A Literacy of the Imagination

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Sorry Jason Calacanis, Google Isn't the Only Game in Town (The Amazon Principle)

Next month, I'll be delivering a keynote at TruEffect's Brand Partner Summit in Boulder, Colorado, on the topic of storytelling and advertising. I've talked a bit about the future of ads in general, in particular as a service industry.

The real context I'd like to address right here -- and what will serve as the backdrop for my talk in Boulder -- is what is actually driving the media ecosystem and respective information systems as a whole.

Right now, Google seems to have the upper hand. But this won't be the case for much longer.

As you may recall, late last year Jason Calacanis wrote a really interesting piece entitled "#googlewinseverything".  The post generated quite a lot of buzz in technology and venture circles for obvious reasons. In the piece, Calacanis provides a list of truisms about Google, saying rather emphatically:

"In truth, the 10 ‘facts’ I’ve outlined above are not mine; these are the opinions I’ve collected over the past year asking intelligent folks, ‘So what do you think about Google?’ These are the 'facts' as the people see them. Although, I haven’t found anyone who disagrees with these 10 facts – do you?"

Well, I'm not going to disagree with Calacanis per se (he has access to a lot more inside info than I do and I have lots of respect for him as an entrepreneur and investor), but I am going to challenge the list of assertions he provides within context.

Here they are, point and counterpoint.

1. No company has as many smart people as Google. -> Define 'smart'. In a 'wicked' complex world, creative intelligence (or 'EQ', emotional quotient) is just as important as quantitative or purely scientific chops.

2. No company is as ambitious as Google. -> Define 'ambitious'. Do you mean to say that a host of companies without Google's market cap or footprint aren't taking on significant cultural mores, or attempting to create massive social change (for the better) -- like Amazon?

3. No company is working on as many hard problems as Google. -> Define 'hard problems'. Defer to counterpoint #2.

4. No company makes as many big bets as Google. -> What kind of bets? With what intentions? Defer to counterpoint #2.

5. No company is willing to make as many crazy acquisitions as Google. -> Maybe so. But there are lots of companies that don't have to acquire as much in order to 'push the envelope' as it were (i.e. market ownership is not the same as market creation...). Defer to counterpoint #2, with the caveat that Amazon is buying a lot in order to strengthen its infrastructure and market positioning.

6. No company has more data than Google. -> Perhaps. But is it all the right/best kind of data? (i.e. Is it clean? Can it be parallel processed? Is it behavioral? Does it seamlessly connect to the knowledge/social graphs? Is it scalable through reference/inferential databases? etc.). Defer to counterpoint #2.

7. Few companies understand how to play the government better than Google. -> Probably the case. But in Google's position, and given backdoor surveillance (as just one example), is that a good thing? More importantly, is Google really influencing policy in the best interests of us (its users)?

8. No company has more global influence than Google. -> Right now, probably true. But that won't remain to be the case. Defer to counterpoint #2.

9. No company is as ruthlessly efficient as Google. -> From my own experience working with Google (Google 'proper' and YouTube), that's simply not true. Great company and great people, yes, but 'ruthlessly efficient', no.

10. Only one CEO is more ambitious than Google’s Larry Page.* -> Jeff Bezos?

As you might've gathered, I have a thing for Amazon. Don't get me wrong, I think the world of Google, but Amazon is a special kind of dark horse (if you can even call a company that big a 'dark horse'). This Atlantic piece, which came out right around the time Calacanis wrote his post, was a really good, balanced take on how Amazon is making seismic moves.

The basic premise -- and my firm belief -- is that any company which thinks the way Amazon does long-term, to include massive financial risks, will 'win' long-term.

Now of course, pundits will say that Google has always thought long-term. That's debatable. Per the (counter)points above, Google has thought long-term about experimental domains like artificial intelligence, quantum computing, sustainable cities and transit, but I would assert that it actually hasn't thought that way about its own $28bb+ core search/ad business.

Here's why/how.

Amazon has just about every asset in the new commerce toolkit, and it's only a matter of time before its search product catches up with its capabilities in content, storytelling (journalism especially), publishing, purchasing, production, cloud/quantum computing and network distribution (private, social and virtual).

