Data portability, the Potter parable, 21st century demand mechanics, and zombie attacks

Summary: Want to understand data portability and the fuss between Facebook and Google’s Friend Connect? Watch the river.

A few months ago Wired ran an article on Gavin Potter, a retired British consultant who was out to crack the Netflix challenge and pocket a million bucks.

While the interview focused on Potter’s use of psychology in contrast to the usual algorithmic glue that solves complex sorting issues, a side comment jumped out and has stuck with me since:

“The 20th century was about sorting out supply,” Potter says. “The 21st is going to be about sorting out demand.”

I’ve been thinking about that quote in relation to the recent noise about data portability and the fuss between Facebook’s closed view in contrast to Google’s (seemingly) open strategy.

Jeff Jarvis got me going when he posted:

“Any choke point of control, via ownership, decreases the value of the network. Enablers increase the value of the network. The network will abhor and find ways around choke points. The network will value enablers and that is the point at which value may be extracted from the network. The value in networks in the open future is not in ownership and control but in enabling others to control.”

But it was Fred Wilson who cemented the Potter connection for me. As he notes, the crux of the issue is less about ownership and more about flow: the service that enables an effortless flow of your data—and experience—will hold your attention. Whether you “own” it isn’t the key issue since a) average people don’t know how to “own” it or b) don’t care to “own” it. If the service works, after all, what’s the problem?

“The social graph itself is being commoditized as all things get commoditized by the subversive technology we have created on the Internet.

What you cannot commoditize is the desire to create a social graph on a web service and the desire to maintain a social graph on a web service and the flow of data into and around that social graph.

Social web services need not fear data portability. They need to fear others providing a better experience. Because when others do that, the flow of data moves and they aren’t in the middle anymore. They might still have your data but they won’t have you. And that’s where the value is.”

That last paragraph is the Potter parable, in my mind. The 21st century is about sorting out demand. Where the 20th century grappled with real and artificial constraints of supply—how do we get these raw materials into this product that we can deliver to those regions—the post-grid generation must grapple with the real and artificial constraints of demand flow, a tidal wave of data and interactions that constitute our relationships to one another.

Interestingly, the architects of the supply side needed to address flow in a similar, albeit analogue, format. Transportation routes, shipping schedules, manufacturing output: to succeed, friction needed to be removed between the flow of objects (read “data”) from one port to another. The more elegant the solution, the faster and more durable the flow.

And, of course, artificial constraints were also introduced into the supply side to manipulate flow, from the good (Treasury limits money supply to avoid inflation), to the bad (five-year plans to regulate food production), to the ugly (manipulating markets, politics, and war to control diamond supply).

We’re now dealing with the same flow and constraint issues on the demand side. As Jarvis points out, services that unnaturally restrict data flow will have to grapple with the consequences of rigging and what to do with excess. In some situations, flow will organically adjust itself and simply bypass the obstruction (read “new service”). And in other cases, as Wilson notes with Facebook, flow tampering is semi-sustainable if the consumer doesn’t feel the consequence.

The real opportunity in flow constraint, though, is putting capacity to use and amplifying the effect. Data is like a river: you can dam it and generate electricity.

That’s what Google did with search. They created a machine that, as we pass through it on our way to find something, harnesses our collective energy and turns our data flow into the most powerful asset of this generation. And interestingly, they did it by subverting the prevailing notion of search: the portal, a benign (if not annoying) throttling technique that tried to control flow by creating smaller tributaries.

Really, life in general is about flow, from our biology to our relationships to our communities. And the study of flow almost always deals with “allowable constraints.” What we give versus take is situational and contextual, but it’s also the simplest and most profound way to recognize the value of flow—supply or demand.

Filed under: Platforms, Systems , data portability, Facebook, Friend Connect, Google, Jarvis, Wilson