jeffrey Stamps, 2000,  p. 47) that puts it in perspective:

lipnack

Client-server is hierarchical, bureaucratic industrial and agricultural (see the image below). But it’s also most of what we experience on the Web, and also where the entirety of the supply side sits. So, even if Cluetrain is right when it says (in Thesis #7) “hyperlinks subvert hierarchy,” subversion goes slow when the people running the servers are in near-absolute control and hardly care at all about links. In less abstract terms, what we have on the Web is this:

calf-cow

As clients we go to servers for the milk of text, graphics, sound and videos. We get all those, plus cookies (and other tracking methods) to remember who we are and where we were the last time we showed up. And, since we’re just clients, and servers do all the heavy lifting  (and with technology what can be done will be done) the commercial Web’s ranch has turned into what Bruce Schneier calls Our Internet surveillance state.

By 2006 it was already clear to me that we could make the whole marketplace a lot bigger if individuals were fully capable human beings and not just calves — if we equipped Demand to drive Supply at least as well as Supply drives Demand.

To help people imagine what will happen when Demand reaches full power, I wrote a Linux Journal column a few months earlier, titled “The Intention Economy.” Here’s the gist of it:

The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.

The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.

In The Intention Economy, a car rental customer should be able to say to the car rental market, “I’ll be skiing in Park City from March 20-25. I want to rent a 4-wheel drive SUV. I belong to Avis Wizard, Budget FastBreak and Hertz 1 Club. I don’t want to pay up front for gas or get any insurance. What can any of you companies do for me?” — and have the sellers compete for the buyer’s business.

This car rental use case is one I’ve used to illustrate what would be made possible by “user-centric” or “independent” identity, which was also the subject of the cover story in last October’s Linux Journal, plus this piece a year earlier, and various keynotes I’ve given at Digital Identity World, going back to 2002. It is also the use case against which the new open source Higgins project was framed.

Even though I’ve been thinking out loud about Independent Identity for years, I didn’t have a one-word adjective for the kind of market economy it would yield, or where it would thrive. Now, thanks to all the unclear talk at eTech about attention, intentional is that adjective, because intent is the noun that matters most in any economy that gives full respect to what only customers can do, which is buy.

Like so many other things that I write about (including everything I’ve written about identity), The Intention Economy is a provisional idea. It’s an observation that might have no traction at all. Or, it might be a snowball: an core idea with enough heft to roll, and with enough adhesion to grow, so others add their own thoughts and ideas to it.

So that’s the purpose I chose for my new Berkman project: to get a snowball of development rolling toward the Intention Economy.

The project has been lightweight from the start, consisting of myself* and other volunteers. Our instruments are this blog, a wiki, a mailing list and events. In gatherings of project volunteers at Berkman and elsewhere, we narrowed our focus to encouraging development of tools for independence and engagement. That is, tools that would make individuals both independent of other entities (especially companies) and better able to engage with them. These shaped the principles, goals and tools listed on our wiki.

The term VRM came about accidentally. I was talking about my still-nameless project on a Gillmor Gang podcast in October 2006. Another guest on the show, Mike Vizard, started using the term VRM, for Vendor Relationship Management — or the customer-side counterpart of CRM, for Customer Relationship Management, which was then about a $6.2 billion B2B software and services industry.  (It’s now past $20 billion.) The Gillmor Gang is a popular show, and the term stuck. It wasn’t perfect (we wanted a broader focus than “vendors,” which is also a B2B term, rather than C2B). But the market made a decision and we ran with it. Since then VRM has gained a broader meaning anyway. Every thing (hardware, software, policies, legal moves) that enables an individual to interact with full agency in any relationship is a  VRM thing. “RM” turns out to  be handy for sub-categories as well, such as GRM (government relationship management) and HRM (health relationship management).

ProjectVRM has always been unusual for Berkman in two ways. One is that it has been focused on business — the commercial side of the “society” in Berkman’s name. The other is that it put the development horse ahead of the research cart. So, while we always wanted to do research (and did some along the way, such as with ListenLog), we felt it was important to create research-worthy effects first.

My first mistake was thinking we would have those effects within a year. My second mistake was thinking we would have them within four years — the length of my fellowship. It has taken twice that long, and still requires one more piece. More about that below, in the Research and Opportunities sections.

In its early years, when it was pure pioneering, ProjectVRM had a lot of volunteer organizational help. There were weekly conference calls and meetings, and events held in Cambridge, London, San Francisco and elsewhere. But the main gatherings from the start were at the Internet Identity Workshop (IIW), an unconference I co-organize at the Computer History Museum in Mountain View. (Our next VRM Day is 27 October. Register here.)

IIW also started with Berkman help. It was first convened as a group I pulled together for a December 31, 2004 Gillmor Gang podcast on identity. Steve Gillmor called the nine participants in the show “The Identity Gang.” The conversation continued by phone and email, with growing energy. So we convened again, this time in person with a larger group, in February 2005 at Esther Dyson’s PC Forum in Scottsdale, Arizona. It was there that John Clippinger asked if we would like “a clubhouse” at Berkman. I said yes, and John had Paul Trevithick create a Berkman site for the gang. As interest collected around the site and its list, three members — Phil Windley (then CIO of Utah), Kaliya Hamlin (aka “IdentityWoman“) and I morphed the gang meetings into IIW, which met for the first time in Fall of 2005. Our 19th is coming up on 28-30 October. (Register here.)  It tends to have 180-250 participants from all over the world. While identity remains the central theme, as an unconference its topics can be whatever participants choose. VRM is always a main focus, however. And we always have a “VRM Day” at the Museum the day before IIW. The next is on 27 October. It’s free.

The Identity Gang  also grew out of other efforts by a number of individuals and groups:

I’ll leave it at those for now. Others can add to it and help me connect the dots later. What matters is that ProjectVRM has both roots and branches that intertwine with the digital identity movement. I unpack more in the Community section below. Meanwhile it is essential to note that Kim Cameron’s Seven Laws of Identity had a large guiding influence on ProjectVRM. This is partly because they were all good laws, but mostly because they came from the individual’s side:

  1. User control and consent
  2. Minimal disclosure for a constrained use
  3. Justifiable parties (“disclosure of identifying information is limited to parties having a necessary and justifiable place in a given identity relationship”)
  4. Directed identity (“facilitating discovery while preventing unnecessary release of correlation handles”)
  5. Pluralism of operators and technologies
  6. Human integration
  7. Consistent experience across contexts

As you see, all of those should apply just as well to VRM tools and services.

We have had two interns in our history, both hugely helpful. The first was Doug Kochelek, an HLS law student with a BS and a EE from Rice. He came on board at the very beginning, in September 2006. He’s the guy who worked with Berkman’s Geek Cave to create the wiki, the blog and the list. He also shook down many technical problems along the way. The second was Alan Gregory, a 2009 summer intern and a law student at the University of Florida. Alan helped with research on the chilling effects of copyright expansion on Web streaming, which was a focus of a research project we did with PRX called ListenLog — a self-tracking feature installed in PRX’s Public Media Player iPhone app. (Here’s a presentation Alan and I did at a Fellows Hour.) ListenLog was the brainchild of Keith Hopper, then of NPR, and was years ahead of its time. Work on those projects was funded by a grant from the Surdna Foundation.

