// The Song Remains The Same

…And I feel fine.

As sung REM back in the 90s, I feel like this represents the current state of data portability on the net right now. Things are changing and the big boxes (yahoo, MS, google, facebook, myspace) are feeling the evolutionary pressure to move towards that new market equilibrium.

One of the things I’ve seen as a constant in the time I’ve spent promoting new projects and concepts to Old Business types (or types in established positions) is that change means fear, fear means contempt, and contempt will bring about actions that generally aren’t in the favor of those promoting said change. By challenging some previously held market dynamics a group is essentially challenging a market leader’s position, challenging their ability to remain profitable and in command. In business school they litterally classify this in a SWOT analysis as a “threat”, so you can imagine the less-than-savory categories a veteran CEO or CTO would give to such a proposition.

Data portability, availability, interoperability — however you term it — is one of the biggest “threats” that established big boxes face today. Their model’s are based around their semi-walled gardens, where the data inflow is magnitudes greater than the data outflow. Typically when a large entity like a facebook had a stable market position, any threats towards this position are handled with litigation. Most of these threats go quietly into the night, rarely to be heard from again. However, when a market is in a period of “tectonic shifts”, ie, shifts in what the actors in the market will accept or expect, the ability of a big box to “lay down the law” dissipates.

A good example of this was the dominance of the RIAA in terms of artificially controlling not only the consumers of their data (the people who buy music) but also the producers (the artists). Both parties, consumers and producers, had to do business with one another via the RIAA. The RIAA kept the market suppressed for a long period of time, with the slightest provocation meaning a stiff lawsuit or loss of means to generate income (for the artist). Then the internet came along, and the market shifted with the majority of their efforts of artificial suppression becoming ineffective. Artists and music patrons are now finding new market equilibriums in terms of usage rights and preferred medium. In some cases, such as the recent release of Radiohead and NiN material, the middle man has been completely eliminated and the sky did not fall.

I titled this blog “the song remains the same” partly because the business patterns we see are the same ol’ song, over and over, just different bands are playing it. In the late 90s when new media companies came along, they told old media groups like the RIAA “too bad, we’re the new kids”. Problem is, there’s always a new kid on the block. The new media groups like google, yahoo, and facebook built billion dollar businesses off of walled gardens, off of coming to see them in their shiny new pixelated storefronts. They built their philosphies, their management, their engineering focus around maintaining this position, because that leads to profitability and thats what good public companies do — they increase stockholder equity.

Of course, the cycle always starts anew at some point and it becomes a mad dash to see who can reconfigure in time to be fit for the new market. Microsoft is another good example of a company that has struggled moving from their mindset of desktop dominance to the wild west of the internet, and now they have to deal with the added issue of data usage and interoperability. Buying yahoo might not be their easy fix since in the very near term companies just like yahoo are going to have to deal with the rapidly shifting mechanics of how data is brokered and used.

Evolution in biology is incredibly robust, yet wickedly cold hearted. In one of my favorite books, “The Red Queen”, Matt Ridley bases the title and central theme of the book around the Red Queen in the tale “Through the Looking Glass”. In “Through the Looking Glass” the character the Red Queen tells Alice that “we have to run as fast as we can just to stay in the same place“. As my career has gone on, that statement has progressively echoed louder in my head. Right now, the startups on the internet are all looking for ways to keep the pace, to compete. They want to give more value for less, they want a slice of that upper part of the long tail — and they are the ones that will drive data portability. Some big boxes will not be able to reconfigure themselves fast enough to meet these market shifts and will have progressively harder times competing in future cycles. Others will realize their old business models built around locking data in are quickly becoming an albatross, and they will begin the painful transition towards new business strategies. In my next post I’m going to sketch out just how I think this new data portability economy can work.

It’s not the end of the world at all; It’s just the end of the current cycle, the start of the linked data cycle, which quite possibly will jump start the rise of the semantic web.

And I feel fine.