Monday, April 28, 2003

Source: Escapable Logic; 4/28/2003; 9:36:48 AM The Flip Side . . . . . . of last time is the buyer's ethical responsibility to embrace the seller and help extend the seller's skills and reputation. If that's the flip side, then my last rant must have been the flippant side, noting how resentful and impatient we are with a seller's shortcomings, whether real or assumed. The urge to encourage and cultivate a seller is part of the relationship model that Doc has been championing along with many others. During the period between 40 to 1 B.C. (Before Cluetrain), we assumed that commerce is simply commercial, with buyers and sellers doomed forever to terse, often adversarial salvos. We might call that communication mode expedient. The long decline into mass marketing and the muting of the customer's voice had caused us to forget about the market conversation, or to conduct it sotto voce at best. Then the Internet clued us that the market is a conversation and money is just the punch line. Doc reports that, soon after the ink dried, the Clue Trainers started hearing from people whose cultures had not lost the art of transactional conversation. They pointed out that real markets are more than conversations, they're relationships, crafted one conversation at a time, often over decades and generations. When we realize that markets are relationships, we can recognize that Iraq's Sumerian ancestors invented written language, not to record their ancient myths and epic poetry, but to keep track of market conversations and the relationships developed out of them. At first they were anecdotal, like blogs are today. They evolved like blogs, getting more efficient, connected and data-like until an Italian friar named Fra Luca Pacioli invented double entry bookkeeping in 1494. In a very real sense, double entry bookkeeping was the XML of the Renaissance. (Are the "o", "k" and "e" double-entered in "bookkeeping" just to get the point across? How weird is that?) We need to be clear: Literature, Ethics and Law are the products of explicit recorded history and explicitness is the enabling technology of market relationships. Like VisiCalc jump-starting personal computing, public markets were the killer app that jump-started money and writing and literacy. Without public markets, trade isn't robust enough to support anything more than ad hoc barter. The agora requires standard pricing of a commodity to act as a medium of exchange (probably grain in Mesopotamia) and writing to support the market experience, where you barter your pig in the morning for grain or shells or coins and then barter them for a rabbit, maize, mead, a trinket and a little hashish to make it all seem worthwhile. When everyone uses the same barter good, it's money, no matter how it's styled. The agora was surrounded by cafés, foundries for written philosophy, politics, laws. John Bosak famously said that "XML gives Java something to do." Writing gave Hammurabi, Homer, Plato, Aristotle and Solon something to do. We didn't need literacy to teach the youngsters in Ur about Gilgamesh. Epic poetry retold around the hearth did that more effectively than books ever would. We needed writing only to record explicit market relationships: <grain_deposit>Farmer Hotep deposited 40 bushels of high quality grain in the South Baghdad Granary on the 4th day of the 8th moon of the 7th year of the reign of Shalmaneser III.</grain_deposit> Indeed, the first business forms were Cunei-forms; the first data platform, wet clay; the first data managers, priests (we still think of them as priests, which is how they like it). The data was as closed and proprietary as it gets: Farmer Hotep could no more get at or read his record than you can get at or read your Homeland Security profile. The development of agriculture implied, even demanded, markets and markets imply a thin-client form of literacy, just as TV implies illiteracy, email and blogs imply mass literacy and, I would argue, XML implies, even demands, Open Data. Agriculture was the watershed organizing force that institutionalized slavery and accounting. Daniel Quinn suggested that the Garden of Eden Myth started as the recounting of a barely remembered hunter-gatherer utopia in the lush Fertile Crescent before farming and climate cleared and desolated the middle east. Explicating the Implicit As Ross Mayfield noted, it's often good to be explicit. In the case of transactions, Cluetrain gave us a context to be explicit about market conversations. Bloggging tools set us up to record and archive our thoughts and, collectively, to archive our market conversations and suggest their progeny, relationships. What will give us the context to describe and implement market relationships on a global scale? Let's review the evolution of markets (warning: non-researched vague impressions formatted to look authoritative): Cultural Phase Activities Pricing Data Mode Hunting & gathering 1. ad hoc barter haggle oral relationship Agriculture 2. public market haggle oral+ relationship Mercantilism 3, retail (via distribution) fixed* closed expedient Mass media 4. retail, mail order, QVC/HSN fixed closed expedient E-Commerce 5. [4]+ web brochures & review sites fixed closed+ softened expedient Cluetrained 6. [5]+ data websites + blogs fixed closed+ exp/conversation Peer Economy 7.  