Banking and Finance

EmanciPay, described in chapter 23, is just one of the new business offerings that might open up for banks and similar services. No doubt there will be others. The main question for banks in the Intention Economy is how they can better play the game they invented centuries ago: paying for savings and charging for loans. Better signaling from actual and potential customers should reduce risk and improve the ability to make offerings and monitor performance. Banks can also work as fourth-party agents for customers.

The transcendent fact for banking in the Intention Economy is that every good customer is both a saver and a borrower—even if all they borrow is the money they spend on credit card purchases, while paying off bills completely once a month. In recent years, large banks have been trying to scrape off small customers, who have been taking their business elsewhere (usually to credit unions).² Those small customers, however, are sources of intelligence about what’s happening “on the ground” in the marketplace. Losing them is more costly to large banks than spreadsheet numbers alone might suggest.

The business of banking and finance has always been in money itself. The big money made by making bets on what companies and other securities are worth is now the tail wagging the banking dog. Even leaving aside the securitization failures that brought on the Great Recession, the fact remains that the worth of all securities is inherently derivative. They are a step, or two, or three, removed from the first sources of value, which comes from what people and companies buy, create, save, and do.

The networking of everything on the Live Web makes the first sources of value far more manifest. As more value creation gets hooked together, mostly following the intentions of individuals, more of it will also be accountable. In the past, banks and financial institutions have been good at accounting. It should pay them to see the possibilities that arise when far more accounting of actual work is done in the world.

Supply Chain

The road from first sources to final customers is not a conveyor belt. It is a series of tight relationships and value additions that are always two-way rather than just one. So, instead of seeing the supply chain as a conveyor belt, think about pull between supply and demand as funicular in the manner of trolleys connected to either end of a cable looped over a pulley at the top, so one goes up as the other goes down. And think of this happening at every stage.

According to Michael Stolarczyk, author of Logical Logistics: A Common-Sense Primer for Your Supply Chain, supply chains not only convey goods in the mechanical sense, but involve constant learning for everyone involved. “Collaborating creates value and executive empathy makes mutual innovation possible.” he says. “Understanding what your partners are going through is rarely enough. You have to be interested and attuned as well. This requires feeling: making emotional as well as mechanical connections.”³

That empathy begins on the customer side of the “Chinese wall” I talked about in chapter 2. All of us are customers, no matter what we do in business. That means we all live at the far ends of supply chains. Having empathy for the customer—for ourselves—is one requirement. But so is having empathy as customers for suppliers working for common cause at every stage back up the demand chain.

This isn’t possible in either direction without far more transparency than we have today, even with the Internet connecting every business operation. For most of the industrial age (which is still going on), hiding the mechanics and operations of everything a company did was generally considered a Good Thing, and in most cases a requirement for management. Now companies need to turn inside out, as Craig Burton said (in chapter 22), and have their exteriors bristling with APIs that expose core competencies. For supply chain logistics to become what Michael Stolarczyk calls “locative,” you need an ever-updating assortment of smart handheld mobile devices, GIS (geographical information systems), maps from Google, and other APIs, AR (augmented reality) visualizations, cloud-based platforms for data and processing, and even social media apps that layer data on location. Whatever it takes.

Look back at what Bob the salesman does in the scenario we visited in chapter 22. Think of him as a smart agent moving through the supply-demand chain of life—or just of one business trip. Look at all the ways he, his apps, and the APIs of various services all interact, based on how he and his fourth party program them to interact. Now think of a product as an agent as well, moving from first source to final customer, and the funicular intelligence feedback loops that are established and improved along the way. The less fixed, closed, and siloed all of those are, the better the whole system and each part of it can learn, adapt, improve, and compete in an increasingly open marketplace.

Knowing the intentions of every contributor to that system, especially as they change through learning over time and from experience, is going to be a requirement for both survival and success.

Health Care

Everything in VRM is at the human level, literally. No business is more human than health care—or more screwed up, at least in the United States.

Not surprisingly, VRM development work has been going on in health care since long before ProjectVRM showed up to cheer it on. PHRs (personal health records) have been an ideal since the turn of the millennium, if not longer. Meant to serve as a single-purpose PDSs (personal data stores), their failure to catch on in a big way should be instructive to the many PDS development projects and businesses currently incubating in the VRM community.

Large Health 2.0 conferences have also been held for years, focusing on “patient-generated health care,” “participatory medicine,” and other VRM-ish virtues. The same conferences have also been encouraging development. Large companies such as Google and Microsoft have obliged with PHRs of their own (e.g., Google Health and Microsoft HealthVault), with minimal success. Google Health folded in 2011, and Microsoft’s efforts have also hardly set the world on fire.

So the problem is not a lack of trying or even knowing what the problems are. It’s that the health-care business could hardly be more siloed and fractured between incompatible and noncommunicating systems, with walls thickened by fear of exposure and lawsuits. Still, there are many good people working on solutions, starting with PHR and EHR (electronic health records), controlled by patients rather than by providers alone.

