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Category: markets

Shop Windows And Tablets: Through The Looking Glass

Published October 3, 2011 by cgerrish

In looking for lost house keys under the light of the street lamp, we put aside the fact that we lost them in the ditch at the other side of the road. It’s odd how we can move so swiftly in a particular direction without really knowing where we’re going. An incredible amount of ingenuity, resources and coordination has been applied to building tablet computers. There’s an unstated assumption that the post-pc era is defined by an evolution of the computer to a new human-computer interface model with a new form factor. And at a technical level, there’s some truth there; however at the level of the market for devices, there’s not enough truth.

To make sense of all this, let’s go back to a 1996 interview by Gary Wolf with Steve Jobs. Jobs was at NeXt and was gazing ahead at the future:

Wolf: What other opportunities are out there?

Jobs: Who do you think will be the main beneficiary of the Web? Who wins the most?

Wolf: People who have something –

Jobs: To sell!

Wolf: To share.

Jobs: To sell!

Wolf: You mean publishing?

Jobs: It’s more than publishing. It’s commerce. People are going to stop going to a lot of stores. And they’re going to buy stuff over the Web!

e-Commerce’s path to the Network was from the paper catalog to the electronic catalog. The Sears Catalog was one of the early prototypes for distance retailing. But what was the paper catalog? Why was it successful? The catalog was an evolution of the shop window in the arcade. And it was the shop window that enabled the romantic imagination of the consumer. Heather Marcelle Crickenberger talks about Walter Benjamin’s idea of the flâneur:

“Flâneur” is a word understood intuitively by the French to mean “stroller, idler, walker.” He has been portrayed in the past as a well-dressed man, strolling leisurely through the Parisian arcades of the nineteenth century–a shopper with no intention to buy, an intellectual parasite of the arcade. Traditionally the traits that mark the flâneur are wealth, education, and idleness. He strolls to pass the time that his wealth affords him, treating the people who pass and the objects he sees as texts for his own pleasure. An anonymous face in the multitude, the flâneur is free to probe his surroundings for clues and hints that may go unnoticed by the others.

Today we call it window shopping. It’s an exercise of the imagination in the role of the consumer. What might I look like in that outfit, listening to that music, with those kitchen appliances? A large plate of glass opened a window on to the possibilities contained within the shop. The flâneur could stroll the arcade moving from this window to that, searching for something that might catch his fancy.

Timothy Morton discusses this performance of the consumer imagination in his essay on “The Beautiful Soul.”

These performative styles are outlined by myself (Morton) and Colin Campbell. One style stands out, and that is a kind of meta-style that Campbell calls bohemianism and I call Romantic consumerism. This kind of consumerism is at one remove from regular consumerism. It is “consumerism-ism” as it were, that has realized that the true object of desire is desire as such. In brief, Romantic consumerism is window- shopping, which is hugely enabled by plate glass, or as we now do, browsing on the internet, not consuming anything but wondering what we would be like if we did. Now in the Romantic period this kind of reflexive consumerism was limited to a few avant-garde types: the Romantics themselves. To this extent Wordsworth and De Quincey are only superficially different. Wordsworth figured out that he could stroll forever in the mountains; De Quincey figured out that you didn’t need mountains, if you could consume a drug that gave you the feeling of strolling in the mountains (sublime contemplative calm, and so on). Nowadays we are all De Quinceys, all flaneurs in the shopping mall of life. This performative role, this attitude, is all the more pervasive, leading me to believe that we haven’t really exited from the Romantic period—another sense in which “prehistory” isn’t quite right for what I’m describing, but extremely right in another sense, namely that we’re still caught in an attitude that we don’t fully understand or become aware of.

When we talk about what’s assumed to be a tablet computer, we’re actually talking about a plate of glass, a shop window. In a discussion with Nick Bilton of the New York Times about why all these tablets look similar, Ryan Block hit on the key, although he may not have realized it:

“We are talking about a screen, where the screen is the entire experience and it can only really look and act one way, and that is to look similar to the iPad,” Mr. Block explained in a phone interview Thursday. “At the end of the day, they are all going to look similar, because a tablet is just a piece of glass.”

The innovations of the post-pc era aren’t to the computing device, they’re to the shop window. The ability to transact as part of the performance and the transformation of the goods from material to digital such that they can be played within the same window are the key additions to the “piece of glass.”

