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  • feedwordpress 11:39:41 on 2018/10/24 Permalink
    Tags: Amazon, commerce, , , , , , , , , retail, walmart   

    This Is How Walmart Beats Amazon 


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    A scenario from the future

    (cross posted from NewCo Shift)

    In my last post I imagined a world in which large data-driven platforms like Amazon, Google, Spotify, and Uber are compelled to share machine-readable copies of data to their users. There are literally scores, if not hundreds of wrinkles to iron out around how such a system would work, and in a future post I hope to dig into some of those questions. But for now, come with me on a journey into the future, where the wrinkles have been ironed out, and a new marketplace of personally-driven information is flourishing. We’ll return to one of the primary examples I sketched out in the aforementioned post: A battle for the allegiance – and pocketbook – of one online shopper, in this case, my wife Michelle.

    ***

    It’s a crisp winter mid morning in Manhattan when the doorbell rings. Michelle looks up from her laptop, wondering who it might be. She’s not expecting any deliveries from Amazon, usually the source of such interruptions. She glances at her phone, and the Ring app (an Amazon service, naturally) shows a well dressed, smiling young woman at the door. She’s holding what looks like an elegantly wrapped gift in her hands. Now that’s unusual! Michelle checks the date – no anniversaries, no birthdays, no special occasions – so what gives?

    Michelle opens the door and is greeted by a woman who introduces herself as Sheila. She tells Michelle she’s been sent over by Walmart. Walmart? Michelle’s never set foot in a Walmart store, and has a less than charitable view of the company overall. Why on earth would Walmart be sending her a special delivery gift box?

    Sheila is used to exactly this kind of response – she’s been trained to expect it, and to manage the conversation that ensues. Sheila is a college-educated Walmart management associate, and delivering these gift boxes is a mandatory part of her company training. In fact, Sheila’s future career trajectory is based, in part, on her success at converting Michelle into becoming a Walmart customer, and she’s learned from her colleagues back at corporate that the best way to succeed is to be direct and open while engaging with a top-level prospect.

    “Michelle, I know this seems a bit strange, but Walmart has identified you as a premier ecommerce customer – I’m guessing you probably have at least three or four packages a week delivered here?”

    “More like three or four a day,” Michelle answers, warming to Sheila’s implied status as a premium customer.

    “Yes, it’s amazing how it’s become a daily habit,” Sheila answers. “And as you probably know, Walmart has an online service, but truth be told, we never seem to get the business of folks like you. I’m here to see if we might change that.”

    Michelle becomes suspicious. It doesn’t make sense to her – sending over a manager bearing gifts? Such tactics don’t scale – and feel like an intrusion to boot.

    Sensing this, Sheila continues. “Look, I’m not here to sell you anything. I’ve got this special gift for you from Doug McMillon, the CEO of Walmart. You’ve been selected to be part of a new program we’re testing – we call it Walton’s Circle. It’s named after Sam Walton, our founder, who was pretty fond of the personal touch. In any case, the gift is yours to keep. There’s some pretty cool stuff in there, I have to say, including La Mer skin cream and some Neuhaus chocolate that’s to die for.”

    Michelle smiles. Strange how the world’s biggest retailer, a place she’s never shopped, seems to know her brand preferences for skin care and chocolate. Despite herself, she relaxes a bit.

    “Also inside,” Sheila continues, “is an invitation. It’s entirely up to you if you want to accept it, but let me explain?”

    “Sure,” Michelle answers.

    “Great. Have you heard of the Token Act?”

    Michelle frowns. She read about this new piece of legislation, something to do with personal data and the right to exchange it for value across the internet. In the run up to its passage, her husband wouldn’t shut up about how revolutionary it was going to be, but so far nothing important in her life had changed.

    “Yes, I’ve heard of it,” Michelle answers, “but it all seems pretty abstract.”

    “Yeah, I hear that all the time,” Sheila responds. “But that’s where our invitation comes in. Inside the box is an envelope with a code and a website. I imagine you use Amazon…” Sheila glances toward an empty brown box in the hallway with Amazon’s universal smiling logo. Michelle laughs. “Of course you do! I was a huge Amazon customer for years. And that’s what our invitation is about – it’s an invitation to see what might happen if you became a Walmart customer instead. If you go to our site and enter your code, a program will automatically download your Amazon purchase history and run it through Walmart’s historical inventory. Within seconds, you’ll be given a report detailing what you would have saved had you purchased exactly the same products, at the same time, from us instead of Jeff Bezos.”