To keep its weight light and its work focused on development and relevant issues, ProjectVRM does not have its own presence on Twitter or Facebook. Its social media activity is instead comprised of postings by individual participants in the project, and the memes they drive. #VRM, for example, gets tweeted plenty, and has come to serve as shorthand for individual empowerment.

In 2007 we did a good job of publicizing what VRM and ProjectVRM were about, and got a lot of buzz. It was  premature, and our first big lesson: it’s not good to publicize anything for which the code isn’t ready. In the absence of code, it’s easy for commentators (such as here) to assume that what we’re trying to do can’t be done.

So we got more heads-down after that, and avoided publicity for its own sake.

not_iball1Still, the idea of VRM is attractive, especially to folks at the leading edge of CRM. This is what caused nearly an entire issue of CRM magazine to be devoted to VRM ,in May 2010. It too was ahead of its time, but it helped. So did two books that came out the same year: John Hagel’s The Power of Pull, and David Siegel’s Pull: The Power of the Semantic Web to Transform Your Business. John also helped in June 2012 with The Rise of Vendor Relationship Management.

That essay was a review of  The Intention Economy: When Customers Take Charge, which arrived in May from Harvard Business Review Press. The book reported on VRM development progress and detailed the projected shifts in market power that I first called for in my 2006 column with the same title.

While  The Cluetrain Manifesto has been a bigger seller, The Intention Economy Intention-economy-cover has had plenty of effects. Currently, for example, it is informing the work of Mozilla’s commercial arm, headed by Darren Herman, who this year hired @SeanBohan from the VRM talent pool. (Here’s a talk I gave at Mozilla in New York last month.) On the publicity side, the book was compressed to a Wall Street Journal full-page Review section cover essay titled “The Customer as a God.”

So far ProjectVRM has one spin-off: Customer Commons, a California-based nonprofit. Its mission is “restore the balance of power, respect and trust between individuals and organizations that serve them.” CuCo is a membership organization with the immodest ambition of attracting “the 100%.” In other words, all customers. And it is modeled to some degree on Creative Commons CustomerCommonsLogo4(a successful early Berkman spin-off), by serving as the neutral place where machine- and person-readable versions of personal terms, conditions, policies and preferences of the individual can be maintained. Among those terms will be those restricting or preventing unwanted tracking, and among those policies will be those establishing the boundaries we call privacy. Customer Commons is a client of the Cyberlaw Clinic, which is helping develop both. But much more can be done. We’ll visit that in the Opportunities section below.

2. Development

The list of VRM developers is now up to many dozens. While most don’t use the term “VRM” in marketing their offerings (nor do we push it), the term is gathering steam. For example, while updating the developers list a few minutes ago, I found two new companies that use VRM in the description of their offerings: InformationAnswers (“Where CRM meets VRM.”) and PeerCraft (“The main purpose for PeerCraft is to support Vendor Relation Management.”)

Some developers on our list are now familiar brands, though none started that way, and most did not exist when ProjectVRM began. Some of the successes (e.g. Uber and Lyft) have not been directly engaged with ProjectVRM, but are listed because they are what we call “VRooMy.” Other successes (e.g. Personal.com, Reputation.com and GetSatisfaction) have been engaged, one way or another. One that got a lot of notice lately is Thumbtack, for picking up a $100 million investment from Google. That’s atop the $30 million they got earlier this year.

In fact many VRM developers are now having an easier time getting money, thanks to a trend on which ProjectVRM has had influence: a shift of market interest away from “push” (e.g. advertising) and toward “pull” (e.g. VRM). (More about investment below.)

Several years ago, a bunch of VRM developers (and I) worked on developing SWIFT’s Digital Asset Grid. (SWIFT is the main international system for moving money around, and is headquartered in Belgium.) The code is open source, as is other VRooMy work in the financial sector. (Such as the stuff being done by the Romanian company I wrote about here.) OIX also maintains a set of “trust frameworks,” one of which is at the heart of the Respect Network, which I’ll unpack below.

While there is a lot of development in the U.S., and there are VRM startups scattered around the world, the three main hotbeds of activity are the UK, France and Oceania (Australia and New Zealand). Each is a community of its own, cohering in different ways. It’s helpful to visit each, because they represent unique contexts and resources for moving forward.

The UK

In the UK, government is central, through a role one official there calls “being a giant consumer of personal data from citizens.” It gets that data either from individuals directly or from companies that provide individuals with what are called variously called personal clouds, data stores, lockers and vaults. While all these companies perform as intermediaries, they work primarily for the individual. To differentiate this new class of company from traditional third parties, ProjectVRM calls them “fourth parties”. (That term is alien to lawyers, but is catching on anyway. For example, there is a new VRM company in Australia with the name “4th Party.”)

Leading the UK government in a VRooMy direction from the inside is in the Efficiency and Reform Group of the Government Digital Service (GDS) in the Cabinet Office.  In this presentation by Chris Ferguson, Deputy Director of the GDS we see the government pulling in big companies (e.g. Google, Equifax, Lexis-Nexis, Experian, Paypal, Royal Mail, BT, Amazon, O2, Symantec) to legitimize and engage fourth parties serving individuals (e.g. Mydex, Paoga and Allfiled).

Two outside groups working with the UK government are Ctrl-Shift and OIX (Open Identity Exchange). Ctrl-Shift is a research consultancy that has been engaged with ProjectVRM from the beginning. OIX is a Washington-based international .org focused on ‘building trust in online transactions.’

France

VRM is a familiar and well-understood concept in France. There are meetups (such as this one) and many VRooMy startups, such as Privowny (led by French folk and HQ’d in Palo Alto), CozyCloud, and OneCub. A big organizational driver of VRM in France is Fing.org, a think tank that brings together large companies (e.g. Carrefour, Societe General, Orange and LaPoste) with small companies such as the ones I just mentioned. They do this around research projects. For example, ProjectVRM informed Fing’s Mesinfos research project (described here).

Oceania

If we were to produce a heat map of VRM activity, perhaps the brightest area would be Australia and New Zealand. I’ve been down that way three times since June of last year, to help developers and participate in meetings and events. As with the UK, government in Australia is very supportive of VRM development, and with empowering individuals generally. (We met with three agencies on one of the trips: one with the federal government in Canberra and two with the New South Wales government in Sydney. One of them called citizens “customers” of government services, because “they pay for them.”) Startups there include Flamingo, Meeco, Welcomer, Geddup,4th Party, Fifth Quadrant, Onexus and the New Zealand based MyWave.

Recent changes in Australian privacy policy also attract and support VRM development. Australian companies (and government agencies) collecting personal data from people on the Web (or anywhere) are now required to make that data available to those people to use as they please. (Or so I understand it.) This gives Canberra-based Welcomer, for example, a reason to exist. Welcomer makes “private data dashboards” that “show collected summaries of the personal data held by organisations and by individuals including the person themselves. The dashboard gives a summary of personal data with the ability to link through to the source data (where required).”