If you view the recent crop of tablet computers through this lens, you’ll see what separates the Apple and Amazon products from the rest. We pass the empty shop window of the deserted store as we move on down the block to see what we might find next. Of course, it’s simple to see how a technologist might confuse a shop window with a flat computing device.

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Jubilee: Systems of Forgiveness

Published September 19, 2011 by cgerrish

The technical systems we build have perfect memories. They keep account of everything. The ones are the ones, and the zeros are the zeros. We network the systems together and even account for things across multiple domains. While on the one hand we talk about economies of abundance and prices of many things converging on free—we know the score.

When Jacques Derrida talks about forgiveness, he cuts to the chase. To forgive is to forgive what is unforgivable. It’s an act of transformation, and by definition impossible. Forgiveness without cost isn’t forgiveness. Forgiveness costs everything. A forgiveness that translates the debt from one domain to another isn’t forgiveness. To forgive is to break all the rules of the system.

David Graeber, in discussing his work “5,000 Years of Debt” talks about how morality and monetary debt have always been intertwined.

In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred.

We’ve become very sophisticated in creating instruments of debt and even derivatives on those instruments. Our systems of forgiveness, however, have been left behind. Debt and forgiveness of debt historically were linked. Forgiveness allows a system reset, the negative numbers are zeroed out. The moral judgement that comes along with monetary debt is wiped away. What by definition shouldn’t be forgiven is forgiven.

As the economies of the world are gripped by a debt crisis, the call for austerity measures come down from on high. From within the system, there’s only one kind of solution that’s rational. Austerity is the proper solution on both an economic and a moral level. Only moral weakness and foolishness would cause a person or a country to borrow more than they could repay. A good dose of austerity will put them back on the straight and narrow.

Of course, as Graeber points out, there’s a certain rationality for breaking the rules of the system at particular moments in time:

The first markets form on the fringes of these complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps.

This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.

As our societies become more rational, secular and technical we become less able to do the impossible, to forgive what is unforgivable. It just doesn’t make sense, it’s not a part of the algorithm. Something like a Jubilee seems like the superstition of a primitive people. In the systems that we’re building, is there a set of events that will cause the system to reset itself? Or do we think we’ve somehow evolved into a system of systems that never needs to be rebooted?

Well shake it up now Sugaree, I’ll meet you at the jubilee
And if that jubilee don’t come maybe I’ll meet you on the run
Just one thing I ask of you, just one thing for me
Please forget you know my name, my darling Sugaree

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Of Twitter and RSS…

Published January 9, 2011 by cgerrish

It’s not really a question of life or death. Perhaps it’s time to look for a metaphor that sheds a little more light. The frame that’s been most productive for me is one created by Clayton Christensen and put to work in his book, The Innovator’s Solution.

Specifically, customers—people and companies— have “jobs” that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can “hire” to get the job done. This is how customers experience life. Their thought processes originate with an awareness of needing to get something done, and then they set out to hire something or someone to do the job as effectively, conveniently and inexpensively as possible. The functional, emotional and social dimensions of the jobs that customers need to get done constitute the circumstances in which they buy. In other words, the jobs that customers are trying to get done or the outcomes that they are trying to achieve constitute a circumstance-based categorization of markets. Companies that target their products at the circumstances in which customers find themselves, rather than at the customers themselves, are those that can launch predictably successful products.

At a very basic level, people are hiring Twitter to do jobs that RSS used to get. The change in usage patterns is probably more akin to getting laid off. Of course, RSS hasn’t been just sitting around. It’s getting job training and has acquired some new skills like RSS Cloud and JSON. This may lead to some new jobs, but it’s unlikely that it’ll get its old job back.

By reviewing some of the issues with RSS, you can find a path to what is making Twitter (and Facebook) successful. While it’s relatively easy to subscribe to a particular RSS feed through an RSS reader— discovery and serendipity are problematic. You only get what you specifically subscribe to. The ping server was a solution to this problem. If, on publication of a new item, a message is sent to a central ping server, an index of new items could be built. This allows discovery to be done on the corpus of feeds to which you don’t subscribe. The highest area of value is in discovering known unknowns, and unknown unknowns. To get to real-time tracking of a high volume of new items as they occur, you need a central index. As Jeff Jonas points out, federated systems are not up to the task:

Whether the data is the query (generated by systems likely at high volumes) or the user invokes a query (by comparison likely lower volumes), there is nodifference.  In both cases, this is simply a need for — discoverability — the ability to discover if the enterprise has any related information. If discoverability across a federation of disparate systems is the goal, federated search does not scale, in any practical way, for any amount of money. Period. It is so essential that folks understand this before they run off wasting millions of dollars on fairytale stories backed up by a few math guys with a new vision who have never done it before.

