Just remember, No matter where you go, there you are.

Multichannel, multichannel, multichannel.  For online businesses, it is simultaneously the New Promised Land as well as The Impending Doom.  I’ve discussed before how I think Amazon will ultimately see its greatest threat come from Walmart, and may actually acquire Target or Sears in order to pre-empt the risk of a competitor that can offer online deals as well as physical storefronts.  The same could be said for Best Buy over NewEgg.com, REI over backcountry.com, or even Dave & Busters over Gamestop.com.

Along the same lines, I think Facebook’s recent addition of ‘facebook places‘ isn’t merely trying to push out fourquare or gowalla for eyeball share– quite the opposite– they seem to be warmly welcoming  those partners into the fold.  All Facebook wants is everyone’s current GPS coordinates, regardless of who tricks the user into surrendering them.  Why?  Because once Facebook has your 10-20, it can turn around and drop a dime on you to all those potential location-sensitive advertisers.  Facebook has the opportunity to beat Google at it’s own game.  Think Multichannel.  Think Mobile.  Think Minority Report, much sooner and much worse than anticipated.

Google must realize this also, hence its mad rush to buy up some social network providers along with location-triggered services.  I fear it may be too late for Mountain View, however– everyone has their personal troupe/network built out on Facebook, and they’ll be loathe to do it again somewhere else.

The other risk here is that the proletariat may rise up in rebellion against constantly announcing their whereabouts, but if there are free lattes involved, I wouldn’t be surprised to see people surrender their bank card PINs.

One of Kanye's better tweets, mashed with a New Yorker cartoon

My first brush with fame was shaking an astronaut’s hand when I was fourteen (Robert Crippen).  Since then, I’ve spotted movie stars in Park City, seen musicians drinking in bars, and actually discussed golf swings with the Prime Minister of Japan.  I mention these not to brag, but to say that my exposure to fame has probably been average.

Online, however, I’ve gotten much closer.  Ten years ago I became ICQ friends with Will Wheaton (Ensign Crusher), who had some linux support questions that I answered.  We traded geek creds, and that was that.  On facebook, I’ve got some famous friends; on Twitter, me and @MCHammer are tight (at least I think so, he never answers my pleading to not hurt ‘em).

The Internet and social media have made flash stars of some people, usually not of their own volition– from the numa numa boy to that idiot crying over a rainbow.  The instant connectivity to flash something all over the globe and the proletarian accessability to publishing can make anyone a star for about 15 seconds.  No duh.

Social media may be destroying the machine that builds fame, however.  If “fame” is the marketable asset that comes from being famous, then twitter is destroying value every day.  Here’s my thesis:

• Actors used to be poor.  They could only impress and perform in front of a few hundred people in a given city, and even then, the theatre was long and drawn out.  High quality stuff, no doubt (for acting chops), but weak on the easily-remembered guitar licks.  Charlie Chaplin was the first major star, and it was a direct result of the medium of film, which could be recorded and distributed to thousands and millions of people.  Actors (successful ones) are rich because of the medium and distribution model which allows for small dollars from many many customers.
• As actors and musicians became famous via a remote medium (film is one-way interaction, as is radio, records, tapes, etc.), an entire ‘fame’ industry sprang up to provide that proxy access that fans wanted to make the connection back to their idols.  Variety Magazine, Papparazzi, TMZ, et al, are all part of this machine.  Performers have a weird relationship with it– they say they despise the machinery of fame, yet they depend on it.  The successful navigators seem to balance what information and access they dole out sparingly.  Marlon Brando never attended the Academy Awards, there’s no way he’d have a twitter account.
• Twitter now gives these performers a direct line to their fans.  Wait– no.  It’s the other way around: fans now have a direct line to the performers.  This circumvents the machine, and some performers are seeing their fame getting eaten away.

While Twitter is still technically a one-way medium (I can follow @JeremyPiven, he doesn’t have to  follow me back), the format is stripped down to a degree that allows very little of the fame machine to work its magic: no photoshopping of the photos, no glitzy typeface, no room for a publisher or PR handler in-between the performer and the fan.

Some performers have been able to do this well, mostly comics who are used to the short text of a joke.  Some are burning their capital, reduced to endlessly pimping their own book store appearances.  Still some others have suffered poorly for it– mostly the good looking ones we suspected were vapid shells all along.

There was a Vanity Fair article I read last week about Richard Burton and Liz Taylor, who seemed to be at the apex of the fame machine in it’s best golden era of the 60s, and when Pacino, Hoffman, and other “ordinary” guys started to fill the roles, ol’ Dick Jenkins (Burton) knew the game was changing, and that fame was past him now.