    “Huh,” Michelle responds. “Sounds cool but…that’s my information on Amazon, no? I don’t want you to have that, do I?”

    “Of course not,” Sheila says knowingly. “All of your information is protected by LiveRamp Identity, and is never stored or even processed on our servers. You maintain complete control over the process, and can revoke it at any time.”

    Michelle had heard of LiveRamp Identity, it was a third-party guarantor of information safety she’d used for a recent mortgage application.  She also came across it when co-signing for a car loan for her college-aged daughter.

    “When you put that code into our site, a token is generated that gives us permission to compare our data to yours, and a report is generated,” Sheila explained. “The report is yours to keep and do with what you want. In fact, the report becomes a token in and of itself, and you can submit that token to third party services like TokenTrust, which will audit our work and tell you if our results can be trusted.”

    TokenTrust was another service Michelle had heard of, her husband had raved about it as one of the fastest growing new entrants in the tech industry. The company had recently been featured on 60 Minutes – it played a significant role in a story about Google’s search results, if she recalled correctly. Docusign had purchased the company for several billion just last year. In any case, Michelle’s suspicions were defused – may as well check this out. I mean, why would Walmart risk its reputation stealing her Amazon data? It was worth at least seeing that report.

    Sheila sensed the opening. “The reports are pretty amazing,” she says. “I’ve had clients who’ve discovered they could have saved thousands of dollars a year. And here’s the best part: If, after reviewing and validating the report, you switch to Walmart, we’ll credit your account with those savings – in essence, we’ll retroactively deliver you the savings you would have had all along.”

    “Wow. That almost sounds too good to be true!” Michelle says. “But… OK, thanks. I’ll check it out. Thanks for coming by.”

    “Absolutely,” Sheila responds. “And here’s my card – that’s my cell, and my email. Let me know if you have any questions.”

    ***

    Michelle heads back inside and places the gift box on the table next to her laptop. Before opening the box, she wants to be sure this thing is for real. She Googles “Walmart Walton Circle Savings Token”  – and the first link is to a Business Insider article: “These Lucky Few Amazon Customers Are Paid Thousands to Switch – By Walmart.” So Sheila wasn’t lying – this program is for real!

    Michelle tugs on the satin ribbon surrounding her gift box and raises its sturdy lid. Nestled on straw inside are two jars of La Mer, several samples of Neuhaus chocolates, two of her favorite bath salts, and various high end household items. The inside lid of the box proclaims “Welcome to Walton’s Circle!” in elegant script. At the center of the box is an creamy envelope engraved with her name. Michelle opens it, and just as Sheila mentioned, a URL and code is included, along with simple instructions.

    What the hell, may as well see what comes of it. Turning to her laptop, Michelle heads to Walmart.com – for the first time in her life – and enters her code. Almost instantaneously a dialog pops up, informing her that her report is ready. Would she like to review it?

    Why not?! Michelle clicks “Yes” and up comes a side-by-side comparison of her entire Amazon purchase history. She notices that during the early years – roughly until 2006 –  there’s not much on the Walmart side of the report. But after that the match rates start to climb, and for the past five or so years, the report shows that 98 percent of the stuff she’s bought at Amazon was also available on Walmart.com. Each purchase has a link, and she tries out one – a chaise lounge she purchased in 2014 (gotta love Prime shipping!). Turns out Walmart didn’t have that exact match, but the report shows several similar alternatives, any of which would have worked. Cool.

    Michelle’s eye is drawn to the bottom of the report, to a large sum in red that shows the difference in price between her Amazon purchases and their Walmart doppelgangers.

    $2,700.

    Holy….cow. Michelle can’t believe it. Is this for real? Anticipating the question, Walmart’s report software pops up a dialog. “Would you like to validate your token’s report using TokenTrust? We’ll pay all fees.” Michelle clicks yes, and a TokenTrust site appears. The site shows a “working” icon for several seconds, then returns a simple message: “TokenTrust has reviewed Walmarts claims and your Amazon token, and validates the accuracy of this report.”

