free html hit counter Media/Tech Business Models Archives | John Battelle's Search Blog

NewCo Sizzle Reel, SF Sked Are Up!

By - July 30, 2014

It’s hard to describe what it’s like to attend a NewCo till you’ve been to one, but this video, below, should certainly help. It comes right on the heels of NewCo’s SF schedule going up, which for those of you who’ve never been is like announcing the lineup at Bonnaroo for those of us in the NewCo world. In SF, companies opening their doors include Medium, Carbon Lighthouse, ACT, IFTTT, the melt, Lit Motors, Salesforce, Bloomberg, OpenTable, Scoot, NextDoor, and 100+ more.

Here’s a post announcing the schedule going live – companies fill up fast, and the only way to ensure you’ll get in is to get a VIP or Reserved ticket. But if you can’t pop for the $90 (Reserved) or $295 (VIP, including kickoff party), never fear. NewCos are always free to the public after Reserved and VIPs pick their schedules.

  • Content Marquee

It’s Time For Twitter To Filter Our Feeds. But How?

By - July 27, 2014

article-2678561-1F58F0DC00000578-816_634x394(image)

“We don’t put an algorithm between you and your feed.” – Twitter exec Adam Bain, March 2013

“Please do.” Me, today

Twitter has always appealed to tinkerers, to makers, to the people who first took up blogging, who championed RSS and HTML in the early days – you know, the people who created the open web. And because of that, Twitter has always had a strong dose of egalitarianism in its DNA. Twitter expresses that DNA in a particular way: it never decides what you might see in your feed. Whenever you come to the service, you are presented with everything. It’s up to you to figure out what’s valuable.

Compare that to Google, which decides what content you see based on your search query or, more recently, your location (and tons of other data), or Facebook, whose impassive algorithms sift through a sea of friends’ updates and determine what the service, in its ineffable wisdom, decides you will see. Both of these giant companies have, at their core, the idea of editorial judgement - they decide what you see, and for the most part, you have no idea how they made that decision, or why.

Twitter makes no such distinction. And this, of course, has always been both its declared strength and its obvious Achilles heel.

For it is in making editorial judgements that the edges of a media product emerge – and to most of us, Twitter is  a media product (it’s certainly an advertising product, which to my mind makes it a media product as well).

In the coming months, I expect Twitter will finally execute a major shift in its approach to our feeds, and roll out an algorithm, not unlike Facebook’s EdgeRank, which consumes the raw material of our feeds and process them into a series of media products that redefine our experience with the service. Doing so will solve for three of Twitter’s most critical business problems/opportunities: Its vexing “I don’t get Twitter” issue, its slowing user growth and engagement, and Wall Street’s ongoing uncertainty around how far the company’s current advertising model can scale (IE, whether it can grow to Facebook or Google level revenues, currently orders of magnitude larger).

Three years ago I wrote Twitter and the Ultimate Algorithm: Signal Over Noise (With Major Business Model Implications). My main argument was that Twitter has to figure out how to make my feed valuable to me – a point I’ve been talking about for years. It would take a lot of math, a lot of algorithms, and a lot of trial and error, but ultimately, I wanted Twitter to surprise and delight me each time I came back, and there’s no way a raw feed could do that. In short, I argued that it was time for Twitter to create algorithmically-driven editorial voice, one that presents me media product(s) that extract maximum value out of the feeds I followed.

It’s fair to say that three years later, Twitter hasn’t done what I wished for. Back then, Twitter wasn’t a public company, and its ad business was in its early stages. But today Twitter is a $24 billion public company with strong advertising revenues tracking at more than a billion dollars a year. So what do I know?

Well, I know that the problem still exists, and there’s no way Twitter can grow into (and beyond) its current valuation, much less compete with Facebook and Google, if it doesn’t tack into the waters of editorial judgement. This means Twitter has to stare down its existential DNA problem – it has to be willing to put itself between us and our  feeds.