commerce-blogs satisfaction open exp/conv/relationship * after John Wanamaker If that's how trading and markets evolve, then we can guess that they evolve to the next stage when the old modality can't scale to meet the requirements of a new cultural phase. Hunter gatherers accumulate no more than they can haul around, and they meet very few of each other. Farmers build granaries and farm-to-market roads and highways and cities with sewage systems. All of those imply coinage and accounting as soon as bartering won't scale to the newly expanded marketplace. Farmers notice that tea kettles develop a lot of pressure, but they don't do anything with that knowledge. When steam is harnessed, trade routes proliferate, as cotton is moved to the mills in bulk and loomed into cloth to be worn by the newly employed and tightly scheduled loom operators whose wages buy the cotton. ("Got no time to haggle now, I'm late, I'm late, I'm late!") Haggling on small items won't scale to an industrial pace, so John Wanamaker instantiated fixed pricing in the 1880s, as Saturn did for cars in the 1990s. The expedient mode scales great as long as the one-to-many model of clerk-based retailing constrains buyers' choices. But when media frees sellers from the clerk-based low bandwidth model to the high bitstreams of broadcast, many more sellers are selling to many more buyers. The broadcast model may be one-to many, but the seller model is many-to-manymore. Early e-commerce, we know, is just brochureware, so nothing really changes until data driven web sites and email and web logs open an electronic feedback trickle rising to a bit torrent. That's where we are now, on the cusp of a peer economy. P2P transactions may look like data-backed blogs talking about commerce, like this example. A global market as intimate as blogging is a major disruptor. Should we be surprised that this era's masters are fighting our current scaling crisis without really understanding it? Why should they be any different than their precursors at previous inflection points, movers shaking at the prospect of a new mode for transactions? Sweet Home, Ali Baba So here we are, the newest, least subtle culture, back in the Tigris-Euphrates valley where it all started, just as our economy is emerging from the cathedral's gloom, blinking in the bright light of the global bazaar. Obsessing about Iraq and antiquities and cuneiform records and all the rest, reinventing the divine chaordia of peer-to-peer market relationships mediated by value and quality and with asynchronous time enough to care about those arcane, . . . well, qualities. The super market's goods scaled to suburbia but they really weren't goods, just OKs. They were less filling and worse tasting than fresh New Jersey tomatoes and Iowa farm-raised beef. The mass market is re-learning how to spell q-u-a-l-i-t-y and we won't let mass merchandising put our genie back in their bottle. Now we have all three communication modes at our disposal: Expedience, Conversation and Relationship. We don't want to haggle over commodities but we're experts in prestige and the tools of our trade and we want the good life at great prices. You'll find us over at CostCo, loading paper towels into our Mercedes. Next we'll stop at CompUSA, grooving to our iPod while stocking up on commodity CD blanks to Rip Mix Burn on our tricked-out iMac. Back home, we'll order cut-rate printer cartridges from inks4art.com since CostCo and CompUSA only stock the Epson parts. In a few more web years we'll order our ripe red beefsteak tomatoes direct from Doc's second cousin in Jersey and marbled beefsteaks from ripe red Gelbvieh cattle on Dick Gholson's farm in Mt. Pleasant, Iowa. (If current distribution systems won't scale, someone will scale them for us. Maybe UPS will buy Mail Boxes, Etc. Ya think?) How will we know about those tomatoes and steaks? The same way we knew about them in the bazaar: Reputation. Reputation, that evanescent characteristic owned by everyone except the person it's attached to. Reputation, the secret sauce of a decommodified life. Reputation, the public knowledge that's too important to be left to private data. Clue the Data, Maestro We've not yet developed a clued-in context to help us talk about open data as A Good Thing, or even why it might be. Aside from anecdotal web sites and blogs (randomly linked but otherwise disconnected), there is no user-centric open data yet, where relationship information, reputation, is threaded and mirrored in the mind/data spaces of the seller and the buyer. Consider this stunning fact: There is still no example of public, open data. Big companies insist on mirroring data for their B2B transactions, often using the EDI protocol or the more pervasive my_lawyers_vs._your_lawyers protocol (FYTP). They can afford the effort to 1) agree to agree, 2) explicate the agreement, 4) staff for compliance and 5) go to court to weasel out of or enforce the agreement. But you and I don't have that luxury and we can't compete with mass merchandisers interpreting our data for us, constrained by business models and data architectures that can't scale to the public forum. Corporate Agoraphobia Companies hate public scrutiny as much as agoraphobic hermits hibernating year round. They would never conceive of open data along the Xpertweb model so data for the rest of us is a job for the rest of us. The Internet and FTP and email and the web was built by clued individuals who proved it could scale enough for enterprise. WiFi was built by clued individuals who proved it could scale enough for enterprise. Closed data has proven it can't scale to the Peer Economy, so it's time for some clued individuals to create open public data for the rest of us, where you own your record of our relationship and I own mine and if they're identical, everyone knows the record is valid and so the reputations we build out of our relationship are valid. What might fuel such a profound shift? What's even more powerful than companies' behind-the-scenes collusion, haggling, defaults and legal maneuvering? Publicity, and its dependent, politics. Publicity is literally openness. Openness trumps legality, PR, accounting, advertising, good intentions, pricing, litigation and every other mechanism that convinces us it's a good idea to buy over-hyped commodities and sell an hour of our time for $20 so the company can resell it for $60. A single email may be enough openness to bring bankers down who once would have moved quietly on to another firm to do it all over again. When reputation data is too broadly distributed to be hidden and too obvious to be spun, we'll have recaptured the User Interface enjoyed by generations of traders in the stalls of Chaldea, relating to generations of customers, teaching the world how to serve the customer and the bottom line. Like any relationship, it's a two way street. Gradually we'll remember how to be great customers, embracing and extending seller's customization skills, relating through authentic conversations and coaxing each other into the peer economy, one expert at a time. [Escapable Logic] 12:05:35 PM    trackback []     Articulate []