    Michelle is sold. Next to the $2700 figure at the bottom of her report is one line of text, and a “Go” link. “Would you like to become a founding member of the Walton Circle? We’ll take care of all your transition needs, and Sheila, who’ve you already met, will be named as your personal shopping concierge.”

    Michelle hovers momentarily over “Go.” What the hell, she thinks. I can always switch back. And with one click, Michelle does something she never thought she would: She becomes a Walmart customer.

    Satisfied, she turns her eyes back to her work. Several new emails have collected in her inbox. One is from Doug McMillon, welcoming her to Walton’s Circle. As she hovers over it, mail refreshes, and a new message piles on top of McMillon’s.

    Holy shit. Did Jeff Bezos really just email me?! 

    ***

    Is such a scenario even possible? Well, that question remains unexplored, at least for now. As I wrote in my last post, I’m not certain Amazon’s terms of service would allow for such an information exchange, though it’s currently possible to download exactly the information Walmart would need to stand up such a service. (I’ve done it, it takes a bit of poking around, but it’s very cool to see.) The real question is this: Would Walmart spend the thousands of dollars required to make this kind of customer acquisition possible?

    I don’t see why not. A high end e-commerce customer spends more than ten thousand dollars a year online. Over a lifetime, this customer is worth thousands of dollars in profit for a well-run commerce site like Walmart. The most difficult and expensive problem for any brand is switching costs – it’s at the core of the most sophisticated marketing efforts in the world – Ford spends hundreds of millions each year trying to  convince customers to switch from GM, Verizon spends equal amounts in an effort to pull customers from AT&T. Over the past five years, Walmart has watched Amazon run away with its customers online, even as it has spent billions building a competitive commerce offering. What Walmart needs are “point to” customers – the kind of people who not only become profitable lifelong buyers, but who will tell hundreds of friends, family members and colleagues about their gift box experience.

    But to get there, Walmart needs that Amazon token. Wouldn’t it be cool if such a thing actually existed?

     
  • feedwordpress 13:44:36 on 2018/10/10 Permalink
    Tags: Amazon, , , , , , merchandising, shopping   

    Amazon And The Bridge Too Far 


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    Yesterday, I lost it over a hangnail and a two-dollar bottle of hydrogen peroxide.

    You know when a hangnail gets angry, and a tiny red ball of pain settles in for a party on the side of your finger? Well, yeah. That was me last night. My usual solution is to stick said finger into a bottle of peroxide for a good long soak. But we were out of the stuff, so, as has become my habit, I turned to Amazon. And that’s when things not only got weird, they got manipulative. Sure, I’ve been ambiently aware of Amazon’s algorithmic pricing and merchandising practices, but last night, the raw power of the company’s control over my routine purchases was on full display.

    There’s literally no company in the world with better data about online purchasing than Amazon. So studying how and where it lures a shopper through a purchase process is a worthy exercise. This particular one left a terrible taste in my mouth – one I don’t think I’ll ever shake.

    First the detail. Take a look at my search results for “Hydrogen Peroxide” on Amazon. I’ve annotated them with red text and arrows:

    As you can see, the most eye catching suggestions – the four featured panels with large images – are all Amazon brands. Big red flag. But Amazon knows sophisticated shoppers like me are suspicious of those in house suggestions, so it’s included a similar product in the space below its own brands (we’ll get to that in a minute).

    Above the featured items are ads: sponsored listings that are not Amazon brands, which means the advertiser (a small player named “Blubonic Industries”) is paying Amazon to get ahead of the company’s own promotional power. Either way, Amazon makes money. Second red flag.

    By now, I’ve decided I’m not interested in either the sponsored brands at the top, or Amazon’s four featured brands, because, well, I don’t like to be so baldly steered into buying Amazon’s stuff. Then again, before I move down to the results below, I do notice something rather amazing – Amazon’s familiar brown bottle of peroxide is really, really cheap – as in, $1.29 cheap. There’s even a helpful per oz. calculation next to the price, screaming: this shit is eight pennies an ounce cheap!

    Well, I’m almost sold, but because I hate to be directed into purchases, I’m still going to consider that similar brown bottle below, the one with the red label. Amazon knows this, of course. It’s merchandising 101 – make sure you give the consumer choices, but also, make sure the most profitable choice is presented in such a way as to win the day.

