5by5 | The Critical Path #9: Getting To Know You

Dan and Horace talk about some of the more profound implications of “intelligent assistance” in personal devices both in terms of business models and in terms of industry dynamics. Getting assistance is an implied bargain we all make as internet citizens but what do we pay for that assistance?

via 5by5 | The Critical Path #9: Getting To Know You.

This got a bit deep.

  • Where did this come from, Horace? I thought I knew this stuff, but you just opened a new door to me. Well, yes, I tend to agree with you, this iCloud stuff could really be bigger than even just new shiny devices from Apple every year.

    Wow, this really got me thinking.

    • >Where did this come from?

      Is that rhetorical or are you looking for references? I’m afraid I don’t have anything to refer to.

      • Sure, that’s rhetorical. I share with you your surprise how you came to this topic. You seemed surprised yourself on the podcast.

  • Sure, that’s rhetorical. I share with you your surprise how you came to this topic. You seemed surprised yourself on the podcast.

  • In ten years, will anyone be surprised if the iPod Nano runs Siri?

    Imagine if you wore your iPod Nano over your left breast, if you tapped it once to activate Siri, and if it connected you to a computer that you asked questions of.

    It would be Star Trek: The Next Generation. Ten years…

    • Health related gadgets would be even cooler. Like nano listen to your heart beat and suggests to calm down when under stress, or suggests to eat this and this to for example increase sugar level in the blood, or even cooler – How am I feeling today, you ask Siri, and it answers – you slept well, but your left ankle is a bit stiffy, better to walk to work. And you seem more relaxed than previous mornings – I suggest some creative work could go well today.

      It’s like daily, science based horoscope of the future 😉

      • I like where you’re going with this. I for one need to seriously lose weight. I have a tough time with diet programs, but the easier it’s made for me the more likely I am to follow through with it. So generate a weight loss ap that queries you on type and quantity of food, and measures, say, distance and speed you ride your bike, walk, run, do sit-ups, etcetera.

        You talk to it, it talks to you, and you work together to achieve a goal.

  • You should do some research on Microsoft’s Windows Azure Marketplace:

    It’s where Microsoft creates a marketplace that companies can use to sell all the data they’ve collected.

    While I greatly enjoyed this podcast, I think you come off as someone who takes these business models theories to a far greater extent than what’s actually seen in the real world. There’s absolutely nothing wrong with Apple being a “shiny toy” company, nothing wrong with Google being an ad company, and Microsoft continuing to sell software to the enterprise. They all collect data to do the businesses they’re already in more efficiently, but hey, as you said, it’s sure fun watching where these folks are going.

    • What I talked about is mostly speculative. But things change more rapidly than they used to.

      • Christian Heidarson

        Horace, you are right that Apple can not forever keep their growth up while only monetizing through high-margin gadgets. There is an alternative however to monetizing data the Google way, and that is through services. With iCloud, Apple is transitioning from selling extremely value-added flash memory to extremely value-added cloud storage. As you say, things can change quickly, but Apple doesn’t *need* to move into selling your data in order to make money beyond gadgets. Once people start seeing the value in the 5GB iCloud storage they have, they will pay to get more. And Siri is the next step towards adding value to that storage.

        In short: Apple’s business model is to use cutting edge tech to drive sales of xyz TO customers, rather than to sell customers to companies. I think this model will survive a transition of xyz from shiny gadgets to cloud services. If that is the case, then there is no need for Apple to confuse their brand by looking at Siri as an advertising opportunity.

  • What is impossible with Siri + iCloud? Basically the user is now a package of levers to be used when Siri needs a helping had in the terrestrial world. Now that’s a thought, user as Siri’s assistant.


    Horace, I have put a lot of personal study to disruption theory and you seem to be evolving it beyond how I see it being applied by it’s discoveror. You have mentioned in this podcast and inferred in others, that the the job to be done continues to change, and indeed MUST change with Apple devices. They are never overdelivering performance if the job to be done evolves upward as well. So with this upward trajectory of more and more complex jobs to be done getting done by apple devices, maybe we can say that there is a third parrallel to the trajectories of technological innovation and consumer utility. The Jobs to be done trajectory rides atop all of them.

    I guess I am still unsure though. This could be a massive overdelivery or a huge disruption. It all depends on what jobs can eventually be done with the device. I believe that Siri + iCloud is a tectonic shift in how we use devices and it will catch on as people use it and rave about the experience. I think it will become more and more functional as it is integrated with new and updates of existing aps. As you said it still doesn’t do the job good enough, but to disrupt personal assistance? That was something I had never considered.

  • Thibaut Sailly

    About “The bargain we’ve always made” : very good perspective setting, thank you.

    But the scope of what one can do with the data collected with/by the internet is broadening : computing power, data accessibility, data compatibility, and growing storage of all this allows us to profile individuals with way more depth and efficiency than ever before. It’s a very different beast than a paper based bureaucracy.
    As long as this profiling is not associated with an identified internet citizen, but associated to “a” user, the bargain “getting to know you” seems to be a good deal.

    But when this profiling is linked to a specific citizen name for an extended period of time, that’s troublesome. Facebook and Google are into this, and we should be very careful about it.

    They are able to read a person’s interests, readings, social habits,… If they store and process this data for about a year, they can estimate this person’s patterns, then the evolution of these patterns. This is way too personal. Think of this person as you, or your child.
    It’d be naive to think they will stop at using this data to sell you toothpaste ads. Insurance companies are going to love this. “Want your health covered? Let’s see… ah, facebook log!… Looks like you liked to drink when you were a teen. You loved it. Extra risk for us : that’ll be an extra 800$ per year for you. You gotta love these facebook logs…”

    We have to think of all this with the notion that what seems like a haystack today will be presented to us as a zen garden in 10 years time, thanks to computing progress.