This summer, the first commercial community to grow out of ProjectVRM work, the Respect Network (which Privacy By Design (PbD) calls the “World’s First Global Private Cloud Network”) held a world tour to launch the community and stimulate funding for members’ common goals, standards and code development. I was on the tour (London, San Francisco, Sydney, Tel Aviv), and wrote a report on the ProjectVRM blog. (Naturally, I shot pictures. Those are here. I also spoke at each venue. One of my Sydney talks is here.)

3. Community

To understand where ProjectVRM fits in the world, and how it works, I like the Competing Values Framework by Kim S. Cameron (no relation to the one above), Robert E. Quinn, Jeff DeGraff and Anjan Thakor:

Screen Shot 2014-09-01 at 5.48.45 PM

While there are many VRM developers operating in the lower half of that graphic, what ProjectVRM does is in the upper half of that diagram.  We have a collaborative clan of flexible and creative individuals in an adhocracy, working together on long-term transformational change.

Pretty much everything that gets criticized about our efforts falls in the lower half. That’s because we have no hierarchy and don’t work to control what anybody does. And progress on the whole  has been slow. (Though there are exceptions, such as Uber, Lyft and Thumbtack.)

That graphic is just one of many helpful ones in David Ronfeldt‘s Organizational forms compared, which he’s been updating since first publishing it in May 2009. One reason it is helpful is that the hierarchical short-term stuff is obvious and easily understood, while collaborative long term stuff is much harder to grok. It’s like the difference between weather and geology. Which makes me think that graphic should be flipped vertically: slow stuff on the bottom, fast stuff at the top. That’s what the Long Now foundation does with this graphic, which I’ve always loved:

layers of time

The change we want most is down in the culture, governance and infrastructure layers, even though our focus is on commerce. This also explains why we run into trouble when we play with fashion. The last thing we want is for VRM to be cool. (This is also a lesson I learned and re-learned over two decades of watching Linux, free software and open source for Linux Journal.)

The following graphics are all from David Ronfeldt’s scholastic gatherings. Each in its own way helps explain how our community works — and how it doesn’t. First, from one of Bob Jessop‘s many papers on governance and metagovernance (this one from 2003):

jessop figure

That’s our column on the right.

Then there is this, from Federico Iannacci and Eve Mitleton–Kelly’s Beyond markets and firms: the emergence of Open Source networks (First Monday, May, 2005):

iannacci

That’s us in the middle. We’re a stable and decentralized heterarchy that coordinates by mutual adjustment.

Then there is this from Karen Stephenson‘s Neither Hierarchy nor Network: An Argument for Heterarchy (in Ross Dawson’s Trends in the Living Networks, April, 2009):

stephenson

Again that’s us on the right.

Something I like about those last two is the respect they give to heterarchy, which has been a focus for many years of Adriana Lukas, another VRM stalwart who has been with the project since before the beginning. Here’s her TED talk on the subject.

Finally, there is this graphic, from  Clay Spinuzzi‘s Toward a Typology of Activities (2013):

Spinuzzi

In Spinuzzi’s Losing by Expanding: Corralling the Runaway Object, an object is identified as “a material or problem that is cyclically transformed by collective activity.” With our tacit, inductive and flexible approach, this also characterizes the way our community works.

One can see all this at work on the ProjectVRM mailing list, an active collection of 615 subscribers. We also meet in person twice a year at IIW, starting one day in advance of the event, with “VRM Day.” This adds up to a total of at least eight days per year of in-person collaboration time.

Most of the rest of the VRM community meets locally, or through the organizing work of organizations such as Respect Network (U.S. based, but spanning the world) and Fifth Quadrant (Sydney based, and focused on Australia and New Zealand).

There are many other organizations with which ProjectVRM is well aligned. Among them are:

If things go the way I expect, Mozilla will also emerge as a center of VRM interest and development as well. (For example, I expect VRM to be a topic in October at MozFestival in the U.K.

4. Influence

Nearly all VRM influence derives from the work of its volunteers and its developers. “Markets are conversations,” Cluetrain said, and we drive a lot of those. But they rarely get driven exactly the way I, or we, would like. Conversations are like that. EIC awardSo are heterarchical networks. Everybody wants to come at issues from their own angle, and often with their own vocabulary. We see that especially with analysts and think tanks. None of them like the term VRM. (In fact lots of developers avoid it as well. I don’t blame them, but we’re stuck with it.) Ctrl-Shift, for example, calls fourth parties PIMS, for Personal Information Management Services. Kuppinger-Cole, which gave ProjectVRM an award in 2008 (that’s the trophy on the right), insists on the term “Life Management Platforms.” (I pushed it for awhile. Didn’t take.) Here in the U.S., Forrester Research calls the same category PIDM for Personal Identity and Data Management. We don’t care, because we look for effects.

As for the influence of others on ProjectVRM, there are too many to list.

5. Issues

Privacy is the biggest one right now. (A Google search brings up more than five billion results). We’ve done a lot to drive interest in the topic, and have brought thought leadership to the topic as well. (Here is one example.) On behalf of ProjectVRM, I’ve participated in many privacy-focused events, such as the Data Privacy Hackathon earlier this year, and at GovLab gatherings such as the one reported on here. I’m also in Helen Nissenbaum‘s Privacy Research Group at the NYU Law School, where I presented ProjectVRM developers’ privacy work on February 26 of this year.

Tied in with privacy online, or lack of it, is users’ need to submit to onerous terms of service and meaningless privacy policies. Those terms, also called contracts of adhesion, have been normative ever since industry won the industrial revolution, but have become especially egregious in the online world. Today there is a crying need both for better terms on the sites’ and services’ side, and for terms individuals can asset on their side. From the beginning ProjectVRM has been focused mostly on the latter.

Trust is another huge issue, also tied with privacy. ProjectVRM has both encouraged and influenced the growth of “trust frameworks” such as the Respect Trust Framework and others (there are five) at OIX, as well as Open Mustard Seed and OpenPDS under IDcubed at the MIT Media Lab.

VRM+CRM has been a focus from the start, but the timing has not been right until now. At the beginning, we expected CRM companies to welcome VRM. Press and analysts in the CRM space were encouraging from the start (CRM Magazine devoted an entire issue to it in 2010), but the big CRM companies showed little interest, until this year.

Sitting astride or beside VRM and CRM is a category variously called CX (for Customer Experience), CRX (for Customer Relationship Experience), EM (for Experience Management) CEM or CXM (for Customer Experience Management) and other two and three-letter initialisms. Another happening in the midst of all these is “co-creation” of customer experience. The purpose here is to bring customers and companies together to co-create experience in a lab-like setting where research can be done. This is what Flamingo does in Australia. In a similar way, MyWave in New Zealand (with developers in Australia) “puts the customer in charge of their data and the experience” for a “direct ‘segment of one’ relationship with businesses.”