Bottom line: with its advanced ecosystem, Amazon doesn't need ads or impressions to rule the web like Google does currently.

If you'd like more validation on this position, check out a wonderfully curated thread my friend Alex Schleber put together in early February -- he poses a great list of questions (probably better than those I did here), and there's lots of contextual grist to explore, replete with great data-points.

The 'battle' between Google and Amazon, as it were, will likely produce cultural tensions that will push all of us to think differently, consume differently, produce more thoughtfully and tell stories with more of a bent towards real social utility. As a result, I think we will see the emergence of a truly co-opetitive economic landscape, in which ecosystems amplify these tensions and create amazing new ways to improve our world.

It will be exciting to watch and participate.

PART III of FIVE EASY PIECES - The Federation of Ideas, Intent & Action #curation #socialutility #business #ThinkState

[Part I – Embracing & Cultivating The Great Divide]
[Part II – Making Meaning Out of Experience]

Knowledge must be federated (and must manage scarcity).

Knowledge federation as a convergent human technology: why is the nexus of digital collaboration and live event so powerful?

PART III of FIVE EASY PIECES - The Federation of Ideas, Intent & Action #curation #socialutility #business #ThinkState
[image by @GavinKeech]

Fred Wilson’s post December 30th highlighted some salient points around our current business landscape through the lens of digital technology. He was talking about how mobility will become an inherent function of web economics. Wilson went on to say that “scarcity is not a viable business model for the Internet”.

Truth is, scarcity isn’t going away just yet, not at least until we are able to remove the artificial barriers we have imposed with our transactional models. Scarcity has come into play as a manufactured by-product of supply and demand dynamics (think of how stock or commodities markets have evolved; speculation—not value—is the currency).

The search and publishing spaces, for one, exist in a vacuum because there is no consensual context for how or why stories or told, or, why they mean so much to business. But the fact is that most businesses have very little if any context for understanding them anyway. Much of this has to do with their organizational outlay, and much more of it has to do with the fact that we are conditioned, through institutional systems, in how we are supposed to think and act.

But here's the good news: conversations and respective behaviors can and do evolve as stories (narrative fractals, for example); the communities and discussion forums are everywhere – and metadata can tie them all together into new, dynamic intelligence frameworks.

The LBS (location-based services) space is a terrific example of where dynamic intelligence could go or be codified, provided that we don’t use the respective channels as fodder for sales indulgences or as a means to spy on the unsuspecting.

Regardless, we have lots of work to do to get to a place where dynamic intelligence is protected (think of this as the new privacy). And where intelligence isn’t protected, neither is business.

Take Google, for example; Google offers free application suites and open source services (not to mention a host of great non-profit ventures) yet revenue is confined to fixed media systems that cannot scale; it can only push its model outward (Google basically skins the same cat differently - the core search product - and then repackages it across its offerings.)

So ask yourself the important questions:

Will things like "Social Search" or "Google Instant" change the search paradigm? They can’t.

Will a quicker, faster, eCommerce engine make buying more meaningful and fun? Hardly.

Will people continue to check into places because they want to give their data away? No f---ing way.

Will more media, easier and quicker to digest, produce meaningful experiences, or compel us to make purchases? Maybe for a moment or two, but not really.

You see where this is going.

Let’s break this down into a purely business context, with the caveat that we love each and every one of these companies for different reasons... It’s just that their business models were not prepared for the inevitability of open networks.

Google considers itself a media company (not a technology company) but doesn’t quite grasp the construct that the inherent value—and scale—is in people, not technology. Case in point: Google is a highly unsocial brand.

Amazon is an eCommerce company (not a media or publishing company) that doesn’t understand the inherent value in buying is actually sharing, not making limited purchases (or purchases with unwanted thresholds).

Netflix is really an intermediary business (although it considers itself disintermediary) that does not understand the value of people as products; for one, where are all the peer reviews in the US market? (As one person tweeted recently, why not merge with a partner like Rotten Tomatoes, for example?)

