Episode Fifty Two: Disintermediation & Externalisation; Housing; Odds

by danhon

0.0 Station Ident

It’s Friday. I have a Diet Coke near me (as ever) and I even managed to do some work on SULACO BLUE yesterday, which is a relief, because I haven’t ever done anything like it before, but at least I’m still excited about it. What I am not excited about: jet lag. I successfully fell asleep in the middle of a meeting yesterday (I think), and also managed to pass out at around 8pm last night, a scant half hour after my thirteen month old son. He slept through the night; I woke up at 3am.

1.0 Disintermediation and Externalisation

Thanks to a note from Phil Gyford, I’m still thinking about yesterday’s pseudo-rant about informed consumer choice. It feels like there are so many factors working together in this area.

Point the first: disintermediation can be seen as broadly a good thing in terms of the quality of service and consumer choice, right? Take something like travel agents. The vast majority of them performed a so-so service that you were required to use (you couldn’t book a flight or hotel directly, really) and following sturgeon’s law, five to ten percent of them were probably actually any good. Disintermediate the travel business and what do you get? In theory you get better choice (now I can choose any hotel, not just the ones recommended to me by a travel agent), and you get a better deal (you don’t pay for the privilege of having to use an ineffective middleman, right?).

What instead happens is the intermediaries get hollowed out because *most people* can afford self-service and instead the intermediaries (can? should?) focus on the higher-end. You can get a travel agent, but now it’s Amex Black/Centurion type stuff: concierge services. Or, costs have been externalised in terms of the hotels and the airlines fishing to acquire customers directly or through affiliate relationships through the travel search engines.

But again, turns out we’re not good at assessing costs, right? Turns out we’re not quite so rational economic actors. Because it turns out that the cognitive overhead – the tax, as it were – of going to Expedia and Orbitz and Booking.com and wherever, and navigating through their good-enough UI to tweak the details to find what you want, is actually pretty time-consuming. So time-consuming and so difficult, in fact, that startups like Hipmunk bubble-up to make the process easier! And Hipmunk is *still* a cognitively taxing process – because you end up looking at an array of choices and having to pick one.

In some ways, sometimes we just want to be able to outsource the decision making and trust that someone can make a choice for us, on our behalf. And this is what a travel agent might do for us.

One reader remarked on Twitter yesterday that this is why sites like The Sweethome and The Wirecutter exist: trusted sources in the Consumer Reports/Which? vein that make their money through affiliate links and purport to reduce the mental drain involved in things like: “which headphones should I buy?”, or “What’s a good iPhone external battery?”

Gosh, I mean: you take all of this stuff and roll it into the fact that we have research now showing that decision-making and willpower is a resource that gets drained over time, and not only do you have problems for people dealing with poverty who are time-starved, but the middle-classes start complaining as well.

Would Amazon test, for example, an Amazon Express option for browsing their site where they *only* show you the highest-rated, most-recommended items against your search? Because even the presence or indication of hundreds or thousands of other options can be stress-inducing. And perhaps pair it with a liberal return policy?

I guess the thing is this. Disintermediation and increased consumer choice rely upon the assumption (if you care, I suppose) that your consumer or audience is a rational economic actor who *has the time and the resources to be a rational actor*. I get pissed off at stereotypical, straw-man privileged engineers who just want a spreadsheet with a table and do all the research and go buy the best thing because seriously: who has the time for that?

And there’s a significant, vulnerable section of the population that *doesn’t* have time for that, that doesn’t have time to be a rational actor. And who are you supposed to trust? Do you trust the financial advisor who is getting kickbacks? Do you trust your health insurance company? Do you even have health insurance to trust? This isn’t a mere case of “information overload” in terms of a firehose of stuff coming to you. This is: how do I make a basic decision and ensure I am informed to make a rational, appropriate choice.

The other side of this is the fantastic one for businesses that get to externalise formerly internal costs under the guise of consumer choice. So instead of having knowledgeable salespeople (for example), “the information is available on our website”. This is perhaps the difference with a retailer like Apple where I believe their store employees are taught to listen to user needs (there’s that phrase again) and help them accomplish them rather than being commission-driven and pushing everyone to buy the most expensive model, for example. And so a place where retail can be improved both offline and online: Amazon doesn’t have salespeople that understand their products to help you choose one, they externalise that cost by having you write reviews and lists instead.

2.0 Housing

Man, finding a place to live in Portland was *hard* three years ago, and it sounds like it’s even harder now. You’ve got a place with low supply and high demand and also, for someone coming from London, an absolutely god-awful user experience that, I think, appears to be mirrored all over America. For the non-Americans, it works a bit like this:

1. Ask people how you go about finding a rental place
2. Get told that you should use Craigslist
3. Do a double-take because, really, Craigslist?
4. Take a look at Craigslist to check if it really hasn’t changed at all in the last five years, realise no, it hasn’t changed at all in the last five years
5. Even though they were absolute cunts, miss estate agents like Foxtons in London which at least provided a central place for rental listings, standardised floor plans, photographs and panoramas, TEN YEARS AGO
6. Look at some Craigslist listings that don’t even have photographs, don’t mention how much square footage they have, and send an email through Craigslist
7. Realise that there’s no decent mobile interface
8. Try, in a futile manner, using something like Trulia but then realise that there’s hardly anything on it
9. Jesus Christ What The Fuck I Actually Have To Use Craigslist
10. There’s not even rudimentary search or structured data that will reliably return 2-4 bedroom places because, fuck it, it’s Craigslist and anything that isn’t a free text field isn’t the One True Way

I mean What The Actual Fuck, America.

Anyway: all of this was prompted by a chat over breakfast where some friends and I were talking about the rental experience and came up with the quite horrible idea that, in addition to the credit check (which, you know, absolutely fair game for a rental application) and the application letter (Letter! In America, you write cover letters to beg and PLEAD for the rental!), what a landlord might actually want to see is a list of all your social media profiles to see if you’re the kind of person who does, or does not, throw awesome orgies or like playing the drums.

This is not a new thing: I remember being asked by Airbnb to supply my Facebook address so prospective Airbnbers could stalk^Wcheck me out when I applied to stay at their place. It feels like this type of credit/social check would work doubly so in a residential rental environment. But don’t worry, it’s not going to happen because America doesn’t have its shit together.

3.0 Odds

I mentioned in a previous episode that I thought Oculus would plug into a mobile, not a desktop PC. I completely missed the fact that you might as well build the mobile processor and rendering chipset into the headset itself and just give it wifi. Because hey, why not. But then batteries. Oh, I could have loads of thoughts about this. Also, the nagging suspicion (along with Kim Pallister) as to whether anyone has a more-developed business model than “Snow Crash”.

I hope I never, ever have to have with my son the kind of conversation Eric had to have with his daughter, Rebecca. You might have read his earlier piece about speaking with her about chemotherapy (http://meyerweb.com/eric/thoughts/2014/01/04/the-choice/), but I can’t help but share the latest conversation he’s had to have with her:


With that, I hope you have a good Friday, a good weekend and perhaps we all try to be as good people as we can to each other in a world that reminds us how indifferent it is to our existence.