And I think there’s all sorts of opportunity in doing so. I think nearly everyone wants Twitter to try, and while I have no inside information, I’m pretty sure that Twitter is working hard on doing just that. Ever since the company made it clear it didn’t want developers creating consumer facing applications that built new interfaces for the consumption of tweets, the responsibility for creating that value lies squarely with Twitter.

But even as the product and engineering folks at Twitter labor to create these new interfaces, there’s no need for the company to abandon its core philosophy of showing us everything - that should be a mainstay (and differentiating) feature of the service. We just want media products on top of those feeds that mine the best stuff and present it to us in a way that keeps us engaged, provides us significant value, and thereby keeps us coming back. This of course would solve for quite a few other pesky problems – user growth and engagement chief amongst them. Oh, and it’d create the kind of media product that’s rife with signals of user intent  - exactly the place where new Twitter ad products can thrive.

Earlier this year I argued that Twitter might encourage a class of “super curators,” a kind of crowd sourced approach to solving the problem, but that’s not enough. For Twitter to grow at Facebook or Google like rates, it has to build a media product that is automated, but feels uniquely “Twitter-y.” And to me, that means making something that exposes its inner workings to its users, and lets those users customize their consumption in ways that can be shared, celebrated, and even commercialized.  In Who Owns The Right to Filter Your Feed?, I wrote “No one company can boil the ocean, but together an ecosystem can certainly simmer the sea.”

It’s my hope that Twitter lets its tinkerers, makers, and users help make it better and better. The company’s roots are as a user-driven service. Users came up with hashtags, retweets, and other core Twitter features. One of its most valuable assets is its open DNA – and it needn’t abandon that to create an algorithmically edited version of its main product. In fact, given all the suspicions both Facebook and Google have fostered because of their black box algorithms, a more open approach could be a great strength for any new Twitter product. Show us why your algorithm created a particular media product, and let us play around with making it better. I’d bet that plenty of folks would love to do just that. I know I would.

Content Marketing And the New Mainstream

By - July 08, 2014

Content-Marketing(image) On the eve of our third annual P&G Signal (a private event I’ve produced for P&G these past few years) comes this piece in HBR: The Content Marketing Revolution. Just this morning I was reflecting on the speed with which the idea that “all brands are publishers” has moved from evangelical blog post to standard business practice – less than four years since we officially canonized it at FM, and about seven since I first began writing about “conversational marketing” in earnest on this site.

The HBR post notes “Nine out of ten organizations are now marketing with content – that is, going beyond the traditional sales pitches and instead enhancing brands by publishing (or passing along) relevant information, ideas, and entertainment that customers will value. The success of content marketing has radicalized the way companies communicate.”

That’s quite a shift in what is, by the standards of media and marketing, a very, very short time. Back in 2007 (!) I wrote a post that pointed to early examples of content marketing in a social and digital context, and offered a framework for why this nascent movement made sense. In it, I said:

Marketers are realizing that while it’s fine to advertise in traditional ways (Hey! This movie is about to open! Hey! Check out the cool new car/product, etc.), it’s now an option to begin a dialog with the folks who you hope are noticing your ads. In fact, it might even be a great experience for all involved. Brands might hear criticisms that are valid, and have the chance, through conversations with customers, to address those critiques. Customers have the chance to give their input on new versions of products, ask questions, learn more – in other words, have a dialog.

And in the end, isn’t having a dialog with your customers what business, and brands, are supposed to be about?

We’re still early in the shift to conversational marketing, and not all brands are excellent at it. But even the most traditional brands are now deeply engaged in figuring out how to be part of conversations that matter to them. And that’s a very good thing. Content marketing has birthed native advertising, which has given new life to independent publications like Quartz and Vox. And it’s become the lifeblood of massive platforms like Twitter, Facebook, Tumblr, and LinkedIn. In short, content marketing is working.

