Bacon, eggs and pie: the problem with #VRM

The VRM email list is once again suffering a bout of name angst.  There are many identity geeks on the list and an existential question of the extent to which identity flows from the name and vice versa so it’s always an interesting discussion, regardless of whether headway is made.  I’m of the opinion that the name tends to define the thing and that this is in fact part of the problem with VRM up to now.  It has become defined, to the point of being confined, by it’s own name.

Pie

In conversations with the tech community, I have been  using the rather unimaginative name “Personal IT” as a placeholder because what I want to build exceeds what VRM is.  My vision is of individuals having access to the same quality of IT infrastructure that Western Reserve Life had when I worked there in 1984.  The phone on my hip is in many ways as powerful as the IBM 4381 mainframe that I tended to in those days and it is among the least powerful devices that I own.  There is no reason that I should not be able to capture all my transactional data and large segments of experiential data and then do something useful with it.  As we ramp up with Internet of Things and instrumentation I want my Personal IT to manage that too, in real time, and log it for analysis.

The purpose of all this technology is to relieve us from the infrastructure maintenance part of our lives so we can focus on living them.  It it supposed to improve health and safety, help us perform tasks more efficiently, or take over those tasks altogether.  For example, home security relieves us of the need for vigilance.  Home automation relieves us of the need to focus on infrastructure, and does so more efficiently than a human operator.  An oft-overlooked aspect of the electric commuter car charging in the garage is that it eliminates visits to the gas station.  Can you imagine a world without gas stations?  An all-electric fleet could in time eliminate what are now ubiquitous features of our lives.

From this perspective, the name VRM isn’t very compelling.  There is no VRM without the vendor and no vendor without a transaction.  Consumption and purchasing are not the focus of my life.  My life is the focus of my life.  If you charted your activities as a pie chart, the VRM slice is probably tiny.  At least, it is for me.  No matter how well the relationships with my vendors are managed, it’s still going after the smallest slice of the pie.

The name VRM clicks in part because it is instantly recognizable as the consumer-side version of CRM but that meme fails to consider the massive asymmetry between the two.  CRM scales to millions of customers.  The sweet spot for VRM might be what – a few dozen active vendor relationships at most?  In the business world, CRM is compelling because it is a large slice of the pie.  That does not hold true for consumers.  To be compelling, Personal IT has to go after the larger pie slices.  VRM and Intentcasting will be facets of Personal IT, very important ones to be sure, but are much less compelling as stand-alone functionality.

Eggs

What is compelling is the opportunity to do new types of things. For example, individuals today typically do not capture line item purchase data because the cost outweighs any possible benefit if you are typing it in by hand. But if VRM captures that data electronically, the incremental cost of collection drops to near zero, and suddenly personal analytics applications become commercially viable.  One use might be to account for all the external costs of the things we purchase on a line-item basis.  Rendering all the energy, carbon, recycle, disposal and other costs might dramatically change our choices.  So VRM making our transactional lives smaller and more efficient may be a yawn, but providing strategic decision support for individuals can drive lifestyle changes.

But note that Intentcasting is not required for any of this, and to me it has always been the “tail wagging the dog” aspect of VRM.   The digital interface between my vendor and I is absolutely required to accomplish my Personal IT vision.  It is the means by which the cost of capturing my transactional data drops to near-zero, thus unlocking all the possibilities of what I night do with that abundant data.  The only thing the vendor gets out of this is that given a choice between vendors who do or do not provide that interface, we’ll prefer the ones who do.  Or, at least we will when we have Personal IT infrastructure to do something with it.  At the moment, whether people can get an e-receipt doesn’t make much difference to us at all, and that’s the chicken-and-egg.

So what, exactly are VRM and Intentcasting in this scenario?  Basically, it’s asking the vendor to lay a consumer egg.  Vendors won’t make an API available to the consumer on the belief that someday we’ll prefer it that way.  The vendor sell is that co-opting existing infrastructure and tools minimizes the investment.  It promises to strengthen the vendor/customer relationship and within that context generate strong, clean, valuable consumer intent signal flowing back to vendors.

Remember that VRM tells consumers they have a choice in what information they reveal to vendors and it promises to allow them to severely restrict that sharing if they wish.  So when Intentcasting asks vendors to invest in the promise that consumers will willingly share valuable signal, both sides are skeptical.  Consumers say they would be willing to try the golden eggs but highly doubt one will ever be produced.  Some of the vendors professed interest but when presented internally, the vendor chickens replied “you want me to do what?!?!?  That’s unnatural!!

Bacon

Strictly speaking, Personal IT functionality doesn’t depend on the vendor’s participation.  We could  always enter our transactional and experiential data manually and get all the functionality we want. In fact, for much experiential data such as photographs and social media, that is exactly what we do.  This is because the primary value does not depend on further analytics or processing.

But transactional data without analytics, enrichment or correlation is pretty boring.  More transactional data is available to us electronically than most people realize.  We haven’t taken notice because even if we had it, what would we do with it?  First we need to capture it.  Then it needs to be organized.  Only then might we actually slice, dice, massage and stir it into something interesting.  Rather than personal analytics, the big selling point of e-receipts so far is that they save trees.  Somewhere along the line, we forgot to “sell the sizzle.”

