Whether it’s thinking about the roadmap for an open-sourced project or how a cooperative of constituents and their custodians come together, governance has been a pinnacle aspect of our thinking in setting the foundation for EVERY and the greater ecosystem. We researched many models that could potentially bring us closer to providing a system of self-governance, and in doing so, we solidified our intent to establish specific pillars to create the right incentive structures that are aligned with the underlying philosophy of the blockchain community. What that translates to is the proclamation that the interactions between Brands and Shoppers are pinnacle to EVERY governance and creating the space for them to contribute insights and proposals in guiding that governance is paramount.
We’ve engineered exciting initial rules of engagement for Brands and Shoppers, and have aligned them around the fundamental framework of equitable value exchanges. In a democracy where every Brand and every Shopper has a standalone vote, Co-op Members will be able to come together and collaborate. As custodians, our job is to make it easy, informative, and fun while incentivizing members to participate in determining how the EVERY Protocol, the EVERY Token, and their associated funds and value, respectively, will move forward.
The way that we’ve put this together is a very holistic, intricate, and thoughtful piece of EVERY as a whole. The manner in which EVERY governance will interact with software, people, and processes, will demonstrate a level of authenticity between members, technology and the way their interactions are organized. A fully centralized or a non-distributed governance structure doesn’t match with a distributed piece of software. We could build a typical corporation, throw an archaic model on top of a distributed ecosystem, but not only is that illogical, it goes against the fundamental tenets of the ecosystem we’ve set out to build.
Putting in place strong governance from the outset is so important to EVERY because we’re building something ambitious and we want break the status quo. Our governance system will need to be built to empower and enforce our ability to help Brands, Shoppers, and third party marketplace developers to express their wants, needs, and current pain-points so that others in the ecosystem can respond and adapt. Bringing together these different viewpoints and perspectives to create a more harmonious ecosystem while leveraging the blockchain will require a newfound approach. Our governance system will also need to enable an ever-changing ecosystem and protocol in order to help unlock the mechanisms that enable the ecosystem to organically refine, optimize, and grow more efficient for everybody involved.
Originally published at medium.com on February 12, 2018.
At the demand end of the retail supply chain where advertising and marketplace experiences occur, there are a couple of key layers that sit between the brand and the shopper. Marketplaces, like Amazon and Walmart, and the networks that create demand against those marketplaces, like Facebook, Google, Adroll, and other social channels, have developed yet another layer of intermediation between the brands and the shoppers. These “bad actors,” as we like to call them, have perfected their monetization strategies against centralizing shopper data, hindering these brands from authentically connecting with those who desire to purchase their products.
Everyone has an opportunity for fair trade and a fair stake in the value that they bring to the supply chain, but inside of advertising and demand generation, I do think that there are archaic models that are being relegated into nothing more than significant consumer data strongholds. The owners of these strongholds continue to compound and re-leverage all that consumer data in order to abstract a brand as far away as possible from the shopper. Specifically, when social platforms look to move eCommerce experiences and more of the shopping funnel inside of their environments rather than facilitating a fair exchange with the brand around an attributable model driving against authentic shopper interest and demand, they continue to cheapen brands against KPIs or ad metrics that are incredibly inefficient. That’s an area that feels very brittle and I think that decentralization and disruption centered around the economic model of a brand, ie driving sales or net new transaction, presents a massive opportunity.
The data that is abstracted from shoppers across ad networks or social channels is significant. I’m not sure an individual shopper would be able to comprehend the amount of data that is stored “on their behalf” and then used against them as they are trying to move through the natural discovery process for products, services, and food that interest them. That level of manipulation under the guise of convenience is not only sustainable, but will only lead to withering out of culture and individual expression.
Amazon has blossomed into a very diverse business with a massive product portfolio. As a shopper, we look at Amazon as this marquee marketplace for third party goods. Let’s be honest, they’re amazing at delivering products quickly and at a great price. But at what cost? And at whose expense? [10–30% of a brand’s margin, but we can get into that later.]
