The internet is fueled by increasingly-targeted advertising. We all know that the big internet companies are tracking our behaviors and locations online — and even in our homes with recent technologies like Alexa voice assistant and Nest thermostats — in order to help advertisers “harvest" who we are. Look at what happened in 2016, where outside parties tried to influence our election process by targeting swing voters. Is the business model for internet advertisers in our best interest? Do advertisers want to steer us toward the best options as consumers, or play to our deepest emotions to get us to buy what they are selling? There is plenty of data that supports the latter. What if this same behavioral mechanisms that grew the internet to the colossal scale it is today was about to transform itself? What if harvesting our most primal desires is replaced by helping us improve our lives by learning what would make us more effective, productive, and raise our salaries? And what if it can do this while not turning us into robots in some Matrix-like new reality, but encouraging us to be more creative and unique...more human?
Harvesting consumer behavior drove the first wave
The internet opened up a door into our minds…but it was a two-way door. Not only could we find and explore anything we imagined at the touch of a screen, but it allowed advertisers to see the “popcorn trail” of what we were interested in in ways that were never possible before. By understanding our Facebook likes and posts, seeing what we shop for, and even knowing where we go in the physical world, advertisers now know more about our behaviors and what they mean about us than we do. The excitement that we all have for the power of the internet to expand our lives is only outstripped by the excitement advertisers have to sell us what we think we want. We have given marketers the keys to our minds, and they are going to use it to their advantage, not ours. Advertisers pay ever more money to the big tech companies who harvest our behaviors, and that has led us to the current backlash against Big Tech. They are becoming too powerful and controlling of our lives. Something has got to change.
Cloud software has always been driven by a different model
While Big Tech has been exploiting the first wave of the internet, the business software market has been quietly evolving. Cloud software, mostly sold to businesses, may have the answer to the misalignment Big Tech has created between consumers and marketers. The roots of the 50-year-old software industry lie in helping users manage tasks more easily, and ultimately make them more productive at their jobs. Software has not been as sexy during this first wave of the internet, but it is grounded in a core business model that is based on “pay for performance.” Even in the old client-server software world prior to the internet, businesses (and consumers) paid for the software they thought would help their workers perform better. Cloud software (aka Software as a Service, or SaaS) of the last 15 years has only further tighten the relationship between who pays and what they get in return. As the name implies, SaaS allows companies to “rent" their software over the internet, and not be exposed to the big upfront costs of installing millions of dollars of software before they see if it will help them. Clearly, the software market is not perfectly aligned with buyers. There are times when SaaS does not perform for businesses and their workers in the way the buyer expected, but vendors that consistently underperform will die away.
Harvesting versus helping
What is so different about the advertising model of Big Tech and the pay-for-performance model of software? Aren’t they both just different ways of getting paid for building a product or service that people want? This is the crux of the question. The fundamental difference is in the motivation behind each of the models. Big Tech companies need to please advertisers and advertisers want to sell to our carnal needs. They have no motivation to consider whether an ad to sell you a loan you don’t need or a car you can’t afford is good for you. Their job is to target your deepest emotions, which they can now do with pinpoint accuracy given the behavioral data we each give to them, and get us to buy their products. And yes, sometimes we learn about some great new product because of advertising, but most of the time advertisers are getting under our skin to get us to buy what we don’t need. They are harvesting our emotions, not helping us do better.
The best of both worlds
What if the deep behavioral understanding of the consumer internet could be combined with the “add-value-or-you don’t-get-paid” business model of cloud software? What if we all were happy to share our methods and behaviors because it would come back to us as better software that improves as we use it? The next “social" networks will be driven by the commercial economy and they will make us better, versus getting us to part with our money. Introducing: Coaching Networks.
The answer is something we’ve dubbed Coaching Networks, and it forms the foundation of a major advance in how we think businesses will use software to augment the capacity for human learning. We also believe Coaching Networks will drive the creation of the next generation of iconic enterprise software companies.
This transformation could not have happened 5 years ago. The ability to deeply understand what makes a great writer, salesperson or manufacturing worker is far too nuanced for a system to gather behaviors and give useful advice. With Internet of Things (IoT), mobile devices with GPS, accelerometers and cameras, and modern communications infrastructure (i.e. Zoom), the deep data available to the software industry is rivaling the broad-but-thin data of Big Tech. Additionally, machine learning algorithms and the massive systems to manage the data that feeds them, were not available even a few years ago.
Do no harm?
Why will this “advise vs. addict” wave of the internet not fall into the same trap as the first wave? With all this deep data about what makes us perform, why won’t some huge company become the next Google? Or even, why won’t Google just do this? Two main reasons: First, as stated above, the business model aligns with improving users. Business buyers will not buy or continue to use software that is not making their employees more productive. Second, unlike the more-unified consumer market, this market will evolve into many large but specialized companies that are focused on part of the enormous commercial economy. Organized either by function (i.e. Sales) or industry (i.e. Manufacturing), Coaching Networks will each have a specific “domain” that they will be known for. These two factors will limit the monopolistic behavior the first wave of the internet, Big Tech. A third, and perhaps most important factor follows below.