Sure, there are as many examples of flat footed or poorly thought-out executions as there are screaming successes, but again, we’re just getting started. Brands are finding their voice, and we, their audiences, will determine the value they add by our response to what they have to say.

A Return To Form In Media

By - June 30, 2014

mediaappsOnce upon a time, print was a vibrant medium, a platform where entrepreneurial voices created new forms of value, over and over again. I’ll admit it was my native platform, at least for a while – Wired and The Industry Standard were print-driven companies, though they both innovated online, and the same could be said for Make, which I helped early in its life. By the time I started Federated, a decidedly online company, the time of print as a potent cultural force was over. New voices – the same voices that might have created magazines 20 years ago, now find new platforms, be they websites (a waning form in itself), or more likely, corporate-owned platforms like  iOS, YouTube, Instagram, Tumblr, and Vine.

Now, I’m acutely aware of how impolitic it is to defend print these days. But my goal here is not to defend print, nor to bury it. Rather, it’s to point out some key aspects of print that our industry still has yet to recapture in digital form. As we abandoned print, we also abandoned  a few critical characteristics of the medium, elements I think we need to identify and re-integrate into whatever future publications we create. So forthwith, some Thinking Out Loud…

Let’s start with form. If nothing else, print forced form onto our ideas of what a media product might be. Print took a certain form – a magazine was bound words on paper, a newspaper, folded newsprint. This form gave readers a consistent and understandable product  - it began with the cover or front page, it ended, well, at the last page. It started, it had a middle, it had an end. A well-executed print product was complete – a formed object – something that most online publications and apps, with some notable exceptions, seem never to be.

Now before you scream that the whole point of online is the stream – the ceaseless cascade of always updated stories – I want to question whether “the stream” is really a satisfying form for providing what great media should deliver – namely voice and point of view. I would argue it is not, and our obsession with producing as many stories as possible (directly correlated to two decades of pageview-driven business models) has denatured the media landscape, rewarding an approach that turns us all into hummingbirds, frantically dipping our information-seeking beaks into endless waving fields of sugary snacks.

I, for one, want a return to form in media. I want to sit down for a meal every so often, and deeply engage with a thoughtful product that stops time, and makes sense of a subject that matters to me. A product that, by its form, pre-supposes editorial choices having been made – this story is important, it matters to you so we’ve included it, and we’ve interpreted it with our own voice and point of view. Those editorial choices are crucial – they turn a publication into a truly iconic brand.*

Closely tied to the concept of form (and antithetical to the stream) is another element of print we’ve mostly discarded – the edition. Printed magazines and newspapers are published on a predictable episodic timeline – that’s why we call them periodicals. They cut time and space into chunked experiences, indeed, they stop time and declare “Over the past (day, week, month), this is what matters in the context of our brand.”

I’ve noticed a few interesting experiments in edition-driven media lately – Yahoo News Digest, Circa, and email newsletters (hello ReDEF!) most notably. But I think we could do a lot better. When the iPad came out, powerful media outlets like NewsCorp failed spectacularly with edition-driven media like The Daily. And the online world gloated – “old” media had failed, because it had simply ported old approaches to a new medium. I think that’s wrong. The Daily likely failed for many reasons, but perhaps the most important  was its reliance on being an paid app in a limited (early iOS) ecosystem. As I’ve said to many folks, I think we’re very close to breaking free of the limits imposed by a closed, app-driven world. It’s never been easier to create an excellent app-based “wrapper” for your media product. What matters now is what that product stands for, and whether you can earn the repeated engagement of a core community.

Which takes me to two critical and quite related features of “print” – engagement and brand. I like to say that reading a great magazine or watching a great show is like taking a bath, you soak it in, you commit to it, you steep yourself in it. When good media takes a bounded form, and comes once in a period of time, it begs to be consumed as a whole – it creates an engaging experience. We don’t dip in and out of an episode of Game of Thrones, after all - we take it in as a whole. Why have we abandoned this concept when it comes to publications, simply because they exist online?