With the Internet of Things (IoT) heating up as a topic, there is also an increased focus, on the “own cycle,” rather than the “buy cycle” of the customer experience. I explain the difference here, using this graphic from Esteban Kolsky:

oracle-twist

In our lives the own cycle is in fact the largest, because we own things — lots of them — all the time and are buying things only some of the time. In fact, most of the time we aren’t buying anything, or even close to looking. This is a festering problem with the advertising-driven commercial Web, which assumes that we are constantly in the market for whatever it is they push at us. In addition to not buying stuff all the time, we are employing more and more ways of turning advertising off (ad blockers are the top browser extensions). For advertising and ad-supported companies, including millions of ad-supported publishers on the Web, this is a mounting crisis. According to an August 2013 PageFair report, “up to 30% of web visitors are blocking ads, and that the number of adblocking users is growing at an astonishing 43% per year.” In The Intention Economy, I called online advertising a “bubble” and I stand by the claim. It’s just a matter of time.

As the stuff we own gets smart, and as more of it finds its way onto the Net service becomes far more important to companies than sales. And VRM developers are laying important groundwork in service. I wrote about this in Linux Journal last year, drawing special attention to the pioneering work led by Phil Windley, who has been a VRM stalwart since before the beginning. In fact it’s Phil’s work that makes clear that things themselves don’t need to be smart to exist on the Internet. All they need is clouds that are smart, which Phil calls picos for persistent computing objects. In this HBR post I explain how the shared clouds of products can be platforms for relationship between company and customers , with learnings flowing in both directions.

6. Verticals

Relationship

This was the first for VRM, and it’s still a primary interest. We need tools on the individual’s side for managing many relationships. There still is not a good “relationship dashboard,” though there are a number of efforts in this direction. But as soon as we have code on the VRM side that matches up with code on the CRM side (including, for example, call centers, which are also interested in VRM), we’ll rock.

Payments

Even though ProjectVRM’s mission is centered around relationship and conversation, transaction is a big part of it too — just not the only part, as business often assumes. Our first efforts, starting in 2006, were around making it as easy as possible for individuals to donate money in one standard way to many different public radio stations.

We have been involved in many meetings and discussions around payments and secure data transactions, and some projects as well. We worked with SWIFT on the Digital Asset Grid, and have been in conversations with banks (e.g. Chase) and VISA Europe for a long time as well. With the rise of alternative currencies (e.g. Bitcoin), distributed accounting (e.g. Blockchain), digital wallets and other new means for transacting and accounting, there are many ways for VRM developments to play.

Email

In what is being called “post-Snowden time,” many new secure and encrypted email approaches have evolved. While some are listed on the ProjectVRM developers list, we haven’t been very involved with them — at least not yet. But we are involved with developers working on privacy-protecting tools that can either be embedded in existing email systems or offer alternative communications “tunnels.”

Personal information Management

There are two breeds of development here.

One is fourth party services and code bases for managing and sharing personal data selectively online. There are now many of these. Some support self-hosting as well. (ProjectVRM has always been supportive of free software, open source, and the “first person technology” and “indie” movements.) One organization, the Respect Network, was created to provide a framework for substitutability of services and apps.

The other is code the individual uses to manage his or her own life, and connections out to the world. This is where calendar, email, IM, to-do lists, password managers and other convenience-producing apps for the connected world come together. There is no leader here, though there are many players, including Apple, Microsoft and Google.  So far, this area has only seen centralized and siloed players, with inherent security and data mining disadvantages. But recently, commercial and open source conversations about a decentralized approach to this opportunity have been taking place.

A test case for VRM that applies to both kinds of solutions is this: being able to change my address, my last name or my phone number for many services in one move. This is exactly what the UK government is calling for from citizens’ personal information management systems (what Ctrl-Shift calls PIMS). A citizen should be able to change her address for the Royal Mail, the Passport Office and the National Health Service, all at once. Bonus links: Making things open, making things better, by Mike Bracken in the Gov.UK Government Digital Service blog, where Mike’s prior post, Reading the Digital Revolution featured this illustration by our old friend Paul Downey:

cluetrain-620x295

Apple’s HealthKit and HomeKit, which go live with the release of iOS 8on 9 September, also have some VRM developers excited, because it will make this kind of integration at the individual end easy to do in two verticals: Health and Home Automation.

Health

Early on with ProjectVRM, I avoided health as an issue, because I wanted to see real progress in my lifetime — and I felt that the situation in the U.S. was fubar. But other VRM folk did not agree, and have pushed VRM forward very aggressively in the health field. Dr. Adrian Gropper and Dr. Deborah Peel of Patient Privacy Rights have done a remarkable job of carrying the VRM flag up a very steep and slippery hill. Berkman veteran John Wilbanks is another active ProjectVRM volunteer whose work in health is broad, deep, influential and at the leading edge of the pioneering space where personal agency engages the wild and broken world of the U.S. health care system. Brian Behlendorf, the primary developer of the Apache Web server (which hosts the largest share of the world’s Web sites and services) and the CONNECT open source code base for health service collaboration, is also an active participant in ProjectVRM.

A number of VRM developers are working with, or paying close attention to, Apple’s HealthKit. In the words of one of those developers, “It’s very VRooMy.” HealthKit developments go live when Apple rolls out iOS 8 on 9 September.

Automotive

While a number of car makers are eager to spy on drivers, Volkswagen has put a stake in the ground. In March, Volkswagen CEO Martin Winkerhorn gave a keynote at the Cebit show that drew this headline: “Das Auto darf nicht zur Datenkrake warden.” My rusty Deutsch tells me he’s saying the car shouldn’t be a data octopus.

Toward that end, Phil Windley’s Kickstarter-based  Fuse will give drivers and car owners all the data churned out of their cars’ ODB-II port, which was created originally for diagnostics at car dealers and service stations. With an open API around that data, developers can create apps to alert you to schedule maintenance, monitor your teen’s driving and much more.

Real Estate

The only products that cost us more than cars are homes. Here too we have a VRM advocate in Cambridge-based Bill Wendell of Real Estate Café. He has always been way ahead of his time, but it’s clear his time is coming. (Here’s Bill leading a session on VRM in Real Estate at IIW 18 in May.)

7. Investment

There is an upswing of investment in start-ups on the “pull” — the individual’s — side of the marketplace. Many wealthy individuals, some quite new to tech investing, perceive an opportunity in “pull” side tools, so interest is building, especially in angel funding. There are currently at least three initiatives coming together to invest in VRM or intention based start-ups in Silicon Valley and Europe. This is one of the outcomes of the last IIW (in May of this year), where investment emerged as a big theme, with a number of VC’s for the first time participating in IIW sessions. I’m involved in planning a VRM specific fund, which is still in its preliminary stages. If it moves forward (which I believe it will), it should come into shape by next year.

In some cases government is also involved. In the UK, for example, the SEIS (Seed Enterprise Investment Scheme) program offers huge tax incentives to angel investors.

