Starring in Your Own Constellation: Independent Identity in Networked Markets
The Cluetrain Manifesto, which went up on the Web seven years ago, is perhaps best known for ideas like "markets are conversations" and "hyperlinks subvert hierarchy". But perhaps Cluetrain's most important concept isn't in its long list of theses, but in the plain facts behind in a noun compound repeated three times in its preamble: networked marketplace. (The word "networked" appears 23 times and "market" 52 times.)
Cluetrain was about what the Internet does for markets. Four years later (Cluetrain co-author) David Weinberger and I posted World of Ends, which unpacked some points about the Net's end-to-end architecture. One was the Net's essentially open and ownerless (yet endlessly improvable) nature. Another was the location of action on the outside, or surface, of the Net — at its ends, rather than in the middle.
Lately many advocates of the Net have been framing its all-ends nature as Net Neutrality. (David Weinberger says Net Neutrality is "formerly known as the end-to-end principle".) Net Neutrality is being debated all over the place right now, including by me. Since most of the debating is focused on political action (or inaction, or traction, take your pick), precious little is focused on business. Or, specifically, on the countless markets, new and old, that the Net facilitates and supports.
Those markets are comprised of ends, too. A market of ends is one that may include value chains, but is primarily comprised of what Richard Normann and Rafael Ramirez called value constellations. See "Designing Interactive Strategy: From Value Chain to Value Constellation", John Wiley & Sons, 1994, or the Harvard Business Review article that preceded it in 1993.) Thanks to the all-ends nature of the Net, we are all peers here. The powers we bring to the Net may differ widely, but at a fundamental level we all enjoy powers that far exceed anything we enjoyed in the disconnected world that preceded the networked one.
When Cluetrain (in the words of Chris Locke) said —
we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.
— it turned marketing labels into pejoratives. It also served notice to the head ends of value chains that they are now also peers among stars in the collection of constellations we call the networked marketplace.
Now, seven years later, seems like a good time to talk about how we, as peers work in this marketplace. For example, how does the networked nature of markets change the way we relate? (And not just transact or converse.)
We don't know yet. Because the new models aren't there. We understand value chains extraordinarily well, because we've been operating with them for hundreds of years. Value constellations are still new.
I'd like to suggest, as long as we're in such protean territory, that the value constellations that will matter most in the long run are the ones that assemble around the individual market peers we call customers.
This is where I was going with The Intention Economy:
The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them.
The Intention Economy is about markets, not marketing. You don't need marketing to make Intention Markets.
The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don't have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer's purchase. Simple as that.
The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just "branded" by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.
The Intention Economy is about buyers finding sellers, not sellers finding (or "capturing") buyers.
In The Intention Economy, a car rental customer should be able to say to the car rental market, "I'll be skiing in Park City from March 20-25. I want to rent a 4-wheel drive SUV. I belong to Avis Wizard, Budget FastBreak and Hertz 1 Club. I don't want to pay up front for gas or get any insurance. What can any of you companies do for me?" — and have the sellers compete for the buyer's business.
In order to operate in the Intention Economy — in order to attract your own value constellation — you will need the freedom and liberty to be independent and autonomous. For that you will require an independent identity. This is what we — the Identity Gang and its fellow travelers — have been working toward in our many conversations, and in our series of Internet Identity Workshops, the latest of which commences in just a few hours in Mountain View.
I would like to suggest to the gang, and to the rest of ya'll, that we need something in the identity-based market relationships that is akin to what Creative Commons brings to creative relationships. I don't know what it is yet, and I don't want to carry the analogy too far. But I do think we need something that puts buyers and sellers on a peered footing in the same way that Creative Commons licenses do for artists and users.
Note the role of intention in Creative Commons licenses. Seems more than coincidental to me.
Anyway, I have to get back on the road so I can make it to the workshop on time. Meanwhile, I wanted to get this thinking up and on the Web.
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Affinity vs. Intention
It was the Cluetrain Manifesto that helped me realize that open source is not communism, but a radical restructuring of the software market. By describing the mechanisms that alter the way people perceive and interact with a product and the people behind the product, I could realize that open source was not just an alternative to the commercial software world, but that the commercial software process is in intensive care.