AOL is a portal that wants to be a publishing powerhouse but can't - why? Because it is reliant upon closed networks dedicated solely to inflating the value of its own inventory, or that within its own affiliate/publisher networks.

...Just like Gawker and StumbleUpon can only try to filter content so as to shoehorn their relevance into…more and more of the same...

...Just like OpenText needs better, more hyper-relevant and hyper-local search characteristics to be better at selling its core vertical services.

Pepsi is changing its entire business model around a sustainable infrastructure (and deserves high praise for this), but having made a major investment in fixed media systems as well as product development and procurement loops, Pepsi needs major help.

Walmart has exploited its might in the green & clean energy space for a few years now. But it also owns the distribution chain. What happens when supply runs low or is commodified or distribution hubs disintegrate and abundance wipes away the need to purchase? (It could happen... And soon.)

Best Buy already recognizes that its future is not actually in electronics retailing, but in providing families with utilities of scale (like energy credits).

Arguably, every Fortune 100 brand needs help in this way. Every company needs help in this way. Economies of scale can’t scale if the media and technology systems they rely on won’t afford them the opportunity to be adaptable. While the dynamics are very complex, the paradigm is quite simple.

And all businesses already curate. What they don’t realize is exactly what or why.


Federated curation culminates in purpose, intent and action.

We might pare this down to a single equivalence: the realization that like individuals who need to have a higher purpose other than their jobs (the ideal scenario being one in which the job is the purpose), businesses need a purpose other than to just sell products and services.

Clay Shirky’s recent article about social media supporting civil society is a terrific (if unintended?) commentary on how individuals and businesses can find their meaning and purpose in curation. Quite simply, civility is the key to relational (and relatable) value. Relational value leads to collective understanding. The web will continue to evolve into a network of actions, fueled by common purpose.

That said, common purpose requires actionable context.

For businesses, this can culminate in a wiki, for example, but we need to be able to actively provide instances for change. In other words, forums are not channels or platforms (in the digital or media sense); forums, like networks, are comprised of people intent on taking action.

In 1727, Benjamin Franklin organized a group of friends to provide a structured forum for discussion about money, called Junto. The group, initially comprised of twelve Philadephia members, were drawn from diverse occupations and backgrounds, but they all shared a spirit of inquiry and a desire to improve themselves, their community, and to help others.

Franklin’s Junto was an early effort to literally socialize the discourse of our everyday challenges. In 21st Century terms, that socialization matched the underlying drivers to a series of frameworks that acted as actionable solution-sets; these solutions spawned a movement that would illustrate a real, human willingness to contextualize the role of institutional hierarchies, and in particular, banking systems. Junto also introduced some of the earlier precepts for localizing subsidies and making financial “utilities” a fungible, tactical practice that would leverage human networks.

Further, Franklin and his Junto colleagues used the act of physical lending or subsidization as a reciprocal means for creating better social value.

What they did was effectively curate social value (actionable value) within a truly federated system.

Today, there are a number of juntos in existence, including many online forums that elicit action in local communities and affect change. Several of us in an emergence collective have used our own Junto to evaluate instances in an attempt to co-create solutions around them, including hard thinking about curated experiences in a federated system... The heart of Part IV.

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The following illustrations manifested by Gavin Keech represent the infocology of how content develops as a fluid experience, as well as what the variables for an experience might look like. These will be posted in Part IV as well to hopefully provide and gather more context; the last piece will actually walk us through what an interface experience might look like, with an emphasis on how purchasing and social value can align.

  First, is the infocology of content as a fluid experience. While you can identify a pentagram shape within the design, do not be alarmed ;) Our intention is to build technologies around or representative of these flowcycles.

 

PART III of FIVE EASY PIECES - The Federation of Ideas, Intent & Action #curation #socialutility #business #ThinkState

Here are the precepts, or experiential drivers, for content interface variables. Please note that these are explorations, frameworks if you will, that address content dynamics, but do not intend to identify all of them (as dynamics constantly change).

