The fundamental problem of ‘owning’ user data

Who is on control now?

I do not often agree with Facebook, but I do agree with their decision to make privacy settings of their users more important than opening up the vast amount of data they track to 3rd party developers. Marshall Kirkpatrick writes about that decision and points out that Facebook isn’t opening up everything:

Facebook holds a mind-blowing amount of conversational data. The company is analyzing it extensively and it has an omniscient view of conversations across all the networks of friends and privacy restrictions. It uses that aggregate data analysis to make business decisions and to sell advertisements. The rest of us are only allowed to give Facebook more data and to get back a sliver per user that will facilitate more user-level participation in amassing more data at Facebook.

He continues and decides that the value of the data is too big to be held by one company alone:

The data that Facebook controls, conversations and social connections, could be used for analysis of real-time social patterns which could lead to world-shaking new insights. Do we get access to that data? No.

Why not? We don’t get that access because Facebook was built on a fundamental promise of privacy and a complex system of privacy controls. Privacy is good, it’s very good. But, the census gathers and exposes personal data without violating privacy. Lots of systems do.

[stuff deleted...]

The data the network controls is just too valuable to keep locked up for only the company’s own analysis.

Marshall asks an interesting question and provides a provocative answer for it. Is the ability to innovate with user data fundamentally more important than the right of a user to keep his data (interactions)  private?

It is tempting to answer this question with a ‘yes’. Many web advocates will explain that by giving up privacy they get value. That the free flow of data has lead to new interaction possibilities that were impossible before (web 2.0). We’ve made our progress because everything is set free. Data that is free can be mashed up and provide new value, unprecedented.

While we all benefit from these effects, we should not lightly dismiss this as a simple case of ‘collateral damage’. Marshall touches a fundamental dilemma. What is more important, the rights of the mass, or the rights of the individual. In the western world we tend to assume an inverse relationship between individual rights and social control. More social control leads to less individual rights and vice versa. Marshall suggests that individual rights may be less important than the ‘greater cause’ of being able to provide more value to users if data is freely accessible. The obvious question to ask when resented with this view is “where do you set the boundary?”  In other words, what violation of individual rights is still acceptable for the greater cause of innovation?

But to me, there is a more fundamental flaw underneath. Individuals do not really have the means to protect their rights in the first place. Even with every privacy setting Facebook offers a user, there isn’t a single setting that protects the user’s rights from Facebook itself! There is only one way a user can be in control of his own rights. The user can decide not to participate. The web gave us value, and in return it forced us to give up our most important right. The right of the individual. Everything is free and accessible for all. But in return we have to accept that there is no way for us to control what these companies know or do with the data they collect. No matter how honorable Facebook is, they have a disproportional power that allows them to crush individual user rights. Currently, 3rd party developers complain they can’t store Facebook data because of privacy settings, but Facebook itself doesn’t have that limitation. Teh user doens’t own his data, Facebook does.

I realise that these views aren’t popular. That many already (un-)consciously made the decision to participate. We are accepting a world in which the balance is in favor of the companies that develop services. That it is ok that I have to accept a Privacy Policy and Terms of Use of a company, but that that same company doesn’t commit itself to my individual rights. I do not mind data being set free, but I do mind that I do not really have the means to decide for myself what the tradeoff is. It’s all or nothing. Join the party or stay home. And while we might see the benefit of more value now, this is a decision that can’t be undone easily.

Don’t get me wrong. I totally agree with Marshall that the innovation over user data can lead to incredible value. I’m fine with sharing my data in order to have access to that value. What bugs me is that I do not have control over that decision or that balance. We are scared to give that fundamental right back to the individual. It might break all web business models. But I am an optimist. I think we would be surprised to see how many people would be quite willing to share data in return for value. The difference is that in this new situation they would be able to make a conscious decision. The user would be in control. He would join a service like Facebook and consciously deciding the best trade off between sharing information and obtaining value from the service. And that conscious act would provide us all more value than the current situation in which we are  hijacked.

The only way this can be solved is by putting the user in control. Turn the entire model inside out Privacy/accessibility settings should not be set per service, but set by the user. The user shouldn’t have a fragmented profile across every service, but instead have one profile that can connect to any service. He should not have to find friends across many services, but have his friends within his profile, accessible to him across any service he wishes to use. The user can be in control of what his profile would look like per service, who his friends are, what data he is willing to share. The user should own his data. If that would be the case then we would have balance between user and service provider. If the user has control over the decision to share, then there can be a much more effective exchange of data for value. A service provider wanting access to some of that data will have to agree to the individual’s privacy policy and terms of use. We would not need a new developer’s APIs for every service, but we would need one standard API that allows users to connect to services.  In many ways, putting the user in control would simplify technology and our ability to mash up data in order to create new value. It enforces a more natural cooperation between service provider and user.

The real innovation of the web would be to restore balance and put the individual user in control again.

On Apple, Facebook, Google, Whuffie and why customer lock-in sucks

What is the difference between customer lock-in and customer value It’s huge! Customer lock-in is a marketeers wet dream. It is a bonus received at the end of the year. It is an internally focused measurement. It is EGO. If your CEO, organization, or marketeer is talking about customer lock-in you can be sure of one thing. Making revenues is more important than bringing value to a customer.

Don’t get me wrong, every company has to make revenues. But think about this for a second. Which company would you rather work for, or buy products from? A company that is focused on revenue and sees customers as a byproduct of that revenue? Or a company that is focused on providing user value, and as a result of this earns a good living?

