I can’t be the only one struck by the commonalities between building sustainable businesses on the app store and NSA spying. Or my moving to Taiwan.
(Forgive me one more meta-ish post; I’m still a bit jet-lagged).
First the app store: the inability to monetize existing customers is a primary reason why it’s difficult to build a sustainable business on apps alone. But there’s a second, more fundamental issue at play as well: the absence of friction in searching for, purchasing, downloading, and installing apps.
On one hand, this is a great thing, especially for users. Finding and installing apps is trivial, easily accomplished on the bus, on the couch, or on the can. And it’s great for developers, as a set; the ease with which apps are installed via app stores likely means exponentially more apps have been installed in the last five years than in the thirty-five years that preceded the App Store.
But, for individual developers, the benefits are much less clear cut. The friction of packaging an app, negotiating retail placement, and distribution in the pre-App Store days meant many fewer users ultimately purchased apps (the web solved the distribution challenge, but none of the marketing and installation ones). However, if you did build one of the apps that were widely available for purchase, you also had many fewer competitors.
Before the app store, initial success was hard, but once achieved, a sustainable business almost certainly resulted. On app stores, success is much easier, but sustainability is that much more elusive. Any changes that Apple, Google, or any other platform owner makes to enable more sustainable businesses on the app store will only go so far in alleviating this economic reality.
Friction was the foundation of sustainability, and now friction is gone.
Having labored as a police reporter in the days before the Patriot Act, I can assure all there has always been a stage before the wiretap, a preliminary process involving the capture, retention and analysis of raw data. It has been so for decades now in this country. The only thing new here, from a legal standpoint, is the scale on which the FBI and NSA are apparently attempting to cull anti-terrorism leads from that data. But the legal and moral principles? Same old stuff.
Allow for a comparable example, dating to the early 1980s in a place called Baltimore, Maryland.
The example involves pay phones and pagers, and the collection of metadata surrounding calls, but not the calls themselves. To requote Simon:
The only thing new here, from a legal standpoint, is the scale on which the FBI and NSA are apparently attempting to cull anti-terrorism leads from that data.
Let’s say Simon is right, and was universally acknowledged as such; I bet the outrage would persist. The problem is the lack of friction.
In Baltimore, those detectives had to identify the relevant pay phones, install a dialed-number recorder on each pay phone, clone the pagers, and even then they often didn’t know who the drug dealers were.
Things are much easier today; global communications is largely routed through a few key backbone and service providers, many of which are located in the US. It’s arguably easier to collect the call records of everyone on the planet – and identify them – than it was to collect the records and identities of those Baltimore drug dealers.
One could argue that friction was the foundation of our privacy, and now friction is gone.
I am typing this in Taiwan, rushing to finish in time for the West Coast AM Twitter rush. I know that when I press “Post” people from all over the world will read the words I wrote just seconds earlier. Soon, I’ll start work with a company that is entirely virtual, allowing me to live anywhere I want.
The Internet has removed the friction of time and place, and I am benefitting greatly.
Of course it cuts the other way; I grew up in the Midwest, which means this isn’t my first exposure to the intersection of work and geographic independence. Usually it’s the jobs that move, while the workers are left behind.
Friction was the foundation of our job market, and now friction is gone.
This blog will soon return to the more concrete world of high-tech strategy, value chains, and app store economics, but underlying everything is the seismic change that is only just beginning: if there is a single phrase that describes the effect of the Internet, it is the elimination of friction.
With the loss of friction, there is necessarily the loss of everything built on friction, including value, privacy, and livelihoods. And that’s only three examples! The Internet is pulling out the foundations of nearly every institution and social more that our society is built upon.
Count me with those who believe the Internet is on par with the industrial revolution, the full impact of which stretched over centuries. And it wasn’t all good. Like today, the industrial revolution included a period of time that saw many lose their jobs and a massive surge in inequality. It also lifted millions of others out of sustenance farming. Then again, it also propagated slavery, particularly in North America. The industrial revolution led to new monetary systems, and it created robber barons. Modern democracies sprouted from the industrial revolution, and so did fascism and communism. The quality of life of millions and millions was unimaginably improved, and millions and millions died in two unimaginably terrible wars.
Change is guaranteed, but the type of change is not; never is that more true than today. See, friction makes everything harder, both the good we can do, but also the unimaginably terrible. In our zeal to reduce friction and our eagerness to celebrate the good, we ought not lose sight of the potential bad.
We are creating the future, and “better” does not win by default.