Sessions Top Ten Insights – Eight – Putting A String On Data

Our sessions event happened almost a month ago and it is starting to fade into my memory.

But there is at least one phrase that came out of Sessions that we are still using with regularlity at Union Square Ventures. And it came out of this really interesting exchange between Brad and Tim O’Reilly on the subject of “open data architectures”:

MR. BURNHAM: I wanted to jump on that one-way aspect, because, for instance, one of the things that if you syndicate a piece of data, you know, do you want to have a string tied to that, at least be able to capture the meta data about how it’s being used, and does that make it then two way, because if you — is it the same to syndicate and just let it go and never have no feedback at all about where it’s being used, how it’s being used, or is the ultimate architecture going to have something to do with —
MR. O’REILLY: I’m making a guess here, but I’m making a guess that if you try, actually quote Blake, catch the joy as it flies, the wing or something or other destroys. Anyway, basically, you have to let — I think you have to let whatever you do go. If you try to kind of say, “Oh, I have the instrument so I captured it,” you’re not going to get it.
MR. BURNHAM: That’s a pretty significant departure from just saying, “Okay, I’m not going to let it go at all. You can’t crawl me. I’m not going to syndicate my data. It’s in a box,” to “I’m going to syndicate it, but I’d like to be able to at least capture the value that is associated with how people use it,” to saying “I’m just going to let it go and I have no idea what’s going to happen.”
MR. O’REILLY: I’m going to make a leap here, and I don’t know if it’s actually true, if I look at the web and what happened, it wasn’t until the web got to a certain scale that it was possible to discover how to recapture the aggregation. So I think that something happens when you syndicate outwards. When you let things go, you create network effects. If you try to optimize prematurely so that you capture the value and you build the aggregate system too early, you limit the network growth. And that’s why often the actual value is captured by a second party, right, because you cannot build it into the system at the outset. You have to figure out how to, you know, how it’s actually implicit somewhere in the system. Somebody discovers later where that implicit way —

This back and forth between Brad and Tim has been rattling around in my brain ever since because Tim is postulating that open data means “let it go with no strings on it” and let others reaggregate it in the future and make the money on it.

That’s clearly what happened with web 1.0 where everyone put their content up for the world to see and the search players, led by Google, crawled it and are monetizing it for their benefit.

When we move to syndicated data- via RSS and other technologies – do we have to accept the same deal? Or can we put something into our data (an ad call in a video for example) that allows it to be monetized wherever it goes.

I wrote a post several weeks ago on my personal weblog called The Future of Media where I suggested the following formula for media businesses in the age of syndication:

1 – Microchunk it – Reduce the content to its simplest form.
2 – Free it – Put it out there without walls around it or strings on it.
3 – Syndicate it – Let anyone take it and run with it.
4 – Monetize it – Put the monetization and tracking systems into the microchunk.

It’s that last part, monetize it, that is in conflict with Tim’s comments at Sessions:

So I think that something happens when you syndicate outwards. When you let things go, you create network effects. If you try to optimize prematurely so that you capture the value and you build the aggregate system too early, you limit the network growth. And that’s why often the actual value is captured by a second party, right, because you cannot build it into the system at the outset.

And so we’ve been talking about strings on data/content in the office a lot lately. And we don’t have the answer yet.

Regardless of whether Tim’s “guess” is right or wrong, it’s important to understand the argument and build your business models so they aren’t based entirely on putting strings on content because its hard to catch the joy as it flies.