How to you reach a status of customer lock-in? You can’t accomplish that by serving the customer value. Instead you focus on the costs involved to move away from your service. If the cost of leaving the service are high enough, your customer will not attempt to leave. Too much hassle. Examples? We see lots of businesses attempting some form of customer lock-in. Try leaving a mobile operator and taking your mobile phone number with you. Leave an Internet access carrier and then try to keep your data or e-mail address. Try switching banks making sure your monthly payments are still in order. The list is endless.

The online space isn’t any different. Web 1.0 thinking is essentially customer lock-in thinking. Web 1.0 business models force customer lock-in. It is their oxygen. Without customer lock-in, no revenues. It is the reason web 2.0 isn’t really a revolution but simply an evolution. Examples? The most obvious one is Facebook. Once you sign up your soul is sold and leaving again is impossible. Actually, that is not entirely true. If you simply quit, your account will not be deleted. But if you really want to get out, start acting against the terms of service and they will wipe your account faster than the speed of light. Facebook is a black hole that sucks you, your friends, your interactions and data in, but never lets it out again. It is the perfect customer lock-in platform.

Another example? The Apple iPhone. Apple builds great products but dictates everyone how to use it. I have an iPhone but I couldn’t buy it from the mobile operator I have been happy with for years. Instead of offering me choice, Apple has decided to make it exclusively available via a select set of operators. The reason is simple, it isn’t about customer value, but revenues. While the iPhone itself may be a great and user-friendly product, the Apple strategy is a lock-in strategy. Forcing me to buy the phone and jail breaking it. Sorry Apple, I don’t give a toss about your exclusive strategy, I want choice! Google’s g-phone? Exactly the same issue. Not because of the way they will distribute it. But because it needs a Google account to be useful.

Customer lock-in is a lucrative business. Corporations have tons of marketeers employed to build their customer lock-in strategy. The funny thing about it is that if you would get rid of all that overhead (yes, marketeers are idiots), you would not only save a whole lot of money unwisely spend, but you would also have the chance to work on customer value. It would make your customer, your employees much happier. It would generate profit and build you a strong business with loyal customers. You would not need a “Social Media strategy”  to “engage” with your customers. You would not need “loyalty”  programs. Note that these two “social” strategies become customer lock-in tools if applied within a customer lock-in organization. You would not need Tara Hunt to explain to you what the Whuffie factor is, as it would be in your genes. Having said that, you’d be crazy not to hire ten Tara Hunts and turn your company around form customer lock-in to customer value. A company build on customer value would be doing these things naturally, well before any consultant has thought of a new Powerpoint title called “Social media”. It is funny to realize that great developers tend to understand this much better than any marketeer ever can. It’s because a great developer does not take revenues into account. He looks at customers first.

There are many reasons thinkable why customer lock-in is dominant in company strategy, but that is big enough in itself to write another post about. Sufficient to say that if your company is using social media consultants to enter this exciting new web 2.0 world, you are in deep trouble

Facebook is fighting a lost cause, they just don’t know it yet

I’m not sure what to think about the different blog posts covering the interview Mark Zuckerberg has given recently. The tech community seems to be giving Mark a pop star status,leading to witch burning scenario’s, well described by Michael Arrington here. I guess techies are just like other people in need of icons.

Mark and his team do need to get credit for the way they have grown Facebook in a few years. Starting from scratch it is now on of the top communication platforms worldwide. There aren’t many examples of entrepreneurs being so successful in such short time. But now that the time has come to leverage that success, in other words, monetize the platform, I’m not much of a fan of Mark or the Facebook platform.

When it comes to monetising Facebook is constantly trying to balance on a thin line between the interests of the user versus the need for Facebook to generate revenue streams. The most obvious example is the release and backlash of their Beacon project. The main reason for their incredible growth but also this balancing act is that Facebook fell for the $16 Bln advertisement trap, just like many other web 2.0 companies did. In an interview with Marshall Kirkpatrick we can clearly see this balancing act. He says:

Zuckerberg told me today that he believes data portability is an important direction the web is moving in, that fundamental openness between sites is inevitable – but that Facebook is focusing on questions of privacy and user control as its contribution to that movement. That may be a fair, if frustrating, position for Facebook to take. It may also leave them on the sidelines of larger conversations.

Let’s translate this. I hear Mark is saying that data portability is great but that user privacy and the control of it comes first. While I couldn’t agree more, I have serious doubts Mark is there to protect the privacy of his users. Launching SocialAds and Beacon proves that Facebook isn’t there to protect privacy. That doesn’t generate revenues. Facebook’s sole purpose is to monetize the social network with advertisement. Which is fine, but hardly the “user” perspective. Facebook logs everything we do on the platform. We do not have the option to turn this data hogging off. It is the price we pay for getting the service for free. So let’s get one thing out of the way, Facebook isn’t there to protect our privacy. It is there to protect the Facebook network so that it can execute it’s business model without leaking value away outside the network. The biggest problem I have with this is that most Facebook users are completely naive to the working of this business model. They do not have a clue that Facebook collects their data, their interactions for monetizing purposes. It is the “below the radar” data hogging that creates the tension with user controlled privacy. Not the openness of the Facebook platform. Facebook is one big walled garden, and Mark isn’t going to open up that garden for data portability. He needs people to remain within that garden to make money. It is as simple as that.

On data portability he says:

“If you export your friends list, does their contact information come with that? What if they change their privacy settings later? Right now if you take an action that gets published to your friends’ news feeds, but then if you change your privacy settings later to be more restrictive – then those events disappear from the news feeds. If that data is published off-site, then there’s no longer any control over the data for users.

