Time agrees… users are in control

This year’s Man of the Year from Time Magazine is You.

All hail the power and relevance of the user centered revolution that started with Pong and continues into the future with VRM.

Pong? Yes, Pong, that simple little game that created the interactive entertainment industry. The great ancestor of Quake, The Sims, and Second Life. A bit of interactivity that started the great reversal of the industrial era of media. Mass production and mass media led to literal generations of couch potatoes and an American mono-culture dominated by the big three TV networks and the Hollywood Studios. Mass production of passive entertainment taught people to sit back, relax and just enjoy the show.

Interactive entartainment was, and is, fundamentally different. To get any value, you have to do something. You have to. It isn’t an option, it is a requirement. Fail to move the controller and the game ends in short order. No points. No advance levels. No victory animations. No stirring love story and climactic ending. While mass media teaches passivity, interactive media teaches pro-activity.

The Internet took the interactivity of single-context video games and extended it to a worldwide network of infinitely variable services and content. One of those services, the World Wide Web, made that interactive network visual and immediately accessible to hundreds of millions of people.

Now we have a new generation of entertainment, commerce, society, and even politics  built upon interactivity, where users’ actions drive the outcome. Powerful stuff. No wonder Time Magazine makes You Man of the Year for 2006.
Vendor Relationship Management, or VRM, is another one of those services built upon the interactive capability of the Internet. VRM creates an open marketspace where, with a single gesture, a person can create a market of one, where vendors compete on-demand for their purchases and relationships. As VRM goes from an inspiration to a working system, we will see users gaining even more and more control.

That makes me wonder, if this year’s man of the year is You, what does Time Magazine do when VRM really hits its stride?

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Incredible Inevitable Identity

Last week I attended the Internet Identity Workshop 2006b. It was amazing. Not only was it a source of much varied and in-depth information, the people and community were world-class, all engaged in an “unconference” format that was truly the most effective self-organizing and productive community effort I’ve ever seen. Major thanks to Kaliya Hamlin and the crew for moderating the whole program and to everyone who participated.

Three huge things were clear:

1. Identity systems that address the goals of Kim Cameron‘s Principles of Identity are now largely integration and product management problems.

With open source OpenID (wikipedia), Microsoft’s CardSpace (wikipedia), and the Liberty Alliance (wikipedia) all having deployed solutions, the hard part, technically, is arguably over. Now we have to figure out interoperability (still non-trivial) and how to communicate with users, grow usage, and complete the feature set. With most of the large technology players supporting Identity in some fashion, this is set to be one of the next major developments in people’s interactions with the Internet.

2. The community of people who have made this happen is truly amazing. I don’t know how to do justice to the spirit of open, respectful engagement that pervaded the entire workshop nor to the passion and quality of everyone there. In fact, I won’t even try. Instead, I’ll extend that spirt by inviting you to join us at the next Internet Identity Workshop in 2007.

3. VRM is ripe for development. Although VRM isn’t strictly about Identity, Identity enables ways for VRM to work without compromising the implicit privacy and security we have come to expect when buying.

I spoke about this last night with a colleague of mine who would love to be able to publish a bill of materials as a personal RFP for his company’s products, sort of a corporate VRM. The problem is that if he simply published that RFP on his blog, all of his competitors would see what they are ordering. This was in fact a useful World War II espionage technique: spy on factory orders to discern future battle plans. [Thanks to NPR‘s Morning Edition for their recent story on WWII spy Virginia Hall.]

Interoperable Identity systems would avoid that problem. Instead, you could publish an RFP with restrictions on who could read it, requiring them to be a valid vendor, including a legally binding assertion of the same. Further, you could hide your own identity so that even valid vendors don’t necessarily know which company is shopping around for those goods. You could also provide vendor-restricted information that only particular vendors see, such as customer IDs, which could help them prioritize and price more competively based on your existing relationship with them. You could even send it to specific vendors only or to both the open market and preferred vendors. Eventually, all of this will come together in a relatively seemless technology framework that creates a market of one on demand, when you are ready to buy.