    So my eye moves down the page to check out the second bottle. It’s from Swan, a brand I’ve vaguely heard of. Then I check its price.

    Nine dollars and sixty nine cents.

    Which would you buy? After all, this is a staple, a basic, a chemical compound. And you trust Amazon to get shit right, don’t you? I mean, a buck and change – nearly nine times cheaper? What a deal!

    So…my eyes revert to  Amazon’s blue labeled bottle. I mean…it wouldn’t have a four-star plus review if it burned your skin, right? And that’s when I notice the tiny icon next to it, which looks like this:

    What’s this? Is this yet another annoying subscription service? Ever since we moved to New York, my wife and I have tried to figure out Amazon’s subscription services (Fresh? Pantry? Prime Now? Whole Foods Delivery? Who knows?!). I’m already deeply suspicious of any attempt by Amazon to lure me into paying them monthly for a service that I don’t understand.

    But…a buck twenty nine! So I click on the bottle, and the landing page is super clean, and there’s no obvious Prime Pantry mention. Plus, it turns out, that bottle from Amazon is the Whole Foods generic brand, which for whatever reason seems a bit better than a generic Amazon brand. Did I just get lucky? Maybe I can just get some super cheap chemicals delivered in a day to my door, and my annoying hangnail will be a thing of the past soon enough….Right?

    Here’s the landing page:

    Looks great, the price is amazing, but…Uh oh. I can’t get this bottle of peroxide until Sunday. By then, I’ve likely lost my finger to a flesh eating bacteria. As I feared, this bottle is nothing more than a baited fish hook for one of Amazon’s subscription offers – which I find out, will cost somewhere between five and thirteen bucks a month. I’ve signed up for Prime Pantry by mistake in the past, and it wasn’t a smooth or enjoyable experience. No thanks. I click back to the original search results. Seems to me Amazon is gaming the shipping deals.

    Well of course it is.  I’m no longer a happy Amazon customer at this point. Now I’m annoyed.

    But what’s this? If I scroll down below the $9.69 bottle, there’s another choice, also from Swan, and, it seems, exactly the same, if one is to judge just by the image (and we do judge just from the images, let’s just admit it). This one costs almost half as much as the one above it. What’s going on?! Here’s an annotated screen shot:

    As you can see, there’s a lot going on. I’ve narrowed my choice down to two non-Amazon brands. They look nearly identical. The most significant difference, at least in terms of the information provided to me by Amazon, is the price – the top bottle is nearly twice as expensive as the bottom one. But the top bottle has a major benefit: I can get it nearly immediately! The bottom one makes me wait a day. Is the wait worth four or five bucks? Hmm.

    Also confounding: The bottom bottle has its price broken out on a per ounce basis – 32 cents, exactly four times more than the 8 cents-an-ounce bottle I just looked at from Amazon’s Prime Pantry. Ouch! Now I’m really annoyed, and confused. My eyes dart back up to the $9.69 bottle. As I’ve shown with the empty red circle, there’s….no per-ounce breakdown shown by Amazon. It does tell me that this particular bottle is 32 ounces, whereas the bottom one is 16 ounces.

    But why not do the math for me? A quick calculation shows that the top bottle comes out to about 30 cents an ounce – two cents less than the bottom bottle. Why not show that fact?

    This, folks, this is algorithmic merchandising at its finest.

    Amazon knows exactly how many clicks it’s going to take for me to reach shopping fatigue. Not “on average for all shoppers,” or even “on average for each shopper who’s ever considered a bottle of hydrogen peroxide.” Amazon knows all of that, of course, but it also  knows exactly how long it takes ME to get fatigued, to enter what I like to call “fuck it” mode. As in, “fuck it, I’m tired of this bullshit, I want to get back to the rest of my life. I’m going to buy one of these bottles.”

    And because there’s no per-ounce breakdown of the 32-ounce bottle, and because that makes me suspicious of it, and because hell, who ever needs 32 ounces of hydrogen peroxide anyway, well, I’m just going to buy the $5 one.

