Rock Paper Scissors for Digital Businesses

The growth of Social Media has elevated identity, privacy and big data to become vital topics for CIOs and CMOs of online businesses. Looking deeper into legislative, consumer and technology trends, I see the challenges for the post-digital organization as: Privacy, Ownership and Persistence. 'Rock, Paper, Scissors' provides a handy metaphor to describe the challenges faced by post-digital businesses. (January 2013)

Pre-Digital Ro-Sham-Bo

Pre-Digital Rock Paper Scissors

As recently as 15 years ago, most personal information of value such as the record of our birth, our health records and our tax history, were preserved on Paper - in books, journals and government and business archives. The Rocks are our material possessions, tangible assets such as property, automobiles and gold, the heavy burdens that we carried as we moved through life. Our pre-digital era Scissors were the tools that we created value with, things that moved matter like shovels, looms, printers and tractors.

Ro-Sham-Bo Post-Digital

Post-Digital Rock Paper Scissors

Now jump forwards to today's rapidly changing landscape driven by widespread adoption of social technologies and advances in computing power. We see that the Cloud has replaced Paper as the store of information and also as the transaction medium - tickets, currency and images all now electronic. Social Security numbers, credit scores and bank balances are simply ones and zeros on a network of anonymous remote servers. The Rocks have become our relationships, persistent anchors that provide context for our activities. They are the connections between individuals, businesses and government that create business and social opportunities. And the post-digital toolset are the devices that access and manipulate information and manage the relationships - today, computers, tablets and smartphones and tomorrow, our cars, houses and any object with an IP address.

Transforming Pre-Digital Businesses

With such tectonic shifts, businesses or organizations founded on pre-digital values will need to re-think how and where value is created.

Post-Digital Rock Paper Scissors

Some rights reserved, image by Fuangg

Libraries and bookshops were essentially exchanges for printed matter - reference, fiction and non-fiction. Today Wikipedia has supplanted Encyclopedia Britannica as the popular source of reference knowledge and as its base of contributors and curators grows, doubts about authenticity and accuracy will diminish. Google Books and Project Gutenberg is digitizing the world's inventory of print, which will be consumed via e-Readers and mobile devices. This is how we say goodbye to paper.

School, Universities and other educational institutions that disseminated knowledge via lectures and classroom tutorials make their way online. Coursera has rapidly cultivated a vast repository of course materials and has built a large student base subscribing to those courses. Online education is not only revolutionizing content delivery, but it may change testing and accreditation all together.

Finally in the space of less than three decades, the music industry has moved through vinyl, tape and optical disc to digital cloud-based storage. The distribution model has moved from radio and retail to online purchase, rental by the track and onto online personalized broadcast channels that resemble personal radio stations - an interesting digital irony that could play out across all content forms.

Challenges for Post-Digital Businesses

For businesses that have been founded on post-digital value creation, where information is the primary currency, there are new challenges to be overcome - Privacy, Ownership, and Persistence.

Privacy

Venturebeat Randi Zuckerberg

Social Data is the trail of information we leave as we interact via social media - the check-ins (geo-positions), the conversations (text and voice) and the image data (photos and videos). As Randi Zuckerberg recently discovered, whatever information we publish runs the risk of being broadcast in a public forum. The Search spiders are now deep inside Social Media busy indexing your personal content.

As long as our online data has sat in corporate silos and remains poorly attributed, the risks are low. But as data is being joined up across silos via various single-sign on services and data science, organizations are building a very rich picture of us without our explicit permission.

Organizations with databases of customer data are amassing mountains of Personally Identifiable Information (PII). Mature data companies like Experian and Equifax, like financial institutions and like database marketing providers have rules and processes for handling PII, but new entrants are sitting on huge potential liabilities. Data based litigation and legislation may eventually catch up - so new organizations building out prized 360 degree customer information systems will need some checks and balances on how this data is handled.

Ownership

Library Image on Flickr

Digital content can be copied with equal fidelity and then remixed and enhanced. Although this has spawned huge creativity, for those who make their living as creators of such content, this presents a problem of ownership and licensing.

For those organizations that store and publish digital content, the part they play in its authorized and unauthorized reproduction will come under scrutiny. The digital rights movement may be too late in advocating for encryption, but there is time for innovative business concepts. I am certain there is an alternative path for creators, publishers and consumers that erodes the benefits of piracy and that will foster creativity and entrepreneurial gain.

Persistence

In the last hour we have uploaded over 10 million photos to Facebook, over 100,000 blog posts, and over 37,000 hours of video to YouTube. For now it looks like the growth of cloud storage capacity can keep pace with the growth in volume. Yet the problem may not be with capacity - the storage is currently paid for and maintained by private companies. If Yahoo decides to take down Flickr, then what happens to our uploaded photos? Same for HP and Snapfish or Fox Interactive and Photobucket? When Delicious was removed, how many people lost their bookmarks? What could happen to our webmail? Our music?

A data escrow service would help safeguard our valuable digital content. Solving the problem of persistence creates an opportunity for new digital business concepts: Of the tens of thousands of photographs we upload, which are the ones that are most valuable? Automated selection via usage statistics and preference settings and a payment for escrow and retention rather than printing could provide value and revenue.

Conclusions

There are new challenges for digital businesses to overcome - privacy, ownership and persistence. As we innovate to do this, there are some pre-digital values that we can rekindle - community, trust and relationships. Prior to mass markets, local businesses relied on word of mouth marketing, and building trust with their customers to reach what today's CRM nirvana - a two-way relationship with individuals who become loyal repeat customers and recommenders.