There is still a lot of work to do, both with Identity and VRM, but I’m excited. It is amazing how far along Identity systems have come in the last two years and how close it is to mainstream viability, thanks largely to the energy and spirit of the community at IIW. It was also inspiring to see how quickly people warmed to the VRM idea and stepped up in a similar spirit to start working through the details. Doc Searls has already proven it can work in isolated examples (his VRM Gesture for a new phone worked like a charm.) Now to scale it to larger and more meaningful applications.

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Internet Identity -> Reputation Networks and more

Effective, distributed, and automated third-party Identity systems will touch and change just about everything on the Internet. (Tip of the hat to Kim Cameron for the proposal and work behind that link.)

For the last few months I’ve been exploring how VRM and Complex Search might be augmented with an Internet Identity Meta-System (IIM). The first idea was simple: provide special product offers or search results based on identity. If you are a member of a particular affinity group, it would be useful to target promotions and advertisements automagically.

For those who don’t know how IIM works, think about it as third-party authentication where the second party need never see your secret information.

Instead of giving your Social Security Number (SSN) to a potential lender so they can check your credit rating, IIM uses a form of token-passing to let you authenticate directly with the credit bureau (who already knows your SSN), who then tells the lender your credit rating.

Make sense? Essentially, you and the vendor agree to use IIM and swap tokens. You go to the credit bureau with that token, and authenticate yourself directly. The vendor goes to the credit bureau with their token and gets your credit score. Result: vendor has the credit report and never required your SSN, name, or other “secret information” that might enable identity theft by an unscrupulous lender or middleman. [Note: this isn’t quite how it works, but it correct enough for the explanation.] In a fully realized IIM, all of these tokens are created and exchanged magically and nearly invisibly, just as SSL today makes it trivial for users to establish secure communication links between web browsers and servers without really paying attention to certificates.

The nice thing about a ubiquitous and inexpensive IIM is that it will make it possible for practically anyone to host an identity service. Any entity with a meaningful relationship with you could validate that relationship instantly. The result for Complex Search and VRM: relationships that support and improve your search and/or shopping experience.

If you are a million-miler at United Airlines, I’m sure there are hundreds of vendors who would like to offer you special promotions and discounts. Ditto for AAA and AARP membership, or even military affiliation. IIM integrated into VRM and/or Complex Search makes that possible, even simple.

The more I thought about it, the more possibilities emerged. In particular, distributed, secure Identity allows for a new kind of reputation network.

Equifax and other credit bureaus already offer digitally empowered reputation services. Lenders transmit a shared secret (the individual’s social security number or SSN) to Equifax. In return, Equifax gives the lender a real-world financial reputation report based on the identity associated with that SSN.

eBay, Digg, and Technoratti use similar reputational effects to help people buy things and find things.

It’s easy to see reputation being a factor in VRM as well, including countering the concerns some people have raised about “window shopping” the VRM system.

To refresh, VRM allows customers to specify their needs in a sort of digital RFP, send that RFP to a distributed marketplace, and vendors reply with bids to fulfill those needs. But what if the customer isn’t really going to buy anything? What if they are just window shopping? Isn’t that a violation of the intent of the system?

Actually, it can be both a feature and an opportunity. It’s a feature because people should be able to window shop. If I’m planning a vacation, I want to be able to evaluate my options before committing to a purchase (one reason I rarely use any of the priceline buying models). Perhaps I won’t be offered binding contracts when “window shopping”, but I should be able to browse, to see what discounts might be offered for my various affiliations or because of the timing of the purchase, even when I’m not yet ready to buy.

On the other hand, if people claim they are in the market to buy and don’t, that is an abuse of the system. The answer: a reputation network.

A reputation could be integrated with the marketplace, as it is at eBay. Or there could be distributed reputation management, like lenders have with credit bureaus: Markets would inform the Reputation firms about ratings and disputes and Reputation firms would aggregate reputation over multiple markets. In fact, there is no inherent reason that people couldn’t use their reputation at eBay to endorse VRM transactions at other markets, as long as we have an interoperable IIM in place. eBay then makes money by selling access to that reputation, just as the AARP might make money validating the identity of its membership, as it does today.