Known for his poetry, drinking binges, and temper tantrums, @RichardBurton would have been one helluva feed.

from the rightcliq website. What's up with the toolbelts?

Ever since Steve Jobs and Woz unveiled their little pet project to bring computing to the masses, we’ve had a debate about where the application should live: server-side or client-side.  IBM always argued that server-side is faster, cleaner, and generally more profitable for them.  Bill Gates made his billions bringing apps to the client-side.  Cloud Computing is really this argument wrapped in shiny new clothing– and has been blargged about ad nauseum everywhere else, so I won’t bother with that.

I mention that debate simply to bring up what might be a parallel argument that is forming now that many sites are becomming socially-aware.  Here’s the topic: is a social network invidivual-centric (client-side) or catalog-centric (server-side)? This isn’t a debate about where the actual software app resides, that’s pretty much invisible now.  For a social network, the core function is the graph– but where is that centered?  Is it centered around the individual (like facebook), or around the catalog (like amazon.com)?

An individual-centric graph has the person at the center, and she is free to add her friends, likes, dislikes, and catalog choices to her graph.  In this model, she will always want to log in with her personal network ID, and then interact or share with a given website.  Facebook is this way.  Pluck offers this kind of model.

A Catalog-centric graph has the products or new topics acting as the currency of the graph, and individuals may come and interact with them as they please.  The individuals may even use their Facebook ID for logging in, but the graph stays with the catalog and is structured in a way to build out the graph between those products, regardless of who or which individuals contributed any given part.  Bazaarvoice is a catalog-centric model

At first blush, it would seem that the individual-centric graph has run the table, but this may change. Faceboook offers a ‘like’ button just about anywhere (any major website) now, and people are certainly participating.  But those same individuals are starting to push back on the flood of information coming into their facebook feed.  Everyone is hungry for peer-driven invormation about products, but very few are willing to contribute content if it pollutes their friend feed.

Can a catalog-centric graph solve this concern for users?  Would you be willing to review more products or “like” more things if it could be somewhat anonymous?  What would you need in return?  Will you want to segment off your personal contacts (all your high-school drinking buddies) away from your shopping guru mentors?  Visa has announced Right Cliq, an individual addon that serves as the bridge between the individual graph and catalog graph.  Sure, we need another social network like another holein the head, but this may actually have some legs: consolidate your shopping peer-driven information with your purchase history, while segmenting it away from your personal contacts.

It becomes a catalog-centric social graph, but it belongs to Visa, not to the vendor.

p.s. if you like this article, please click the ‘like’ button in the upper right. :-P

Times was, I used to be able to spout off any random factiod I thought I knew, and the Internet took it as read truth.  The Wikipedia used to be great for this.  Now, my rants are pretty much limited to the blarg you’re reading right now– we’re probably all better off for it.  Most university professors scowl very deeply if a student references the Wikipedia in a footnote, which is fair, but not for the reasons most people think: Wikipedia is a bad reference source because it’s a derivative work, not because it may be inaccurate:  The student should be citing the original work, not someone’s summarized boilerplate.  Wikipedia has largely squashed the ‘inaccurate’ label through a zealous use and requirement of all statements must have footnotes.

But that raises a conundrum for many of us: where is truth?  Where is the expert?  Is the expert the one with the most experience?  Is the expert the one with the most money?  The most devotees?  Is truth simply the mob’s consensus?  Graduate school told me that truth is the logical sum of a tested thesis.  I spent 15 years being smug that I knew what that meant, only now to really see that when the Internet gave everyone a soapbox from which to preach, now social networks are giving everyone a Hyde’s Park corner complete with audiences.  Companies like bazaarvoice and pluck are setting up these cacophonies wherever possible (good for them).  These systems invariably include meta-rating systems to rate the reviews and the reviewers, in the hopes of crowdsourcing the good information from the bad.  In general, it usually works.  It is still, however, all based on a Kuhn-model of mob truth.

The NYT recently published an article on a new computer named “Watson” designed by IBM to play Jeopardy.  Another possible use they summized might be to find counter-factual statements to anyone’s gtiven declaration on the Internet.  In short: a bullshit detector.  I can imagine they will be able to monetize this thing into millions of dollars: every social network and review thread can now come with a robot that can read plain speech, offer immediate counter-responses to erroneous information, and perhaps even show us a numerical score for ‘trustability’ or ‘truthiness‘ (all the footnotes in that link– irony!). The downside here, of course, is that most reviews for most products will be reduced to little more than the barren subjectivism of American Bandstand: “It’s got a good beat, I can dance to it.”