Twitter works as a central index, as a ping server. Because of this, it can provide discovery services on to segments of the Network to which a user is not directly connected. Twitter also operates as a switchboard, it’s capable of opening a real-time messaging channel between any two users in its index. In addition, once a user joins Twitter (or Facebook), the division between publisher and subscriber is dissolved. In RSS, the two roles are distinct. Google also has a central index, once again, here’s Jonas:

Discovery at scale is best solved with some form of central directories or indexes. That is how Google does it (queries hit the Google indexes which return pointers). That is how the DNS works (queries hit a hierarchical set of directories which return pointers).  And this is how people locate books at the library (the card catalog is used to reveal pointers to books).

A central index can be built and updated in at least two ways. With Twitter, the participants write directly into the index or send an automated ping to register publication of a new item. Updates are in real time. For Google, the web is like a vast subscription space. Google is like a big RSS reader that polls the web every so often to find out whether there are any new items. They subscribe to everything and then optimize it, so you just have to subscribe to Google.

However, as the speed of publication to the Network increases, the quantity of items sitting in the gap between the times the poll runs continues to grow. A recent TPS Report showed that a record number, 6,939 Tweets Per Second, were published at 4 seconds past midnight on January 1, 2011. If what you’re looking for falls into that gap, you’re out of luck with the polling model. Stock exchanges are another example of a real-time central index. Wall Street has lead the way in developing systems for interpreting streaming data in real time. In high-frequency trading, time is counted in milliseconds and the only way to get an edge is to colocate servers into the same physical space as the exchange.

The exchanges themselves also are profiting from the demand for server space in physical proximity to the markets. Even on the fastest networks, it takes 7 milliseconds for data to travel between the New York markets and Chicago-based servers, and 35 milliseconds between the West and East coasts. Many broker-dealers and execution-services firms are paying premiums to place their servers inside the data centers of Nasdaq and the NYSE.

About 100 firms now colocate their servers with Nasdaq’s, says Brian Hyndman, Nasdaq’s SVP of transaction services, at a going rate of about $3,500 per rack per month. Nasdaq has seen 25 percent annual increases in colocation the past two years, according to Hyndman. Physical colocation eliminates the unavoidable time lags inherent in even the fastest wide area networks. Servers in shared data centers typically are connected via Gigabit Ethernet, with the ultrahigh-speed switching fabric called InfiniBand increasingly used for the same purpose, relates Yaron Haviv, CTO at Voltaire, a supplier of systems that Haviv contends can achieve latencies of less than 1 millionth of a second.

The model of colocation with a real-time central index is one we’ll see more of in a variety of contexts. The relationship between Facebook and Zynga has this general character. StockTwits and Twitter are another example. The real-time central index becomes a platform on which other businesses build a value-added product. We’re now seeing a push to build these kinds of indexes within specific verticals, the enterprise, the military, the government.

The web is not real time. Publishing events on the Network occur in real time, but there is no vantage point from which we can see and handle— in real time— ‘what is new’ on the web. In effect, the only place that real time exists on the web is within these hubs like Twitter and Facebook. The call to create a federated Twitter seems to ignore the laws of physics in favor of the laws of politics.

As we look around the Network, we see a small number of real-time hubs that have established any significant value (liquidity). But as we follow the trend lines radiating from these ideas, it’s clear we’ll see the attempt to create more hubs that produce valuable data streams. Connecting, blending, filtering, mixing and adding to the streams flowing through these hubs is another area that will quickly emerge. And eventually, we’ll see a Network of real-time hubs with a set of complex possibilities for connection. Contracts and treaties between the hubs will form the basis of a new politics and commerce. For those who thought the world wide web marked the end, a final state of the Network, this new landscape will appear alien. But in many ways, that future is already here.