While this sounds like a real privacy issue which Facebook solves for its users, it really isn’t. Facebook isn’t actually deleting information or protecting the user when he changes settings. Facebook has your data, always, and never deletes it. The real issue is that the data isn’t owned by the user. He doesn’t have any real controls over it. Sure, he can ask Facebook not to display certain aspects of it in a newsfeed, but the data is still there, owned by Facebook. The Facebook user gets a false illusion of privacy and security, but in fact he doesn’t have the control. Always look who is in control, who owns, and you will know who is controlling privacy.

The answer to this privacy issue is really simple. Let the user own and control his data. Only then privacy responsibility is put where it should be, at the user. That doesn’t mean privacy is secure, users make mistakes or do not take their responsibility. It just means that the responsibilities lies there where it really belongs. I’m not sure if the user is ready for it yet, but it is the right thing to do. Check Dick Hardt’s work on identity 2.0 out. He knows what he is talking about and works on ways to solve this issue.

On Beacon Mark says:

On Beacon, Zuckerberg said: “There were sites that people wanted to share from, like Yelp, where you’re already making public comment. For shopping, maybe in a couple of years people will want to share that.” He said that it “was probably a mistake” to roll out Beacon in the context of user commercial activity. He emphasizes that Beacon is a part of the Facebook Platform more than it is an advertising effort.

I think Marshall gets it right when he says:

Zuckerberg’s assertion that people may be more excited about exposing their shopping activities in a few years may be correct, but it might also be the delusion of a man trying to monetize the tricky market of social networking.

I remember the speech Mark Zuckerberg gave when project Beacon was launched. He wasn’t talking to the users. He wasn’t addressing user issues or user value. He was giving his speech to top executives in the advertisement business. He was explaining to them that the world of advertisement was fundamentally changing due to Facbeook and Beacon. So let’s drop the “users want to share” part of this message and recall that the business model of Facebook isn’t about leveraging user value. It is about leveraging network value. Facebook is getting the Turkey ready for serving, the question is, who is the Turkey?

More on data portability:

I asked Zuckerberg if he was taken to the edge of a cliff and had to implement either OpenID, oAuth or APML immediately – which would he chose? He said he enjoyed the question, that OpenID was the one of the three protocols that had been most discussed internally, but that the bulk of actual developer demand seems to him to be focused on the Facebook Platform.

And finally Mark says:

“We are philosophically aligned [with the data portability movement],” Zuckerberg said. “We are pushing in our own way to make the world a more open place. It’s going to be good when it happens.”

I like the “philosophical alignment” part of it. Yeah we are committed to data portability (on a philosophical kind of way), but for now we will focus on the platform itself. Well, he couldn’t have said it any clearer than this. Facebook is holding on tightly to their walled garden. But it is a fight they will not be able to win. Human nature will not let them,. It is in our nature to look for freedom, not to be bound by some network value leveraging business model.

Free is a clever disguise for a concealed trap

I have been writing a lot about the problems I see with the current main stream web 2.0 business model. Free but ad based services.  There are several issues with that business model that I summed up in a post called “$16 Bln reasons to get out of the advertisement trap”. But what is worse about it is that since the major web companies use that business model, new web initiatives follow that lead without thinking about other possibilities. Current web 2.0 thinking is mediocre, lazy and opportunistic.

I am not an expert on these matters. I tend to look at the effects the free business model has on the customer. We are all affected by this business model. While it arguably has several benefits for customers it also comes with very distinct downsides. One of the most important problems with the free business model is that it leads to customer lock-in as, which is the opposite of customer freedom. Consider for a moment the possibilities that would arise if we would think the opposite of free. It might sound like dreaming, but there are many benefits to this, the major one being customer freedom. Everyone talks about the importance of data portability, open networks, open API’s etc. The focus is mostly on the technical aspects, as if we are trying to solve an incredibly difficult technical puzzle. But we tend to forget what purpose it has. It basically resolves two issues, customer freedom and putting the responsibility where it belongs.

Don’t take my word for it, rather read the stuff of experts in the field on it.

I came across several posts that discuss this business model and I thought it would be good to provide you with an overview. Chris Anderson has a nice overview of free discussions here. Kevin Kelly has written several great posts about free. His post called “Better than Free” sums up 8 excellent possibilities to charge services to customers. He really sums it up in just one punchline:

When copies are free, you need to sell things which can not be copied.

But he continues to deepen this thought and offers 8 ways to go about this. I’m going to try and summarise it a bit. Read his excellent article to get into the details:

Immediacy – Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, produced — by its creators is a generative asset.

Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot. 

Interpretation — As the old joke goes: software, free. The manual, $10,000. But it’s no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that.

Authenticity — You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity.

Accessibility – Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, me included, will be happy to have others tend our “possessions” by subscribing to them.

Embodiment — The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.

Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators.

Findability — The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the “long tail” phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The “long tail” is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL)will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users’ attention back to the works.

Alex Iskold continues the discussion with an excellent post called “Beware of Freeconomics”. He ads 2 interesting points to the free business model discussion. The first point Alex provides us is that free leads to a monopolistic market. Google has come, conquered and now rules the free market. While everyone has benefited from this, and Google continues to provide us with new innovations, it has one major drawback. Who can still compete with Google? They have the market, the money, the innovators, and basically kill off competition before it is born. You might have a great idea for a new startup, but how can you possibly compete with that?

As a side step, according to Comscore Google’s incredible growth is possibly endangered as they show a lower US click performance rate in January 2008. While I personally do not think Google’s growth is really in danger it does perhaps show that they are reaching a limit on their basic search revenues. Google is already anticipating on this  by making some bold moves into the mobile and social network markets.