    Ca-ching! Amazon just made a nearly seven percent markup on my purchase. It took five clicks, 15 seconds, and a vast architecture of data and algorithmic mastery to make that profit. Each and every time we purchase something on Amazon, that machinery is engaged in the background, guiding us through choices which insure the company remains the trillion dollar behemoth we know and…

    Love?

    ***

    Do you love Amazon anymore? For that matter, do you love Facebook, Google, or Twitter? Interactions like the one I’ve detailed above are starting to chip away at that presumption. Personally, I’ve gone from cheerleader to skeptic over the past few years, and I’m broken out into full-blown critic over the last twelve months. I no longer trust Amazon to have my best interests at heart. I’ve lost any trust that Facebook or Twitter can deliver me a public square representative of my democracy. I’ve given up on Google delivering me search results that are truly “organic.” And YouTube? Point solution, at best. I can’t possibly trust the autoplay feature to do much more than waste my time.

    What’s happened to our beloved tech icons, and what are the implications of this lost trust? In future posts, I plan on thinking out loud on that topic. I hope you’ll join me. In the meantime, I think I’ll stroll down to CVS and buy myself another bottle of hydrogen peroxide. By the time Amazon’s comes, I’m sure my hangnail will be a distant memory. But that taste in my mouth? That’s going to remain.

     
  • feedwordpress 23:59:30 on 2018/06/01 Permalink
    Tags: Amazon, , , , crypto, , , , , , , , , , , , world wide web   

    Do We Want A Society Built On The Architecture of Dumb Terminals? 


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    The post Do We Want A Society Built On The Architecture of Dumb Terminals? appeared first on John Battelle's Search Blog.

    God, “innovation.” First banalized by undereducated entrepreneurs in the oughts, then ground to pablum by corporate grammarians over the past decade, “innovation” – at least when applied to business – deserves an unheralded etymological death.

    But.

    This will be a post about innovation. However, whenever I feel the need to peck that insipid word into my keyboard, I’m going to use some variant of the verb “to flourish” instead. Blame Nobel laureate Edmond Phelps for this: I recently read his Mass Flourishing, which outlines the decline of western capitalism, and I find its titular terminology far less annoying.

    So flourishing it will be.

    In his 2013 work, Phelps (who received the 2006 Nobel in economics) credits mass participation in a process of innovation (sorry, there’s that word again) as central to mass flourishing, and further argues – with plenty of economic statistics to back him up – that it’s been more than a full generation since we’ve seen mass flourishing in any society. He writes:

    …prosperity on a national scale—mass flourishing—comes from broad involvement of people in the processes of innovation: the conception, development, and spread of new methods and products—indigenous innovation down to the grassroots. This dynamism may be narrowed or weakened by institutions arising from imperfect understanding or competing objectives. But institutions alone cannot create it. Broad dynamism must be fueled by the right values and not too diluted by other values.

    Phelps argues the last “mass flourishing” economy was the 1960s in the United States (with a brief but doomed resurgence during the first years of the open web…but that promise went unfulfilled). And he warns that “nations unaware of how their prosperity is generated may take steps that cost them much of their dynamism.” Phelps further warns of a new kind of corporatism, a “techno nationalism” that blends state actors with corporate interests eager to collude with the state to cement market advantage (think Double Irish with a Dutch Sandwich).

    These warnings were proffered largely before our current debate about the role of the tech giants now so dominant in our society. But it sets an interesting context and raises important questions. What happens, for instance, when large corporations capture the regulatory framework of a nation and lock in their current market dominance (and, in the case of Big Tech, their policies around data use?).

    I began this post with Phelps to make a point: The rise of massive data monopolies in nearly every aspect of our society is not only choking off shared prosperity, it’s also blinkered our shared vision for the kind of future we could possibly inhabit, if only we architect our society to enable it. But to imagine a different kind of future, we first have to examine the present we inhabit.

    The Social Architecture of Data 

    I use the term “architecture” intentionally, it’s been front of mind for several reasons. Perhaps the most difficult thing for any society to do is to share a vision of the future, one that a majority might agree upon. Envisioning the future of a complex living system – a city, a corporation, a nation – is challenging work, work we usually outsource to trusted institutions like government, religions, or McKinsey (half joking…).