In short, IIM is an approach to identity that scales with the Internet, without centralized bottlenecks, with all the value and security one requires when checking identity. On top of the underlying autonomy and anonymity of the Internet, there will emerge a parallel fabric of self-organizing accountability and identity. The value and potential uses of such a fabric are just beginning to be defined and understood.

Consider how such a system might allow a reinvention of blacklist/whitelist approaches to SPAM. Or how it might protect children from sexual predators. Or even provide seemless, anonymous access to semi-restricted public services like disaster relief programs.
There’s still a lot of work to do. Once we get the infrastructure fully defined, toolmakers will need to integrate it into clients and developers will need to build services that utilize it. But once the pieces start clicking into place, it should be interesting to say the least.

If you can make it to the Internet Identity Workshop this next week, please say hi. I’m looking forward to meeting folks engaged in this space. I’m also looking forward to learning more about the current state of development, especially how current approaches inter-operate.

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Supreme Court & Global Warming 2

Following up on yesterday’s post, tThe NYT‘s coverage of the Supreme Court hearing on Global Warming continues:

On one level, the argument was about the meaning of the Clean Air Act, which the Environmental Protection Agency maintains does not treat carbon dioxide and other heat-trapping gases as air pollutants and thus does not give the agency the authority to regulate them.

On another level, the argument was about whether the dozen states, three cities and many environmental groups that went to federal court to challenge the agency’s position had legal standing to pursue their lawsuit.

Intriguing. On the issue of standing:

Chief Justice John G. Roberts Jr., along with Justices Antonin Scalia and Samuel A. Alito Jr., expressed strong doubts that the plaintiffs, represented by Assistant Attorney General James R. Milkey of Massachusetts, could meet those interrelated conditions by showing that global climate change presented a sufficiently tangible and imminent danger that could be adequately addressed by regulating emissions from new cars and trucks.

“You have to show the harm is imminent,” Justice Scalia instructed Mr. Milkey, asking, “I mean, when is the cataclysm?”

Mr. Milkey replied, “It’s not so much a cataclysm as ongoing harm,” arguing that Massachusetts, New York, and other coastal states faced losing “sovereign territory” to rising sea levels. “So the harm is already occurring,” he said. “It is ongoing, and it will happen well into the future.”

I doubt Scalia’s hyperbole is going to carry the day. After all, harm need not be cataclysmic to be regulatable. The Times also points out that the claim that Congress didn’t intend for the EPA to regulate CO2 seems particularly specious. The attorney for the EPA didn’t seem particularly effective on this point:

Mr. Garre referred several times to “the conclusion the agency reached,” an unusual locution that seemed something short of the full embrace that lawyers from the solicitor general’s office usually offer the agencies whose positions they defend.The Bush administration’s conclusion that the Clean Air Act does not authorize the E.P.A. to address climate change marked an about-face from the agency’s previous view of its legal authority.

Still at the end of the day, it appears that we can’t yet predict the outcome:

By the end of the argument there appeared a strong likelihood that the court would divide 5 to 4 on the standing question, with Justice Anthony M. Kennedy holding the deciding vote. His relatively few comments were ambiguous.

For now, we wait while the justices work through the details and develop their decision. Either way, it will make for an interesting news day.

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Supreme Court, the EPA, Dubya, and Climate Change

Climate change is a mess.

Not just because of the environmental impact, but because of its politicization. We can’t even get the name right.

Environmentalists want to call it Global Warming. Industrialists want to call it bogus. The facts are that the climate is changing and we are likely responsible.