The experience that a publication creates for its audience is the very essence of that publication’s brand – and without deep engagement, that publication’s brand will be weak. A good publication is a convener and an arbiter – it expresses a core narrative that becomes a badge of sorts for its readership. I’m not saying you can’t create a great branded publication online – certainly there are plenty of examples. At FM, we helped hundreds through launch and maturity – but those were websites, which as I said before, are declining as forms due to social, mobile and search. But every brand needs a promise – and that promise is lost if there’s no narrative to the media one experiences.

Our current landscape, driven as it is by sharing platforms and mobile use cases, rewards the story far more than the publication. Back and forth, back and forth we go, dipping from The Awl to Techcrunch, Mashable to Buzzfeed. Playing that game might garner pageviews, but pageviews alone do not a great media brand make. Only a consistent, ongoing, deep experience can make a lasting media brand, one that has a commitment from a core community, and the respect of a larger reading public. If the only way that public can show respect is a Facebook Like or a Twitter retweet, we’re well and truly screwed.

Reflecting on all of this, it strikes me that there’s an opportunity to create a new kind of media, one that prospers as much for what it leaves out as for what it decides to keep in. Because to even consider the concepts of “in” and “out” you need a episodic container – a form. Early in the Internet’s evolution (and I think it’s safe to say, two decades in, that we’re past the “early” stage), it made sense to explore the boundless possibilities of formless media. And while most media companies have been disappointed with “apps,” remember, it’s early, and that ecosystem is still nascent. We’re 20+ years into the Internet, but barely half a decade into apps. The next stage will be a mixture of the link economy of the original web with the format of the app. And with that mixture comes opportunity.

But as we consider the future of media, and before we abandon print to the pages of history, we should recall that it has much to teach us. As we move into an era where media can exist on any given piece of glass, we should keep in mind print’s lessons of form, editions, and brand. They’ll serve us well.

NB: Writing this made me realize there are many topics I had to leave out – longer ramblings on the link economy, on how the stream and “formed” media can and should co-exist, on the role of platforms (and whether they should be “owned” at all), on the role of data and personalization, on why I believe we’re close to a place where apps no longer rule the metaphorical roost in mobile, and more. As summer settles in, I hope to have time to do more thinking out loud on these topics…..

*I’ve noticed a few publications starting to do this, whether it’s the experiments over at Medium (with Matter, for example, or the hiring of Levy to focus tech coverage), or The Atlantic’s excellent Quartz. 

 

Search and Apps – Give Consumers Back Their Links

By -

I’ve railed against the “chicletized” world of apps for years. I’ve never been a fan of the way mobile has evolved, with dozens, if not hundreds, of segregated little “chiclets” of stovepiped apps, none of which speak to each other, all without any universal platform to unite them save the virtual walled garden of Apple or Google’s app store and OS platform.

Of the two, Google has been the most open to the “webification” of apps, encouraging deep links and building connective tissue between apps and actions into its Android OS. Given Google’s roots in the link-driven HTML web, this is of course not surprising.

Last week’s I/O included news that Google is now actively encouraging developer’s use of deep links in apps. This is a very important next step. Watch this space.

I’ll have more to write on this soon, but my takeaway is this: while developer-driven deep links are great, the next step in mobile won’t really take off until average folks like you and I can easily create and share our own links within apps. Once the “consumers” start creating links, mobile will finally break out of this ridiculous pre-web phase it’s been stuck in for the past seven or so years, and we’ll see a mobile web worthy of its potential.

Programmatic Needs Context

By - May 27, 2014

Today Digiday published a piece I wrote about the lack of context in the display advertising marketplace. Check it out, I’ve posted it below as well for posterity.