    But in the past few decades, something has changed when it comes to society’s future vision. Digital technology became synonymous with “the future,” and along the way, we outsourced that future to the most successful corporations creating digital technology. Everything of value in our society is being transformed into data, and extraordinary corporations have risen which refine that data into insight, knowledge, and ultimately economic power. Driven as they are by this core commodity of data, these companies have acted to cement their control over it.

    This is not unusual economic behavior, in fact, it’s quite predictable. So predictable, in fact, that it’s developed its own structure – an architecture, if you will, of how data is managed in today’s information society. I’ve a hypothesis about this architecture – unproven at this point (as all are) – but one I strongly suspect is accurate. Here’s how it might look on a whiteboard:

    We “users” deliver raw data to a service provider, like Facebook or Google, which then captures, refines, processes, and delivers that data back as services to us. The social contract we make is captured in these services’ Terms of Services – we may “own” the data, but for all intents and purposes, the power over that information rests with the platform. The user doesn’t have a lot of creative license to do much with that data he or she “owns” – it lives on the platform, and the platform controls what can be done with it.

    Now, if this sounds familiar, you’re likely a student of early computing architectures. Back before the PC revolution, most data, refined or not, lived on a centralized platform known as a mainframe. Nearly all data storage and compute processing occurred on the mainframe. Applications and services were broadcast from the mainframe back to “dumb terminals,” in front of which early knowledge workers toiled. Here’s a graph of that early mainframe architecture:

     

    This mainframe architecture had many drawbacks – a central point of failure chief among them, but perhaps its most damning characteristic was its hierarchical, top down architecture. From an user’s point of view, all the power resided at the center. This was great if you ran IT at a large corporation, but suffice to say the mainframe architecture didn’t encourage creativity or a flourishing culture.

    The mainframe architecture was supplanted over time with a “client server” architecture, where processing power migrated from the center to the edge, or node. This was due in large part to the rise the networked personal computer (servers were used  for storing services or databases of information too large to fit on PCs). Because they put processing power and data storage into the hands of the user, PCs became synonymous with a massive increase in productivity and creativity (Steve Jobs called them “bicycles for the mind.”) With the PC revolution power transferred from the “platform” to the user – a major architectural shift.

    The rise of networked personal computers became the seedbed for the world wide web, which had its own revolutionary architecture. I won’t trace it here (many good books exist on the topic), but suffice to say the core principle of the early web’s architecture was its distributed nature. Data was packetized and distributed independent of where (or how) it might be processed. As more and more “web servers” came online, each capable of processing data as well as distributing it, the web became a tangled, hot mess of interoperable computing resources. What mattered wasn’t the pipes or the journey of the data, but the service created or experienced by the user at the point of that service delivery, which in the early days was of course a browser window (later on, those points of delivery became smartphone apps and more).

    If you were to attempt to map the social architecture of data in the early web, your map would look a lot like the night sky – hundreds of millions of dots scattered in various constellations across the sky, each representing a node where data might be shared, processed, and distributed. In those early days the ethos of the web was that data should be widely shared between consenting parties so it might be “mixed and mashed” so as to create new products and services. There was no “mainframe in the sky” anymore – it seemed everyone on the web had equal and open opportunities to create and exchange value.

    This is why the late 1990s through mid oughts were a heady time in the web world – nearly any idea could be tried out, and as the web evolved into a more robust set of standards, one could be forgiven for presuming that the open, distributed nature of the web would inform its essential social architecture.

    But as web-based companies began to understand the true value of controlling vast amounts of data, that dream began to fade. As we grew addicted to some of the most revelatory web services – first Google search, then Amazon commerce, then Facebook’s social dopamine – those companies began to centralize their data and processing policies, to the point where we are now: Fearing these giants’ power over us, even as we love their products and services.

    An Argument for Mass Flourishing

    So where does that leave us if we wish to heed the concerns of Professor Phelps? Well, let’s not forget his admonition: “nations unaware of how their prosperity is generated may take steps that cost them much of their dynamism.” My hypothesis is simply this: Adopting a mainframe architecture for our most important data – our intentions (Google), our purchases (Amazon), our communications and social relationships (Facebook) – is not only insane, it’s also massively deprecative of future innovation (damn, sorry, but sometimes the word fits). In Facebook, Tear Down This Wall, I argued:

    … it’s impossible for one company to fabricate reality for billions of individuals independent of the interconnected experiences and relationships that exist outside of that fabricated reality. It’s an utterly brittle product model, and it’s doomed to fail. Banning third party agents from engaging with Facebook’s platform insures that the only information that will inform Facebook will be derived from and/or controlled by Facebook itself. That kind of ecosystem will ultimately collapse on itself. No single entity can manage such complexity. It presumes a God complex.

