Tagged: essays Toggle Comment Threads | Keyboard Shortcuts

  • feedwordpress 14:40:18 on 2018/09/18 Permalink
    Tags: essays, , ,   

    Dear Marc: Please, *Do* Get Involved 

    The Los Angeles Times was the first newspaper I ever read – I even attended a grammar school named for its founding family (the Chandlers). Later in life I worked at the Times for a summer – and found even back then, the great brand had begun to lose its way.

    I began reading The Atlantic as a high schooler in the early 1980s, and in college I dreamt of writing long form narratives for its editors. In graduate school, I even started a publication modeled on The Atlantic‘s brand – I called it The Pacific. My big idea: The west coast was a huge story in desperate need of high-quality narrative journalism. (Yes, this was before Wired.)

    I toured The Washington Post as a teenager, and saw the desks where Bernstein and Woodward brought down a corrupt president. I met Katherine Graham once, at a conference I hosted, and I remain star struck by the institution she built to this day.

    And every seven days, for more than five decades, Time magazine came to my parents’ home, defining the American zeitgeist and smartly summarizing what mattered in public discourse.

    Now all four of my childhood icons are owned by billionaires who made their fortunes in technology. History may not repeat, but it certainly rhymes. During the Gilded Age, our last great era of unbridled income inequality, many of America’s greatest journalistic institutions were owned by wealthy industrialists. William Randolph Hearst was a mining magnate. Joseph Pulitzer came from a wealthy European merchant family, though he came to the US broke and epitomized the American “self made man.” Andre Carnegie, Jay Gould, Cornelius Vanderbilt Jr., and Henry Flagler all dabbled in newspapers, with a healthy side of politics, which drove nearly all of American publishing during the Gilded Age.

    Which brings us to the Benioffs, and to Time. This week’s announcement struck all the expected notes – “The Benioffs will hold TIME as a family investment,” “TIME is a treasure trove of the world’s history and culture,” “Lynne and I will take on no operational responsibility for TIME, and look only to be stewards of this historic and iconic brand.”

    Well to that, I say poppycock. Time needs fixing, not benign stewardship. While it may be appropriate and politic to proclaim a hands-off approach, the flagship brand of the former Time Inc. empire could use a strong dose of what the Benioffs have to offer. Here’s my hot take on why and how:

    • Don’t play down the middle. What the United States needs right now is a voice of reason, of strength, of post-Enlightenment thinking. Not a safe, bland version of “on the one hand, on the other hand” journalism. As Benioff well knows, politics is now the biggest driver of attention in the land, and taking a principled stand matters more than ever.
    • Learn from Bezos. Sure, the richest man in the world didn’t mess with the editorial side of the house, but then again, he already had an extraordinary leader in Marty Baron at the helm. But Bezos did completely shift the business model at the Post, implementing entirely new approaches to, well, pretty much every operating model in the building. New revenue leadership, new software platforms and processes, even a new SaaS business line. He thoroughly modernized the place, and if ever a place needed the same, it’s Time.
    • Invest in the product – editorial. But thoughtfully.  First and foremost, the Benioffs should force the Time team to answer the most important question of any consumer brand: Differentiation that demands a premium. Why should Time earn someone’s attention (and money)? What makes the publication unique? What does its brand stand for, beyond history and a red band around the cover? What mission is it on? If anyone understands these issues, it’s Marc and Lynne Benioff. Don’t hold back on forcing this difficult conversation – including on staffing and leadership (I’ve no bone to pick with anyone there, BTW). American journalism needs it, now. I can imagine a Time magazine where the most talented and elite commentators debate the issues of our day. And what issues they truly are! But to draw them, the product must sing, and it must also pay. Abolish the practice of paying a pittance for an argument well rendered. It’s time.
    • Related, rethink the print business. Print isn’t dead, but it needs a radical rethink. There isn’t a definitive weekly journal of sensible political and social discourse in America, and there really should be. The New Yorker is comfortably highbrow, US News is a college review site, Newsweek is rudderless. Time has a huge opportunity, but as it stands, it plays to the middle far too much, and online, it tries to be everything to nobody. Perhaps the hardest, but most important thing anyone can do at a struggling print magazine is to cut circulation (the base number of readers) and find its truly passionate brand advocates. The company already did this a year ago, but it may not have gone far enough. Junk circulation is rife in the magazine business. It’s also rampant online, which leads to…
    • Please, fix the website. A  site that has a nearly 10-month out of date copyright notice at the bottom is not run like a lean product shop. Time online is a poster child for compromised business decisions driven entirely by acquiring junk audience (did you know that Time has 60mm uniques? Yeah, neither do they). Every single page on Time.com is littered with half a dozen or more competing display banners. The place stinks of desperate autoplay video, programmatic pharmaceutical come ons, and tawdry link bait (there are literally THREE instances of Outbrain-like junk on each article page. THREE!). Fixing this economic and product mess requires deep pockets and strong product imagination. The Benioffs have both. Invent (and or copy) new online models where the advertising adds value, where marketers would be proud to support the product. I’ve spoken to dozens of senior marketers looking to lean into high-quality news analysis. They’ve got very little to support at present. Time could change that.
    • Move out of Time Inc’s headquarters. Like, this week. The original Time Inc. HQ were stultifying and redolent with failure, but even the new digs downtown bear the albatross of past glories. It’s soul crushing. As an independent brand, Time needs a space that reclaims its pioneer spirt, and encourages its staff to rethink everything. Move to Nomad, the Flatiron, West Chelsea – anywhere but a skyscraper in the financial district.
    • Finally, leverage and rethink the cover. One of the largest single losses in the shift from analog to digital publishing was the loss of covers – the album cover (and its attendant liner notes), the book cover (and its attendant social signaling), and the magazine cover (and its attendant declarative power). The magazine cover is social artifact, editorial arbiter, cultural convener. The digital world still lacks the analog cover’s power. Time should make it a priority to invent its successor. Lock ten smart humans in a room full of whiteboards and don’t let them out till they have a dozen or more good ideas. Then test and learn – the answer is in there somewhere. The world needs editorial convening more than ever.

