As far as I know, ‘What Would Google Do?’ by Jeff Jarvis is the first book to talk about VRM. When I started reading, I was excited. Jarvis was telling it like it is – clarifying and explaining the vast changes now under way.
His critique of old-style corporate mindsets is spot on. “Listen to the rhetoric of corporate value,” he writes. “Companies own customers, control distribution, make exclusive deals, lock out competitors, keep trade secrets.”
All these points of ownership and control are now exploding, he points out. The new rule is “Give the people control and we will use it. Don’t and you will lose us”. Value lies not so much in the product or service companies sell, but in the tools they provide for individuals to use, he explains.
This is not just semantics. It’s a real shift. It’s about providing individuals with platforms that enable them to build their own value; that “help users create products, businesses, communities and networks of their own”. These words – enable, help, build and create – are important. In this new world, the individual is no longer just a ‘consumer’ or a ‘customer’ of the corporation. He and she is an active, creative, equal partner in the process of wealth creation.
Fantastic stuff, and it’s really helpful to have it explained so clearly.
The more I read, however, the more concerned I got. What is the alternative to yesterday’s centralized, controlling business?
Well, it turns out that Jarvis has only one, one-size-fits-all answer. Here’s how he describes the rules of the new networked ‘link’ economy. “First, you must produce unique content … Second, you must open up so Google and the world can find your content … Third, when you get links and audience, it is up to you to exploit them, usually through advertising.”
Oh dear. Jarvis’ previous career was in ad-supported content publishing and guess what? Despite frantic, breathless huffing and puffing about how revolutionary and different the new world is, it turns out to be almost exactly the same as the old one – all about ad-supported content publishing. The only thing that’s different is that this time the ads are delivered a different way (via Google) and the content is (sometimes) produced by different people.
Jarvis then applies this vision basic one-size-fits-all vision to everything he touches.
For example, he cites the Cluetrain Manifesto countless times in the support of his arguments. But (Doc, please tell me if I’m wrong) I thought the whole point of the Cluetrain Manifesto was that if you are having a proper conversation both sides are in a much better position to navigate their way to value without advertising.
By the end of the book I was seething with irritation. Right now, there is a particular form of hype coming out of silicon valley – let’s call Hype 2.0 – that is singularly unhelpful. Jarvis’ hype gets three things wrong. They are intimately connected.
First, he has an ‘either/or’ attitude towards atoms versus bits. Time and again, he is sneeringly dismissive of the real world of material goods, and of services provided using material infrastructure. “Stuff is just so last century. Nobody wants to handle stuff any more,” he declares. “Many industries are saddled with slowness because they are trapped by atoms and complexity.” “Manufacturing is expensive, vulnerable to commodity pricing, labour-intensive, weighed down by gigantic benefit costs, and competitive. That’s the tyranny of atoms.” And so on.
Fact is, we are material beings living in a material world. I’m sure Jarvis would be the first to complain if he could only drink Googlejuice with his breakfast; if he couldn’t catch a plane to his next speaking engagement and sleep in a comfortable bed with nice cotton sheets in a safe, secure hotel afterwards; and if he didn’t have a boring old atoms-based computer to access the Internet.
This is not just about rhetoric. It’s about economics: the real opportunity in what’s going on right now is not the ‘either/or’ of atoms or bits but the ‘and’: how better use of information can help us strip away waste in material production and distribution, attack its complexities, improve its value and so on.
This links to the second flaw in Jarvis’ argument. For him, the new world is all about ‘content’. The opportunities individuals now have to create their own, new content. Opportunities to co-create content via communities. Opportunities to share content. Opportunties to search for and find the content you want.
These are all fantastic things. But they are less than half the story. They ignore other uses of information: for example, the critical role it plays in organisation and coordination.
There’s a saying in the boring old material supply chains that Jarvis dismisses as “so last century” that “uncertainty is the mother of inventory”. In other words, if you don’t have the right information about who wants what, when and where, then you are ‘saddled’ (to use Jarvis’s term) with guesswork and just-in-case operations.
In fact, without the right information about the who, what, when and where of demand everything you do – production, distribution, communication – has to fall back on wasteful guesswork and ‘just-in-case’. And at least half – probably much, much more – of the potential value of the web is its ability to help us deal with these ‘tyrannies’ of waste. What Jarvis misunderstands is that these are not “tyrannies of atoms” as he calls them – they are tyrannies of poor information.
This leads to his third flaw. In his obsession with ‘content’ and cool new things that involve content such as communities and co-creation, Jarvis misses the point of VRM.
Wave 1 of the information revolution resulted in an explosion of ‘top down’ flows of information: cable, satellite, publishing on the web, etc. These were the first fruits of digitalisation.
Wave 2 made sideways or peer-to-peer information sharing possible. And thanks to Google, it gave us new tools to help us navigate our way through the tidal wave of top down, published content to find what we wanted. Wave 2 is very ‘content’-focused. It’s what Jarvis focuses on.
It’s Wave 3 however, where the real fruits of the information revolution finally pass into the hands of individuals. Under Wave 3 individuals will be able to build their own databases – to manage information on their own terms for their own purposes – and to use this information to articulate their own needs, preferences, priorities and so on to the marketplace. Wave 3 reverses commerce from ‘top down’ to ‘bottom up’ and right side up. Yes, this third wave has important content elements (as with atoms and bits, it’s not either/or) but it’s just as much about personal analytics, organisation, coordination and logistics.
The next economic revolution lies exactly in the three bits Jarvis overlooks: the importance of the connection between atoms and bits, the fact the web is not just about content and advertising, and that it is not just about peer-to-peer information sharing – it’s also enabling personal information management and volunteered personal information.
The real potential of VRM and buyer-centricity will be unleashed when we bring these three elements together, as we would bring chemicals together to create an explosive reaction.