ProjectVRM Blog

Sitting here talking with Tara about her new VRM business. Lots of helpful ideas bouncing around. So we’re both pausing in the midst to write stuff down. Here’s my brain dump of the moment, with some actionable ideas toward the end…

For retailing, the Net changes everything. But it’s still new. It’s three seconds after the Big Bang and all we have are a few light elements, a lot of heat and no galaxies. Yet $billions are already being made in online retailing, and$billions more are being spent and saved by retailers and shoppers using the Net to advantage. And because of those $billions, and the successes of companies like Amazon and Zappos, and services like Google Checkout and Orbitz, we’re inclined to think this stuff is mature. It isn’t. It’s still embryonic and protean, compared to what it will become.

In the meantime, consider this thesis: Amazon and other excellent online retailers have improved the online shopping experience as far as a retailer can. Yes, there is always room for improvement, but there is only so much improvement you can carry out only on the sell side, even if you’re equipping buyers to do a better and better job. At a certain point the improvements need to happen on the buy side. You need better buyers, not just better sellers. You need to improve the tools available to buyers — tools that help buyers with all sellers, and not just within each seller’s walled garden or silo.

Therefore… At a certain point the problem is no longer scale but scope.

Amazon and its competitors are pushing out the envelope of sell-side scope. On the buy side we’re just getting started. The envelope is still mostly empty. The job of VRM is to start pushing out its walls, starting at close to zero.

Another way of putting it. There is only so much any retailer can do, because they are sellers and not buyers.

Still another: It doesn’t matter how big you make a walled garden if it’s still a walled garden. At a certain point you reach the Multiple Walled Garden Problem. (Shall we call it MWGP? Or SO for Silo Overload?)

If you’re carrying a pile of retailer loyalty cards, you have a silo overload problem. It may not be a huge one for you, but it’s still a problem. It’s friction, and not just for you. Loyalty cards can be a PITA for the seller as well. They require multiple pricings, slow things down at the cash register, and involve piles of often wrong and irrelevant data. But I don’t want to go into how good or bad loyalty cards are here, because they’re beside a larger point: that we need to start solving market problems from customer’s side, by improving the scope of what the customer can do in the same way with multiple vendors.

For example, take affiliate programs, or affliliate marketing. Tara has been schooling me about these things, which are a huge part of how online retailing works. Hell, I didn’t even know that when I clicked on an a Head Butler link such as this one, Jesse Kornbluth gets a kickback (or at least puts himself in a position for one) from Amazon.com. He’s not just pointing to a book. He’s part of a new retail system in which commissions or kickbacks (or whatever you want to call them) are silo’d. Amazon has one kind and other retialers have other kinds. Some have none. Whether he means to or not, Jesse discriminates against those, and does so for financial reasons.

From the sellers’ side this is all fine in the sense that it’s a free (and fee, I suppose) marketplace. Every retailer is at liberty to compete by providing the best kickback system.

But what if the customer wants, say, purchasing guidance that’s uncontaminated by bias toward one kickback system over another? What if the intermediary guides the customer to a seller that doesn’t have a kickback program, and the intermediary gets nothing from the sale while the seller gets everything? Wouldn’t it be better to have the buyer (or the intermediary, on behalf of their buyers, and for the good of the marketplace) assert a single form of commissioning that’s fair and helpful to all sellers and all intermediaries — even while respecting the kickback (or commissioning) systems that are already in place?

This is a greenfield here. Let’s think and talk about it.

Also, let’s think about what kind of research project this might make — or that the theses presented here might make — for a business school student or class (at HBS or elsewhere). Because that’s one of the things I’d like to do in the next school year, which is just getting started.

I’m vetting ten VRM principles here: all grist for next week’s VRM Workshop mill. We’ll be changing these as the workshop approaches, I’m sure.

Note that these apply to management of relations with vendors by customers: the narrowest scope of VRM. The larger topic of relationship managmement (RM) is part of the discussion as well. Obviously there are other relationships — with chuches, clubs, civic organizations, government bodies and so on — where VRM tools apply, but the individual is not a customer. Do we want to broaden things by saying “individual” and “organization” rather than “customer” and “vendor”? I think we’re better off with the former than the latter, but I’m open.