I’ve attended the last two California Climate Change Research Conferences as well as last year’s U.S. Climate Change Science Program (CCSP) Workshop on Climate Science in Support of Decision Making. All three were chock full of hard, scientific evidence from dozens and dozens of research institutions around the world. The climate is changing, but it isn’t necessarily warming. In some places, it is cooling, like in the orange belt on the eastern coast of the US where the frost line has steadily moved southward, shrinking the climate for growing oranges in that area. For Savannah, Georgia, climate change means a global cooling and no more orange groves.

The NYT today brings us a story that highlights both the political tomfoolery around this topic as well as a ray of hope that we might see some honest traction on the issue this year. The Supreme Court will be hearing a case brought by twelve states against the Environmental Protection Agency for failing to do its job regulating greenhouse gases. The case seems pretty straightforward. The Bush Administration’s stance is anything but:

A group of 12 states, including New York and Massachusetts, is suing the Environmental Protection Agency for failing to properly do its job. These states, backed by environmental groups and scientists, say that the Clean Air Act requires the E.P.A. to impose limits on carbon dioxide and other greenhouse gases emitted by new cars. These gases are a major contributor to the “greenhouse effect” that is dangerously heating up the planet.

The Bush administration insists that the E.P.A. does not have the power to limit these gases. It argues that they are not “air pollutants” under the Clean Air Act. Alternatively, it contends that the court should dismiss the case because the states do not have “standing,” since they cannot show that they will be specifically harmed by the agency’s failure to regulate greenhouse gases.

A plain reading of the Clean Air Act shows that the states are right. The act says that the E.P.A. “shall” set standards for “any air pollutant” that in its judgment causes or contributes to air pollution that “may reasonably be anticipated to endanger public health or welfare.” The word “welfare,” the law says, includes “climate” and “weather.” The E.P.A. makes an array of specious arguments about why the act does not mean what it expressly says. But it has no right to refuse to do what Congress said it “shall” do.

What’s ridiculous is that the EPA is the agency that should be addressing this problem. How they address it, what solutions they use, and any regulations they enact are policy decisions. Those decisions will need to be worked out in the time honored way. But to date, the EPA has simply denied that it has the authority to do so, rather than accept its authority and craft a series of regulations.

Indeed, they could craft a series of regulations that suck, that do little or nothing to help the real problem while letting entrenched interests get away with continued, unsustainably harmful emissions. But they haven’t even done that. Instead, they have embraced the Bush culture of denial and simply refused to do their job.

I, for one, hope the states prevail in the case. I’d like to see some arm of the federal government take up the issue of finding a solution to climate change that fits with our national interests, rather than blindly denying the need to do anything.

Defining a working solution will be a challenging problem, quite possibly the defining problem of the 21st century. It’s time to start figuring it out.

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Bread experiment ok

Previously, I said I was going to try out a new bread recipe for Thanksgiving. Well, it turned out that I was stuck starting the mix in a corporate apartment with limited choices for measuring cups, and I had less than complete control over the amount of time spent rising. On top of that I think I overcooked it.

But it was still ok. The crust was wicked hard, but that’s how it is served sometimes… I had expected something lighter however. Probably cooking it less would do the trick.

I will try it again, since it was soooo easy. But this time I’ll be a bit more of a perfectionist and see how things turn out.

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Happy Thanksgiving

Happy Thanksgiving everyone. It’s a US holiday, I know, but the sentiments are definitely international.

It’s good to have a time of the year we take a moment to remind ourselves of the things we are thankful for. I, for one, am thankful for a lot this year.  I hope you are too.

Enjoy the holiday, folks.

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VRM: Make a gesture, create a market.

What do you get when you turn proprietary data silos inside out?

Users in control.

Doc Searls has been advocating VRM for a while (here too). What’s nice about his thinking — in addition to the open source/open standards approach we’d expect from a senior editor at the Linux Journal — is that he’s working the problem through the entire technological spectrum:

I don’t think VRM should be confined to a browser, either. I think this is something that should work through a cell phone, a card, or any other device or representation that works for the individual.

Not only are the vendor’s silos being turned inside out, so are the technology and network providers’.