Before the rise of programmatic buying and “audience retargeting,” most quality brand media was purchased based on a very particular contextual signal –- even if the market didn’t really call it that. Back then, “context” was code for a publication or television program’s brand, and for the audience that brand attracted. If you wanted to reach moms at home, for example, you’d buy Ladies Home Journal or the soap operas. If you wanted business executives, you’d put Fortune or Forbes on your plan, maybe with a dose of golf or baseball broadcasts.

Fast-forward to today, and programmatic has torn audience away from its contextual roots. Using programmatic tools, a media buyer can identify almost any audience segment they want with pinpoint precision – down to the exact cookie or data segment that matches a customer target. And for various reasons, including price, those audience members are targeted mainly on who they are, independently of what they are doing. Put another way, we buy audiences, but we aren’t buying the show they’re watching – we’re ignoring where that impression is served.

This is nuts.

After 20 years of chasing click through rates as a core metric for branded display advertising, we’re finally realizing that CTR is a race to the bottom. The ecosystem optimizes for clicks, and we lose the value of branding in the process. We’re making a similar mistake with audience buying. Exercised without context as a key signal, it’s a bad habit, one we need to change if we’re going to build brands using programmatic media.

Here’s why. When readers or viewers come to a site or app, they come for the experience – what I call “the show.” That show provides context to the reader – if they’re on a business site, they are there in the context of being a businessperson. If they are watching a home improvement video, they’re in the context of being a homeowner. They don’t know, and they don’t care, that they may also be carrying a cookie that identifies them as a “business executive” or a “stay at home mom.” Our current adtech ecosystem is stripped of most editorial context and driven by retargeting which focuses (for the most part) only on the cookie. So that person watching a video about business may get an ad for diapers if she’s visited a parenting site previously. And that woman watching the home improvement video? If she’s been segmented as an auto intender, she may get an ad from Ford.

This seems upside down.

Wouldn’t it be better if the ads matched the content? Or, at the very least, if the ads about diapers or cars understood the environment in which the ad was being shown, and adapted their creative accordingly (“Ford Trucks: Built for Home Improvement,” or some such).

That’s how it used to be, back when ads were bought and sold in a bespoke fashion by publishers’ ad sales forces competing on the quality of their content and the audience it attracted. And it’s how it could be again, given the wealth of contextual information available to marketers today. It’s not an either/or choice: It should be both. It’s well within the programmatic ecosystem’s reach to surface contextual information. Innovation is happening in the market with terabytes of data that allow readers from a situational as well as categorical basis. Soon we’ll be able to match the creative content with the context of the article –- think about the Ford example above where the ad could be served to the reader who was interested in home improvement — but we aren’t there yet.

Programmatic has forced a separation of editorial and ad space, and we’ve lost context as a result. It’s time to get it back – it’ll be good for quality publishers, good for brand marketers, and great for our industry.

Google+ Won (Or Why Google Never Needed A Social Network)

By - April 26, 2014

google+Since the news that Google+ chief Vic Gundotra has abruptly left the company, the common wisdom holds that Google’s oft-derided Facebook clone will not be long for this world. But whether or not Google+ continues as a standalone  product isn’t the question. Google likely never cared if Google+ “won” as a competitor to Facebook (though if it did, that would have been a nice bonus). All that mattered, in the end, was whether Plus became the connective tissue between all of Google’s formerly scattered services. And in a few short years, it’s fair to say it has.

As I wrote three years ago , the rise of social and mobile created a major problem for Google – all of a sudden, people were not navigating their digital lives through web-based search alone, they were also using social services like Facebook – gifting that company a honeypot of personal information along the way – as well as mobile platforms and apps, which existed mainly outside the reach of web-based search.

If Google was going to compete, it had to find a way to tie the identity of its users across all of its major platforms, building robust profiles of their usage habits and the like along the way. Google countered with Android and Google+, but of the two, only Android really had to win. Google+ was, to my mind, all about creating a first-party data connection between Google most important services – search, mail, YouTube, Android/Play, and apps.