A second point mentioned by Alex Iskold is that free leads to additional complexity. For example, you need indirect ways to make revenues when you provide services for free. Alex provides an example of the ad network as a middle man between the service provider and the customer. You offer an ad based product, but no one wants to pay for ads. Even though your user base might grow, you still lose money.

Free isn’t a holy grail for the user, the service creator, the advertiser, the investor. Free is basically a clever disguise for a bounded world in which we are all handcuffed and tied together in this catch 22 trap. It leads to customer lock-in, monopolistic behavior, the death of innovation, spoiled customers, monetizing network value instead of customer value, data hogging, and walled gardens. But worst of all it leads to the loss of focus on customer value. The free business model isn’t really “free”. Free always comes at a cost.

Free is a clever disguise for a concealed trap we are all locked into.

Think opposite, or keep on dreaming?

Sometimes when you look at a specific situation or problem it helps to think opposite. When you think opposite or try to do things entirely against existing rules it helps you to understand the system or to find new ways of dealing with it.

I was thinking about that last night while going to bed. I entered this half dreamy state right before you fall asleep and my thoughts were uncontrollably unleashed. A stream of thoughts appeared, related to activities on the web. I remember thinking about Facebook, MySpace, YouTube, all the major websites that drive traffic all the time. I linked it to current on-line  advertisement models and thought about how everyone is locked into this advertisement trap (all of this sounds like a conscious stream of thought, but it wasn’t really ). The portal, the network, the traffic, all of that is important for advertisement revenues. But this catch 22 leads to lock-in of the user instead of freedom. It leads to data hogging, instead of setting your data free. It leads to non-portability instead of the user travelling free around the web globe.

And then it came to me, what if we would turn it all around. What if we would think opposite? I fell asleep with this feeling that was a great thought, although now I’m awake again it is difficult to get that positive feeling back again. But I decided to think it through a little to see where it would take us.

What if customer lock-in was changed to customer freedom? Instead of portals and (social networking) sites trying to lock you in (for advertisement revenues) they would set you free.  Customer lock-in is a term thought up by marketeers. It helps them get a grip on their work, but it is pretty abusive to the one being locked in. Of course, all marketeers are idiots and do not understand customers any ways. Letting go of your customer or user is pretty scary stuff. But locking them in and thinking you really have a meaningful brand experience with them is an illusion that is held up by CPM metrics and other old school advertisement tricks.

Setting your customer free means a different approach and philosophy to web service design. No more big portals that have an urge to drive traffic. No more pulling in the customer and never letting him out again. No more data hogging or big brother is watching you. No more not allowing the customer to take his data away to another service or even burning it to a DVD archive (ever tried exporting your Facebook profile data?). It means the service owner doesn’t own the customer (yet another term thought up by old school marketeers), but provides the customer service. It means that monetising the network isn’t important any more. Instead the service provider needs to monetise customer value. It means the end of endless and annoying registration and profile processes when a user wants to obtain a service. No more profile mapping to advertisement schemes (SocialAds). These are pointless as we all look much better on our on-line profiles than in real-life.

Where does that leave the customer? It provides freedom. Freedom of choice, of movement, of service, of data. It means the customer is back in the driving seat. He or she travels around on-line and decides where to stop end get service.  It makes the customer important again. It means that the major services do not force the customer to come to them, instead, they come to the customer when he wants them to. The network is not important any more, it’s the customer. The Internet evolves around the customer, instead of the customer evolving around a Web service. But freedom comes at a cost (it always does). It leaves responsibility where it belongs, with the customer. The customer is responsible for his actions, his movements, his data, his privacy. It means that the customer might have to pay for a service that provides him value (now there is a weird thought), instead of running of to the nearest free service (that locks him in again). Freedom is great, but a bit scary too.

Where does that leave the service owner? He needs to stop thinking in monetising the network, social graph or user profile. He needs to monetise customer value. Instead of locking the customer in with free services he needs to draw the users attention by providing him value. He needs to compete on customer value services instead of the size of his user profile database and advertisement revenues. Letting go of his customer, and trusting that this customer will return for more because he provides him valuable services. No more social networking, but instead focusing on social interaction. It means sending the customer a bill, instead of sending a bill to the advertiser. It means counting on slow uptake of your service (as it might not be free any more), but getting customers on board that actually pay to obtain value. It means organic and natural growth instead of testosterone based power growth. It means you need to rethink your business model instead of going with the current free a-based model. Look where that got Amazon! It isn’t a bad business model to monetise customer value. It’s aactually the most effective business model there is.

Where does that leave the advertiser? He needs to stop thinking that screaming out his message to a large crowd provides the crowd with value. Providing the customer advertisement while he is interacting with his friends within a social network isn’t the right thing to do. It doesn’t provide the customer value, it’s most likely intruding. Thinking negative attention is better than no attention is a lost strategy. Instead the advertiser needs to think how his message, in itself, can provide the user value. Advertisement can only be effective and valuable when the advertisement itself provides value in the context that it is seen. That is why advertisement is so effective in search. That is why Google makes a fortune out of it leaving all competitors way behind. When a customer is searching for something advertisement makes sense. When he is interacting with someone, leave him alone, you’re only trespassing.

Sounds like a great plan to me. But who am I kidding, I was only half awake when the thought hit me.