8. Research

There are many questions we can probe with research, but only one I want to work on in the near term: What happens when individuals come to websites with their own agreeable terms?creativecommons-licenses

Such as, “I’m cool with you tracking me on your site, but don’t follow me when I leave.” And, on the site’s side,  “We’re cool with that.” In proper legalese, of course — but expressed on both sides in code and symbols that work like Creative Commons’ licenses (there on the right).

The Cyberlaw Clinic is already involved, though its work with Customer Commons on a broader set of terms than the one I just mentioned, and Berkman’s own  Privacy Tools for Sharing Research Data could assist with and follow the process, both through the term-creation process and as the terms get implemented in code and materialize on the Web.

We would be dealing with cooperative efforts that require this already. One is Respect Network’s Respect Connect “Login with Respect” button.  As I explain here, the terms of OIX’s Respect Trust frame require the setting of, and respect for, the boundaries of individuals. This can be done, even within the calf-cow framework of client-server.

Respect Connect  is based onXDI, which the Respect Trust Framework also specifies. XDI is a protocol that employs “link respect-connect-buttoncontracts.” Drummond Reed, the father of XDI (and CEO of the Respect Network) describes link contracts as “machine-readable XDI descriptions of the permissions an individual is giving to another party for access to and usage of the owner’s personal data.” Very handy. And binding. In code.

Mozilla has also made efforts in this same direction, most recently with  Persona (there on the right). signinWe can help them out with this work, and I am sure other and other browser makers will also want to get on board — which they should, and with Berkman’s convening power probably will.

At the end of the project we will have both standard terms for posting at Customer Commons and reference implementations hosted by Berkman, or shared by Berkman over Github or some other data repository.

And we would bring to the table many dozens of developers already eager to see increased agency and term-proffering power on the individual’s side. I can easily see privacy dashboards, on both the client and the server sides of websites.

(Thinking out loud here…) We could host focused discussions and invite participants (including law folk — especially students, from anywhere) to vet terms the way the IETF vets Internet standards: with RFCs, or Requests for Comments. Some open source code for this already exists with Adblock Plus’s white list for non-surveillance-based advertisers. I would hope they’d be eager to participate as well. We (ProjectVRM, the Berkman Center or Customer Commons) could publish lists of conformant requirements for website and Web service providers, and lists (or databases) of conformant ones.

This work would also separate respectful actors on the supply side of the marketplace from ones that want to stick with the surveillance model.

While there are lots of things we could do, this is the one I know will have the most leverage in the shortest time, and would be great fun as well.

It is also highly cross-disciplinary, with many lines of cooperation and collaboration within the university and out to the rest of the world. Right at Berkman we have the  Privacy Tools for Sharing Research Data project and its many connections to other centers at Harvard. Its mission — “to help enable the collection, analysis, and sharing of personal data for research in social science and other fields while providing privacy for individual subjects” — is up many VRM development alleys, especially around health care.

9. Questions

What if we fail?

What if it turns out that free customers are not more valuable than captive ones for most businesses? That’s been the default belief of big business ever since it was born.

What if the free market on the Net turns out to be “Your choice of captor?” Client-server lends itself to that, although we can work around its inequities with moves like the one proposed in the Research section above.

What if the only VRM implementations that succeed in the marketplace are silo’d and non-substitutable ones? To some degree, that’s what we have with Uber and Lyft. While they are substitutable (as two apps on one phone), we don’t yet have a way to intentcast to multiple ride sharing providers at once, or to keep data that applies to both. Maybe we will in the long run, but so far we don’t.

Apple may be VRooMy with HealthKit and HomeKit, but both still operate within Apples silo. You won’t be able to use them on Android (far as I know, anyway).

And what if the Internet of Things turns out to be a world of silos as well? This too is the default, so far. Phil Windley mocks the Apple of Things and the Google of Things by calling both The Compuserve of Things — and making the case for substitutablility as well.

And what if customers just don’t care? This too is the default: the body at rest that tends to stay at rest. For VRM to fully happen, the whole body needs to be in motion — to move from one Newtonian state to another. It’s doing that in places, but not across the board.

Finally, what if we succeed? VRM is about making a paradigm shift happen. So was  Cluetrain before it. On the plus side, the Net itself lays the infrastructural groundwork for that shift. But the rest is up to us.

Whether we  fail or succeed (or both), there will be plenty to study. And that’s been the idea from the start too.

_________________

* Disclosures: I was paid modest sums as a fellow early on, but otherwise have received no compensation from the Berkman Center. I make my living as a speaker, writer and consultant. I have consulted a number of companies listed on the ProjectVRM development work page, and am on the boards of two start-ups: Qredo in the U.K. and Flamingo in Australia. In my work for them my main goal is to see VRM succeed, and I don’t play favorites in competition between VRM companies.

Getting Respect

Respect Network (@RespectConnect) is a new kind of corporate animal: a for-profit company that is also a collection of developers and other interested parties (including nonprofits) gathered around common goals and principles. Chief among the latter is OIX‘s Respect Trust Framework, which is “designed to be self-reinforcing through use of a peer-to-peer reputation system.” Every person and organization agreeing to the framework is a peer. Here are the five principles to which all members agree:

Promise We will respect each other’s digital boundaries

Every Member promises to respect the right of every other Member to control the Member Information they share within the network and the communications they receive within the network.

Permission We will negotiate with each other in good faith

As part of this promise, every Member agrees that all sharing of Member Information and sending of communications will be by permission, and to be honest and direct about the purpose(s) for which permission is sought.

Protection We will protect the identity and data entrusted to us

As part of this promise, every Member agrees to provide reasonable protection for the privacy and security of Member Information shared with that Member.

Portability We will support other Members’ freedom of movement

As part of this promise, every Member agrees that if it hosts Member Information on behalf of another Member, the right to possess, access, control, and share the hosted information, including the right to move it to another host, belongs to the hosted Member.

Proof We will reasonably cooperate for the good of all Members

As part of this promise, every Member agrees to share the reputation metadata necessary for the health of the network, including feedback about compliance with this trust framework, and to not engage in any practices intended to game or subvert the reputation system.

The Respect Network’s founding partners are working, each in their own way, to bring the Respect Trust Framework into common use. I like it as a way to scaffold up a market for VRM tools and services.

This summer Respect Network launched a world tour on which I participated as a speaker and photographer. (Disclosures: Respect Network paid my way, and The Searls Group, my consultancy, has had a number of Respect Network partners as clients. I am also on the board of Flamingo and  Customer Commons, a nonprofit. I don’t however, play favorites. I want to see everybody doing VRM succeed, and I help all of them every way I can. ) We started in London, then hit San Francisco, Sydney and Tel Aviv before heading home to the U.S. Here’s the press coverage:

In the midst of that, Respect Network also announced crowd funding of this button:

respect-connect-button

It operates on the first  promise of the Respect Trust Framework: We will respect each others’ digital boundaries. Think of it as a safe alternative to the same kind of button by Facebook.

The campaign also launched =names (“equals names”) to go with the Respect Connect button, and much else, eventually. These names are yours alone, unlike, say, your Twitter @ handle, which Twitter owns.

