In talking about his company, Zillow, Rich Barton used the term "consumer intelligence". This is intelligence in the sense of information not the sense of IQ. I liked the things Rich had to say and it caused me to think more about this information age we live in.

implementation

Everyone has heard the term "information age" and how we have passed the industrial revolution and moved into the information age. We have all heard terms like this but what do they really mean?

As a techie, I hear and participate in a lot of discussions about technology and information systems. What I hadn't appreciated before was that these discussions are almost always about implementation. Is it 32 bit or 64 bit? Mac or Windows? Wifi or Bluetooth? These are all implementation questions and they dont really capture a sense of what we are actually doing.

the significance

Step back from the technology implementation issues for a moment and ask what this really means. These gadgets and protocols and such are just a vehicle for information. The revolution here is the information itself, the data, not how it gets delivered.

This is probably pretty obvious but I had never really thought of it this way before. The information is the revolution because it leads to fundamental changes in behavior and businesses.

Economic models assume a rational buyer with perfect information. I have seen the way you drive so I have my doubts about the rational part but I think we can all agree that perfect information has never existed.

Businesses have always had the upper hand in terms of information that would help consumers make decisions. Industries have zealously kept and controlled their information. Consumers were only allowed to know what companies told them via advertising and marketing. Information about product quality, ingredient, prices, etc. were all hard to find, like the ingredient of cigarettes for instance.

What the internet has done is give millions of people information that they never had before. The revolution has been liberating that information and spreading it around, often for free. This data represents consumer intelligence and it radically changes the balance of power in economic relationships.

empowering consumers through education

Rich's example was about medicine. He recently had surgery and used the internet, both blogs and company websites, to learn all about his treatment beforehand. This information changed his experience as a consumer of health care. In the past, he would have been totally dependent on the doctor; now he was able to have a different relationship with his doctor. The information did not put the doctor out of a job but it did change their relationship and what they could talk about.

Think about buying a car. 20 years ago, you had a few magazines but were very dependent on the car salesman. These days, you can know more about the car and the prices than the salesman themselves! Consumer intelligence is liberating and empowering.

what is next?

Rich didnt use the word "revolution" but he did say that the changes are on-going and we are just at the start of things.

As an entrepreneur, I look at industries that still keep tight control over their data (the MLS system in real estate comes to mind) and see opportunities. Expect entrepreneurs to enter these markets and attempt to reshape them with free information. Entrenched businesses dont like the information revolution but consumers do. As long as consumers have a need, marketers will provide innovative products to satisfy those needs. Most companies will fail but the ones that succeed will have a big impact.

I also expect to see an impact from "self-publishing."

Today we are seeing an explosion of user-generated content. People like me that write blogs, people that make videos on you-tube, people that share photo's on Flickr. Self-publishing is a gigantic source of consumer information for consumers, by consumers. It is uncontrolled by a company or MBA's or lawyers.

User-generated content is going to have a huge impact as we move forward. We are already seeing companies try to get laws to address it, like the "net neutrality" debate, and traditional media companies are watching changes in advertising and entertainment with more than a little fear.

Revolutions create winners and loser and that makes for some entertaining changes. Exciting times, indeed.