Capturing and accumulating that data is the first step.  Make it cheap to capture and store information, hint that it might come in handy someday, make capturing it the default, and data will be captured.  What made early IoT devices like Fitbit successful is that they addressed the ease of data capture and collection.  Many predecessor pedometers offered great analytics software but failed to appreciate just how significant a barrier is posed by even minimal data entry requirements. The sold the sizzle but forgot to cook the bacon.

It turns out that many Fitbit users don’t necessarily use the functionality, or even look at the data daily.  But data has intrinsic value and you can only accumulate so much of it before a business case emerges to develop software to extract that value.  “If you build it, they will come” is a risky proposition.  “Why don’t we help them make sense of that mountain of raw data they already have” is safer.  The business case grows more attractive as the data accumulates, eventually approaching inevitability.  This gives to T.Rob’s First Law of Personal IT: In sufficient quantity, data is indistinguishable from bacon.

How do we get there from here?  By connecting the dots between retail transactions and Personal Clouds.  Last week I spoke with an e-receipt provider who agreed to pilot a consumer-facing API for grocery receipts data.  There are several Personal Cloud vendors who could implement this today.  Some, like Fuse, are even poised to mash up transaction data with data they already collect.  The recent flood of IoT devices also generate lots of data.  The trick is making it easier for the device owner to collect the data than to ignore it and make sure they have some storage behind it.  The more integrations, the more data is collected.  The more data is collected, the more valuable it will be to write software to do something with it.  Set up the right conditions and bacon emerges.

The bacon market

Note that the bacon I’ve described doesn’t require chickens or golden eggs.  Personal IT is compelling because it touches the things the individual thinks are most important or where they spend the most time.  The largest slices of pie.

My new e-receipt partners acknowledge that many of their customers want to keep our data in a walled garden and are a bit skeptical about consumer demand.  But their architecture makes this a very minimal investment on their part so they are willing to give it a try.  Very few vendors are in this position so most will not want to invest without a much better business case.  But if and when e-receipts begin to drive customer behavior at scale, a new market differentiator is born.

VRM and intentcasting occur naturally within this Personal IT context.  Having established a connection through which a vendor provides value, the consumer has a reason to trust the vendor and incentive to share back.  The vendor’s path starts small, simply providing transactional data.  There is no requirement for them to add all the VRM-y aspects in the beginning, thus a small up-front investment.  However, the incremental cost to move from simple e-receipts to full-scale Intentcasting or VRM are greatly reduced.  When they do occur, the vendor already has an established and active market on which to base a business case.

That’s more of a walk down a gradual path than a revolution.  That’s doable.  The bad news is the bacon market is all over the map right about now.  The good news is, there’s a lot of bacon!

Here’s a brief overview of the bacon market:

  • Intentcasting is compelling to vendors but less so to consumers, hence the need to explain it.  It’s the idea of bacon.
  • The VRM name is the manifestation of our desire to make Personal IT compelling to consumers, but so far it’s all sizzle, no bacon.
  • Cozy Cloud, Own Cloud, Indie Box, and similar projects provide the infrastructure.  They are cured pork slabs waiting to become bacon.
  • File This is raw bacon.  Whether there’s any sizzle or smell depends on whether and how you cook it.
  • Fuse is actual bacon which you can hear and smell, but it’s behind a locked gate.  You occasionally catch a glimpse of Phil Windley enjoying it at a conference.
  • Large vendors’ IoT devices are boutique bacon that you can actually buy.  There’s dozen’s of flavors, all unique, all proprietary.  All provide sizzle, smell, and bacon on your plate, but you can only consume it at the deli and the guy behind the counter eats off your plate with you, usually charges you to do so, and sees nothing wrong with this arrangement.
  • Crowdfunded startups are boutique bacon-bit futures.  They come in all different flavors but most are unique to their specific deli.  The guy behind the counter describes what the future bacon will look, smell and taste like, and may or may not want to eat off your plate when it’s delivered.
  • IFTTT is meat glue.  You can take many different varieties of bacon and combine them into a type of Frankenpork in hopes of creating better bacon and more sizzle.
  • Your phone has suddenly morphed into the bacon firehose.  Whether it is generic commodity bacon, regular bacon, boutique bacon, or Kobe bacon, you are expected to consume it through your phone.  This is wrong and is a major roadblock to the market.
  • You are supposed to be the dog in the Beggin Strips commercial yelling bacon, Bacon, BACON, BAAAAACON!!!!!  Except you are staring at your phone on a plate, almost covered by a “BACON” label and wondering how to consume it with the knife and fork they gave you.  You do know it’s not bacon.

So, yeah. “Vendor Relationship Management” doesn’t quite cover it.  Personal IT does but that abbreviates to PIT.  I don’t know what the right name is but I’m so busy making the vision come to life that I’m not sure I care.  As long as I’m not constrained by it.

Leave a Reply