To be free or not to be free, that is the question

This is a post I actually started writing at the end of 2007. But I had a hard time putting the finger on what it was really about. After today’s announcement of Google and Facebook now joining the dataportability.org work group I decided to look at it again to see if I could get my thoughts about the consequences of freedom on paper.

Looking back at 2007 for me the year has brought us expected but almost endless growth in social networks. The two biggest, MySpace and Facebook have reached both incredible amounts of users and traffic. There is obviously a need for users to participate in such networks. With rapid growth always comes pain. In the case of Facebook clearly the introduction of SocialAds and Beacon have become their major hurdle to be taken this year.

But a more subtle revolt is gaining strength by the minute. It comes from web knights fighting for the cause of freedom. People like Doc Searl, Tim O’Reilly, David Recordon, Rolf Skyberg, and Chris Messina are raising their voices to set the user and his data free. These people have been shouting hard enough to make some the companies with the biggest user data bases, Google and Facebook, to finally join an initiative to work on data portability. Marshall Kirkpatrick from readWriteWeb makes an interesting remark about that:

The group is working on a variety of projects to foster an era of Data Portability – where users can take their data from the websites they use to reuse elsewhere and where vendors can leverage safe cross-site data exchange for a whole new level of innovation. Good bye customer lock-in, hello to new privacy challenges. If things go right, today could be a very important day in the history of the internet.

Customer lock-in is exactly where the problem lies. We need freedom for users, not lock-in.

There has been a lot of talk about the current openness of social networks. Most services aren’t really open. The user gets inside but isn’t able to get out or publish his data from that network anywhere else. The web 2.0 free but ad based business model enforces these walls and is a major threat to both user and data freedom. The holy grail of behavioral targeted ads is strong amongst social networks owners and advertisers. But the tension between the advertiser wanting to get his message across and the user who’s privacy is not guaranteed will lead to backlashes as Facebook has been dealing with at the end of 2007. This tension is becoming so strong that even the Federal Trading Commission has felt the time has come to publish privacy guidelines.

While I also have argued that it is time to set the user free, I have been thinking a little bit about the possible consequences of that. Freedom always comes at a cost. That is fine, as long as we understand what that cost might be. Let’s first see what kind of freedom we are talking about. In a previous post I used the concept of a traveler and a gas station to describe the type of web we might be moving into. This concept leads to:

A passport that identifies you at all destinations, a traveling bag where you can keep your personal belongings, money, food, drink, a good map for the area you travel to, a language guide, and easy ways for you to: obtain relevant information/keep track of/meet/interact with friends and strangers.

It is a very basic and simple list of needs. Translate these needs onto the (mobile) web and we can easily come up with services that address these needs. Entrepreneurs need to think more in terms of running a gas station on a freeway waiting for a car to arrive and servicing the traveler, instead of becoming an amusement park owner, letting children drive a Donald duck car, but only if you visit Disneyland.

Perhaps the most obvious thread to this freedom comes from the user himself. Often depicted as lazy and unwilling to do the work needed to be in control of his own privacy, we tend to think that no one is really waiting to be freed. An argument heard often is “People on Facebook don’t care about the walled garden”.

This is probably true in a lot of cases. But I’m betting that the majority of the people on Facebook or Myspace, or any social network is completely unaware of the underlying business model of the service. They haven’t got the faintest idea that Facebook actually uses their data and interactions to draw advertisers to the platform and the user. Is that a bad thing? No harm done right? True, but it isn’t exactly transparent. And the trouble starts most of the times when the user tries to move his data from one network to another. Not only is this almost impossible to do, it also raises questions who really owns the data.

I believe it is a good thing to open up walled gardens, to set data portability standards and allow the user to move his data around in a way he prefers. I also believe that by doing that, service providers will start moving away from the free but ad based business model and start thinking about user value again. It is a knife cutting both ways. Everybody benefits.

Let’s assume that all of this is happening, that the user gets his freedom again. What does that mean for the user itself? H.L. Mencken once said ‘The average man does not want to be free. He simply wants to be safe”. I think that this quote ties in nicely with the earlier observation that Facebook users are mostly ignorant about the Facebook business model. They have a sense of security that their data is safe at Facebook and don’t really think about the consequences of their privacy.

Freedom comes with consequences:

1. You can’t really be free unless others are free as well. If you are able to export your profile, data from one place to another, but your friends can’t or won’t then it won’t do you much good.
2. If you control your data, then you get the responsibility for protecting it to a level that you are comfortable with. No blaming services like Facebook anymore. If things go wrong, then you probably screwed up yourself
3. With this responsibility comes work and effort. As people are inherently lazy and pattern steered beings, changing this pattern will be a major hurdle. If controlling your privacy takes too much effort you won’t do it, with all the consequences being your own responsibility.
4. Just as you have the freedom to chose how to handle your privacy and data, your friends have that right too. It isn’t really up to you to move data you got from a friend to another place. It is your friend who should be deciding about that.

Right now I don’t hear a lot of talk about how these issues are going to be handled when data portability becomes a given. I would have been surprised if it was being discussed as data portability seems to be a tech-created solution to the wrong problem. As I said before:

Unfortunately, we are all fighting the wrong war. It shouldn’t be about who owns the data. Who cares? It should be about providing me the best value. What I simply cannot understand is that service providers don’t realize they can have ALL relevant data directly from me if they provide me value, and if I am willing to trust them. It is all about choosing the wrong business model (data, walled gardens, free but ad-based services) instead of providing the user true value (the best business model you can think of).

