I studied a bit of film technique when I was in school (an elective college class, I think), and learned a bit about the “Hollywood Technique” of storytelling. As I recall, the early the pioneers of film evolved a language (camera placement, transitions, crossfades) to help tell stories without words. A series of slow crossfades signals the passage of time, for example. Showing a shot of a building suggests that the next scene takes place in that building. Although there’s no literal connection between the mechanism and the concept it is intended to communicate, over time audiences have come to understand *and expect* those techniques. We know what they mean and if a filmmaker doesn’t use them we feel uncomfortable.
Increasingly I find myself feeling the same way about technology. Show me a market or a product concept and it seems patently obvious where things will end up.
How Music Ends Up
Take music. When I downloaded my first digital music track from Napster in the late 90s (thank you Sean Parker!) it became obvious to me where the music world would end up. Cheap to produce, cheap to distribute, cheap to store? Ubiquitous bandwidth? Ergo: physical storage of music is dead, we’ll all end up consuming music on demand from wherever we happen to be. All the steps on the road since then are just milestones: Napster, iPod, iStore, Pandora. Next will come universal playlist formats (so the music to which I have the right to listen are available to me in my car, my mobile device, or a friend’s house), and ubiquitous cloud playback (stream everything, store nothing). I’ll walk into a room and say “play OingoBoingo” and the music will start. Done.
This seems to apply to every industry or market I can think of. It turns out that if you do a bit of research and think about it for a minute, you can imagine a pretty clear vision for where things are going. Apply the disruptive nature of the big tech trends (efficiency, freedom, ubiquity), some basic understanding of business and cost structures, and voila: endgame. How we actually *get* there is less clear, of course, because so much of the path between now and then has to do with individuals and companies and regulations and market forces that are very difficult to anticipate. How *long* it takes is also unclear: the music endgame took 15-20 years. But that said, it’s still pretty obvious where all this is going.
How Payments End Up
Having just joined the management team of a small business payment provider, I find myself immersed in the world of how we pay for things. From cash to credit cards, invoices to PayPal, traditional dial terminals to smartphones – on the surface it’s all a jumble. But once you look at it for a minute the endgame is fairly clear.
Here’s how I see it: the transfer of value between entities (individuals and institutions) will become more and more frictionless and ubiquitous. I will walk into a store and correctly 1) IDENTIFY myself, 2) ACCEPT the terms of the exchange, and walk away with the confidence that the correct information has been securely recorded, and that the appropriate 3) DATA trail will be easily accessible to all parties of the transaction. I should be able to pay virtually in the same way. The businesses supporting this exchange (from payment issuers to service providers to merchants to banks) will have full access to the data involved – in whatever form they prefer it.
Just as vinyl records, CDs, iPod downloads and Pandora streams have been sequential manifestations of the music I want to listen to, so too are cash, credit cards, signature pads, point-of-sale terminals, and the like: temporary manifestations of the fundamental process.
In the long run, products and solutions and business models that stand in the way of this vision are eventually going to be replaced by those that facilitate it. In the short run, solutions that move us incrementally towards this vision should be successful.
When I buy a Big Gulp at Seven Eleven, I IDENTIFY myself by swiping my debit card and entering my PIN, ACCEPT the transaction by clicking “I Accept” on a keypad, and get my DATA when I receive my receipt (Seven Eleven gets all sorts of data on their own).
When I go into Starbucks, I pull out my iPhone and bring up the Starbucks app. The IDENTIFY step took place when I logged into the app, not when I swiped my card. The ACCEPT step took place when I passed my phone past their reader. The DATA step is visible in my app, on my desktop dashboard when I log in to Starbucks.com, and via any number of views and reports for the Starbucks people.
The Starbucks process is better on many levels – less friction, better data. But it’s not the endgame. A stolen password could compromise the IDENTIFY step, a broken reader could compromise the ACCEPT step, and the DATA from my purchase should be visible alongside my other personal/meal expenses, or trigger a warning when I’ve consumed too much caffeine.
Getting to Next
The next step would be to work towards better, more trustworthy ways of authenticating the user, finding ways to make the scanning step less dependent on hardware, and making the data more ubiquitous. Eventually, my mere presence should be enough to satisfy the IDENTIFY step, voice authorization (or some other trackable event) enough to satisfy the ACCEPT step, and an API should pull the DATA on my Starbucks purchases into my personal expense management system. All this happening beyond my level of conscious awareness? Endgame.
Knowing where you’ll end up makes it easier to decide whether you’re moving in the right direction.