My mindset has been stuck in the browser, perhaps with an accompanying helper application that does nice things for users, but still basically software on a personal computer. At the core, SwitchBook’s innovation is useful in larger contexts, but it won’t start out that way. Our strategy in simple:

  1. Make it work with current search habits.
  2. Augment IE and Firefox.
  3. Expand to other OSes and browsers as quickly as possible.
  4. Push the underlying API and data format as an open standard.
  5. Open the tool for customization as widely as possible.
  6. Open source the code for “built-in” customization

But are we going to take the time now to make sure it works in cell phones or datacards or iPods or anything other than a computer? There just isn’t enough bandwidth for that in a bootstrapping startup.

Fortunately, Doc’s VRM work as a Fellow at the Berkman Center gives him the freedom to invest in a solution of that breadth. A VRM solution that is bigger than any one company, technology, platform, or medium. Say goodbye to the silos.

It has also given me a fresh way to think about Complex Search. Much of VRM — as I understand it — is designed to be automagic. Specify your needs, receive bids from selected/qualified vendors using a tool that makes it easy to manage those relationships. But before one can specify needs, most people need to spend time discovering their needs. For all but the simplest purchases, that’s a Complex Search.

For example, take Doc’s latest VRM “Gesture

I want a phone that is GSM-based (so it works overseas as well as in the U.S.), works across as much of the U.S. and Canada as possible (Verizon has been a disappointment in this respect), has a GPS, and has an easy-to-use UI. I don’t care about PDA functions, ringtones (I like the old Western Electric bell ring, though), or camera functions. I like keys that are easy to read and use, and an address book that’s easy to synchronize with a computer. It would be nice, for personal reasons (I work for Linux Journal), if it ran on Linux. I’d rather it not (for the same reason) run on Windows. Mostly I just want it to be a good GSM phone with a GPS. And I’m willing to let the GPS function slide, just to get a good phone.

That’s a mouthful. Doc is famous enough in the blogoverse to get feedback without the VRM infrastructure. He may not have a vendor make an offer directly (although a smart vendor would seriously consider sponsoring Doc), but he’ll probably get enough direction from peers to narrow down his vendor choices. With a fully operating VRM, the fulfilment side of that gesture will be streamlined and automated so that any vendor who wants to can cost-effectively make Doc a competitive offer, perhaps even a bundled package that leverages their unique value-add. That will take a lot of work, but the potential value to everyone in the transaction is clear.

Compare that to the broad, politicized, unfocused brush strokes of the AttentionTrust and you can see why I think the AttentionTrust goals are still too blurry and ambiguous to generate much success. VRM is working with Intention. It is highly focused. Its output is clear. The benefit to users and vendors is evident. AttentionTrust is stuck thinking about everything, all the time, and only online, then mashing that into some anonymized goulash from which magic is supposed to emerge. Bah humbug. I’ll believe it when I see it.

I think Doc is on to something, though. The Internet so radically drops the costs of so many different modes of communication, it will continue to restructure our society for another couple of decades, at least. Most of the success to date has been based on one-to-many marketplaces, such as Amazon or many-<aggregated-as-one>-to-many marketplaces such as eBay. VRM lets us create inverted “many-to-one” markets. Markets of one. Make your gesture, create a market. That’s powerful.

And yet, Doc’s gesture — as every request for bids must — also contains a treasure trove in the form of Doc’s requirements, a wealth of needs Doc learned the hard way. He’s a power user with heavy demands and he pushes technology to its limits. He is fed up with his current options and, having experimented enough, he knows just what wants. But he’s lucky to have that experience. Most people have no idea what the deciding factors could or should be for the products they want to buy. (Can you say megapixel?) Doc is anything but a typical consumer.

Consider what it was like when the web started taking off in 1994/5/6. At that time, I was out selling Internet marketing services and helping companies figure out what to do online. Overwhelmingly, time and again, smart, capable, professional people asked “How much does a website cost?” Well, what kind of website do you want? Their question was inherently non-sensical, but people didn’t understand that yet.