Freedom for the user can only be achieved if we implement the right tools for him to protect and benefit from that freedom.  We need:

1. Excellent, easy to understand and use, transparent, privacy and trust controls where the default is always set by the standards of the user. This standard should be implemented across any service the user actually uses. It implies that these measures are user centric, not site-centric!
2. Easy to use exporting and archiving tools. Freedom for me and my data isn’t really true if I can’t move around easily. We need standardization so that exporting social data from one network to another can be done seamless by the user himself. That also includes downloading all my stuff to my own computer, burning them to a CD etc. Ever tried burning your Facebook contact data to a CD?
3. I often see privacy tools implemented in such a way that technically protect my privacy well, but require unwanted amounts of effort to use. I don’t want to be in a continuous dialog with a privacy control system asking me if person x or company y can have a specific piece of information. It will take too much effort of the user and will therefore never work. Instead we need a finite set of default behaviors that are related to the task I’m doing as well as the data that is being used. An obvious example would be that it would be rather odd if Facebook would start asking me about my credit card details when I’m browsing profiles. But when I’m buying a book at Amazon, it is just fine. In the first case I might want to actively make a privacy decision, in the second case probably not.

Data portability is important and it is good to hear that some of the major players are now joining the work group. But I hope they aren’t going to solve a technical problem. What they should be thinking about is how technology can support human needs. If they do that users will be freed, if they don’t then we will be stuck with a technical solution to the wrong problem. To be free, or not to be free, that is the question.

Just a few minor wishes for 2008

As this is my first post in 2008 I will take the opportunity to wish you all a fantastic 2008. I hope that some of your wishes will come true (or else you wouldn’t have anything to wish for) and that 2008 turns out to be a great year.

The past week I have been disconnected from the Internet. I spend my time with family and friends enjoying Christmas and new year celebrations, the most important things in life. I also started doing some work on our house, we’re about to start to build four new bedrooms to fit our fast growing children in.  It was really relaxing not having to read e-mail, look at newsfeeds, or even Twitter. I found it quite easy to unplug. But I couldn’t help myself thinking about some of the things I have been writing about the past year. So I ended up making a wish list of things I like to see happen on the Internet this year.  I will spend some time at the beginning of this year to write them out. But here is the first one for 2008

1. Bring freedom and responsibility back to the user.
The current Facebook – Scoble data storm is the perfect example of that. Scoble is banned from Facebook for trying to export data of his friends to another application Plaxo. This has lead to a large discussion where people either agree with Scoble or Facebook. And some wonder who really owns the data. Scoble is back on again, Facebook let him back.

In my opinion we can learn a lot from this incident. First of all, applications that build their business models around walled gardens will increasingly have to fight of those that will try to tear down these walls. And they will lose. Human nature will always find a way to deal with walled gardens, just look at the brief history of the Internet (or any history really).  Walled gardens are broken down constantly and re-appear in different form. But the business model that comes along with it is not a good business model and will ultimately fail.

Secondly, the breaking down the walled gardens issue is really a data war as Scott Karp calls it rightly. It is about service providers trying to monetize user data and in order to do that they need that data exclusively.

Unfortunately, we are all fighting the wrong war. It shouldn’t be about who owns the data. Who cares? It should be about providing me the best value. What I simply cannot understand is that service providers don’t realise they can have ALL relevant data directly from me if they provide me value, and if I am willing to trust them. It is all about choosing the wrong business model (data, walled gardens, free but ad-based services) instead of providing the user true value (the best business model you can think of).

Thirdly, Nicolas Carr gets it (half) right when he says:

Facebook has an obligation to protect the data entrusted to it by its members. At the very least, members should have the right to decide whether or not their personal information can be scraped out of the Facebook database. Scoble did not give them that choice.

Users should be protected against possibly harmful automated data collections. Nicolas points out that Facebook has an obligation to protect its users. True, but only for the right reasons, e.g. the protection of its users. They are crossing a thin line when they are doing it really to enforce walled gardens around the user.But the user has no NEED for walled gardens, all he really NEEDS is freedom.

But with freedom comes responsibility. The user can’t just sit back and blame Facebook or any other service for not protecting him. He needs to actively enforce his own privacy and protection rules to ensure that he is in charge of his information.

My first wish for 2008 is that Service Providers build business models on user value instead of walled garden free but ad-based business models. In doing this they should provide the user with excellent, easy to use, transparent, privacy controls where the default is always set by the standards of the user. This wish would provide us with 3 major changes: The service provider becomes a partner that can be trusted and that provides user value instead of walled gardens, the user gets his freedom, and the user becomes responsible for his own actions and data on the Internet.

I read Dave Winer’s comments this morning, I really like his analysis. He says:

So Facebook has the opportunity to be a crossover company, part of the next generation — or a last gasp of the generation that’s about to run out of gas. It’s their choice. And it’s fitting somehow that Scoble is the poster child for users in this cycle.

I tend to think that Facebook is part of a generation of service providers that is unable to make the transition. To speak in terms of Jim Collins, they are a good company, but I doubt they are a great company (yet).

Freedom to the people (part 2)

In a previous post I talked about some major changes I would like to see happening to the current web. The most important aspect of that is to provide the user freedom again. I said:

More than 2006, when Time Magazine unfortunately called YOU the most important person of the year, I think and hope 2008 will be the year where the user gets his long-wanted freedom back. 2008 will be a year in which we will see the first brand/portal/network/social graph/device- agnostic services pop up. What does all of that mean? It means that the portal or network concept we are so used to is slowly replaced by initiatives where the user isn’t locked in, but viewed as a traveler reaching a place where service is required.