Think about your relationship to Google five years ago – you most likely weren’t “logged in,” unless you were using a silo’d service like mail. Now think about it today – you most likely are. We have Google+ to thank for that. It’s done its job, and it’ll keep doing it, whether or not you ever use its social bells and whistles as a primary social network.

Google still has a lot of work to do on identity – anyone who has more than one login can attest to that. But Google+ has won – it’s forced the majority of Google users onto a single, signed in state across devices and applications. That protects and extends Google’s core advertising business, and opens up the ability to ladder new services – like Nest – into Google’s platform.

 

Else 4.21.14: It’s (Almost) All Google

By - April 21, 2014

GOOG5.21.14Welcome back to Else – I took a week off for Spring break, so this covers two weeks of the best stories related to the work I’m doing on the book. Reflecting an increased focus on Google, this edition of Else is flush with Google news, from its purchase of Titan Aerospace to its unusual willingness to show us a peek behind the curtain of Google X. Google also had a confounding earnings release, took steps to consolidate power in the hands of its founders (again), and had an entertaining wrinkle in its ongoing tiff with European publishers.

To subscribe to Else via email, click here

To the links:

Why Google Isn’t Growing – BI 

In fact, Google is growing – earning prove it – but the point here, cribbed from asymco, is that as goes Internet penetration, so goes Google, and the Internet is growing far more slowly than it used to. This points to two things – one, the need to own “the next 2 billion” people who have yet to get on the Internet – this is why Facebook and Google are buying drone makers – and two, the need to get into entirely new lines of business – which explains Nest, among other things.

You may own shares in Google and Facebook, but you have virtually no say in what they do — and that’s wrong – GigaOm 

Matt Ingram takes a strong POV on recent moves by the Internet giants to insure shareholders don’t have much power. It’s all legal, and it’s also unsettling. Are we putting too much faith in companies that have cheery mission statements and trustworthy CEOs? At what point do we need more influence over them, or do we?

Google, once disdainful of lobbying, now a master of Washington influence – The Washington Post

A very detailed overview of how Google has become a very large player in DC. A timely piece.

Why Google and the Music Industry Want a YouTube Hit – The Information

YouTube is the largest music app in the world, but no one sees it that way. Soon, we will. It’s critical that Google get this one right.

A German business model – Buzz Machine

Jarvis takes off the gloves and beats up Axel Springer, a company for whom I have far more sympathy, even if I do agree, in the end, you can’t cry in your beer. All of this keys off a very public back and forth between Eric Schmidt and the CEO of Axel.

Station to Station – Pitchfork

A very well done article “experience” about the future and present of streaming music. Bravo.

The Naked Android – VisionMobile

A history of how Google tried to put the Android genie back in the bottle.

Google to Buy Titan Aerospace as Web Giants Battle for Air Superiority – WSJ

Take that, Facebook!

Surveillance, Good and Evil- Random House 

An overview of the recent book Social Physics: How Good Ideas Spread—The Lessons from a New Science. This is now on my reading list – seems to be an important new work on the impact of data on our society.

Amazon Ad Business Sparks Controversy—and Growth – The Information

Amazon strikes me as the most natural competitor to Google, not Apple.

The Truth About Google X: An Exclusive Look Behind The Secretive Lab’s Closed Doors – Fast Company

It’s unusual to see Google open up like this. Seems part of a larger strategy worth watching.

IAB Report: US Internet Ad Revenue Grew To $42.8B In 2013, Overtaking Broadcast TV – TechCrunch

A historic year – until you realize, the distinction between TV ads and “internet” ads is false. TV is an app of the Internet, or soon will be.

900 Years of Tree Diagrams, the Most Important Data Viz Tool in History  - WIRED

Fascinating to see how this approach to visualization has informed our understanding of data.