    There’s so much more, but I didn’t actually set out to write a post about how to fix Time  – I was merely interested in the historical allegories of successful industrialists who turned to publishing as they consolidated their legacies. In an interview with the New York Times this week, Benioff claimed his purchase of Time was aligned with his mission of “impact investing,” and that he was not going to be operationally involved. Well, Marc, if you truly want to have an impact, I beg to differ: Please do get involved, and the sooner the better.

     

     
  • feedwordpress 17:53:30 on 2018/07/22 Permalink
    Tags: , , , essays, , , , ,   

    The Tragedy of the Data Commons 

    Before, and after?

    A theme of my writing over the past ten or so years has been the role of data in society. I tend to frame that role anthropologically: How have we adapted to this new element in our society? What tools and social structures have we created in response to its emergence as a currency in our world? How have power structures shifted as a result?

    Increasingly, I’ve been worrying a hypothesis: Like a city built over generations without central planning or consideration for much more than fundamental capitalistic values, we’ve architected an ecosystem around data that is not only dysfunctional, it’s possibly antithetical to the core values of democratic society. Houston, it seems, we really do have a problem.

    I know, it’s been a while since I’ve written here, and most of my recent stuff has focused on Facebook. I’ve been on the road the entire summer, and preparing to move from the Bay area to NYC ( that’s another post). But before you roll your eyes in anticipation of yet another Facebook rant, no, this post is not about Facebook, despite that company’s continued inability to govern itself.

    No, this post is about the business of health insurance.

    Last week ProPublica published a story titled Health Insurers Are Vacuuming Up Details About You — And It Could Raise Your Rates.  It’s the second in an ongoing series the investigative unit is doing on the role of data in healthcare. I’ve been watching this story develop for years, and ProPublica’s piece does a nice job of framing the issue. It envisions  “a future in which everything you do — the things you buy, the food you eat, the time you spend watching TV — may help determine how much you pay for health insurance.”  Unsurprisingly, the health industry has  developed an insatiable appetite for personal data about the individuals it covers. Over the past decade or so, all of our quotidian activities (and far more) have been turned into data, and that data can and is being sold to the insurance industry:

    “The companies are tracking your race, education level, TV habits, marital status, net worth. They’re collecting what you post on social media, whether you’re behind on your bills, what you order online. Then they feed this information into complicated computer algorithms that spit out predictions about how much your health care could cost them.”