 

PART III of FIVE EASY PIECES - The Federation of Ideas, Intent & Action #curation #socialutility #business #ThinkState

Clearly, this stuff is dense – we know this – but we want you to engage with us in a discourse around these recursive elements. We live in a world of complex systems; embracing complexity is the bridge to intelligence discovery, and of course, an approach for curating meaningful experiences.

 

The Socialization of Products & Services #prosperity #good #utility #LBS #Junto

After writing a piece on The Memetic Web & The Internet of Products several weeks ago, I started to think more about the implications products and services would have on the Attention Economy and why the notion of “social” seems to be so often misconstrued in the larger context of the marketing and media worlds.

  We talk a lot about social in terms of things like corporate communications, CRM, content development and to a greater extent, sharing behaviors – all of which are great, mind you – but I think what we don’t talk about enough or even build into our subsequent strategies and executions is the very thread of what social is in an empathic and evolutionary sense... Which is to do and propagate good.

  It’s interesting because doing good is the underpinning of the behavioral economics movement. One of the criticisms from “traditionalists” of this movement is that behaviors have always been a proxy for understanding value systems, currencies and market dynamics, but I think that misses the point: traditional economists have looked at more binary constructs such as cause-and-effect, rather than speculating over or even creating proactive systems by which people and companies create and compete over value.

  To a point that Umair Haque has made many times and in reference to what he has coined as a “betterness model”, this is about relationships, not transactions.

  In other words, social commerce endeavors to build a layer of trust, transparency and authenticity that facilitates purchases, and perhaps even expedites them. Back in February of this year, the McKinsey Quarterly published an insightful piece on behavioral economics for marketers that talked about how payments, like all losses, are viscerally unpleasant, yet emotions experienced in the present—now—are especially important.

  Trust, transparency and authenticity are of course tenets of communication that we have been discussing since “social media” arrived at the marcom gates, but what we are looking at in the context of now --  the real-time experience -- are means by which these things are actionable and of real value, and ultimately, benefactors of good.

  So, if we look at the LBS (location-based services) space, for example, we find ourselves at a very critical intersection; most commonly, check-ins are thought of as gateways for direct purchasing, or at least a funnel to market products directly, when they should be used as a bridge to create relational value. Much in the same way Twitter has been used as a DM funnel, relational value is something that seems to get lost in the barrage of special offers, promotions and price fixes that attract people to the “one-time, one-hit buy”; we simply cannot forget why people get emotional over purchases, or, why they seek emotional support from their peers when making them.

We are talking about relationships to products and services that have special meaning to people in their everyday lives, as defined by them in the context of their own needs and wants. Going a step further, one might argue that the exchange of credits and currencies are duly representative of an emotional bond we have with these experiences. This is, in part, why philosophers and media scholars like Pierre Levy have taken decades of behavioral research to build language systems out of symbolic logic, and to apply those systems to a number of social and economic models.

  Microfinance (Kickstarter, Kiva, et al) and virtual currency systems (Habbo, Facebook Credits, etc.), while still very nascent, are just two indicators of this paradigm shift. There is of course, the partnership between Zynga’s Farmville and 7-Eleven that features products that can be redeemed through Farmville credits (disclosure: 7-Eleven is a RAPP client), but there are other retailers like H&M, Best Buy (another RAPP client), Target and Bed, Bath & Beyond who have evolved their own business models to include a transition into utility-based marketing. And by utility, I mean something that people use that helps them improve their daily lives.

  In fact, not too long ago, Best Buy acknowledged that in the very near future, it would no longer be a retailer as we know it to be, rather a progenitor of goods and services that would co-create value through utility. This means that commodity products like televisions will be sold as secondary offerings and as a part of bundled services that would feature things like energy efficiency and energy savings as the real value sets in the purchase cycle. Moreover, this cycle will be sustained by virtue of meaningful replenishment, or the need for people to update this utility package through critical information sharing and product development, supported by the brand and co-created through its consumer relationships.

  Alex Bogusky spoke about this very transition in a keynote to the Best Buy brass right around this time last year, one that addressed utility in the context and respective dynamics of the “connected world” (BTW, if you haven’t seen this before, I would encourage you to watch the entire series...).