To subscribe to Else via email, click here

 

 

 

 

To Win The Newsfeed, Facebook Should Put Its Users In Control

By - April 01, 2014


Lost in the latest Facebook kerfuffle (if you’ve missed it, read this cheeky Eat24 post, and the hundreds of articles it prompted) is the fact that we all seemed quite confused about what Facebook’s newsfeed is supposed to be. Is it an intimate channel for peer to peer communication, where you stay in touch with people who matter to you? Is is a place you go to find out what’s happening in the world at large, a watercooler of sorts, a newspaper, as Zuckerberg has said? Is it a marketing channel, where any brand can pay for the right to pitch you things based on your stated or inferred interests? Is it all of these things? Can it be?

We’re in the midst of finding out. Of course, I have an opinion. It boils down to this: Facebook’s newsfeed should be what I tell it to be, not what Facebook – or anyone else – tells me it should be. If I want to fill my newsfeed with Eat24 sushi porn, then it should be brimming with it. If I tell it to only show musings from Dwight Schrute and  Marc Cuban, then that’s what I want to see. If I love what Mickey D’s is posting and want to see the best of their posts as determined by engagement, then Big Mac me. And if I prefer to keep it to my immediate family, then damnit, show me that.

If the cost of giving me that kind of control is that I have to see a marketer’s post every five or six entries, I’m cool with that. That’s what Twitter does, and it doesn’t bother me, it’s table stakes, I get it. But what I think Facebook’s got wrong is where they’ve instrumented the controls. Facebook spends an inordinate amount of time and energy tweaking a black box set of algorithms to figure out what it thinks I want in my feed, boiling an ever-larger ocean of content into a stream of stuff it believes I want. For reasons I can’t fathom, it doesn’t give me the chance to truly curate my feed, beyond some clunky lists and filters which, from what I can tell, are only good for blocking people or indicating preference for a particular feed (but not saying, for example, “show me everything from this source.”)

Facebook is therefore viewed as paternalistic – it has a vibe of “we’ll figure out what’s best to show you.” You have *some* input into the feed, but you are not encouraged to actively curate it the way you can curate friends or brands on Instagram or Twitter (and I think both have a long way to go as well). I think Facebook could trump all this debate once and for all by putting the end-user of its service in charge, and iterating the newsfeed based on that feedback. Scary, perhaps, but ultimately liberating and, more importantly, truly authentic. Over time, the value will accrue back. As we say around the office at NewCo, give (control) to get (benefit back).

 

Thinking Out Loud: Potential Information

By - March 20, 2014
o-ALPINE-SLIDE-PARK-CITY-570

Plenty of potential at the top of this particular system.

(image) If you took first-year physics in school, you’re familiar with the concepts of potential and kinetic energy. If you skipped Physics, here’s a brief review: Kinetic energy is energy possessed by bodies in motion. Potential energy is energy stored inside a body that has the potential to create motion. It’s sort of kinetic energy’s twin – the two work in concert, defining how pretty much everything moves around in physical space.

I like to think of potential energy as a force that’s waiting to become kinetic. For example, if you climb up a slide, you have expressed kinetic energy to overcome the force of gravity and bring your “mass” (your body) to the top. Once you sit at the top of that slide, you are full of the potential energy created by your climb – which you may once again express as kinetic energy on your way back down. Gravity provides what is known as the field, or system, which drives all this energy transfer.

For whatever reason, these principles of kinetic and potential energy have always resonated with me. They are easily grasped, to be certain, but it’s also how evocative they are. Everything around us is either in motion or it’s not – objects are either animated by kinetic energy (a rock flying through the air), or they are at rest, awaiting a kinetic event which might create action and possibly some narrative consequence (a rock laying on the street, picked up by an angry protestor….).

To me, kinetic and potential energy are the bedrock of narrative – there is energy all around us, and once that energy is set in motion, the human drama unfolds. The rock provides mass, the protestor brings energy, and gravity animates the consequence of a stone thrown…

Because we are physical beings, the principles of motion and force are hard wired into how we navigate the world – we understand gravity, even if we can’t run the equations to prove its cause and effect. But when it comes to the world of digital information, we struggle with a framework for understanding cause and effect – in particular with how information interacts with the physical world. We speak of “software eating the world,” “the Internet of Things,” and we massify “data” by declaring it “Big.” But these concepts remain for the most part abstract. It’s hard for many of us to grasp the impact of digital technology on the “real world” of things like rocks, homes, cars, and trees. We lack a metaphor that hits home.