    HIPPA, the regulatory framework governing health information in the United States, only covers and protects medical data – not search histories, streaming usage, or grocery loyalty data. But if you think your search, video, and food choices aren’t related to health, well, let’s just say your insurance company begs to differ.

    Lest we dive into a rabbit hole about the corrosive combination of healthcare profit margins with personal data (ProPublica’s story does a fine job of that anyway), I want to pull back and think about what’s really going on here.

    The Tragedy of the Commons

    One of the most fundamental tensions in an open society is the potential misuse of resources held “in common” – resources to which all individuals have access. Garrett Hardin’s 1968 essay on the subject, “The Tragedy of the Commons,” explores this tension, concluding that the problem of human overpopulation has no technical solution. (A technical solution is one that does not require a shift in human values or morality (IE, a political solution), but rather can be fixed by application of science and/or engineering.) Hardin’s essay has become one of the most cited works in social science – the tragedy of the commons is a facile concept that applies to countless problems across society.

    In the essay, Hardin employs a simple example of a common grazing pasture, open to all who own livestock. The pasture, of course, can only support a finite number of cattle. But as Hardin argues, cattle owners are financially motivated to graze as many cattle as they possibly can, driving the number of grass munchers beyond the land’s capacity, ultimately destroying the commons. “Freedom in a commons brings ruin to all,” he concludes, delivering an intellectual middle finger to Smith’s “invisible hand” in the process.

    So what does this have to do with healthcare, data, and the insurance industry? Well, consider how the insurance industry prices its policies. Insurance has always been a data-driven business – it’s driven by actuarial risk assessment, a statistical method that predicts the probability of a certain event happening. Creating and refining these risk assessments lies at the heart of the insurance industry, and until recently, the amount of data informing actuarial models has been staggeringly slight. Age, location, and tobacco use are pretty much how policies are priced under Obamacare, for example. Given this paucity, one might argue that it’s utterly a *good* thing that the insurance industry is beefing up its databases. Right?

    Perhaps not. When a population is aggregated on high-level data points like age and location, we’re essentially being judged on a simple shared commons – all 18 year olds who live in Los Angeles are being treated essentially the same, regardless if one person has a lurking gene for cancer and another will live without health complications for decades. In essence, we’re sharing the load of public health in common – evening out the societal costs in the process.

    But once the system can discriminate on a multitude of data points, the commons collapses,  devolving into a system rewarding whoever has the most profitable profile. That 18-year old with flawless genes, the right zip code, an enviable inheritance, and all the right social media habits will pay next to nothing for health insurance. But the 18 year old with a mutated BRCA1 gene, a poor zip code, and a proclivity to sit around eating Pringles while playing Fortnite? That teenager is not going to be able to afford health insurance.

    Put another way, adding personalized data to the insurance commons destroys the fabric of that commons. Healthcare has been resistant to this force until recently, but we’re already seeing the same forces at work in other aspects of our previously shared public goods.

    A public good, to review, is defined as “a commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization.” A good example is public transportation. The rise of data-driven services like Uber and Lyft have been a boon for anyone who can afford these services, but the unforeseen externalities are disastrous for the public good. Ridership, and therefore revenue, falls for public transportation systems, which fall into a spiral of neglect and decay. Our public streets become clogged with circling rideshare drivers, roadway maintenance costs skyrocket, and – perhaps most perniciously – we become a society of individuals who forget how to interact with each other in public spaces like buses, subways, and trolley cars.

    Once you start to think about public goods in this way, you start to see the data-driven erosion of the public good everywhere. Our public square, where we debate political and social issues, has become 2.2 billion data-driven Truman Shows, to paraphrase social media critic Roger McNamee. Retail outlets, where we once interacted with our fellow citizens, are now inhabited by armies of Taskrabbits and Instacarters. Public education is hollowed out by data-driven personalized learning startups like Alt School, Khan Academy, or, let’s face it, YouTube how to videos.

    We’re facing a crisis of the commons – of the public spaces we once held as fundamental to the functioning of our democratic society. And we have data-driven capitalism to blame for it.