1. VRM provides tools for customers to manage relationships with vendors. These tools are personal. They can also be social, but they are personal first.
2. VRM tools are are customer tools. They are driven by the customer, and not under vendor control. Nor to they work only inside any one vendor’s exclusive relationship environment.
3. VRM tools relate. This means they engage vendors’ systems (e.g. CRM) in ways that work for both sides.
4. VRM tools support transaction and conversation as well as relationship.
5. With VRM, customers are the central “points of integration” for their own data.
6. With VRM, customers control their own data. They control the data they share, and the terms on which that data is shared.
7. With VRM, customers can assert many things. Among these are requests for products or services, preferences, memberships, transaction histories and terms of service.
8. There is no limit on the variety of data and data types customers can hold — and choose to share with vendors and others on grounds that the customer controls.
9. VRM turns the customer, and productive customer-vendor relationships, into platforms for many kinds of businesses.
10. VRM is based on open standards, open APIs and open code. This will support a rising tide of activity that will lift an infinite variety of business boats, and other social goods.

In ProjectVRM we’ve been talking for some time about equipping users with tools for both independence and engagement. In a detailed paper titled Mine! as VRM Infrastructure,  Adriana Lukas has given a name to at least one toolbox: Mine!

I like it.

It begins,

This paper sets out to describe a version of infrastructure or foundation for VRM (Vendor Relationship Management) based on an alternative view on sharing information online between individuals and of online identity. It sets out to explain the strategy and tactics for design, development and adoption of tools - the Mine! and FeedMe (see glossary) - and creation of an infrastructure for other solutions - VRM (relationships with individuals and vendors, transactions), self-defined identity, authentication, data portability and hopefully many more. The aim is to equip individuals with tools to take charge of their data (content, relationships, transactions, knowledge), arrange (analyse, manipulate, combine, mash-up) them according to their needs and preferences and share them on their own terms whilst connected and networked on the web.

With regard to technical aspects, the goals of this paper are, again, to:

1. invent as little as possible
2. reuse only popular technologies, techniques and user-interface metaphors in order to enable VRM, and…
3. provide maximal inclusiveness and extensibility to the Mine! implementation, to permit the greatest potential for growth.

This is very consistent with what Andre Durand started saying back around the turn of the millennium, and what I said in my closing keynote at Digital ID World (DIDW) in 2003.

We are finally there.

Alec Muffett and Adriana Lukas have been at work on “Feeds-based VRM”, which they call A Web-Centric Approach to VRM Implementation. I like the goals:

1. invent as little as possible
2. reuse only popular technologies, techniques and user-interface metaphors in order to enable VRM, and…
3. provide maximal inclusiveness and extensibility to the VRM implementation, to permit the greatest potential for growth.

Check it out and see what you think.

In Two tales of user-centricities, Adriana Lukas gets at something that has bothered me for years about the term “user-centric”. It always seemed too external to me. It equates too easily with terms like “customer-focused”. It’s something one does for a user. Not something a user does.

In the past I’ve tried to steer the identity development community away from it, suggesting terms like “independent” instead of “user-centric”. But I failed and just accepted “user-centric” as is. Hell, I don’t like the term “user”, either.

But I think Adriana is right about “-driven”. It’s a much better term. I don’t know if it’s too late to get the identity community to adopt it, but we’re still getting started with VRM. Regardless of what adjectival phrases we use to describe what VRM is about, it’s essential to get our vectors right.

With VRM, our vectors are anchored on the user side, the customer side, the individual’s side. The relationships we establish and manage are on our terms and not just those of vendors. We are not against vendors in the least, of course. Our logic is AND, not OR. But it starts with the sovereign autonomy and independence of each individual as a fully-empowered participant in the relationships that comprise markets and other social arrangements. “-driven” says that much more clearly and correctly than “-centric”.

Same goes for the identity development efforts I’m most familiar with. The difference is that they’re downstream with their vocabularies and we’re not.

For the identity folks, I’d like to see a session at IIW (and discussion in any case) about concepts and vocabularies. Because when I look at this goal of Identity Commons …

To support, facilitate, and promote the creation of an open identity layer for the Internet, one that maximizes control, convenience, and privacy for the individual while encouraging the development of healthy, interoperable communities.

… I see “-driven” rather than “-centric”.

So hey, maybe it’s not too late. The Identity Thing is still pretty young, too.