    So what might be a better architecture? I hinted at it in the same post:

    Facebook should commit itself to being an open and neutral platform for the exchange of value across not only its own services, but every service in the world.

    In other words, free the data, and let the user decide what do to with it. I know how utterly ridiculous this sounds, in particular to anyone reading from Facebook proper, but I am convinced that this is the only architecture for data that will allow a massively flourishing society.

    Now this concept has its own terminology: Data portability.  And this very concept is enshrined in the EU’s GDPR legislation, which took effect one week ago. However, there’s data portability, and then there’s flourishing data portability – and the difference between the two really matters. The GDPR applies only to data that a user *gives* to a service, not data *co-created* with that service. You also can’t gather any insights the service may have inferred about you based on the data you either gave or co-created with it. Not to mention, none of that data is exported in a machine readable fashion, essentially limiting its utility.

    But imagine if that weren’t the case. Imagine instead you can download your own Facebook or Amazon “token,” a magic data coin containing not only all the useful data and insights about you, but a control panel that allows you to set and revoke permissions around that data for any context. You might pass your Amazon token to Walmart, set its permissions to “view purchase history” and ask Walmart to determine how much money it might have saved you had you purchased those items on Walmart’s service instead of Amazon. You might pass your Facebook token to Google, set the permissions to compare your social graph with others across Google’s network, and then ask Google to show you search results based on your social relationships. You might pass your Google token to a startup that already has your genome and your health history, and ask it to munge the two in case your 20-year history of searching might infer some insights into your health outcomes.

    This might seem like a parlor game, but this is the kind of parlor game that could unleash an explosion of new use cases for data, new startups, new jobs, and new economic value. Tokens would (and must) have auditing, trust, value exchange, and the like built in (I tried to write this entire post without mentioned blockchain, but there, I just did it), but presuming they did, imagine what might be built if we truly set the data free, and instead of outsourcing its power and control to massive platforms, we took that power and control and, just like we did with the PC and the web, pushed it to the edge, to the node…to ourselves?

    I rather like the sound of that, and I suspect Mssr. Phelps would as well. Now, how might we get there? I’ve no idea, but exploring possible paths certainly sounds like an interesting project…

    The post Do We Want A Society Built On The Architecture of Dumb Terminals? appeared first on John Battelle's Search Blog.

     
  • feedwordpress 13:54:54 on 2017/09/28 Permalink
    Tags: Amazon, , , , ,   

    Amazon’s HQ2 Isn’t a Headquarters. So What Is It? 


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    The post Amazon’s HQ2 Isn’t a Headquarters. So What Is It? appeared first on John Battelle's Search Blog.

    Crossposted from NewCo Shift.

    Everyone’s favorite parlor game is “where will Amazon go?” Better to ask: Why does Amazon needs a second headquarters in the first place?

    It’s the future! Rendering of Amazon’s new Seattle HQ. The first and original one. 

    Why does Amazon want a new headquarters? Peruse the company’s RFP, and the company is frustratingly vague on the question. “Due to the successful growth of the Company,” Amazon says of itself in the royal third person, “it now requires a second corporate headquarters in North America.”

    It requires”?

    Is this a request for bulk discounts on toner ink? Did Jeff Bezos outsource this momentous and extremely public communication to his purchasing department? Is there really no more room in Seattle?

    So…Why? Why is Amazon doing this? If I were one of the hundreds of Mayors and local civic boosters huddling in meeting rooms around North America, that would be my first — and pretty much my only question. After all, if you don’t know why Amazon is looking for a “second headquarters,” then your response to their RFP is going to end up pretty rudderless. If Amazon’s true reason for another HQ boils down to, say, Latin American expansion, then Chicago, Toronto, and Philly should pretty much pack in in, no?