There is a common saying: “If you’re not paying for it, you’re the product” In respect of that, =names cost something (like domain names), though not much. Selling =names are CSPs: Cloud Service Providers. There are five so far (based, respectively, in Las Vegas, Vienna, London, New York/Jerusalem and Perth):

bosonweb-logo danube_clouds-logo paoga-logo emmett_global-logo onexus-logo

They  are substitutable. Meaning you can port your =name and data cloud from one to the other as easily as you port your phone number from one company to another. (In fact the company that does this in the background for both your =name and your phone number is Neustar, another Respect Network partner.) You can also self-host your own personal cloud. Mine =name is =Doc, and it’s managed through Danube Clouds. (I actually got it a few years back. The tech behind =names has been in the works for awhile.)

The tour was something of a shakedown cruise. Lots was learned along the way, and everybody involved is re-jiggering their products, services and plans to make the most of what they picked up. I’ll share some of my own learnings for ProjectVRM in the next post.

 

 

VRooMy developments

Youstice is a new VRM company focused on mediating disputes online. Says the home page, “We help customers and retailers resolve shopping issues quickly and effectively.” Here’s the customer side (shop with confidence). Here’s the retailer side (manage claims easily). And here’s the pitch to partners (“help retailers and customers globally reach resolution of thousands of complaints – all through one simple online application”).

Enable your customers to better engage and make them independent. Become a VRooMer! is a new blog post by Zbynek Loebl that nicely explains VRM and the context it provides for Youstice, which is in beta now. So check it out.

Fargo is the online outliner/publishing system brought to us by Dave Winer and friends. As a tool of independence and engagement, it has many VRM possibilities, methinks. I enjoy following it both in use (I often blog through it) and in the Fargo Blog.

Phil Windley‘s The Compuserve of Things speaks to a problem we all suffer but few of us examine: silo-ization. Phil starts by insightfully observing that Web 2.o, for all the progress it brought, did so at the expense of centralization around sites, services and data sources:

Each of these online service businesses sought to offer a complete soup-to-nuts experience and capitalized on their captive audiences in order to get businesses to pay for access. In fact, you don’t have to look very hard to see that much of what’s popular on the Internet today looks a lot like sophisticated versions of these online service businesses. Web 2.0 isn’t so much about the Web as it is about recreating the online business models of the 80′s and early 90′s. Maybe we should call it Online 2.0 instead.

To understand the difference, consider GMail vs. Facebook Messaging. Because GMail is really just a massive Web-client on top of Internet mail protocols like SMTP, IMAP, and POP, you can use your GMail account to send email to any account on any email system on the Internet. And, if you decide you don’t like GMail, you can switch to another email provider (at least if you have your own domain).

Facebook messaging, on the other hand, can only be used to talk to other Facebook users inside Facebook. Not only that, but I only get to use the clients that Facebook chooses for me. Facebook is going to make those choices based on what’s best for Facebook. And most Web 2.0 business models ensure that the interests of Web 2.0 companies are not necessarily aligned with those of their users. Decisions to be non-interoperable aren’t done out of ignorance, but on purpose. For example, WhatsApp uses an open protocol (XMPP), but chooses to be a silo.

He adds,

If we were really building the Internet of Things, with all that that term implies, there’d be open, decentralized, heterarchical systems at its core, just like the Internet itself. There aren’t. Sure, we’re using TCP/IP and HTTP, but we’re doing it in a way that is closed, centralized, and hierarchical with only a minimal nod to interoperability using APIs.

We need the Internet of Things to be the next step in the series that began with the general purpose PC and continued with the Internet and general purpose protocols—systems that support personal autonomy and choice. The coming Internet of Things envisions computing devices that will intermediate every aspect of our lives. I strongly believe that this will only provide the envisioned benefits or even be tolerable if we build an Internet of Things rather than a CompuServe of Things.

When we say the Internet is “open,” we’re using that as a key word for the three key concepts that underlie the Internet:

  1. Decentralization
  2. Heterarchy (what some call peer-to-peer connectivity)
  3. Interoperability

And concludes,

The only way we get an open Internet of Things is to build it. That means we have to do the hard work of figuring out the protocols—and business models—that support it. I’m heartened by developments like Bitcoin’s blockchain algorithm, the #indieweb movement,TelehashXDI DiscoveryMaidSafe, and others. And, of course, I’ve got my own work onKRLCloudOS, and Fuse. But there is still much to do.

We are at a crossroads, with a decision to make about what kind of future we want. We can build the world we want to live in or we can do what’s easy, and profitable, in the short run. The choice is ours.

This is strong and important stuff.

Here in browser-land (where I’m writing this), Firefox has released a major new upgrade: version 29.0. Here’s an explanation. Firefox matters for VRM purposes because it’s the browser that’s closest to ours alone, and therefore in the best position to become a VRM instrument. The team there has also recently made hires — on purpose — from within our VRM orbit, and this is hugely encouraging. Oh, and they just put out this very cool video.

Same goes for WordPress. Gideon Rosenblatt‘s Automattic for the People: WordPress as a Regenerative Business singles out WordPress for praise as a paradigmatic example. He defines a regenerative business as a people- (rather than a money- or mission-) centric. So, in this respect, it helps to note that the main stakeholders in WordPress, Mozilla and Fargo are the people who put it to use. They are driven by us. This is more important than them being -centric around us. (This distinction is unpacked here and here.)

Regenerative business reminds me a lot of Umair Haque’s concept of thick value. Need to look more deeply into that.

Last but not least, dig Casius, which matches homeowners with pre-screened and qualified contractors in several European countries, so far: intentcasting, of a sort.

Looking forward to seeing lots of you at IIW next week.

VRM mojo Down Under

Unconference

I’m still de-compressing from a week in Sydney, Canberra and Melbourne, where I had my mind blown by all the VRM energy gathering there and in New Zealand.

In Sydney, Flamingo hosted a consortium of VRM companies on Wednesday, held its official launch on Thursday and put on a Customer Experience unconference on Friday. (That’s one shot from it above. The full set is here.)  The consortium included people representing (in alphabetical order) Customer Commons, Flamingo, Geddup, Meeco, MyWave, ProjectVRM, Respect Network, and Welcomer . Some of us, myself included, wore a number of those hats at once.*

Here are a few links.

A focus of many conversations in Sydney (especially at the unconference) was customer experience, or CX, a buzzterm Wikipedia currently describes (with “issues,” the box above it says) this way: “Customer experience (CX) is the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier.” A VRM corollary to that angle is “Customer experience is also about how the company experiences the customer.” Or how the government experiences the citizen. Or how the organization experiences the member. The source of those was @CatrionaWallace<, CEO of Flamingo. It was also very much in line with conversations last Summer in New Zealand with Geraldine McBride (@GeraldineGlobal) of MyWave. (@JoePine, co-author of The Experience Economy, was also there and contributed to those conversations.)

