Data capital, or: data as common tender

Legal TenderWikipedia states that … is payment that, by law, cannot be refused in settlement of a debt denominated in the same currency. , in turn, is a unit of exchange, facilitating the transfer of goods and/or services.

I was asked a question earlier today about the relative value of open services against open data served in open, non-proprietary data formats. It got me thinking whether — in the pursuit of utter openness in web services and portability in stored data — that’s the right question. Are we providing the right incentives for people and companies to go open? Is it self-fulfilling or manifest destiny to arrive at a state of universal identity and service portability leading to unfettered consumer choice? Is this how we achieve VRM nirvana, or is there something missing in our assumptions and current analysis?

Mary Jo Foley touched on this topic today in a post called Are all ‘open’ Web platforms created equal? She asks the question whether Microsoft’s PC-driven worldview can be modernized to compete in the network-centric world of Web 2.0 where no single player dominates but rather is made up of Best of Breed APIs/services from across the Web. The question she alludes to is a poignant one: even if you go open (and Microsoft has, by any estimation), will anyone care? Even if you dress up your data and jump through hoops to please developers, will they actually take advantage of what you have to offer? Or is there something else to the equation that we’re missing? Some underlying truism that is simply refracting falsely in light of the newfound sexiness of “going open”?

We often tell our clients that one of the first things you can do to “open up” is build out an API, support microformats, adopt OpenID and OAuth. But that’s just the start. That’s just good data hygiene. That’s brushing your teeth once a day. That’s making sure your teeth don’t fall out of your head.

There’s a broader method to this madness, but unfortunately, it’s a rare opportunity when we actually get beyond just brushing our teeth to really getting to sink them in, going beyond remedial steps like adding microformats to web pages to crafting just-in-time, distributed open-data-driven web applications that actually do stuff and make things better. But as I said, it’s a rare occasion for us because we’ve all been asking the wrong questions, providing the wrong incentives and designing solutions from the perspective of the silos instead of from the perspective of the people.

Let me make a point here: if your data were legal tender, you could take it anywhere with you and it couldn’t be refused if you offered to pay with it.

Last.fm top track chartsLet me break that down a bit. The way things are today, we give away our data freely and frequently, in exchange for the use of certain services. Now, in some cases, like Pandora or Last.fm, the use of the service itself is compelling and worthwhile, providing an equal or greater exchange rate for our behavior or taste data. In many other cases, we sign up for a service and provide basic demographic data without any sense of what we’re going to get in return, often leaving scraps of ourselves to fester all across the internet. Why do we value this data so little? Why do we give it away so freely?

I learned of an interesting concept today while researching legal tender called “Gresham’s Law” and commonly stated as: When there is a legal tender currency, bad money drives good money out of circulation.

Don’t worry, it took me a while to get it too. Nicolas Nelson offered the following clarification: if high quality and low quality are forced to be treated equally, then folks will keep good quality things to themselves and use low quality things to exchange for more good stuff.

Think about this in terms of data: if people are forced (or tricked) into thinking that the data that they enter into web applications is not being valued (or protected) by the sites that collect the data, well, eventually they’ll either stop entering the data (heard of social network fatigue?) or they’ll start filling them with bogus information, leading to “bad data” driving out the “good data” from the system, ultimately leading to a kind of data inflation, where suddenly the problem is no longer getting people to just sign up for your service, but to also provide good data of some value. And this is where data portability — or data as legal tender — starts to become interesting and allows us to start seeing around through the distortion of the refraction.

Think: Data as currency. Data to unlock services. Data owned, controlled, exchanged and traded by the creator of said data, instead of by the networks he has joined. For the current glut of web applications to maintain and be sustained, we must move to a system where people are in charge of their data, where they garden and maintain it, and where they are free to deposit and withdraw it from web services like people do money from banks.