    While the RFP is comprehensive in requirements (transportation networks, nearby international airports, sustainable office space, etc.), it nevertheless demonstrates a stunning lack of vision — the very vision that once defined “startups” like Amazon. The current accepted mythology about our fabled tech companies, those lions of our present economic theatre, is that they are fonts of vision — driven not just by profit, but by outsized missions to change the world, and to make it better. So what mission, exactly, will this new headquarter actually be charged with? Can anyone answer that? Absent any serious data, the default becomes “to expand Amazon.” And what, exactly, might that mean?

    Amazon’s lists of current and projected businesses include e-commerce (its core), entertainment, home automation, cloud services, white label products, logistics and delivery, and any number of adjacent businesses yet to be scaled. It also harbors serious international expansion plans (one would presume). Any and all of these businesses might inform the “why” of its Bachelor-like RFP. But nowhere in the RFP does the company deliver a clue as to whether these factors play into its decision.

    I have a theory about why Amazon issued such a vision-free RFP — and why the world responded with a parlor game instead of a serious inquiry as to the motivations of “the most valuable company in the world.” And that theory comes down to this: Amazon needs a place to put workers that are secondary but necessary — back office service, lower level engineering talent, accounting, compliance, administrative support. It will move those support positions to the city that has the cheapest cost per seat, and consolidate its “high value” workers in Seattle, where such talent is already significantly concentrated.

    Put another way, “HQ2” isn’t a headquarters at all. But calling it one insures a lot more attention, a lot more concessions, and a lot more positive PR. Maybe Amazon doesn’t have an answer to the question, and is hoping its call for proposals will deliver it a fresh new vision for the future. But I doubt it.

    I’d love to be wrong, but absent any other vision the most likely reasoning behind this beauty pageant boils down to money. It may sound like the cynical logic of a rapacious capitalist — but more often than not, that’s what usually drives business in the first place.

    The post Amazon’s HQ2 Isn’t a Headquarters. So What Is It? appeared first on John Battelle's Search Blog.

     
  • feedwordpress 22:11:05 on 2017/05/17 Permalink
    Tags: Amazon, , , , , , ,   

    The Internet Big Five Is Now The World’s Big Five 


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    The post The Internet Big Five Is Now The World’s Big Five appeared first on John Battelle's Search Blog.

    Back in December of 2011, I wrote a piece I called “The Internet Big Five,” in which I noted what seemed a significant trend: Apple, Microsoft, Google, Amazon, and Facebook were becoming the most important companies not only in the technology world, but in the world at large. At that point, Facebook had not yet gone public, but I thought it would be interesting to compare each of them by various metrics, including market cap (Facebook’s was private at the time, but widely reported). Here’s the original chart:

    I called it “Draft 1” because I had a sense there was a franchise of sorts brewing. I had no idea. I started to chart out the various strengths and relative weaknesses of the Big Five, but work on NewCo shifted my focus for a spell.

    Three years later, in 2014, I updated the chart. The growth in market cap was staggering:

    Nearly a trillion dollars in net market cap growth in less than three years! My goodness!

    But since 2014, the Big Five have rapidly accelerated their growth. Let’s look at the same chart, updated to today:

    Ummm..HOLY SHIT! Almost two trillion dollars of market cap added in less than seven years. And the “Big Five” have become, with a few limited incursions by Berkshire Hathaway, the five largest public companies in the US. This has been noted by just about everyone lately, including The Atlantic, which just employed the very talented Alexis Madrigal to pay attention to them on a regular basis. In his maiden piece, Madrigal notes that the open, utopian world of the web just ten years ago (Web 2, remember that? I certainly do…) has lost, bigly, to a world of walled-garden market cap monsters.

    I agree and disagree. Peter Thiel is fond of saying that the best companies are monopolists by nature, and his predictions seem to be coming true. But monopolies grow old, fray, and usually fail to benefit society over time. There’s a crisis of social responsibility and leadership looming for the Big Five — they’ve got all the power, now it’s time for them to face their responsibility. I’ll be writing much more about that in coming weeks and months. As I’ve said elsewhere, in a world where our politics has devolved to bomb throwing and sideshows, we must expect our businesses — in particular our most valuable ones — to lead.

    The post The Internet Big Five Is Now The World’s Big Five appeared first on John Battelle's Search Blog.

     
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