But lately I’ve been using the basic principles of kinetic and potential energy as a metaphor in casual conversations, and it seems to have some resonance. Now, I’m not a physicist, and it’s entirely possible I’ve mangled the concepts as I think out loud here. Please pile on and help me express this as best I can. But in the meantime…

…allow me to introduce the idea of potential information. Like potential energy, the idea of potential information is that all physical objects contain the potential to release information if placed in the right system. In the physical world, we have a very large scale system already in place – it’s called gravity. Gravity provides a field of play, the animating system which allows physical objects (a rock, a child at the top of a slide) to become kinetic and create a narrative (a rock thrown in anger, a child whooping in delight as she slides toward the sand below).

It seems to me that if we were to push this potential information metaphor, then we need our gravity – our system that allows for potential information to become kinetic, and to create narratives that matter. To my mind, that system is digital technology, broadly, and the Internet, specifically. When objects enter the system of technology and the Internet, they are animated with the potential to become information objects. Before contact with the Internet, they contain potential information, but that information is repressed, because it has no system which allows for its expression.

In this framework, it strikes me that many of the most valuable companies in the world are in the business of unlocking potential information – of turning the physical into information. Amazon and eBay unlocked the value of merchandise’s potential information. Airbnb turns the potential information of spare bedrooms into kinetic information valued at nearly $10 billion and counting. Uber unlocked the potential information trapped inside transportation systems.  Nest is animating the potential information lurking in all of our homes. And Facebook leveraged the potential information lurking in our real world relationships.

I’d wager that the most valuable companies yet to be built will share this trait of animating potential information. One of the best ideas I’ve heard in the past few weeks was a pitch from an inmate at San Quentin (part of The Last Mile, an amazing program worthy of all your support). This particular entrepreneur, a former utilities worker, wanted to unlock all the potential information residing in underground gas, sewage, and other utilities. In fact, nearly every good idea I’ve come across over the past few years has had to do with animating potential information of some kind.

Which brings us to Google – and back to Nest. In its first decade, Google was most certainly in the business of animating potential information, but it wasn’t physical information. Instead, Google identified an underutilized class of potential information – the link – and transformed it into a new asset – search. A link is not a physical artifact, but Google treated as if it were, “mapping” the Web and profiting from that new map’s extraordinary value.

Now the race is on to create a new map – a map of all the potential information in the real world. What’s the value of potential information coming off a jet engine, or  a wind turbine? GE’s already on it. What about exploiting the potential information created by your body? Yep, that’d be Jawbone, FitBit, Nike, and scores of others. The potential information inside agriculture? Chris Anderson’s all over it. And with Nest, Google is becoming a company that unlocks not only the information potential of the Web, but of the physical world we inhabit (and yes, it’s already made huge and related moves via its Chauffeur, Earth, Maps, and other projects).

Of course, potential information can be leveraged for more than world-beating startups. The NSA understands the value of potential information, that’s why the agency has been storing as much potential information as it possibly can. What does it mean when government has access to all that potential information? (At least we are having the dialog now – it seems if we didn’t have Edward Snowden, we’d have to create him, no?)

Our world is becoming information – but then again, it’s always had that potential. Alas, I’m just a layman when it comes to understanding information theory, and how information actually interacts with physical mass (and yes, there’s a lot of science here, far more than I can grok for the purposes of this post.) But the exciting thing is that we get to be present at the moment all this information is animated into narratives that will have dramatic consequences for our world. This is a story I plan to read deeply in over the coming year, and I hope you’ll join me as I write more about it here.