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Shadows in the Crevices of CRM and VRM

Published November 21, 2010 by cgerrish

Two sides of an equation, or perhaps mirror images. Narcissus bent over the glimmering pool of water trying to catch a glimpse. CRM and VRM attempt hyperrealist representations of humanity. There’s a reduced set of data about a person that describes their propensity to transact in a certain way. The vendor keeps this record in their own private, secure space; constantly sifting through the corpus of data looking for patterns that might change the probabilities. The vendor expends a measured amount of energy nudging the humans represented by each data record toward a configuration of traits that tumble over into a transaction.

Reading Zadie Smith‘s ruminations on the film “The Social Network” in the New York Review, I was particularly interested in the section where she begins to weave the thoughts of Jaron Lanier into the picture:

Lanier is interested in the ways in which people ‘reduce themselves’ in order to make a computer’s description of them appear more accurate. ‘Information systems,’ he writes, ‘need to have information in order to run, but information underrepresents reality (Zadie’s italics).’ In Lanier’s view, there is no perfect computer analogue for what we call a ‘person.’ In life, we all profess to know this, but when we get online it becomes easy to forget.

Doc Searls’s Vendor Relationship Management project is to some extent a reaction to the phenomena and dominance of Customer Relationship Management. We look at the picture of ourselves coming out of the CRM process and find it unrecognizable. That’s not me, I don’t look like that. The vendor has a secured, private data picture of you with probabilities assigned to the possibility that you’ll become or remain a customer. The vendor’s data picture also outputs a list of nudges that can be deployed against you to move you over into the normalized happy customer data picture.

VRM attempts to reclaim the data picture and house it in the customer’s own private, secure data space. When the desire for a transaction emerges in the customer, she can choose to share some minimal amount of personal data with the vendors who might bid on her services. The result is a rational and efficient collaboration on a transaction.

The rational argument says that the nudges used by vendors, in the form of advertising, are off target. They’re out of context, they miss the mark. They think they know something about me, but constantly make inappropriate offers. This new rational approach does away with the inefficiency of advertising and limits the communication surrounding the transaction to willing partners and consenting adults.

But negotiating the terms of the transaction has always been a rational process. The exchange of capital for goods has been finely honed through the years in the marketplaces of the world. Advertising has both a rational and an irrational component. An exceptional advertisement produces the desire to own a product because of the image, dream or story it draws you into. Irrational desires may outnumber rational desires as a motive for commercial transactions. In the VRM model, you’ve already sold yourself based on some rational criteria you’ve set forth. The vendor, through its advertising, wants in to the conversation taking place before the decision is made, perhaps even before you know whether a desire is present.

This irrational element that draws desire from the shadows of the unconscious is difficult to encode in a customer database profile. We attempt to capture this with demographics, psychographics and behavior tracking. Correlating other personal/public data streams, geographic data in particular,  with private vendor data pictures is the new method generating a groundswell of excitement. As Jeff Jonas puts it, the more pieces of the picture you have the less compute time it’ll take to create a legible image. Social CRM is another way of talking about this, Facebook becomes an extension of the vendor’s CRM record.

So, when we want to reclaim the data picture of ourselves from the CRM machines and move them from the vendor’s part of the cloud to our personal cloud data store, what is it that we have? Do the little shards of data (both present and represented through indirection) that we’ve collected, and release to the chosen few, really represent us any better? Don’t we simply become the CRM vendor who doesn’t understand how to properly represent ourselves. Are we mirror images, VRM and CRM, building representations out of the same materials? And what would it mean if we were actually able to ‘hit the mark?’

Once again here’s Zadie Smith, with an assist from Jaron Lanier:

For most users over 35, Facebook represents only their email accounts turned outward to face the world. A simple tool, not an avatar. We are not embedded in this software in the same way. 1.0 people still instinctively believe, as Lanier has it, that ‘what makes something fully real is that it is impossible to represent it to completion.’ But what if 2.0 people feel their socially networked selves genuinely represent them to completion?

I sense in VRM a desire to get right what is missing from CRM. There’s an idea that by combining the two systems in collaboration, the picture will be completed. We boldly use the Pareto Principle to bridge the gap to completion, 80% becomes 100%; and close to zero becomes zero. We spin up a world without shadows, complete and self contained.

From T.S. Eliot’s The Hollow Men

Between the idea
And the reality
Between the motion
and the act
Falls the Shadow

For Thine is the Kingdom

Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow

Life is very long

Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow

For Thine is the Kingdom

For Thine is
Life is
For Thine is the

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

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