To reach freedom for the users we need new business models. No one will freely remove the existing “customer or advertiser lock-in”, walled gardens, locked user data unless there is a new economic engine that can really set the user free. At the same time we might question the user’s comprehension of what it means to be locked in or set free. Millions of people are already locked into walled gardens and exploited for advertisement reasons without really knowing it or even caring about it. The same thing holds for advertisers. They are locked into a promise that a new era in media has arrived and that it will bring endless new possibilities to reach a targeted audience using tools like Beacon and SocialAds on Facebook.

At best an advertiser reaches a semi-targeted and somewhat ignorant audience. But most likely these new ways of reaching targeted sets of people will lead to indifference by the user. A new business model or economic engine isn’t enough, we also need to show the user that being free has advantages over being locked in. We need to show the advertiser that advertisement only makes sense if the advertisement itself provides the targeted user value. And we need to convince service creators to work on user value monetization instead of network value monetization.

What would such an economic ecosystem have to look like? What benefits should it address? Difficult questions with difficult answers. Chris Messina points this out very well when he says:

We need instead to frame the discussion in terms of real-world benefits for regular people over the situation that we have today and in terms of economics that people in companies who might invest in these technologies can understand, and can translate into benefits for both their customers and for their bottom lines.

The discussion is continued with Anne Zelenka at GigaOM.

Real-world benefits for the user

What could be real-world benefits for the user to be free? Although some obvious advantages like data freedom and privacy control come to mind immediately, we might need to look beyond that. Let’s face it. There are currently hundred of millions of people locked into social networks like Facebook and MySpace and they do not seem to care that their profile data, friends data, relationships and interactions aren’t their own. It is impossible to export any of that into another service thus providing the user choice. But he doesn’t seem to mind much. His privacy isn’t guaranteed and his data is being used to target advertisers onto his profile. Users are often described (and often behave) like ignorant, lazy, “entertain me” like people. Some even predict it is human laziness that will burst the web 2.0 bubble.

I am a more positive thinker about human nature. People need to interact, and they want to do this as conveniently as possible (we are a bit lazy right). Freedom is about having a choice. Being able to say I can choose it the way I want. I believe that if a user is offered choice between spending time within walled gardens or traveling around as a free man, the choice will be on freedom. Freedom would provide the user the possibility to integrate real-life experiences with “cyber” experiences. In a way that is convenient to him.

I wrote about the web being a surrogate of real-life interactions. But if you can integrate real-life interaction with the ability to share and interact with people who are not physically present it would add value.You should be able to decide how, where, when and with whom you would have that interaction. Regardless of device, technology or platform. That is what freedom is about.

You can use Facebook and the friends you have there, but if you want to do something else, then it should be possible as well. Without you losing the ability to interact because some platform locked your friends away behind some wall. And freedom is a blade cutting 2 ways. If you have the choice to interact in the way you want, a service provider that wants to service you needs to provide value. For it is only that user value that makes you want to use that service provider. So freedom for the user leads to user value innovations, everybody wins.

And with this freedom comes the ability to be able to identify yourself anywhere with one means, and the ability to perform transactions anywhere using a simple mechanism.

Benefits for the advertiser

If a user is free he will choose to interact with a brand or an advertiser. It will be a positive choice, one of free will. It provides the advertiser with a meaningful interaction with the user, providing him valuable opportunities to build a brand, advertise or sell stuff that matter. The advertiser can learn more about the user in a way more targeted than a Facebook profile or Beacon message.

It means letting go, stop waisting enormous amounts of advertisement spendings on large groups of users. Instead the advertiser will have to learn to interact on an almost individual basis with users. Microbranding. Scary, but also potentially very powerful. It also means that advertisers will have to deal with the user being on the move (for he is a traveler). It will focus the attention of the advertiser to add value to the experience of the traveler. Not just broadcasting a message to him, but understanding what the travelers needs are when using a service, and adding value to that user experience by providing brand or advertisement that actually matters.

Benefits for the service creator

If the service creator would be able to let go of the concept of “customer lock-in” and think about his business in terms of serving a free traveling customer he would be forced to think in terms of user value. There is no need to put up walls and lock customer or advertiser within those walls, as the user is free to go wherever he wants to. Instead he needs to work on his main competitive advantage, providing the user more value than a competitor could do.

Service creators need to let go of their proprietary platforms, the lock in of users and their data, the free but ad-based business model. They need to participate in a user-centric web, become a gas station next to a freeway servicing the traveler passing by.

There are clear benefits for the service creator. Most importantly, instead of providing services for free and creating revenues through ads, the user will pay for the value he obtains. This leaves the service creator to concentrate on user value and monetizing that. It implies that the service creator should not focus on page rank, page views and user clicks but instead focus on meaningful interactions of the user via his service. Interactions to buy or sell things, to find help or provide help, interactions with friends or strangers, search information. Each of these interactions can be monetized if they provide the user value. We are happy to pay for sending an SMS because it allows us to interact with our friends. We pay for a professional Flickr account because it provides us more freedom and value than a free account. We should be paying Twitter when sending an SMS for it adds value to my interactions with others.

This is not an easy step to be taken by the service creator. Right now he is in control, he owns the platform, the data, the social graph, the connections to the advertiser, and yes, even parts of the user in some way. They have to believe that freedom in the end benefits us all. A user that willingly chooses to go to a service creator will be more valuable than a user that is (unwillingly) locked into the service by the service creator. As Milton Friedman, Economics Nobel prize winner, has said rightly:

“Underlying most arguments against the free market is a lack of believe in freedom itself”

I have only provided an outline or framework in which an economic engine might be redefined allowing the user to become free (and taken too many words for it already). More and detailed work needs to be done to define the benefits for all. Then again, courage and the willingness to start is all it takes to set the user free and and the same time making huge amounts of money on the monetization of user value. Any takers out there?

