Information Asymmetry – the evil that plagued the world that the internet was supposed to have solved, no? All sorts of information available to all ensuring fairness and balance of power, leading to economic opportunity.
Well, I’ve been thinking.
There used to be the go-between layers offline that had and controlled access to information about sources, markets, producers and traded it, sometimes with an unfair advantage over the producers themselves.
Then came the internet. And made more and more of that information online.
And over time, there’s a new layer online that’s now the layer that controls that information! Ecomm, listings, aggregators of all sorts – everyone’s in the race to become the primary source of information, and maximize the revenue potential out of being this, automatically leading to asymmetry sooner or later. True for Flipkart, true for JustDial and even true for Google. Unless you have SEO muscle, or buy advertising, there’s no hope for a small guy.
It isn’t the internet in itself – though it’s a great tool given the right motivations (as the early days of the “directories” and search engines showed.)
It’s us. Our motivations.
Or rather, the motivation of the capital that rules us.
It seeks to appropriate the most power in the cheapest way possible – and that’s clearly not in production of fundamental value, but in the control of information. It’s the least possible (creation) work/expense for the most arbitrage possible. In terms of capital deployment alone, it’s “efficient”.
It’s why those aggregating/trading/controlling either or both ends of the information flow are valued the most today.
It’s why this capital, or the efforts it encourages, logically cannot and will not encourage information/access symmetry. It’s why a “marketplace” can get away commanding more value that the producers of the goods and services it trades on. It’s why valuation >> value today.
I am pretty sure it is also ripe for disruption – thanks again to the internet! (Unless, of course, capital ensures asymmetry there through lack of neutrality). Imagine open collectives that work on a sustainable/small fee to run collaborative marketing, SEO, referrals and actually give the small guy a chance. There are models in the past offline world that can be drawn parallels with, but the internet helps scale that enormously.
I have an idea around this in the travel space. If someone’s keen to work on this, let’s coffee.
I would so love to marry better motivations and less capital-dictated effort with the power of the internet. If you pause to think of it – all the great tech we’re riding on the back of was NOT created by funded-for-a-quick-flip companies maximizing the teeniest incremental idea or IP they produced, but by those who shared it openly and freely. The internet itself, various protocols, Hadoop, php/python/perl etc, Unix/Linus and so much more. Those efforts are often in their Nth iteration, while most funded-for-an-exit efforts die prematurely, with little impact or benefit in the long run for the rest of the world. Innovation?
There’s surely an opportunity to disrupt this, and truly break the barriers of information asymmetry even in business domains.