As eCommerce has fueled revenue growth, Amazon has compounded the value they’ve been able to gather off of shopper income and brand margin, but it is only sustainable so far. As Amazon has moved into other margin-gauging tactics like Amazon Ads, Amazon Fulfillment, and marketplace seller fees, there’s only so far they’re able to go into the share of a dollar from a merchant before it becomes a counterintuitive environment for certain product categories or for certain brands to sell through. In order for Amazon to maintain the clip of revenue generation that it has established for shareholders, they’re forced to enact net new strategies that maintain the upside of growth that people are hungry for.
It took Amazon a long time to get to the point where it was operating efficiently from a profit standpoint on the marketplace model, and now that they have, it isn’t a beast that they can afford to stop feeding. Enter strategies like private line development and the launch of the Amazon Media network, all enacted in order to hit revenue goals so that they can continue to appease shareholders. Is it sustainable? I don’t think it is. Amazon has diversified and is positioned to move into so many different sectors but they don’t realize the damage they’re actually inflicting on retail and eCommerce inside of fashion, home decor or any of the key categories. It’s got to be the smartest company on the planet but there’s no way that they can believe that these tactics and the damage that’s occurring against third party sellers and brands is part of a future where they’re a meaningful player in commerce.
At the end of the day, appeasing shareholders is at the top of the list. If you look at the personal net income of Bezos, I’d argue he’s shareholder Number 1. He has architected his share strategy so that he wins. There was a long time there where dividends were a faux pas, all the meanwhile Bezos was amassing wealth off of the margin of brands. While a brand is just wanting to develop meaningful products for shoppers, run their business, manage their inventory, and continue to provide jobs, they’re being as relegated out of the process as possible in order to afford for someone to build jets and try to take himself to the moon. So, when I talk about shareholder value, it’s a pretty tight scope of who that ends up appeasing.
With Prime, you can get a couple of propane patio heaters for a little over $100 each delivered to your door for free in only two days, just in time for a party. That is nothing short of amazing. However, there are ways that Amazon is positioning itself in the market that aren’t so awesome for some of its key stakeholders: the brands. Ways that marginalize the brands even more than the margin pillaging fees are by trying to survive in an Amazon-dominated world, and that are ultimately bad for consumers.
To explain, back up to 2013, when Amazon built its very own demand-side platform (DSP) for ad retargeting across web properties. Amazon now has developed a way to turn the massive amount of data it collects on its loyal online shoppers into advertising for itself.
It’s now becoming clear what that means.
The elephant in the room
You might be saying so what? Facebook and Google have been collecting our data for years so they can sell stuff to us, and we’ve pretty much bought into it, haven’t we? Isn’t this the price we pay for the addictive experiences we enjoy? Isn’t this simply the cost of convenience? Like and share if you agree.
For Amazon, the victims of ads aren’t just the consumers who see them, but the brands, whose exploited margins have funded Amazon’s ad network. Brands are tired of theoretical advertising metrics but will continue to give ad budget to Amazon for the sheer appearance of full funnel visibility. But for Amazon, the endgame is the same: maximize consumption activities on their properties to leverage consumer and funnel data.
While every engagement action a consumer performs on social media builds the targeted data profile, and you see the ads and sponsored content on those networks as evidence of exactly what they’re doing, the actual shopping data that Amazon collects is much closer to the funnel of dollars. That’s what everyone is after. And they are pushing further and further to control every aspect of that funnel in ways that, if it weren’t for the free shipping and great prices, would scare the pants off most of us. But it’s happening, albeit quietly and very sneakily.
Why wouldn’t Amazon do something like this? It makes perfect sense! And it does. From an economist’s standpoint, it looks like a good thing. Amazon is leveraging its assets for maximum earning potential.
But from every perspective other than Amazon’s, this is a cluster through and through.
To date, Amazon’s ad business has mostly focused on driving online sales with targeted ads on sites across the web, leveraging its rich supply of shopping data culled from years of operating a massive e-commerce business. It can, for example, help an advertiser target people who have recently searched for men’s apparel products.
Lately the company has been catering to a wider range of brands — the kind that advertise on TV and focus on “top of the purchase funnel” metrics, such as getting people to feel favorably about their brand. Amazon believes its data is just as useful for those marketers.