    We shouldn’t be making this bargain because it makes us lab rats in a cage, not people having some well thought out services to have a better online experience.

    Logs should remain anonymous.

    – –

    The site seems to be down for now but they have a sample of what sort of informations Facebook stores about you.

    This article on The Atlantic is a good reminder of the fact that science fiction technology is way closer to us than what we think.

  • Anonymous

    As you’ve mentioned, the change in input modality is often what drives disruption. So, if Apple manages to make inroads to search through Siri, because we can use voice instead of keyboard, that’s one major change. It can also flip the search business on its head, as briefly discussed at the end of this nytimes article:

    What if they choose to extract value from Siri by extending their revenue sharing model that has worked so well in the app universe and moving away from the user as a search product revenue model? Does apple choose the results winners in this walled garden scenario? I haven’t thought through all the implications, but love the idea of a different search model

    • deV

      The key piece that Apple is missing is decision making data. Google has more high-quality data than anyone else in the world. Which is why they are renowned for having the best search results. I’m sure they don’t just give that away. Apple doesn’t have any of that vital decision-making data. But to figure out what someone is taking about when they are speaking, you need that search engine data. Without it, you’re about as useful as Encyclopedia Brittanica as compared to Wikipedia. Huge gaps, stale information, limited functionality. That is to say, not very useful. Perhaps their best bet is to team up with Google’s competitors: Microsoft or Yahoo. And well…good luck with that.

  • One thing many folks aren’t talking about, that _might_ be relevant to the discussion, and future prognostications…

    If AR really takes off in the way I think it will, say 5-10 years from now when GPS/head-tracking AR “spectacles” you wear are actually viable — won’t natural language recognition be the most obvious way to interact with such a system? Siri could be a major sign that Apple may share this vision, and is laying the foundation. They DO have patents on head-mounted display systems, let’s remember…

    I am convinced that “the story of our time” is not “the Internet” or even “mobile” but rather, the very real merging of our “online” and “real” worlds into a single space. Siri is probably part of that, AR is part of that, “smartphones” are part of that, but mark my words, in ten years, people will not differentiate “online” and “real world” in the way we do today…

  • poke

    Interesting fact for the “tinfoil hat” crowd: Siri was spun off from a DARPA project called Cognitive Assistant that Learns and Organizes (CALO).

  • horace, big fan of your site. i was interested to hear your comments on data gathering. coming from the market research world (and data collection in particular) and i would add the following to your observations:
    there is not just a rise in “free” being paid for by “getting to know you data”, on top of that, there is also the phenomenon of the old paradigm of data gathering via surveys breaking apart, too. people don’t want to respond to surveys anymore and the prize baited, incentive driven consumer panels the research industry has relied over the last years now just yields incredibly skewed data from a minority who incentivised, but not motivated to respond to surveys.

    you alluded to societal conventions of privacy. i think it is the sense of entitlement that is changing, people may feel more willing to share information, but now they also want information back in return. the days of only large corporations basing their decisions on data are numbered – consumers are starting to demand data to make better decisions, too.

    in short, consumers are changing from “respondents” to “data users”. ultimately, “data users” are of course also customers in our society, but perhaps, against this backdrop of being a “data user” and not just a data provider, the choices in this risk-reward ratio will be differently informed.

  • Anonymous

    The issue I have with the “bargain” is that it often seems one-sided in favor of the service provider in the sense that we, the consumers, know what we’re getting, e.g., a sexy smartphone, but we don’t really understand what we’re paying. Privacy policies are typically buried in dense legalese and often aren’t clear on what our private information is being used for. One approach is to assume the “worse,” i.e., that the service providers know EVERYTHING, and make a purchase decision, opt-in or opt-out, based on that. But I think we need to do better than that.

    Thanks for incorporating this into your 5by5. We need more discussion about this.

  • Les S

    Why should we assume that Apple will take the data that they will be collecting in getting to know us and then turning around and reselling that data with their iCloud Siri initiatives when they have demonstrated regularly that they are not interested in that strategy and is part of the benefit of buying into the Apple ecosystem? Why not take that knowledge and feed it back into the ecosystem in a way that enhances their products and thereby make them more attractive?

  • Paolo Palombo

    Horace, love your site and your podcasts. I just listened to this episode. Great insight as always.

    One thing puzzles me. It is fairly obvious why Amazon or Google want to get to know us.
    The better Amazon know us, the better they can target their product placement, thus increasing their revenues. The better Google know us, the better they can target their ads, thus increasing their revenues.
    Apple… today they make money by selling hardware. Services and media represent a tiny fraction of their revenues. As they build their knowledge base, do you see them using it to make better products and sell more hardware? Or do you think they would gradually move from a hardware-centric company to a service-centric company? In the podcast you seemed to imply the latter, but I fail to see how that could support a revenue stream comparable to what they have today.
    Same for Microsoft. Would they use their acquired knowledge to sell more software or change their profile?

    Would appreciate your thoughts.

    • Apple knows a lot about you already. The difference is that they don’t sell that knowledge. They use it to figure out how to make better products and perhaps on how to sell you more of them. I don’t see that changing. They might engage on a different level as with Siri, becoming a companion more than a product you hire.