Thursday, October 11, 2007

From Healthy To Heartbreaking: Digital Business vs. Personal Self-Interest

Ever find yourself sitting there questioning why it is so many users are fine with building other people's online businesses?

Don't they question what's happening to their data? Is free really so appealing that we are willing to give/trade anything for it?

It all comes back to fundamentals of economics. Everyone works in their own best interest. And only they can determine what that best interest is.

From the customers perspective, as long as their self-interest is being served, (be is 15 minutes of fame on youtube, life streaming on Jaiku or creating a social network on Facebook) they are unlikely to question what it is that the digital business is up to.

But there is a tipping point. We are more fickle than ever and while you have a few digital businesses acting like the cable monopolies by raising fees whenever they feel like it (EBay anyone?), many of the more recent entrants are going to have to quickly find the balance between what their users self interest is and their own.

This came up a while back in a blog conversation I was having with a person named PAW on the Buzzmachine post My Space Or Rupert’s Space.

His/her point was that once a larger organization buys a Web 2.0 company, they then have the right to do whatever it is that they want. My point back was that when your business IS your users, I don't think that applies the same way it would in a traditional business context.

While people are happy and you are serving their best interest, it's all good. But, it only takes one bad executive decision (myspace widget decision being a perfect example) to have that tension between digital business and customer personal self-interest turn from healthy to heart breaking.

4 comments:

Fraser said...

When the strongest barrier to entry is network effects, the curator of the network has to make decisions carefully or risk reversing the trend.

I'm in agreement with you Leigh - manage decisions carefully, especially around valuable (/worthless but priceless) things like personalized data.

Leigh said...

It's the obvious but almost always forgotten....

I've been in some of these high powered meetings where these decisions are made by Sr. Execs. Very rarely does the customer ever come into the discussion.

It’s probably the nature of the reactionary business world we live in (particularly let me say here in Canada) but it’s still wrong minded.

Paul Miller said...

Leigh

Should the work of the Attention Trust help here?

Also, explicit statements about the uses to which data can be put... and appropriate licensing of data to transparently encourage appropriate value-add uses... (http://blogs.talis.com/nodalities/2007/10/open_data_license_it_or_lose_i.php)

Leigh said...

Hi Paul,

Thanks for that link. I am definately going to check that out and maybe see if any of it applies to our own product ucaster (if you haven't downloaded it, go and check it out at www.oponia.com)

:)

 
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