    Now, before you conclude that Battelle has become a neo-luddite, know that I remain a massive fan of data-driven business. However, if we fail to re-architect the core framework of how data flows through society – if we continue to favor the rights of corporations to determine how value flows to individuals absent the balancing weight of the public commons – we’re heading down a path of social ruin. ProPublica’s warning on health insurance is proof that the problem is not limited to Facebook alone. It is a problem across our entire society. It’s time we woke up to it.

    So what do we do about it? That’ll be the focus of a lot of my writing going forward.  As Hardin writes presciently in his original article, “It is when the hidden decisions are made explicit that the arguments begin. The problem for the years ahead is to work out an acceptable theory of weighting.” In the case of data-driven decisioning, we can no longer outsource that work to private corporations with lofty sounding mission statements, whether they be in healthcare, insurance, social media, ride sharing, or e-commerce.

     

     

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

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

    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 19:30:31 on 2018/05/25 Permalink
    Tags: , , , essays, GDPR, , , ,   

    GDPR Ain’t Helping Anyone In The Innovation Economy 

    The post GDPR Ain’t Helping Anyone In The Innovation Economy appeared first on John Battelle's Search Blog.

    (image)

    It’s somehow fitting that today, May 25th, marks my return to writing here on Searchblog, after a long absence driven in large part by the launch of NewCo Shift as a publication on Medium more than two years ago. Since then Medium has deprecated its support for publications (and abandoned its original advertising model), and I’ve soured even more than usual on “platforms,” whether they be well intentioned (as I believe Medium is) or indifferent and fundamentally bad for publishing (as I believe Facebook to be).

    So when I finally sat down to write something today, an ingrained but rusty habit re-emerged. For the past two years I’ve opened a clean, white page in Medium to write an essay, but today I find myself once again coding sentences into the backend of my WordPress site.

    Searchblog has been active for 15 years – nearly forever in Internet time. It looks weary and crusty and overgrown, but it still stands upright, and soon it’ll be getting a total rebuild, thanks to the folks at WordPress. I’ll also be moving NewCo Shift to a WordPress site – we’ll keep our presence on Medium mainly as a distribution point, which is pretty much all “platforms” are good for as it relates to publishers, in my opinion.

    So why is today a fitting day to return to the open web as my main writing outlet? Well, May 25th is the day the European Union’s General Data Protection Regulation (GDPR) goes into effect. It’s more likely than not that any reader of mine already knows all about GDPR, but for those who don’t, it’s the most significant new framework for data regulation in recent history. Not only does every company that does business with an EU citizen have to comply with GDPR, but most major Internet companies (like Google, Facebook, etc) have already announced they intend to export the “spirit” of GDPR to all of their customers, regardless of their physical location. Given that most governments still don’t know how to think about data as a social or legal asset, GDPR is likely the most important new social contract between consumers, business, and government in the Internet’s history. And to avoid burying the lead, I think it stinks for nearly all Internet companies, save the biggest ones.

    That’s a pretty sweeping statement, and I’m not prepared to entirely defend it today, but I do want to explain why I’ve come to this conclusion. Before I do, however, it’s worth laying out the fundamental principles driving GDPR.

    First and foremost, the legislation is a response to what many call “surveillance capitalism,” a business model driven in large part (but not entirely) by the rise of digital marketing. The grievance is familiar: Corporations and governments are collecting too much data about consumers and citizens, often without our express consent.  Our privacy and our “right to be left alone” are in peril. While we’ve collectively wrung our hands about this for years (I started thinking about “the Database of Intentions” back in 2001, and I offered a “Data Bill of Rights” back in 2007), it was Europe, with its particular history and sensitivities, which finally took significant and definitive action.

    While surveillance capitalism is best understood as a living system – an ecosystem made up of many different actors – there are essentially three main players when it comes to collecting and leveraging personal data. First are the Internet giants – companies like Amazon, Google, Netflix and Facebook. These companies are beloved by most consumers, and are driven almost entirely by their ability to turn the actions of their customers into data that they leverage at scale to feed their business models. These companies are best understood as “At Scale First Parties” – they have a direct relationship with their customers, and because we depend on their services, they can easily acquire consent from us to exploit our data. Ben Thompson calls these players “aggregators” – they’ve aggregated powerful first-party relationships with hundreds of millions or even billions of consumers.

