The best recent example is Twitter. They effectively “own” the format of short, one-to-many messaging. Their “product”, the web app, is good but not that compelling on its own. The fact that everyone who wants to participate in their particular communication protocol needs to pass through their “switchboard” — well, that is compelling. They own the format.

I see a similar opportunity in a couple of small products right now. With luck, Pinterest could become the canonical data format for shared “things” — any noun really. And my corporate cousins at Trello could do the same for a particular idea of lists-on-boards.

Each of these data formats is not particularly profound in architecture. But they loosely couple a few ideas which, when opened via an API and adopted by many, can lead to many emergent use cases.

(It’s kinda Unix-y, actually — small parts, loosely coupled,  some of which become “the” way to do certain things. Who wants to be grep?)

Call it data, or call it a protocol, but the idea is that there is a surprising number of “simple” schemas that no one has established a standard for. A small set of correct assumptions, well presented, can be quite profound.

The first is the idea of a broker for trivial transactions. Many (most?) apartment buildings require that you go through a broker, paying a fee between 1-2 months’ rent.

This is not a “broker” in the sense of someone who saves you time by shopping on your behalf (though some do that). This is simply a person extracting a toll because they stand between you and the landlord.

I’ve never experienced this in other markets. Heck, if you get 3 or 4 miles outside of Manhattan, brokers become rare.

This is what economists would call a problem of asymmetric information. The “information” in this case is the relationship with the landlord.

(To a lesser degree, they have asymmetric information about apartment availability, though once advertised that becomes hard to protect.)

I would like to find a way to get these folks out of the equation, or at least give renters a bit more leverage on fees. The core of the issue is that landlords are (apparently) comfortable with this arrangement. We need to look at their incentives.

Is the landlord simply trying to save time by delegating the legwork of showing and renting an apartment? Perhaps. But it’s not skilled work — an admin assistant would be perfectly qualified.

Does the broker pay the landlord for the right? This is the only explanation I can imagine that allows this business to persist.

So taking the broker out of the equation requires giving the landlord a financial incentive that replaces the broker bribe.

I propose a bidding market, combined with a tenant-generated apartment database.

Landlords would auction their apartments instead of offering a simple take-it-or-leave-it rent. Bidders would compete not just on monthly rent but perhaps the length of the lease. Credit checks would be built into the site.

On the tenant side, the site would build a (verified) database of apartment experiences. Tenants would share the rent they pay, specifics about the unit and the building, and their dealings with the management — all viewable by other prospective tenants.

Similar to Yelp, of course, but the site would verify tenancy — think Amazon’s “Verified Purchase” reviews. Snail mailing a code would probably be the way to do it.

So: tenants are relieved of arbitrary broker fees, and information asymmetry is reduced. Landlords realize the market value of their apartments.

Would the landlord and tenant sides of the market embrace this?

The immediate answer is, they won’t…but bear with me.

These senators, like others, succeed because they are able to monetize their influence. This means that they expect would-be influencers – like, say, the entertainment or technology or finance industries – to put their money where their mouths are. And historically, they have.

The senators are accustomed – indeed their careers are based on – having interested parties donate in $$ amounts proportional to the legislative consideration they expect.

But what if the tech industry were able to radically reprice political influence? What if we were able to have the same influence of (say) the entertainment industry, at (say) 1/10th of the cost?

This idea frightens legacy politicians as much as the web frightens local newspapers. They are accustomed to being the only game in town, with a captive customer and a strong negotiating position. When the pricing floor drops out, the legacy business becomes much less important while the consumer receives a better product.

In other words, please don’t lobby. Disrupt.

Both big business and big labor depend on it. Freer markets drive down the cost of goods as new entrants undercut incumbents. A freer market is very threatening to existing businesses, and I wouldn’t want it any other way.

Exploiting inefficiencies is not a bad thing — it’s a fundamental part of markets. Noticing these inefficiencies, and reducing them, is the main incentive for new business creation. The majority of benefits go to consumer, with lower per-user profits going to the new producer. Think Airbnb, Google, Skype.

I’ve historically been a big fan of intellectual property — it’s one of the main differentiators between first-world and third-world economies.

But… I’ve come to realize that intellectual property law often serves as a friction, and that some constituencies prefer it that way. Thus, broad incumbent support for SOPA.

Intellectual property should be defended primarily by its owners. This might mean DRM, but more likely it will mean creating a better consumer experience such that piracy is less interesting. (Piracy is a market phenomenon, so we should expect anti-piracy to be so as well.)

The law will have some role. But the government has shown itself to be generally incompetent, heavy-handed, or worse in this area.

It’s better for the consumer, and thus the economy, if producers of intellectual property are responsible for how it’s distributed, including measures they wish to take (or not take) to prevent unauthorized use. The market will judge those efforts.

There are three basic elements to living, and it is in these areas that NYC residents fare worse than middle-class suburbs. Fix these fundamentals, and quality of life ramps up.