Why am I seeing Amazon’s incredible technical milestones and strategic direction as so blatantly bad? Because they are committed to using their massive pool of data, not just of “likes” and “pins” but actual purchase data, to increase the gap between brands and the consumers in favor of profit. While knowing that reduced product selection, removal of independent brands and leverage over product pricing across categories will negatively affect all consumers, they’ve got their money on their mind and nothing else matters.
All the things
Consumers always want more choice at a better price. You could argue that “owning” the consumer end of the supply chain is the most powerful place to be. This is the prime real estate that Amazon is going after with this play for ad business, at the expense of the product producer and, ultimately, the choice that consumers crave.
Looking today at a typical search on Amazon, you can see the encroachment on choices for the consumer. Take a search for something like a “microphone cable,” for example. In the results on my laptop, I see none of the old consumer-driven merchandising benefit that was the promise of the enormous data-collection machine started by Amazon, and remains a key driver of much of the rest of internet-based business, appear above the fold. No top-rated, most popular pick that my peers have determined to guide my choice. The page is instead dominated by sponsored links — even a scroll downward leads to “Amazon’s Choice” rather than the consumers’ preference.
But it’s what is at the very top of the page that is the most concerning of all. The entire top strip of the page highlights a selection of microphone cables by AmazonBasics, featuring a variety of options at more desirable price points compared to competitive cables offered on the same page. But what are AmazonBasics? Amazon has quietly started manufacturing and offering for sale on its properties a vast collection of hard goods that are of wide need and appeal to consumers. Everything from computer accessories, kitchenware, and even pet supplies are all available to you for an enormously discounted price from the rest of the competition.
One can imagine the volume of these categories of items that are sold through Amazon, and how that drove their inclusion in the collection of AmazonBasics. What Amazon is doing here is using the vast amount of data that is available to them and turning around to produce the very items that are most searched for, right down to the specs of the most sold items in each category.
Data that producers and brands don’t have access to.
One can also imagine the quality of such goods. And the future of what will be most available and accessible to consumers should this scenario play out to its foreseeable trajectory. Does everyone want to put AmazonBasics sheets on their beds, and send their kids to school with AmazonBasics backpacks? It’s such a great price. We have some indication today, with the availability of goods at Costco, or really any big store’s own brands. But we’re not all wearing Kirkland jeans or cashmere. It’s a great price, and surely it fills a need in some cases. But the choice that we all crave sends each of us in somewhat different directions, to different styles, cuts, and washes in our jeans.
To go back to the microphone cables, what is it that makes a good cable? As a musician you want a richness of the resulting sound that travels through them, as well as durability and reliability over time, among other specifications based on your own experience and need. Is Amazon the best company to deliver what you want in these cables? No. Do they care? Certainly not.
Meet the producers
You can see the potential effect on consumers of this control of the funnel, but what about producers?
When most producers start out, they begin with an affinity for an item or category, coupled with a unique vision for something different or better than what is available at the time. Sometimes it is a more straightforward view into a need in the market itself for a particular item or a different take on an existing item. And so the research and eventual production begins. As a small producer, perhaps selling directly to customers through your website or storefront, or even a marketplace like Etsy, or as a small merchant, on Amazon, you have access to information about who your customers are. Where they are, what they want, when they are happy with what you’ve produced, or not. But, as demand grows and the product begins to appear in other outlets, like bigger stores or outlets like Amazon, you lose that direct connection. At every point in the supply chain there is data that you no longer have access to. As you start to ship product to a warehouse, you don’t entirely know where it is going from there. What parts of the country are getting how much, and when? As it ships out, how long does it take to get there? Is it arriving in time for the right demand? And finally, in the store or outlet itself, who is buying, how much, and when? What are they searching for to find your product? What is their first experience with your product?
Over time Amazon, and others, really, if you look at Walmart’s actions and acquisitions (Jet) recently, have taken ownership of each of the points along this chain. And now they are working on closing that loop to the disadvantage of the producer, and ultimately the customer.
Within their properties, Amazon is slowly but surely moving to dominate the wide base of consumer goods, to the point of undercutting producers. Now, with the move into the ad space, they are moving beyond their properties and into most any other media you consume.