There is still salvation for quality content in quality reviews: hard numerical data, solid logic, and qualitative feature polarization.  I’ll explain myself on those in some upcoming posts.

So, here’s my case for offering free wifi in a retail environment:

• The percentage of customers with smart phones will only get bigger.  The share of people who will want to check prices, ask-a-friend, or otherwise tweet about their shopping choices will only get bigger.  Do you want to welcome those people, or frustrate them?
• The potential for data mining about what customers are doing on their smart phones is a huge opportunity.
• Cost is pretty minimal.  One wifi antenna should do for most stores; Macy’s might need one on each floor.

Risks are fairly minimal, and can be contained with some common sense policies:

• Put a standard anti-porn filter to mitigate the legal liability of perverts in the store.
• It’s doubtful someone would go down to the mall to download mp3s– the bandwidth is relatively poor compared to the land-line available at the public library (not that I condone that kind of behaviour).
• Someone may try to hack into NORAD from the store wifi, but again– internet cafes are better for that because they offer coffee and a table for all your blue-tooth voice encryption equipment (again– I’m not suggesting anything).  Barnes & Noble isn’t a hip enough place to hang out for that long anyway.

So, where’s the upside?  Where’s the money?  It’s in that second point in the first group: the data mining.  There are several forms of valuable bits of data flying around that the store would be well to catch:

1. Competitor Recon: if Barnes & Noble could know exactly which books people are looking up on Amazon, they could match it against their own conversion rates on those same books.  They would know where they’re losing the sale.  They would also know which books people are viewing on Amazon that B&N doesn’t stock.  This is great informaiton for gauging demand.
2. Brand Awareness:  how often are REI customers going to REI.com whilst inside the store?  Are they trying to get details on products that the floor peeps aren’t explaining well enough?  Should the floor manager and corporation welcome this kind of look-up? [yes]
3. Social network awareness: how often do customers ping Facebook that they’re about to buy / just bought a 60″ LCD or a $600 pair of boots?  How often are they tweeting?
4. Instant couponing: most free wifis have a ‘Conditions of Use’ short login page.  This doesn’t need to have a username and password, just a paragraph that tells the customer we are tracking web traffic anonymously (for all these rich data mining opportunities).  it’s a great opportunity to offer someone some up-sell and cross-sell offers, and maybe an instant coupon with a barcode for 10% they can take up to the register.
5. These same advantages apply for airports: people love to surf– a gold mine of surfing behaviour lying unexploited because some airport middle manager thinks there’s more money in trying to charge $9.99 for the 2% of people on expense accounts that will fork over that money. [stupid]

Some stores will understand this sooner than others, but in a pretty short window (the next 18-24 months), we should have pretty ubiquitous wifi signals in any urban or suburban environment.  The benefits for free and onmipresent wifi are legion.  The most apparent opportunity is the VoIP, and the chance to show some advertisements.

Google gets this second point clearly– they’ve chosen a target-rich environment (airports), and are handing out free wifi just to get people to surf, and maybe use Google, and maybe click-thru on some AdWords.  In this sense, they’re competing with the idiot box CNN.  If it pays off, I wouldn’t be surprised to see Google putting in free wifi anywhere there are more than p number of people waiting for an average of t amount of time.  The equation would look something like:

Demand (D) = p * t * p(sp)

Opportunity (O) = D * p(G) – wificost

where

p = number of people in a given location

t = average time of wait or lounging around that location

p(sp) = percentage of people with smart phones

p(G) = percentage of people who will go to Google and click on an AdWords

wificost = cost of installing and running wifi base station

In the market, I would not go long on telco stocks, unless they’re leading the pack on opened smart phones.  I would go long on Skype and Cisco, and business intelligence providers, and of course, Google.

If we were to graph a spectrum of communication forms, spreading them out along the x-axis in terms of speed, and y-axis for quality of information, then email would be somewhere to the left and slightly higher than chat: It’s not real-time (you send something, and an answer comes back whenever the other person feels like it), but it can contain pictures and video, so it’s arguably better quality.  Below and to the left, we would have twitter: asynchronus, poor quality (short).  To the right of chat we would telephones (real-time verbal), and above that we would Skype: real-time verbal communication with the bonus of your friend’s beautiful face on your screen.  Skype’s real-time video conferencing should be superior (above and to the right) of all of them, right?
Why do we still have the other forms around?

