I have spent a few posts thinking about this concept – the ‘why’ in Scarcity Thinking in Marketing and Feels & Fields in Marketing and some of the ‘what’ in Brand with a world view. Essentially, the idea is that as customer attention becomes increasingly more scarce, brands will have to think beyond ‘fracking’ and the efficiency driven marketing approach (with all the seemingly contextually relevant data they offer) for a sustainable advantage.
I have to confess that it doesn’t seem that way now. In Pipeline to Platform Organisations, Neil Perkin makes the point that this (pipelines to platforms) is one of the most significant shifts in internet era business economics. And the argument is indeed right, proven by the fact that Facebook, Google, Amazon, Uber, Airbnb and even Apple to a lesser extent are all great examples of platform companies. In fact, the article he has linked to states that in 2013, 14 of the top 30 global brands were platform companies. They have been built to scale, which they have achieved to a large extent by building fairly insurmountable ‘moats’, hugely powered by network effects. And there lies my problem because they are now well on their way to becoming platform monopolies (euphemistically called ecosystems) – the new intermediaries on the very web that was supposed to help level the playing field. Arguably, it’s becoming increasingly clear that a fight against them based on efficiency/network effects is either doomed from the start, or becomes unsustainable.
So what can be the ‘think beyond’ that I mentioned in the first paragraph? Simplistically, it’s just a value system and a world view that the brand upholds – what I’d call a brand protocol. Quite obviously, the business basics – a differentiated product, competitive pricing, distribution – are assumed. This protocol currently finds a place on everything from office walls to websites to t-shirts, and logos, mission statements etc but is probably the last thing on the mind of the brand’s custodians. So how is it ever going to change?
I found an interesting possibility in this excellent post by Jeremy Epstein titled Blockchain-based digital tokens – the new brand logo? It brings out the difference between the web model, followed by the companies mentioned earlier, where the rules are intentionally simple, giving application developers a chance to add a lot of value, and the blockchain model, where the rules can be much more robust, and the data is immutable and shared. As Jeremy explains, the latter is a ‘fat protocol‘ (coined by Joel Monegro) in which developers can write algorithms that are native to the protocol, in essence reducing the role of the intermediary. He uses the example of Storj, which has built a protocol to facilitate the renting and leasing out of hard disk space, to show how value can be created, and communities can govern themselves, using a token model. Demand for the tokens will increase not based simply on the actual service delivered, but on whether the values of the underlying protocol are consistent with the beliefs of the consumer. He actually uses Uber as an example to illustrate how the business economics can get affected by the value system the brand upholds.
The danger I see is that existing platform monopolies will try to subvert it and use it to their advantage. A great example would be Zuckerberg’s new manifesto for Facebook – a global community that works for everyone by developing the social infrastructure for community. As Ben Thompson writes in this insightful post Manifestos and Monopolies it’s bad enough for Facebook to have so much power, but the very suggestion that Zuckerberg might utilize it for political ends raises the costs of inaction from not just opportunity costs to overt ones. Between Facebook, Instagram, Messenger and Whatsapp, (and Oculus in the future) he has enough tools to create universal protocols, and hold brands to ransom at a scale much more massive than what happens now.
Theoretically, the blockchain is an excellent way to take the subcultures that thrive on the web to an economically viable and participative model. On the brand side its values are codified in the fat protocol, giving its employees and consumers a clear operating system to refer to. On the consumer side, my consumption as per my beliefs, thereby allowing the brands (businesses) that share my value system to thrive. A sway outside of the value system ends up in consumers shifting loyalties. But it also means a complete flip compared to what we have now – brands being radically transparent and consumer identities being protected instead of being tracked incessantly. All this, without a central authority. That’s the world consumers and brands should be working towards – tokens over monopolies!