Does the notion of an Intention Economy equally apply? The example that you give with car rental is a commodity service with a huge potential market. It is also a commodity service that can be differentiated through options: loyalty points, convenience factors and location-specific services. Would this also be applicable to software and open source?
Open source has done well where software has been commoditized. Open source has not really done well in markets for specialized applications, but has done well in mass market software that can target millions of users. The software goes out there and users discover the software through reviews, blogs and directories. It is up to the user to choose which open source software of a particular category meets their needs.
In my company’s category of content management, constellations have not happened through an individual as a constellation, but a community as a constellation. The content management market and open source in particular, have been highly fragmented. In the fragmented open source content management market, users have discovered communities of affinity where wikis, or French content, or XML content, or blogs might be more important. At this point, the community speaks through a consensus voice that they want particular features or combination packaging. Often, they do this work themselves and attract more people of a particular affinity.
This model is true, in general, of open source. It is ultimately not an expression of intention to buy, but more of an affinity group of both “buyers
Intention vs. Marketing
First, I think open source is two things. One is a set of development principles and practices. The other is a noncommercial breed of software. It adds a "because of" effect to the "with" effects to which we were accustomed in the software marketplace. In the past you only made money with software: by boxing and selling it as a manufactured good. Now there are because effects as well. Companies make money because of open source products, rather than with them. Google, Yahoo, Amazon and countless other companies make far more money because of Linux than any "Linux company" (e.g. Red Hat, Novell) makes with Linux.
This is not to say there isn't a commodity market for open source goods. As Don Marti says, "Information wants to be $6.95".
The car rental example is useful because the competitive offerings are nearly identical, and the whole industry has been stuck in a commodity mode for a very long time. The flywheels of Business As Usual there are so enormous, and so geared into the airline industry, that the two conspire — probably unintentionally — to replicate the airport experience online, rather than offer something more appropriate to the networked "live Web" marketplace. (United actually kills sessions with one agency when the customer goes off to check offerings at another.)
Aside from countless new offerings that rental car agencies might try out (test drive-to-buy, per-driver customization, etc.), they could also compete in willingness to give customers what they want, when the customers' intentions become known.
Not long ago I spoke with a marketing chief at one of the major rental agencies, and he told me he found the prospect of full customer empowerment, independence and autonomy "frightening". He said his was a "tonnage" business. I told him coal and pork bellies were tonnage businesses. His business was renting expensive products to wealthy customers. The fact that his industry had a tradition of treating customers as luggage with drivers licenses didn't mean there were not countless new ways to differentiate, or to build relationships and loyalty, outside the scope of their limited and obsolet Customer "Relationship" Management (CRM) systems.
As for the markets where open source has done well, these have moved steadily up the stack from the bottom (Linux). Today there are open source offerings in data center management, transaction monitoring, PBXes, CRM, ERP and lots of other formerly high-end areas. Most, but not all, of the money is being made from services. There are lots of creative approaches to revenue production there.
As for users discovering which open source items they need, I think that's still a matter primarily of interest to experts. For the most part, open source is infrastructural, and buried inside offerings that specialize in other ways.
As for content creation and management, there are affinity groups (around various forms of wikis, blogging software, RSS aggregators and largescale CMSes such as Drupal), but I think those categories are all changing rapidly as users and developers together evolve the base infrastructures forward.
You're right that buyers and sellers express (I'm not sure "advertise" is always the right word here) their intentions. And your points about affinity are good ones.
My purpose in talking about an "intention economy", however, is to factor out all but two things: 1) the customer with a made-up mind and money to spend; and 2) all the marketing and sales efforts that work to make or change the customer's mind.
I believe it is only by focusing on this one narrow set of concerns that we'll begin to build market mechanisms that are 1) fully efficient; and 2) give full respect to the customer as an independent, autonomous and fully potentiated participant in the marketplace. And not just a "consumer" with a few more choices among silos.