    The second group are the thousands of adtech players, most notably visualized in the various Lumascapes. These are companies that have grown up in the tangled, mostly open mess of the World Wide Web, mainly in the service of the digital advertising business. They collect data on consumers’ behaviors across the Internet and sell that data to marketers in an astonishingly varied and complex ways. Most of these companies have no “first party” relationship to consumers, instead they are “third parties” – they collect their data by securing relationships with sub-scale first parties like publishers and app makers. This entire ecosystem lives in an uneasy and increasingly weak position relative to the At Scale First Parties like Google and Facebook, who have inarguably consolidated power over the digital advertising marketplace.

    Now, some say that companies such as Netflix, Amazon and Apple are not driven by an advertising model, and therefore are free of the negative externalities incumbent to players like Facebook and Google. To this argument I gently remind the reader: All at scale “first party” companies leverage personal data to drive their business, regardless of whether they have “advertising” as their core revenue stream. And there are plenty of externalities, whether positive or negative, that arise when companies use data, processing power, and algorithms to determine what you might and might not experience through their services.

    The third major player in all of this, of course, are governments. Governments collect a shit ton of data about their citizens, but despite our fantasies about the US intelligence apparatus, they’re not nearly as good at exploiting that data as are the first and third party corporate players. In fact, most governments rely heavily on corporate players to make sense of the data they control. That interplay is a story into itself, and I’m sure I’ll get into it at a later date. Suffice to say that governments, particularly democratic governments, operate in a highly regulated environment when it comes to how they can use their citizens’ data.

    But until recently, first and third party corporate entities have had pretty much free reign to do whatever they want with our data. Driven in large part by the United States’ philosophy of “hands off the Internet” – a philosophy I wholeheartedly agreed with prior to the consolidation of the Internet by massive oligarchs – corporations have been regulated mainly by Terms of Services and End User License Agreements, rarely read legal contracts which give corporations sweeping control over how customer data is used.

    This all changed with GDPR, which went into effect today. There are seven principles as laid out by the regulatory body responsible for enforcement, covering fairness, usage, storage, accuracy, accountability, and so on. All of these are important, but I’m not going to get into the details in this post (it’s already getting long, after all). What really matters is this: The intent of GDPR is to protect the privacy and rights of consumers against Surveillance Capitalism. But the reality of GDPR, as with nearly all sweeping regulation, is that it favors the At Scale First Parties, who can easily gain “consent” from the billions of consumers who use their services, and it significantly threatens the sub-scale first and third party ecosystem, who have tenuous or fleeting relationships with the consumers they indirectly serve.

    Put another way: You’re quite likely to click “I Consent” or “Yes” when a GDPR form is put in between you and your next hit of Facebook dopamine. You’re utterly unlikely to do the same when a small publisher asks for your consent via what feels like a spammy email.

    An excellent example of this power imbalance in action: Facebook kicking third-party data providers off its platform in the wake of the Cambridge Analytica scandal, conveniently using GDPR as an excuse to consolidate its power as an At Scale First Party (I wrote about this at length here).  In short: because they have the scale, resources, and first party relationships in place, At Scale First Party companies can leverage GDPR to increase their power and further protect their businesses from smaller competitors. The innovation ecosystem loses, and the tech oligarchy is strengthened.

    I’ve long held that closed, walled-garden aggregators are terrible for innovation. They starve the open web of the currencies most crucial to growth: data, attention, and revenue. In fact, nearly all “innovators” on the open web are in thrall to Amazon, Facebook, Apple, and/or Google in some way or another – they depend on them for advertising services, for ecommerce, for data processing, for distribution, and/or for actual revenue.

    In another series of posts I intend to dig into what we might do about it. But now that the early returns are in, it’s clear that GDPR, while well intentioned, has already delivered a massive and unexpected externality: Instead of limiting the reach of the most powerful players operating in the world of data, it has in fact achieved the opposite effect.

    The post GDPR Ain’t Helping Anyone In The Innovation Economy appeared first on John Battelle's Search Blog.

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

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

    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.

     
c
compose new post
j
next post/next comment
k
previous post/previous comment
r
reply
e
edit
o
show/hide comments
t
go to top
l
go to login
h
show/hide help
esc
cancel