• Is it because we don’t necessarily always want to see the other person? [yes]
• Is it because we sometimes don’t want to deal with the other person (your boss or girlfriend or bosses’ girlfriend or boss-you-wish-was-your-girlfriend) in real-time? [yes]
• Is it because we want to spew something out of low-quality and not have to burden ourselves with the responsibility that comes with actually having to put forward a cogent logical position? [yes]

So, it seems there is room for something that can land in that flexible in-between the safe distance that asynchronous  email gives us, but the conversational flow of chat.  If it were an open platform, people could start grafting on the higher-quality content elements like music and videos and pictures of cats eating cheezburgers.

Enter GoogleWave.  I’ve had it for a little while now, and I see some promise if people understand the construct.  Google is betting that people will want to sometimes be real-time, sometimes not-so-real-time, sometimes lo-fi, sometimes hi-fi.  I bet they’re right.

My GoogleWave ID is tokyodave@googlewave.com.  Hit me up.

In August 2009, congressmen and senators scattered out of Washington back to their home districts like so many rats carrying plague.  They had to get Health Care Reform passed, and it was time to bring in the proletariat on the deals they had already been cooking.  The problem is that the prols didn’t play ball.  The quick reaction was to chalk it up to sour grape astro-turfing by the GOP– and once it showed up, I have little doubt they did amplify it wherever possible– but I think that people are just as upset with the Town Hall format as they are with the actual message trying to get preached at them by their “representative”.  Thanks to the internet, the masses are much more connected and have their opinions (right or wrong) much more set before they go to the meeting; thanks to social networks, people now have the baseline expectations to participate in a two-way conversation, not get lectured at and told what to think.  The worst representatives actually yelled at their own constituencies to “shut up and listen“.  Ah, irony.

I saw this same pattern at a recent ecommerce conference in Las Vegas.  Each morning had the usualy Big Name Keynote address which was just as much show-n-tell as it was informative, but then the afternoon sessions consisted of smaller breakout sessions with a small (3-4 people) “panel of experts” sitting at the front of a long ballroom pontificating about some facet of ecommerce chellenges (customer usability, mobile commerce, social networks, etc.).  Here’s the thing– very few people actually listened, I think.  Most people had their heads down checking their email, tweeting out what they were hearing in the meeting, or even tweeting out how they’re not getting anything out of the meeting about how to use Twitter.  Ah, irony.

On the flight home, I downshifted with a Newsweek magazine, and saw an article about the Emmy Awards for TV, and how the awards shows seem increasingly out of touch with the will of the people.  “That makes sense,” I thought to myself: awards shows depend on panels of experts, and that model is becoming increasingly flawed.  Anything that is perceived as a one-way street of information transfer, or has a significant amount of time-lag between the chosen opinion coming down from above and the feedback going back up will lose attention with an increasingly twitchy, real-time community.

So what to do?  Here’s some cheap shots:

• For political town halls, obviously not everyone can talk, and even then not everyone has a cogent thought, but everyone wants to participate.  What if everyone was handed a chit or poker chip as they came into the room, and each person could either ask their friends for their chips because she wants to speak, or she could hand her poker chip to someone she trusts to voice her opinion.  The microphone would then be ‘auctioned off’ to those with the most poker chips, and passed around as time allowed.
• For conference meetings, the panels must absolutely integrate real-time tweets, polls, and feedback.  As topics become more tightly defined, the likelihood that smarter people are sitting out in the audience increases.  The poker chips might work here as well.
• For awards shows– I have no remedy.  They really were just a money-scam from the Big Studio era anyway, it seems, to put butts in seats a second time in November, while allowing actors to negotiate higher salaries because they had won something.  With the social networks, rotten tomatoes, and Mr Dynamite, we all have sufficient information to judge they good films, music, and TV from the dreck.  Those that cannot discern quality content deserve what they get.

For those of you who may not be familiar with EDI, it’s a system for all those coal-burning AS-400 mainframes and other legacy computers to share data with each other in a standard format.  Through a series of arcanely formatted pre-set protocols, computers send invoices, inventory levels, sales requests to each other, and then send back all the acknowledgement messages.  It’s efficient, but klunky.  I would bet that Amazon sees this klunkiness, and thinks it can do better, and make a little bit of cash by providing a better service.