If you want to think about what comes next — what the proverbial “Web 3.0” is all about — it’s not just about a bunch of web applications hooked up with protocols like OAuth that speak in microformats and other open data tongue back and forth to each other. That’s the obvious part. The change comes when a person is in control of her data, and when the services that she uses firmly believe that she not only has a right to do as she pleases with her data, but that it is in their best interest to spit her data out in whatever myriad format she demands and to whichever myriad services she wishes.

The “data web” is still a number of years off, but it is rapidly approaching. It does require that the silos popular today open up and transition from repositories to transactional enterprises. Once data becomes a kind of common tender, you no longer need to lock it; in fact, the value comes from its reuse and circulation in commerce.

To some degree, Mint and Wesabe are doing this retroactively for your banking records, allowing you to add “data value” to the your monetary transactions. Next up Google and Microsoft will do this for your health records. For a more generic example, Swivel is doing this today for the OECD but has a private edition coming soon. Slife/Slifeshare, i use this and RescueTime do this for your use of desktop apps.

This isn’t just attention data that I’m talking about (though the recent announcements in support of APML are certainly positive). This goes beyond monitoring what you’re doing and how you’re spending your time. I’m talking about access to all the data that it would take to reconstitute your entire digital existence. And then I’m talking about the ability to slice, dice, and splice it however you like, in pursuit of whatever ends you choose. Or choose not to.


I’ll point to a few references that influenced my thinking: Social Capital To Show Its Worth at This Week’s Web 2.0 Summit, What is Web 2.0?, Tangled Up in the Future – Lessig and Lietaer, , Intentional Economics Day 1, Day 2, Day 3.

Modern music economics: a fierce independent streak

CoverSutra - IN RAINBOWS

Steven Hodson posted a response to my IN RAINBOWS entry titled “Being free doesn’t make crap any better“. He makes the simple argument that, just because bands are freeing themselves from their labels and giving their fans the ability to pay what they want for their albums, that this won’t necessarily result in higher quality music being produced. It just means that we won’t have to buy the filler crap that most bands crank out to fill out albums to convince us to shell out $18 a CD.

He reminisces:

When I first started collecting music back in the days of vinyl it was commonly accepted that at least one; two at the most, tracks on the LP would be crap and usually stuffed onto the B-side of the LP. Over the years this ratio has slowly changed to the point that the majority of the time you are lucky if even half the songs are worth listening to. We became nothing but cash cows for the music industry as we lined up obediently with every big release and plunked over our hard earned money because we had no alternatives.

He goes on point out the change:

Then came the Internet and suddenly we had a way to thumb our noses at the industry that had been bleeding us dry and get only the songs we felt were worth listening to. The days of the 45 single had returned albeit in electronic form.

He then attacks what he sees as my warm and fuzzy view of a kinder, gentler “Open Media Web” (my term, borrowed from Songbird’s Rob Lord — (a client of Citizen Agency)).

The comment thread seems particularly interesting, so I thought I’d reproduce it here. I begin:

Hmm, I’m not sure that I have any illusions about the role of commerce in the decisions of these bands. Especially in the cases of Radiohead and NIN, they’ll do fine selling direct to consumers. For many other bands, especially undiscovered ones, or ones who aren’t MySpace et al-savvy, I think it’ll be a long slog before they can go completely independent. Let’s face it, you have to reach a certain amount of volume selling your wares before you can survive off of it.

In any case, I wouldn’t look at this as so much a warm and fuzzy revolution, but rather the kind of circumstance that made the coming of Firefox so exciting… the ground is beginning to shift and the landscape is taking on new forms. If Firefox didn’t come around, who knows when Microsoft would have been forced to update its browser…! The same thing is true for music now with bands advocating for fans to “steal their music” (as Trent Reznor proclaimed, genius marketing if you ask me) or advocating against the use of DRM (since it effectively reduces the number of people who can experience a band’s music, limiting their potential viral spread — which is where bands get their volume from!).

Anyway, I see the commerce side of this. This isn’t just a “Free The Music From the Evil Tyrants” thing. This is changing the way that money is made and how it flows. An Open Media Web is about recirculation, redistribution and greater freedom of choice. Personally I hope this change (more openness and choice) brings about a Darwinian evolution where the crap begins to wane and bands are forced to actually crank out top shelf A-Sides in order to make it.