First is one’s home. We overpay, and in an amount that is disproportional to the density. And for the privilege, we don’t control our own heat and have floors that are not orthogonal to gravity.

Why should it be so? The short answer is, unnecessary scarcity due to height restrictions and NIMBYism in the guise of preservation. See these two excellent books for the numbers.

The result is landlords with too much power, and regressive (read: country-club-like) housing economics.

Second is transportation. Mass transit is good and necessary in dense areas. However, we pay 5-10x too much for a mile of tunnel. Which means less tunnel and fewer serviced neighborhoods.

Related, we restrict the number of taxis on the road for reasons that are pure corruption. We don’t put a cap on the number of cooks, and yet the market price for a taxi medallion has reached $1 million. It’s pure artificial scarcity, serving a constituency (incumbent medallion owners).

Remove the medallion cap, and the availability of livery ramps up. Again, quality of life improvement, not least for the outer boroughs. (NB: it’s easy not to see this in Manhattan.)

Thirdly, and this one is a mystery to me: food. I am thrilled to see Trader Joe’s and Whole Foods in the city. I can only imagine what took them so long.

Whatever it is that took them so long is the same thing that allows Gristedes, Food Emporium and Morton Williams to still be in business. Those supermarkets would not survive in any suburb I’ve known. Compete on quality, or compete on price. These incumbents compete on neither.

I disagree. Throwing money down the lobby hole starts a vicious circle. We pay to play, and Congress finds new ways to milk the cow — or to create problems that justify their existence. As Clay Shirky put it:

Institutions will try to preserve the problem to which they are the solution.

Asking permission of Congress, or seeking their assistance, becomes the norm. Just look at the telecom business.

Don’t we, as an industry, do the “disrupt” thing? Don’t we disintermediate? Except when it’s Congress, and we are blindsided– in which case we embrace the status quo, with vigor?

A month ago, I suggested:

Becoming one of many moneyed interests diminishes us, and makes the world a worse place. Let’s disintermediate.

This means dropping out the pricing floor. What Skype did for phone calls, what Google did for information retrieval, and what Amazon is doing with publishing.

They did this by looking at the interest of the consumer (read: voter), first and foremost — existing institutions’ concerns were considerably lower on the list.

And so it must be with democracy. The existing system of buying favor is vastly overpriced. Let’s deflate it.

How? Yeah, I don’t know yet. But it’s an economic problem. The future is in doing what Congress does for an order of magnitude cheaper.

Their influence and their pricing power are one in the same.

Actually, they are, it’s just underexploited. For example, this little radio app allows me to deep-link specific radio stations as tiles on my (Win Phone 7) home screen.

Guess what? The tile has a URL, pointed to a specific place in the app. Now, I haven’t dug deeply enough to know about the security boundaries, but it seems to me it would be a small step to allow the app to register a namespace on the phone (app://appid) and expose endpoints to any other app.

This seems like a nice way to bridge the gap between the advantages of phone and web. iPhone allows protocol handlers which are the same idea, putting the namespace at the front of the URL.

(Of course, URLs would need to be managed just like public, web URLs — you’d want them to be stable, and deliberate about what’s exposed.)

A future of on-device linking may be closer than we think.

There’s an easy way to get around this if you want the whole story. (I am using the Chrome browser for this, should be similar in others.)

1. Select the story headline, and right click to “Search Google for…”

2. Hopefully the desired story will be at the top of the search results, under News…

3. Click it!

I assume this works because the WSJ likes referrals from Google, offering a better preview for potentially new subscribers. The NYT has a similar “porous” model.

The second wave was Ajax and broadband. This combination allowed web sites to act less like pages and more like applications — responsive enough for things like email. Javascript came of age.

Even at that second milestone, however, the web as an application platform was still behind most desktop apps. I began my professional career on Filemaker, and its capabilities weren’t matched by web sites for a decade or more.

The main limitation, in my opinion, was markup + styles as the interface language. HTML and CSS are a complex of interacting and highly dependent rules. Any change to the DOM requires a recalculation of the layout. Small operations compel the browser runtime to do work that is disproportionate to the size of the change.

(Of course there are optimizations to be had, and browsers are amazing from this perspective.)

We are experiencing the third wave now, which I will call “the binary web”. Three technologies in particular — Canvas, WebGL and sockets — are the next big step forward. What these have in common is the ability to do truly granular operations.

These technologies replace a world of markup and bytes with one of pixels and bits. WebGL and Canvas allow pixels to be changed without reflowing a document; witness the frame rates of web pages that use these technologies.

Similarly, web sockets free us from the expense of the HTTP request-response cycle; the data-to-overhead ratio is greatly improved. (And the “server push” promised in the 90′s finally arrives.)

In other words, these technologies make the web computationally cheaper, perhaps by an order of magnitude. It’s a matter of economics more than technology. Think of it as Moore’s Law for the browser.

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