Retailers will come and go, but they’ll always need to do a few things: store their data securely, talk to vendors, track customers, and sell stuff.  Look at Amazon’s trajectory: they offer all of these things either freely, or for a small percentage-type handling fee.  They have the A9 search/merchandising platform, a cloud computing offering, most of their sales comes in from vendors, they have millions and millions of customers tracked in real-time, and they offer a method for small vendors to sell goods fairly easily.  Prediction: Amazon.com will continue to be a front-end website, but more and more, we’ll see Amazon showing up as the “retail platform” for other branded websites (like Zappos.com).

The ice is getting thinner for conglomerated pure-play online retailers.  If they don’t offer something uniquely value-add, customers will simply go directly to the brand’s own website to buy their stuff.  Where would you buy your Adidas?  Zappos.com, Shoes.com, or Adidas.com?  It depends on what you need and what each one offers, right?  The end product is the exact same, so it comes down to the free shipping, the search engine, and the eye-candy on the website.  Amazon was never that glamorous a website to start with–  a very utilitarian look and feel (but very information-rich) experience overall.  We all know that Amazon does usability research, so all that data must be worth something, right?

Zappos has built a great base of user loyalty through its mix of customer-centric activities and transparency.  Their back-end has always been first-rate, but also probably very expensive (call centers are pricey).  If all that IT development and warehouse operations can be folded into the larger Amazonian Empire, then Zappos can concentrate on giving away free pizzas to the customers, or tweeting about Tony’s sushi dinner, or whatever.

Amazon will pick up a few more “major” retailers.  My short list of predictions includes: NewEgg.com, Overstock.com (hostile takeover likely), Etsy.com, and maybe even Target retail to finally “go cross-channel”.  They’ll likely buy out BillMeLater or even Mastercard to get the financial end covered.  Afterall, Amazon needs to watch out for Walmart.

a) Blowing their own horn on twitter — not worth watching

b) Showing insights on the social interaction of the great online hive that has now come into being — these are what I’ll call  “Network Biologists”, and are worth your time.

The network biologist will spend his/her time researching the strange interactions between people, and the even stranger medium that is created as a result.  They are not sociologists, because it is more than the interactions of the humans; there are robots, scripts, and crude AI influencing the mix.  The environment itself is ever changing– and the actors change as a result– but the center of focus has shifted to the behaviour of the fish, not the mechanical workings of the reef: hence the term ‘biologist’.

The usability managers in ecommerce companies were an early manifestation.  Now, everyone in the online marketing department, merchandising, and even finance is trying to ascertain how the huge mass of people will react to the online environment.  This is different from standard “retail science” or “catalog management” because of the constant arms race in online functionality as well as the multiple-variable equation where customers will influence each other in real time, as well as try to get in on the deal with some sort of affiliate, coupon, or recommendation in exchange for a slice of the profits.

The best results so far have been to segment and clasify online users into their various behavioural patterns.  Oddly enough, people don’t mind surrendering them willingly.  The current spate of “what [blank] are you?” viruses circulating on facebook are a segmentation maker’s dream: people are happy to tell us exactly what drives their brightest fears and darkest hopes. The most successful websites out there have tapped into the hive behaviour that humans portray when given just the right mix of anonymity and self-aggrandizement: Google’s page rankings are a canopy of dominant players and ground-dwellers in their shadow; Amazon’s entire merchandising catalog for millions of products is an expansion of fecundity like salmon spawning; Facebook is basic tribalism that proves Dunbar’s number, De.licio.us is our own pollen-finding wiggle dance; twitter is a sea of iridescent jellyfish desperate for attention; there is a flavour of pr0n out there for every strange perversion you could imagine (and a few you don’t want to).

I would imagine that colleges will soon have some sort of degree in Network Biology: it will be a combination of sociology, crowd biology, and basic network mechanics, to show how it is all wired together.

But Softbank has two things going for it: 1. jailbreaking the iPhone is possible but not easy, 2. the 3G network is still somewhat proprietary.  With these, Softbank can go back to the market-share giveaways that made them famous.  Earlier, I didn’t see the iPhone taking off so strongly inside the Empire.  Now– maybe we’ve got a real race.  In response, competitors could go either way:

a) Use Android to lower the cost of the hardware (also offer for free), and then use VoIP wherever possible to lower radio costs.  However, this doesn’t work because– believe it or not– open wifi networks are not that common in Tokyo

b) Use Android or another OS platform to out-app the iphone (weak strategy)

If the iPhone can get sufficient marketshare, it will be fascinating to see what unexpected apps the Japanese developer community comes up with.