Ecosystem Evolution & My Data - Part 2
Peter Cranstone
CEO@3PMobile l Reimagining Digital Engagement l Low-cost Growth Engine for Web-based Businesses l Harnessing the Power of Digital Ecosystems through Consumer Choice.
Dearest Reader,
This is a follow up to my last post - Ecosystem Evolution . This time I want to talk about ‘My Data’. in the context of the ecosystem In my opinion (IMO) there are really only two economic models in use on the web today:
That’s it. These two economic models were enabled by two web communication protocols (aka layers).
Sir Tim Burners Lee invented the first one in 1989, it was commercialized in 1993, and the spec was finalized in 1996. Taher Elgamal of Netscape invented the second one in 1995, and it was finalized in February 1996. I believe Amazon took their first credit card over the web via SSL in July 1996.
According to Google - the global AdTech market is currently valued at around $845 billion in 2023, with projections showing significant growth to reach over $2.5 trillion by 2032. Whereas, the global e-commerce economy is estimated to be around $6 trillion in 2024, with projections showing it could reach over $8 trillion by 2027.
With AdTech you’re the product (your data) and with E-commerce you buy the product, and now they use your data to sell ads as well. Google generates about $320B in trailing twelve month (TTM) revenue where Amazon generates $620B in TTM. Google is valued at roughly $2.1T whereas Amazon is at $2.3T.
There is a lot of money in my data and my buying habits that are captured by two companies. I’ve never seen (please correct me, if I’m wrong) either company be affected by privacy regulation. Pause and think about that for a moment. Even with GDPR, CCPA and a host of state privacy laws nothing has changed how these two companies consume my data and my intent to buy something.
In my last post I wrote -?
Today's dominant ecosystems have used their hyper-scale platforms and networks (where they write the rules) to compete with and disintermediate the offerings of traditional competitors by controlling the customer user interfaces and financial control points such as search, advertising, and messaging.
To that I would add at the end, ecommerce. Today’s dominant ecosystem vendors have incredible financial control points with a deep moat around them. So far, nobody has been able to penetrate those moats at scale.
I asked myself a simple question - What comes after Google? Fortunately George Gilder came to my rescue with his book - Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy . I haven't read it but I did read the comments. This one by Tim Knight captured my attention - Time Well Spent .
This was my favorite part:
The biggest problem I have with this entire topic is that "blockchain" seems to be the answer to everything. How do we combat climate change? Blockchain. How can we track ownership of digital content, no matter how trivial? Blockchain. How do we maximize the best distribution of limited resources? Blockchain. I could be stone-cold wrong, but I sincerely think blockchain is a fringe technology that has garnered vastly more attention than it deserves, even though there is surely SOMETHING to it (it's not clear what, though).
Putting it a different way, what problem does this solve? The foundational premise of this book seems to be what a terrible thing it is that people like you and me use Google Maps, Google Docs, Gmail, Google Drive, etc., all for free, which surely means that we are being "used" to get private information for their own advertising-oriented purposes. My answer to this is: so what? I don't care who knows what I'm searching for, nor do I care if Google has an awareness of where I'm online. As long as they're not live-streaming me sitting on the toilet, I'm a happy guy (to which I would add I'm sure this would be everyone else's preference as well). So.......there isn't a problem in my life of which I am aware that blockchain is going to heroically solve, and I don't mind having a few ads on my screen which I can ignore in exchange for some great online tools that I need.
Without going down the Rabbit Hole on blockchain, I will simplify things for you Dearest Reader.
Hmmm. We already have two layers - HTTP and HTTPS that are responsible for trillions of dollars of daily value. What will happen ON these new layers that is different when it comes to:
I can’t think of a single thing. Do I see where blockchain technology (the immutable ledger) can be useful in lowering some transaction costs by ‘basis points’ - yes. Do I see ‘dApps’ (decentralized apps) replacing the app store - no. And every time I hear someone say - decentralizing my data is the future I read the second paragraph above from Tim.
America has traded privacy for convenience and services, and based on the amount we use them we’re not going to change any time soon.
Which brings me all the way back to ‘My Data’. IMO what comes after Google and Amazon is another economic model. For want of a better term I’m going to call it the Ecosystem Economy.?
It’s clear, from the history above, that layers create economic models. Maybe that’s why there are so many bets on Layer 0, 1 and 2 of blockchain. They are hoping to replicate the success of the web economies and take control back from the current control point incumbents.?
IMO it’s better to make the current layers smarter than to have to build out a whole new layer of infrastructure hoping that everyone will change their behavior and migrate over to you. Hint - they won't.?
In my next and hopefully final post I will go deeper into the Ecosystem Economy - the innovation surrounding a new web layer, what job this innovation does differently, and how the value of my data can be more equitably distributed.