Central Perk: Seth's Blog : Coordination

duminică, 19 iunie 2011

Our economy is almost entirely based on a Darwinian competition--many products and services fighting for shelf space and market share and profits. It's a wasteful process, because success is unpredictable and unevenly distributed.

The internet has largely mirrored (and amplified) this competition. eBay, for example, not only pits sellers against one another, it also pits buyers. Craigslist makes it easy for buyers to see the range of products and services on offer, making the marketplace more competitive. Google, most of all, encourages an ecosystem where producers can evolve, improve and compete.

I think the next frontier of the net is going to use the datastream to do precisely the opposite--to create value by making coordination easier.

A pre-internet pioneer of this: the method residents are assigned to hospitals after med school (the Match). The competitive way to do this is the same way we do college--we tell students to apply to a ton of schools, and perhaps you get into four, perhaps you get into none. Perhaps someone else gets into your favorite and chooses not to go... while you're left behind.

The Match coordinates instead. You tell the system your favorites, in rank order, and it uses application feedback from the hospitals to maximize the happiness of the largest number of applicants. No sense wasting scarce acceptances on people unable to work in two places at once.

Consider the way Logos is determining which books to bring out. They challenge readers to indicate the most they'd be willing to pay for a particular title, and then, based on the number of people voting with their dollars, can bring out titles at the lowest possible price for the largest number of people.

In both cases, the system works because it can become aware of buyer preferences in advance. Kickstarter takes this to an extreme, allowing producers to pre-sell items before making them. But this is not nearly as nuanced as it could be, and a lot of effort is wasted in acquiring the attention of potential purchasers.

Any wasting asset--a restaurant table, a seat at a conference, a wasting box of fish--can be efficiently used instead of wasted if we use technology to identify and coordinate buyers.

Synchronizing buyers to improve efficiency and connection is a high-value endeavor, and it's right around the corner. It will permit mesh products, better conferences, higher productivity and less waste, while giving significant new power to consumers and those that organize them.