Various combinations of VRooMers also met with three different government agencies, all of which were eager to support GRM (government relationship management) by citizens, and to learn as much as possible about how that’s being done in the U.S., the U.K. and elsewhere. Two of those meetings happened in Canberra, where we were led within and between meetings by Kevin Cox of Welcomer. In Melbourne we also got quality time with Rohan Clarke (@GeddupRC) of Geddup, who also arranged an interview at PBS 106.7 on the overlapping subjects of VRM and community radio in Australia. Pieces of that should be coming online soon.

One VRM outfit I’m bummed to have missed was 4th Party, which sources  The Intention Economy, and says “Fourth parties are trusted agents that help consumers interact with multiple vendors on the consumers’ terms.” Since we’ve been talking about fourth parties for several years, it’s great to finally see the term put to good use.

Much more happened, and will continue to happen, than I’m reporting on here. I’m just in a hurry right now to get something up while it’s fresh in my mind and all the browser tabs are open.


*I’m on the Flamingo board (and have relationships with other VRM companies as well), but I don’t play favorites. I want everybody to win, and work toward that goal.

Good news for VRM and financial transactions

FinTPTomorrow, 24 January, is code launch day for FinTP, described by its parent, Allevo, as “the first open source application for financial transactions.” The code is being released under the GPL v3 license on Github.

FinTP’s development is intended, among other things, to support VRM product and service development. This began in 2011, when Allevo folks discovered that VRM developers were collaborating with SWIFT‘s Innotribe on what would become the Digital Asset Grid (described as “a new infrastructure providing a platform for secure, authorised peer to peer data sharing between known, trusted people, businesses and devices”).

Since FinTP is open source, VRM developers — especially those dealing with financial transactions (and there are many) — should check it out and consider getting involved as well. (On my own wish list: EmanciPay.)  The FinTP community is FINkers United, and looks like this:

FinTP community

Read more at the Allevo blog.

By the way, SWIFT has an annual Startup Challenge it would be wise for VRM developers to check out — especially those dealing with banking and financial transactions.

 

 

A Holiday list of VRM links

New VRM developers (in alphabetical order, two from Australia, one from New Zealand)

  • Flamingo. Descriptions:  Personalizing Customer Experience…Empowering businesses…>Flamingo knows that true customer empowerment is achieved by empowering businesses too. Thankfully technology and some clever analytics allow us to do just that….>We have a unique set of tools, created especially for business that will empower individuals across sales, marketing, service, support and business intelligence to know what experience customers and potential customers actually want. Our research tells us organisations that can do this get significant competitive advantage and bottom line growth.
  • Meeco. The Blog. Descriptions: >Your dashboard for life. >It’s time to make digital life simple. >>Be rewarded for being you… >Meeco is a new and easy way to manage your life and the data inside your personal cloud…>Meeco’s beautiful dashboard means one click to your favourite brands, bill payments, travel, banking and shopping…>Meeco gives you a private browser so you control, manage and track your own habits, providing you with rich insight… >>When you decide to share or signal what you want, you can do it anonymously or identified with the brands your trust in exchange for value, discounts or financial reward…  >Meeco will never sell your data because we know it’s yours.
  • MyWave. The Blog. Descriptions: Really putting customers at the centre of the relationship…Founded by former SAP North America President Geraldine McBride in 2013, MyWave is leading a fundamental change in the way enterprises do business with their customers – and how customers interact with enterprises…MyWave’s services and technology platform provide the means for enterprises to evolve away from the existing but outdated push‑based transaction model to a new two-way permission-based relationship based on Mutual Value…MyWave Customer Experience Consulting Services – Customer experience design experts who help businesses re-imagine their customer experiences through the lens of the customer, moving business from the old push-based transaction model to a personalized model….MyWave CMR technology platform – CMR turns CRM on its head by putting the customer in control of getting those personalized experiences anytime, anywhere, on any device. The MyWave CMR platform is constructed so that the customer owns their data. This removes privacy concerns and allows a new dynamic based on trust, advocacy and mutual value in each exchange.

Privacy

Hellbound handbasketry

LG jumps on advertising bandwagon, runs over its own customers

Used to be a TV was a TV: a screen for viewing television channels and programs, delivered from stations and networks through a home antenna or a cable set top box. But in fact TVs have been computers for a long time. And, as computers, they can do a lot more than what you want, or expect.

Combine that fact with the current supply-side mania for advertising aimed by surveillance, and you get weirdness such as Doctor Beet‘s LG Smart TVs logging USB filenames and viewing info to LG servers. According to Doctor Beet, viewer activity is actually reported to a dead URL (which may not be, say some of the comments). The opt-out is also buried an off-screen scroll. And LG tells Doctor Beet to live with it, because he “accepted” unseen opt-out terms and conditions.

But wait: there’s more.

If you want to really hate LG — a company you barely cared about until now, watch this. It’s a promotional video for “LG Smart AD,” which “provides the smartest way to reach your targeted audiences across the borders and connected devices with excitement powered by LG’s world best 3D and HD home entertainment technology” and “enables publishers to maximize revenues through worldwide ad networks, intelligent platform to boost CPM and the remarkable ecosystem.” The screen shot above shows (I’m not kidding) a family being terrorized by their “immersive” advertising “experience.”

This promotional jive, plus the company’s utterly uncaring response to a customer inquiry, shows what happens when a company’s customers and consumers become separate populations — and the latter is sold to the former. This split has afflicted the commercial broadcast industry from the start, and it afflicts the online advertising industry today. It’s why the most popular browser add-ons and extensions are ones that thwart advertising and tracking. And it’s why the online advertising industry continues to turn deaf ears and blind eyes toward the obvious: that people hate it.

Clearly LG is getting on the surveillance-based advertising-at-all-costs bandwagon here. The sad and dumb thing about it is that they’re actually selling customers they already have (TV buyers) to ones they don’t (advertisers). Their whole strategy is so ham-fisted that I doubt they’ll get the message, even if bad PR like this goes mainstream.

The one good effect we might expect is for competing companies to sell surveillance-free viewing as a feature.

Bonus link.

Why Google and Facebook need to go direct

In Google sets plans to sell users’ endorsements, and describe new ways that Google and Facebook are taking liberties with users who have had nice things to say about companies’ products and services in the past, in contexts where they didn’t expect their words to turn into personal endorsements (especially ones for which they are not paid). Specifically,

Google on Friday announced that it would soon be able to show users’ names, photos, ratings and comments in ads across the Web, endorsing marketers’ products. Facebook already runs similar endorsement ads. But on Thursday it, too, took a step to show personal information more broadly by changing its search settings to make it harder for users to hide from other people trying to find them on the social network.

(on the left) An example of a Google shared endorsement…

The problem, privacy advocates say, is when Web companies use or display the personal information of users in ways the authors did not expect when they originally posted it.

“People expect when they give information, it’s for a single use, the obvious one,” said Dr. Deborah C. Peel, a psychoanalyst and founder of Patient Privacy Rights, an advocacy group. “That’s why the widening of something you place online makes people unhappy. It feels to them like a breach, a boundary violation.”