We’re still a long way off, but I’m not sure, as was the case in the last post we exchanged words on, we really disagree.

Steve follows:

Chris I have to admit I always like it when you join in any of the conversations I try and spark here at WinExtra. Both from the point of view that you as a firm Web 2.0 proponent bring to the table and because you always have some intelligent feedback. Maybe that is one of the reasons why your posts tend to either spark thoughts of my own or figure prominently in my posts.

I do agree that the ground is shifting under us but whether it will make any difference in the larger picture of society is highly debatable. In this bubble we call the early adopterism of all things cool we seem to suffer from a myopic view that people outside of the bubble will see things the same way.

With music as much as folks who look at the current happenings hope that this will indeed foreshadow a larder trend outside of the bubble that will result in more bands being able to get out from under the thumb of music labels and become successful the fact is I think for the larger Internet world it will only see the word FREE.

As for not disagreeing on points in discussions we have had in the past I think my next post today; which again was sparked by one of yours, may see us definitely at opposite ends LOL

Thanks for taking time and being a part of my contributions to the conversation chain

Finally:

I do think there is something to the insider bubbloptics effect that keeps us somewhat sheltered from reality. And as much as I try to empathize or imagine what the rest of the world might think about such things, let’s face it, I’m like Paris Hilton thinking that I can speak for Guantanamo inmates.

That said, I do have a view inside the bubble, and since I’m originally from New England, I have a curmudgeonly distrust of all things large and who think they’re in charge. Usually that means the government or Big Business, and in this case, I’m talking about the collusive record labels.

Will there be some cataclysmic changing of the guard where every band joins up with a new RIAA (Recording Independents Association of Anarchists?) and goes Free Agent Nation on the former RIAA’s ass? Will all bands start giving away their music for free? Or better yet, seeding copies of their albums to the BitTorrent networks themselves? I doubt it.

BUT, what is important here is that Radiohead, NIN and the others are waking up from their somnambulant stupor and realizing, in Harrison Bergeron fashion, that they do indeed have free will and can take risks (instead of just pot shots) with their own careers if they so choose.

And since the actualization of choice is tantamount to establishing that one has free will, marketing-driven or not, the fact is, their model will become an inspiration for an entire generation who won’t just assume that the only way to make it is through signing away your life and becoming a slave to the economics you decried in your post, but instead that they can consider alternative routes to success and satisfaction and more importantly, more genuine or original ways to create and be involved with music, less as a Business, and more as an Art.

So Mozilla wants to go mobile, eh?

As with baseball, on the web we have our home teams and our underdogs and our all-stars; we have our upsets, our defeats, and our glorious wins in the bottom of the ninth. And though I’m actually not much of a baseball fan anymore (though growing up in New England, I was exposed to plenty of Red Sox fever), I do relate my feelings for Mozilla to the way a lot of folks felt about the Red Sox before they finally won the World Series and broke the Curse of the Bambino: that is, I identify with Mozilla as my team, but dammit if they don’t frustrate me on occasion.

Tara wonders why I spend so much time on Mozilla when clearly I’m a perennial critic of the direction they’re headed in and the decisions that they make. But then Tara also didn’t grow up around vocal critics of the Red Sox who expressed their dedication and patronage to the team through their constant criticism and anger. It might not make sense, and it might not seem worth my time, but whatever the case, you really can’t be neutral about Mozilla and still consider yourself a fan. Even if you disagree with everything decision that they make, they’re still the home team of the Open Web and heck, even as you bitch and whine about this or about that, you really just want to see them do well, oftentimes in spite of themselves.

So, with that said, let me give you a superficial summary of what I think about Mozilla’s recent announcement about their mobile strategy:

If you want to stop reading now, you can, but the details and background of my reasoning might be somewhat interesting to you. I make no promises though.

Continue reading “So Mozilla wants to go mobile, eh?”