VRM: Where does it start?

From IIW

Session topic: VRM – Where will it start? (TH1F)

Convener: Kaliya, William, Jenny and Drummond

Notes-taker(s): Augustin Bralley

Tags for the session - technology discussed/ideas considered:

Discussion notes, key understandings, outstanding questions, observations, and, if appropriate to this discussion: action items, next steps:


  • Jennifer Cobb - Smart disclosure
  • Drummond Reed - Retail organizations

William -

  • Benefits - VRM + CRM = knockout proposition
  • Question - where does it start?

Doc Searls -

  • We start with individuals. We can’t just say we’re going to improve advertising.

William -

  • Utility: Individuals aren’t going to go through a whole new set of steps. There has to be utility, convenience.
  • Geography: Will this take off in some particular region or jurisdiction?
  • Vertical sector: public, private, not for profits?
  • Facilitators: technical and legal
  • Incentive: Aspirin or Candy?

Jennifer - smart disclosure

  • Cass son stein (sp?) at the white house - office of regulatory affairs
  • Smart Disclosure: “The timely release of complex info and data in machine readable format that enables users to make smart decisions”
  • Instead of making companies release data, use behavioral economics
  • Nudge - build “choice architectures” for people to make better decisions
  • Invitation to release data instead of a requirement
  • Examples:
  • Blue button initiative - a VA hospital patient can click a button and get a digital copy of health records
  • Vendors (e.g. Walgreens) have signed up to take the data and offer services (e.g. price comparison)
  • Green button - energy industry - companies have agreed to release their energy data
  • Idea: data should spur innovations, new businesses
  • Start with the data, match up with some of the VRMish approaches
  • This may be a wedge into the VRM problem

What are the major incentives for the community at large?

VRM = new tools and services that make customers independent of sellers

More people have more ways to spend money than before

Intent casting puts money on the table

There’s a lot of problems in customer databases, giving customers access/control will clean up this data

Citizens are in a better position to do things with their data than government is

Drummond -

  • VRM ultimately has to be a win for vendors and customers
  • Grid: 4 party system
    • 1st party - customer
    • 2nd party - vendor
    • 3rd party - vendor cloud
    • 4th party - personal cloud
  • Similar to the four party system with credit cards
  • What’s the incentive in the credit card system?
  • Credit cards reduce friction of transactions
  • VRM reduces the friction of sharing data
  • How do we get this started?
  • Going to the vendors, getting traction in higher value retail sector (e.g. Car buying, Nordstrom)
  • Say to businesses, “We believe the value to you of opening a personal channel between your CRM and the personal cloud is high enough for you to want to pay for it, just like credit cards”

Personal channels are:

  • trusted communication channel with vendors (individuals can dial it down, or turn it off)
    • Similar to the target irrevocable address concept patented by IBM for email
  • Bi-directional data sharing
    • Vendors can send offers to users, users can send intent to vendors
  • Intent casting
    • Customers can broadcast their intent to multiple vendors
  • Continuous customer channel
    • Can’t be unintentionally broken

Doc -

  • E.g. Car rental business
  • 1st party - customer
  • 2nd party - Avis, Hertz
  • 3rd party - Orbits, Kayak, Travelocity - agent for the vendor
  • 4th party - Autoslash (games the reservation systems), Rental Magic (gets lowest rate, $20/month) - agent for the customer

William -

  • Where do we think this VRM thing is going to start?

Group -

  • Life context, with individuals
  • High value transactions
  • 23 and me - health medical records
  • Organizations who have a high commitment to customer service (e.g. Nordstrom)
  • People who work in office buildings
  • Freelancers
  • High net worth people may be more concerned with privacy?
  • Reduce the cost of being Nordstrom (customer service cost)
  • Family CIO, Family HelpDesk
  • Improve non-profits’ already good relationships with their members
  • Co-op concept - a credit union for data
  • Life-time value of a customer
  • Young people care a lot less about privacy than older people?
  • There’s an awful lot of ad-hoc VRM happening now

William -

  • The BBC created a cultural asset that puts digital culture in one place (thespace.org)
  • PII will be kept in a personal data store, ask users to share that data someday
  • There’s no business model, they just think it’s the right thing to do
  • Ethical leadership
  • The principles of VRM are so right, that there’s an ethical leadership opportunity
  • Maybe this will happen on the non-commercial side first

Group -

  • Is the channel the relationship itself?
  • It’s mechanizing the relationship - The channel is the dance
  • Creating an asset structure around my channel

Some sort of trust is necessary

More likely to create those game rules as a non-profit than a conventional startup

People simply want to be able to say that someone us looking out for me in this context

Experian research showed that people trusted Experian more than a startup such as Personal (no-one in the room found this credible).

The public good can be defined broadly and individually

I’d like an organization built around the interests of the customer (individually)

Different people have different levels of mistrust of various sectors (e.g. banks, data aggregators)

We need to set baseline rules for trust

PDS is an example of the kind of viral adoption dynamic needed for this to take off

Intrinsically harmonious relationships

How do we get consumers to be concerned and get them to act?

What are the trigger points?

Behavioral economics: how do we make people change their behavior?

Making choice architectures

Really complicated solution, but a powerful idea

We need the invention that is the mother of necessity

Customers need to get PDS without even knowing they got it

Problem: trusting vendor to vendor


  • X: -Right : +Pragmatic
  • Y: -Individual : +Organization
  • We thought individuals would "do the right thing" (so started in quadrant -x, -y) but research showed we were wrong: they're almost entirely pragmatic (moved our thinking to +x, -y)
  • We started out with assumed wisdom that organisations act entirely and exclusively out of "bottom line/RoI" hard pragmatism (started in +x, +y). But guess what: some of them, sometimes, want to do the right thing (moved to -x, +y). So maybe that is our VRM starting location: if there's a way in with organisations that are public service or which compete on their ethical proposition: Quadrant 2 (-x, +y)