You’re already familiar with the kind of creepy phenomenon of having looked at a product online, only to see an ad for it as you browse elsewhere on the internet. With what Amazon is positioning, your shopping behaviour itself will feed the advertisements you see.
Here’s the thing though, it is creepy. That feeling is legitimate. Amazon has a whole story’s worth of data on you. And they are going to leverage the shit out of it at the expense of the brands you love.
What we recognized early during the creation of Comr.se Corp, (circa 2013) was that the centralizing and serving up of product and shopper data into apps, marketplaces, and social channels would be a significant undertaking, but one hell of a market opportunity. Enabling that level of data mobility would be unique and extremely important should shoppers opt to engage with a brands products across environments.
Let me explain what we wanted to protect: shopping anywhere. Having the world of commerce dominated by Amazon, Flipkart and Alibaba reflects the recurring and compounding strategies of incumbent retailers, entities that persistently centralize the shopping experience.
Again — Let me explain. We tried on multiple occasions with Amazon to engage them to partner with us as a payments partner in order to support the efforts of putting digital commerce into ads, social channels or developer’s apps. While certain humans on the Amazon payments team found the ‘Buy Now’ use cases from Pinterest and Twitter cute, there were ZERO FUCKS given into the consideration process where Amazon would be interested in enabling their value to be leveraged outside of the desirable path to purchase.
Again, more — I have my intuitions derived from previous engagements with the Amazon payments and Amazon ads team that this thesis will hold true. Amazon only wants behavior that will push a shopper into their highly performant funnel so as to drive conversion on Amazon.com or within the Amazon app. This strategy will lead to an ever-growing, self-serving efficiency, bringing more and more shoppers into the belly of the orange beast. Centralize time, centralize consumer attention, centralize value. Mitigate brands’ value, extract margins, commoditize brands’ value, rinse and repeat — these are the systems that uphold Amazon.
Now to the patent… I’ve never been able to look at shopping and the broader retail landscape from any perspective other than through the eyes of the Brands producing the products we love.
When we raised the capital to launch Comr.se Corp in 2014. The idea was brand data liberation. Capture the brand’s attention by unlocking their siloed data, constrained to the enterprise ERP or eCommerce platform, and let it lose. Let their product data move more efficiently into marketing environments experiences or social channels. This was the idea. Sync, unhinge, unlock and ultimately decentralize a brand’s product data to enable the opportunities to connect directly to shoppers regardless of the environment.
You see, the last statement is the lynchpin in our thinking. It was the genius and ultimately our greatest challenge. We wanted to allow brands to connect directly with the shoppers. The fucking product discovery and product conversion ecosystem weren’t having that. Owning the brand’s product journey, from the moment of a shopper’s initial discovery through purchase, has propped up the household tech brands we all know. Consuming data about the performance of a product, interest in search or social environments, and cataloging the upsells and return rates from marketplaces are only a sliver of the centralization tactics that technology incumbents leverage against brands and shoppers.
Again — Back to the patent. We knew centralization wouldn’t last. We knew that there would be a model shopping experience, or marketplace that would want to exist and transcend beyond the confines of its own digitally walled garden. We had no clue that it would take rearchitecting the entire shopping ecosystem to do it.
With EVERY’s consuming of previous ‘Comr.se Corp’ assets, we are excited for the decentralization and distribution of commerce to be resting within EVERY’s Intellectual Property.
US 20150278931 A1 : “Native eCommerce Transactables for Familiar User Environments”
Native e-commerce transactable for social and other familiar and/or suitable user environments are enabled. A user of a network site may interact with a transactable to conduct a transaction with a 3rd party without leaving a user environment of the network site. The transactable may be configured to adopt the “look and feel” of the network site into which it is incorporated. While conducting the transaction with the transactable, the user may perceive that they remain at the network site, even though transaction information may be exchanged with a 3rd party network site. The transaction mediation service may obtain social activity data from a plurality of social network sites, as well as merchant activity data (e.g., transaction activity) from a plurality of merchant network sites. The data of each suitable network site may be translated, transformed and/or normalized into a unified and uniform format maintained by the transaction mediation service.
John Wantz Jr. 