First, you have to figure out what you want, then, and only then, can you send out an RFP to get bids on it. Sure, you scale your RFP based on what your budget is — and unless you have deep pockets, it pays to be prudent in what you include in your request — but at the end of the day, only a detailed specification provides enough direction for vendors to submit a bid. The result of these conversations was often a small strategy and/or requirements engineering contract to distill their needs into just such an RFP.

So how does that work with VRM? How do people develop enough expertise and understanding of their needs so they can present a request like Docs? How does VRM work for regular folk?

In short, they search. They explore. They learn.

From friends. By reading reviews. Going to various manufacturer’s and vendor’s websites. By learning from people like Doc, either through blogs, reviews at CNET or ThisNext, pricing at PriceGrabber, Google, or through direct conversations. By trying out products. Even from advertising and retail stores. I happened to learn about Verizon’s data services in the Verizon store. Imagine that.

This is Complex Search. People aren’t going to rely on any one vendor or reference point, unless they have an absolutely trusted guide like a brother or daughter or college roommate to point them in the right direction. They are going to check out different sources, browse multiple websites, collate and corollate a lot of information from a lot of different places. Then, after they have searched and narrowed their needs down to the details, they can put it in the form of a digital RFP and see the power of VRM kick in. Zing! A Market of One.

VRM is still evolving. Questions and answers of many varieties must work their way through the community, from people’s and companies’ needs to draft technological frameworks, APIs, protocols, and working code. Good stuff.

Somewhere in there, I’m confident Complex Search will meet VRM and lots of real value will be created for people, vendors, and innovators alike.

Doc will be at the Identity Workshop in early December to discuss VRM and Identity with all comers. It should be a great opportunity to figure out where VRM is headed and how we can contribute. I hope you can make it.

Posted in Identity, Search, Vendor Relationship Management | Tagged , , | 2 Comments

GoogleAdvice from Seth Godin

In a conversation about the potential market lock-in of Google at Abe Burmeister‘s blog, Dave Chiu introduced me to a great presentation Seth Godin made to Google early in 2006, explaining that it was marketing, and not technology, that made Google the market leader. I couldn’t agree more, even though most of my technology friends will swear it was all about the quality of PageRank.

Tests show that when Yahoo! & Google results are formatted identically, users can’t tell the difference. And yet, Google matters to people. They matter in a deeply personal way. They have created a powerhouse brand because better technology gave them an opportunity to market to the masses and that marketing worked.

Seth puts this in his framework of remarkable stories. His bestselling books The Purple Cow and All Marketers are Liars discuss this in much greater detail, with lots of anecdotes, examples, and advice on how to improve marketing through remarkable stories. Good stuff.

What he doesn’t talk about is how you create the right stories to tell. He misses that point in his books as well. But that’s ok. Stories are powerful marketing tools. That’s an important enough message by itself. In the presentation he also does a great job pointing out the anticipatory and experiential value of a brand–that value people get just because they buy the brand, independent of the actual value of the product. The driver for this type of value is story, especially when the brand connects with people’s identity in profound ways.

He then goes on to outline his view of Fashion/Permission marketing that is uniquely enabled by the Internet as a one-to-one disintermediated medium. He exhorts Google to create a permission tool that gets users to invite Google into a deeper relationship, one that gives Google more context and more details about what users are really looking for. In other words, leveraging the brand to enhance the technology by meeting users needs in a more meaningful way, which of course will only enhance the brand further. Great stuff. Note to Google: possible areas for development: VRM and Complex Search.

It is worth watching, if only to see the advice one of the hottest minds in marketing gives to the most influention Internet company on the planet.

Curiously, Seth missed the opportunity to explain to Google that their haphazard development strategy is steering them, inexorably, away from the branding that made them the market leader: the promise of making the Internet simple.

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Homemade bread for turkey day

Fellow Caltech alum Castor Fu turned me on to a great recipe for homemade bread that I hope to try out for Thanksgiving. Here’s the article that turned him on to it (unfortunately now behind NYT’s walled garden) … happy cooking!

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