Another problematic noun in the identity lexicon is “provider”. Here OpenID talks about “identity providers” both as servers the user operates and as something you get from other entities. Specifically,

OpenID allows anyone who can run a web server to run an identity server. Your identity server is separate from your identity, so you are free to use any identity server that has some ability to validate your identity and you can change between them at will. An identity server is sometimes referred to as an identity provider. If you wish, you can use the services listed below with your own website as your identifier using delegation…

The following sites provide OpenID identities and servers to verify them.

People want to feel, to know, that they are in charge of their own identities, and how those identities are used. “Providing” identities from the outside seems quite different, even if we’re actually talking about infrastructure that supports individuals providing for themselves — which OpenID does.

So, food for re-thought.

Just found out from Keith Hopper about Fundable.org. Also about RepRap, which Chris DiBona says is “China on your desktop”. And Boston FabLab, which just looks totally cool.

Wanted to get those down before I lost track.

A point is reached, in the spread of an original idea, when its source realizes that others can make the case for the idea at least as well — if not better — than he or she can.

That point came for me with VRM a while ago, from a number of the sources I just added to the blogroll there on the right. But it was especially gratifying to read What Comes After CRM, from Jay Deragon, about whom I’m sorry I wasn’t clued into sooner than the last few weeks, when I started catching up on his writing, that of Carter Smith, and other colleagues of theirs. In fact, while making their improving acquaintance, I wrote the forward to their book, The Emergence of the Relationship Economy.

Lots of grist for our mills there.

I just learned by the Ajatus Manifesto that sixty-five percent of all CRM systems fail. Ajatus blames companies rushing to implement CRM. I’m sure that’s true. But I also think it’s possible that CRM itself is flawed by the closed and silo’d nature of the “relationships” involved. As a customer I can only relate to company CRM systems on the companies’ terms. Not on ones that I provide as well — for the good of us both. In other words, the base problem is that the lack of customer independence as a base condition for the relationship in the first place.

But I see here that Ajatus itself is a new CRM system for individual humans. Specifically,

Ajatus is a revolutionary CRM that runs as a local Ajax web application on your own computer. It uses the CouchDb object database for data storage and enjoys a wide range of plug-in and replication possibilities. With Ajatus you can keep track of your

• Notes
• Contacts
• Appointments
• Hour reports

…and as Ajatus is very extensible…

So it’s personal. That’s interesting.

It ’s also an open source project, which is cool. Here’s more from the prime author, Henri Bergius:

What makes Ajatus so special is the approach we’re taking with it. Having with OpenPsa found the traditional, hierarchical CRM approach unworkable we wanted to solve the problem in a different way:

• Local, rich AJAX client everybody can run on their laptop or internet tablet
• Replication to allow sharing data with partners, customers and the employer
• Simple base data types (note, event, contact, …) that users can customize and extend
• Possibility to build integration tools and plug-ins in almost any language (with CouchDb’s restful JSON interface)
• Speed

To help us stay on the right path we even wrote an Ajatus Manifesto to guide ourselves.

Currently the software already runs and does pretty much all the basic things needed. Once we get it into state where we can dogfood it (in interoperation with the company OpenPsa) we will make the first release. Until then, stay tuned, check the Git repository and join the talk!

Perhaps Hernri would be interested in joining ours as well.

Meanwhile, thanks to Zak Greant for pointing out the Ajatus Manifesto.

Work to Be Done is my August 2007 Linux For Suits column in Linux Journal. In it I leverage the wisdom of Willard McCarty —

Particularly since the advent of the Web, our attention and energy have been involved with the exponential growth of digitization. The benefits for scholarship here are unarguably great. But as ever larger amounts of searchable and otherwise computable material become available, we don’t simply have more evidence for this or that business as usual. We have massively greater ecological diversity to take account of, and so can expect inherited ways of construing reality and of working, alone and with each other, to need basic renovation. Here is work to be done. It’s not a matter of breaking down disciplinary boundaries-the more we concentrate on breaking these down, the more they are needed for the breaking down. Rather the point is the reconfiguration of disciplinarity. From computing’s prospect at least, the feudal metaphor of turf and the medieval tree of knowledge in its formal garden of learning make no sense. We need other metaphors. Here is work to be done.

… into the challenge of VRM, where approximately 100% of What We Need To Do remains to be done.

…deciding to expose any data to a potential vendor is a customer choice, not a marketers right. — Echovar on Why marketing is broken.