Adrian Gropper (an MD and longtime advocate and developer of health-care VRM solutions), says medical errors, many caused by bad or missing data, kill many thousands of people per year in the United States. He adds,

The errors in closed, proprietary systems derive from lack of open source, absent peer review and everyone re-inventing the same bugs. Aside from buying closed systems, hospitals also seem to differentiate themselves by the idiocies and idiosyncrasies of their information systems. Hospitals, groups and some doctors also resist cloud systems, which are inherently lower in cost and easier to maintain, even though the bugs in a cloud system are much more public and the errors more manageable.⁴

Adds Marty Heaner, another VRM advocate in health care,

The major stumbling block is data flow. Today’s medical systems are not designed to share data. If data is going to flow, then the EMRs (Electronic Medical Records) and integrated hospital management systems must evolve to add APIs and interfaces that allow them to link to Personally Controlled Health Records (PCHRs) to both read in and write out data. This is not going to happen quickly and without a fight.

I think the incentives need to come from customers—patients—working to maximize their own health, with their own devices and services. This will have a funicular⁵ effect on health-care provisioning, because it will provide better knowledge and data direct from the individual. The empathy required is already there. Means for applying it are missing.

Toward that I’ll give Adrian the last word: “The only way to apply VRM to health information exchange is to enable patients to control real time connections and queries by doctors. In my world, the patient is the driver and the doctor is the valet.”⁶

Law

There are two VRM challenges in law. One is keeping the Net open and free. The other is establishing freedom of contract dealings between vendors and customers.

Keeping the Net open and free has always been a cause for the Berkman Center and one of the reasons I was drawn to it. Although I can’t find any bylaws or mission statements saying so, the best explanation I ever heard for the Berkman Center’s founding mission went like this: “To keep old laws from screwing up the Net and to help new laws save it.” That should also remain a mission for any businessperson who cares about the Net and wishes it to remain the business-friendly environment it still is, in spite of many attempts to fence it in.

Toward freedom of contract, the main challenge for businesses at this stage is to keep legal departments on a leash while customers and their developer friends come up with new and better terms of engagement that work for both sides and create new business. On the Live Web, lopsided and customer-hostile contracts of adhesion (see chapters 4 and 20) are worse than obsolete. They maintain private marketplaces that are free only to the extent that customers can choose captors. They also prevent an immeasurable sum of economic activity by severely limiting what customers can bring to the market’s table and enlarging that table in the process.

The Intention Economy will require both a free Internet and free customers. Whatever legal folks can do to make both happen (including staying out of the way) will be a Good Thing.

Government

In addition to being a serial entrepreneur, a great programmer, and a computer science PhD, Phil Windley is a retired U.S. Navy commander who also served as CIO for the state of Utah. So, when he talks about how government works and what it ought to do, I listen. That’s what I did one day in early 2004, when I ran into Phil at the airport in Salt Lake City. This was when Howard Dean was briefly the front-runner in the Democratic primaries, and there was a lot of noise about how the Internet was going to make all the difference in that year’s presidential election. (It didn’t.)

Phil and I talked for a long time, standing in a concourse between flights. I don’t remember anything I said (and I doubt Phil does either), but two pieces of Phil’s wisdom stick with me still. One was, “Democracy is about elections and governance, and governance is what gets the job done.” The other was, “Everyone wants the roads fixed.”

Four years and a few months later, on Election Day 2008, I got up at 4 a.m. to watch Barack Obama (the real Howard Dean, it turned out) give his acceptance speech, live on a flat screen in the corner of a pub underneath Smithfield’s, the meat-packing house on the north side of London. Joining me were folks from MySociety, whose largest and most dramatic success was a simple Web site called FixMyStreet.com—a service that cost little to build and provided results beyond measure, mostly by making connections between individual citizens and U.K. government entities in charge of fixing streets.

The success of FixMyStreet and similar grass-roots efforts are among the reasons why the U.K. government’s Midata project (reviewed in chapter 21) is working to make sure that citizens are respected as the parties best positioned to control their own data.

Here in the United States, the Personal Democracy Forum (as both publication and event) has become a fixture at the center of the move to personalize democracy. So has the work of Britt Blaser, a former Air Force pilot, real estate developer, and the prime mover behind NewGov.us. Britt’s corollary to Phil Windley’s two principles is, “Government is the story; Politics is just the punch line. All politics is yokels.” He also says, “What if they formed a party and everybody came?”⁷

He doesn’t mean that as a joke. He means NewGov.us should be the party where every voter comes to manage his or her politicians “as easily as you manage your iTunes: rate, promote, collect and discard them and never attend a party meeting.” His final goal for this is a “participatory surplus.”⁸

There are many other grass-roots efforts to do GRM—government relationship management—but these two are the ones involved today in the VRM movement. Watch for them, or start one of your own.

Meanwhile, I take hope in Abraham Lincoln’s call, in his Gettysburg Address, for “a new birth of freedom” leading to “government of the people, by the people, for the people.” We have the same ends today. But we’ve also got better means.