Freedom to the people

We are nearing the end of 2007 so human nature forces me to look back and forth, thinking about things that happened and things to come. I am by no means a good trend or technology predictor, but here’s my take on it.

Looking back the most talked and blogged about subject is probably Facebook and it’s plans with monetization of their build up social graph. The story remains a top item on TechMeme, and it is a controversy as most either love or hate their Beacon attempt. Now that we are slowly recuperating from the privacy backlash they received, the next thing already being discussed is the possible inflation of visitor numbers or even the stealing of people from other companies. Facebook is now getting payback for the hype that was created around it. This almost seems Dutch behavior. In Holland we tend to talk anyone down sticking his head above the play field. Facebook is in that league now and I predict for 2008 that they will get into more trouble than they are already in right now. Not because they might be doing things wrong, but more likely because they are becoming too popular and the blogging community seems to be smelling blood. And that isn’t good. Fear isn’t what Facebook needs now. It needs leadership and making the right choices together with its users.

Looking forward towards 2008 I feel that the time is there to make some major changes in the current web. We need technological barriers to be taken down by developments such as Android, openSocial, OAuth, and OpenID.  It will take time, but in the end the user wins. I’m not going to worry too much about the technology needed, it always finds a way. More interesting is to think about human nature and the needs that we might need fulfilling in 2008.

More than 2006, when Time Magazine unfortunately called YOU the most important person of the year, I think and hope 2008 will be the year where the user gets his long-wanted freedom back. 2008 will be a year in which  we will see the first brand/portal/network/social graph/device- agnostic  services pop up. What does all of that mean? It means that the portal or network concept we are so used to is slowly replaced by initiatives where the user isn’t locked in, but viewed as a traveler reaching a place where service is required.

If you think about  the user becoming a traveler instead of a profile in a network or social graph then you quickly realise that current service isn’t all that fit to service the traveler. We have walled gardens, locked data, privacy issues, spam, free but ad-based web business models, crappy mobile to Internet solutions, locked mobile phones and networks, a total lack of standards, competition on the network and profile layer instead of on the application service layer, customer “lock-in”, advertisers “lock-in”, iPhone wannahaves, Beacon, DRM, etc. Essentially things that are meant to keep you locked into a specific place, instead of letting you move around wherever you want to go.

But a traveler really doesn’t need all that. What would you take with you when you go on a trip? Basic needs probably include:

A passport that identifies you at all destinations, a traveling bag where you can keep your personal belongings, money, food, drink, a good map for the area you travel to, a language guide, and easy ways for you to: obtain relevant information/keep track of/meet/interact with friends and strangers.

It is a very basic and simple list of needs. Translate these needs onto the (mobile) web and we can easily come up with services that address these needs. Entrepreneurs need to think more in terms of running a gas station on a freeway waiting for a car to arrive and servicing the traveler, instead of becoming an amusement park owner, letting children drive a Donald duck car, but only if you visit Disneyland. This sounds easy enough, but with it comes a radical change in business models. Not based upon page views or clicks, as these are easily inflated, but based upon user value.

As Rolf Skyberg puts it, the network should become the commodity. The question is, who’s going to do the plumbing?

My hopes for now lie with new initiatives like OpenSocial, and Android,  because they do the open “talk”. Let’s see if they can do the “walk” too. Let it be noted that I could care less about the Social Graph, web 3.0, or whatever you want to call it. It is time to free the people, who will take the first step in 2008?

Who will free the iPhone customer?

What is the deal with Steve Jobs, who is protecting his iPhone from being used the way users really like it, their own way? Apple not only launches it exclusively with certain partners, telling all you morons that don’t happen to have a mobile subscription there to hop over, but it also doesn’t like it when people try to open it up themselves.

Hacks are reported on a daily basis for the iPhone. I wonder how long it will take Apple to understand that these hacks aren’t just a protest against our savior Steve.

The hacks are coming from two emotions: the techies that just love to prove that “it can’t be hacked!” isn’t true, and the  user that disagrees with the “you have no choice” mantra.  If someone tells you that you only have one choice (his), what do you do? Well, I remember getting these sort of speeches at home when I was a child. Didn’t like it then, don’t like them now.

The iPhone may just be the invention of the year. Apple, just may have proved that mobile communications can be redesigned and evolved into a new user experience. But, having said that, they also ignore a basic need of their customers called “freedom”.  Making it an exclusive phone that is only within reach of a few proves to be an excellent short term revenue strategy. It is already the most talked about market entry strategy in the mobile world. But I cannot help but think it is also a very arrogant strategy towards the customer. If we are to make mobile Internet successful, and let the iPhone be one of its drivers, then  Apple better start thinking about opening up their platform.

If not, then Apple will definitely have a great niche on its hands and make a great living on it. But the mass will most likely choose something that works on all carriers and handsets.

And the mobile operators better rethink their strategy as well. As long as they determine who can get on their network and who cannot, they will remain hijacked to the Apple mantra. Forcing them to pay loads of money to Apple for every iPhone they sell.

It is freedom that sells in the end. Freedom will help customers (re-) discover the Internet on their mobile phones. Freedom is the ticket to increase in ARPU, the thing Mobile carriers need so desperately. Google is trying to jump on the bandwagon of freedom with their recent Android announcements. We will have to wait and see if that will be taking of. In the meantime the question remains. Who will free the customer?