  What’s also an interesting point in Bogusky’s address is his reference to the notion of accelerated return, and more specifically, Ray Kurzweil’s prophetic assertion that technology is an offshoot of biology. The larger implication here is that we are literally developing products and marketing them within ecosystems that we must carefully manage and maintain, simply because if we as brands and agencies don’t do this, these ecosystems will move right past us. This is also why the notion of building platforms versus mere campaigns is so vitally important for us to embrace.

  Now of course the retail space is just one of many verticals that will soon undergo some very profound shifts in the socialization of products and services, and our new reality as a connected and parity-driven world holds us to an entirely new way of doing business, and it is also likely that very soon we will be seeing some very interesting cross-pollinations of brand utility as well as vertical integration between complementary, or previously less compatible, industries. As I’ve entertained in previous posts and articles, we might even see competing brands play in the same sandbox over a common interest initiative, an educational program or something that builds sentient development within specific youth groups. These days, anything is possible.

  So what are the new consideration sets? Here are a few things to chew on.

Scarcity can be redefined & managed better.

Scarcity has been regarded for years as the fundamental economic problem of seemingly unlimited human needs and wants, in a world of limited resources (source: Wikipedia). Scarcity drives these needs and wants into a translation of market value, which then experiences fluctuations in price based on basic supply and demand. But here’s the catch: if we have the ability to (co)create the resources, then market value is no longer restrictive. The core proposition of the connected world and what retailers like Best Buy are advocating is the transference of sustainable goods and services. In other words, the need becomes the product. The layers we build and package on top of that are the new markets, and therefore the utilities of real value. And just as we were able to bridge brick-and-mortar thinking with the Internet Economy, we now have a new opportunity to manage scarcity as a by-product of human resourcefulness.

Value truly begets value.

Looking at value under the lens of human resourcefulness, one of the great intellectual and aspirational challenges of economists in the modern era is the notion of what value can really be. At a more rudimentary level, this is most often talked about in the distinction between transactional value (things we purchase with or for hard currency) and reciprocal value (things we trade or exchange). Where and how we end up on the value chain shouldn’t be of grave concern, after all, just within the last 30 years we’ve built entire economies or micro-economies on products and services that were completely new. Our focus should be on the relationship between reciprocity and how transacting becomes a function of intent, meaning that we share most what can most use as utilities. From there, market opportunities (namely white spaces) abound.

‘Best’ means most connected.

It seems that one of biggest misconceptions about platforms like Groupon is that the ‘best’ offer is one that is shared the most; this may be the case, but the bigger potential lies in how the offer itself scales to fit the needs of people. Just as transacting has been confined to single or a series of like repeat purchases, reciprocity shouldn’t be confined to a single act or series of like acts in which people share. True sharing, as with those experiences characteristic in memes, is a function of evolution, change and adaptation.

Purchases are not only emotional, they are truly relational.

We have known for many years that purchase decisions are made based on emotion. Whether this is a function of brand, product messaging or a simple gut motivation is also becoming more and more irrelevant, and fact is, not only are “consumers” inundated with myriad tag lines and indignant calls-to-action, but arguably they seek out the opinions of their peers just to avoid them. There is good reason why platforms like openIDEO and Quirky have taken off – because what we buy is now a manifestation of what we create, and that co-created value is what will be soon driving the supply chain and predominantly directing our purchase decisions.

Pricing is a mechanism of relational value, not (so much) market value.

One glaring example of this is how Amazon sells books through its Kindle app at a price-point that is well below market value. Why? Because there is more value in what Amazon gives you as a provider of utility. The trust the brand earns with you both in social currency (that which is deemed valuable by you and then passed along to others) and what your social graph then propagates as potential goods and services is invaluable, not only in mitigating supply chain issues (demand sensing) but also in recalibrating demand in a way that is dictated by a healthier balance of reason, emotion and sentience.

  These are exciting times, indeed. The question remains as to what we are willing to do right now not only as marketers, but as intermediary businesses.

  Thoughts? Opinions? Upheavals?