“We set our own boundaries,” she added. “We don’t want them set by the government or Google or Facebook.”

There is a simple reason why Google and Facebook feel free to take these kinds of liberties: we pay them nothing, so they feel free to make us the product they sell, rather than the customers they serve.

This kind of abuse (and it is exactly that) will cost more value than it adds, for example with the Times story and this post. Even if the costs aren’t obvious on bottom lines, the negative externalities are large, and growing.

So here’s a simple suggestion for both companies: go freemium. Charge for value-added services, such as genuine, accountable privacy, within circles that customers (no longer just “users” or “consumers”) help define. We are legion, and you are increasing our numbers every day.

Online advertising is already post-peak and possibly headed toward oblivion, at least for ads that aren’t whitelisted by the likes of Adblock Plus. Ad and tracking blockers and enlightened browser makers, all working for the demand side of the marketplace, have their fingers on a pulse that Google, Facebook and the other ad-supported Web companies ignore. Enlightened as they are about their algorithms, analytics and infrastructures, they are literally senseless toward the consumers they sell to their customers — and the far greater return on investment they would get if lots of those consumers were customers as well.

A couple years ago I heard a Google executive say the company would never “go direct” because it was an “engineering company” and that didn’t want to make less than $1 million per employee. The implication was that going direct would require lower-wage and lower-skill workers in call centers — and other forms of non-engineering-type overhead. Yet there are plenty of highly profitable companies that do high quality service (call centers and all) with plenty of margin. For example: Apple and Amazon.

The writing is on the wall, big guys. Time to wake up and smell the demand for respect, privacy and genuine service. It’s huge.

And, if you’re ready to talk about it (or anything), come to IIW the week after next, at the Computer History Museum in Mountain View. It’s cheap. (Heck, Google is already a sponsor — and we do thank them for that.) It’s an unconference, so we can easily make “going direct” a topic there. (Hey, if you don’t, one of us will.)

Speaking of negative externalities, here’s the bonus linkage recommended by Zemanta:

Why reduce yourself to a qualified lead?

I have almost 46,000 photos in my main Flickr account. Most of them face the public rather than just friends and family. All of my public-facing photos encourage re-use and re-mixing, through a Creative Commons Attribution 2.0 license. And frankly, if Flickr made public domain dedication available as a choice I would use that, because I want the photos to be maximally useful in the world.

As a result of this policy, more than 350 of those photos have found their way onto Wikimedia Commons. Many — perhaps most — of those also find their way into Wikipedia, where they are used to illustrate the topic of articles there. The Wikipedia article Upheaval Dome (an ancient crater in Utah), for example, uses this photo in Wikimedia Commons, copied from  this one I put up on Flickr. This one, of Denver International Airport’s toothy roof, is in about thirty different Wikipedia articles, in many different languages. It’s not a great photograph and far from my favorite, but I’m glad it’s proven so useful.

Now, what is this data worth? In terms of money, some of the photos have brought me hundreds of dollars, even though I didn’t ask for a dime. Those using the photos simply wanted to pay me. But, overall, the value of any one photo — or hell, the whole corpus — rounds to $0.

Now, if I had wanted to, I could have reserved all rights to these photos, or granted some to, say, Getty Images, and made money that way. It’s possible I could have made quite a bit, if not a living. For example, I could have sold my photos of ice crystals to NBC for its Winter Olympics in 2011, instead of giving them away. (And maybe I could have gotten some perks out of NBC, perhaps for tickets or a hotel room. But I didn’t do that either.)

What matters to me about my photos is their use value, not their sale value. (A difference Eric S. Raymond unpacks nicely.) This is true of everything we own or rent. Every once in awhile we might toss or sell off stuff that has more sale than use value to us, and in those times we’ll take either nothing or far less than we paid for it in the first place. My point here is that we possess and share stuff  almost entirely for its use value. Not because we might be able to sell it as well.

Yet because a lot of our data — or data about us — is collected by other parties, the question of sale value comes up. So, the question goes, If Facebook Can Profit From Your Data, Why Can’t You? That’s the headline of an MIT Technology Reviewpiece with the subhead, “Reputation.com says it’s ready to unveil a place where people can offer personal information to marketers in return for discounts and other perks.” That was dated July 30 of this year. On September 1, TechCrunch followed up with Handshake Is A Personal Data Marketplace Where Users Get Paid To Sell Their Own Data. (Handshake is Reputation.com‘s new offering.) Pull-quote:

Well, here’s a startup that wants to make this money-for-data transfer a little more explicit — by acting as a platform for consumers to sell their own data directly to companies and make some of that filthy lucre themselves.

They’re not alone. Enliken has been offering something like this for awhile. With Glome “you can anonymously control the Web’s offerings and get paid for interacting with businesses.” Ye$ Profile lets you “rent your profile to brands.” Datacoup provides “the first personal data marketplace.” In Who Owns the FutureJaron Lanier makes a similar case, some of which you can see and hear in Should we get paid for our online data, on NPR’s Here and Now program. I also just spotted a new UK company, CTRLio, getting into the game as well, though the text of its video sounds like many of the other companies in the personal data store, vault and locker business. You’ll find those under “Personal Data and Relationship Management” on the Developers List page of the ProjectVRM wiki.

Meanwhile the amounts paid for personal data, within today’s personalized advertising data mills, are miniscule on a per-item (or even a per-person) basis. Financial worth of data comes in at under a penny a piece, says the headline of a Financial Times story. (The rest is behind a paywall.)

But there has always been a market for what salesfolk call “qualified leads.” For a glimpse of that appetite, do this search and see what comes up: https://www.google.com/search?q=qualified+leads. Or go see David Mamet‘s Glengarry Glen Ross.

Why would anybody want to be one of those leads?

The answer is to get better offers, or better deals, whatever those may be. There is no shortage of people who live for this kind of thing. The demographic  bulls-eye of this broad cohort stars in TLC’s Extreme Couponing. Pull-quote: “It’s even better than sex.” If that’s you, rock on. If it’s not, read on.

Here’s a simple fact: if you’re exchanging data for money, offers or both, you’re in the qualified leads business — as a lead. This is an old business with a new model: for you. It also respects some rude facts of life in the digital sphere today:

  1. Data about you is being harvested constantly, and in more ways, every day.
  2. You have few ways of controlling that harvesting, other than to plug a few leaks here and there, for example with tracking blockers in browsers.
  3. That data is being sold to marketers who already want to give you more personalized advertising and/or better offers.
  4. You’re already participating in this system, whether you like it or not

Speaking personally, I have little faith that any of these systems will succeed, for three reasons. First is that each company appears to be building its own closed and silo’d marketplace, and I’m not a fan of those. Second is that the actual size of the markets will be too small. Third is that it will gradually dawn on people that use value trumps sales value.

This is especially true in the subscription economy, which includes all ongoing service businesses. This is where the R in VRM will have the most meaning, and find the most opportunity. I also believe it is a vast new greenfield, and relatively free of current marketing manias.

But my mind isn’t closed about it. VRM is a big greenhouse. Let every flower bloom.

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