How One Little App Creates A Boost Economy

by cv harquail on April 13, 2013

If you’re ever lost your mind worrying that the 3-mile back up at the Lincoln Tunnel was going to make you miss dinner,  you’ll appreciate the unique value of the traffic app Waze.

Waze provides drivers with local maps of accurate, real-time traffic information. The information doesn’t come from a traffic helicopter or from cameras stationed on tool booths, but from data supplied by individual drivers right there on the road with you. The data is gathered, analyzed and presented to drivers on their own mobile devices. Drivers can confidently decide whether to ditch the Lincoln Tunnel and head north to the GWB, or relax knowing things will clear up so they’ll make it home on time.boost economy, app creates boost economy

Waze is a great product because it solves an acute pain for the user.

It’s also a terrific example of how one company, through its product and business model, can create a complete Boost Economy.

How Waze Works

Waze depends on drivers’ willingness to share individual data with an expectation of reciprocity. Waze only works if other people in front of you contribute their data on your behalf, and if you contribute your data to the people behind you.

Before Waze can create value, each user must share information about her drive in real time. The driver activates the Waze app on her mobile device, and then keeps the data flowing by keeping the app on as she drives. The mobile device and its internal GPS system communicate real time data about speed and location, which gets mapped along with the data from other travelers on the same roads at the same time. The information from travelers in front of you allows Waze to estimate the traffic flow on that road and roads nearby, giving you real time information about your options for making your progress as swift as possible.

Waze gives each kind of user a boost of information that they can use to improve whatever it is that they are doing. In my case, I’d be able to choose a better route over the Hudson using information I can get nowhere else.

Users Share Data, Waze Transforms Information, Everyone wins

However, it’s the Waze app itself that turns these individual streams of data into information that’s valuable. Drivers’ data has to be processed through the Waze app so that it can aggregate the data, make geographic sense of it (e.g., puts it on the road map), use its own algorithms to estimate the speed and the density of traffic, and then display this information on an easy to read traffic map.

Waze estimates that, on average, its users saves 5 minutes of driving time per day.

That nets out to more than 2 million hours of traffic a year that users are able to avoid. Each user is able to devote that saved time to something more important. The Waze app also has other functions, and Waze users can also volunteer to play additional roles (e.g., by sharing information about specific delays like tractor-trailer spills, by adding new roads to the maps, and by adding comments about road construction). Everyone’s capacity to do what they want to do is increased. In the eco-system of players everyone wins.

Waze (The Business) Creates the Foundation For the Boost

Waze provides the foundation that everyone (themselves included) builds on to create value. Their business model, formally called a multi-party/multi-market platform, is designed to match players with different contributes to players with different needs to fill. Waze (the company) designed their app intentionally to be open, free, and crowdsourced. It’s easy for users to give and get value simply by using the tool itself. waze-6-300x431

In addition, the platform is designed so that each player’s participation generates more value that that particular player needs to capture. Each driver is happy to receive  real-time traffic information simply by turning the app on. Drivers don’t worry about whether they’ve created more value for the drivers behind them than they themselves received from the people in front of them. (If you were just driving to Ikea, but the people behind you were late for a wedding, you could argue that they received more value from the app than you did. But really, nobody cares.)

In the meantime, Waze  analyzes the aggregated data over time and identifies opportunities to sell ads and adjacent travel services. Waze is able to calculate the direct revenue that they receive for the value they provide to drivers. Although drivers/users are unlikely to quantify the money saved by spending less time in traffic, everybody’s satisfied by the value they receive. The Waze platform generates additional value that many of the users don’t even recognize.

It’s the drivers’ activity that, over time, helps Waze offer the most complete and accurate maps of roads that drivers actually use. These maps are not only highly accurate, but also they are ‘owned’ by Waze. Waze doesn’t have to license map data from Google (in fact, it actually sells map data to Apple).

Waze and the drivers who use it can’t create value without each other.  Relative to the individual drivers, Waze has more power. Waze sets the basic terms of participation, determines how the app functions, and decides what information features are made available.

Still, there is room for drivers to contribute at higher levels for different kinds of additional value if they choose to. They can join local groups, participate in games, earn badges, work on expanding and correcting the map data base, and more.  The Waze platform provides a social community on top of the shared value, that members can engage in as they wish.

Waze has build a profitable business by providing a platform that makes it easy for users give what they have and get what they need. By doing a little extra analysis and selling on the back end for their own profit, Waze has created an economy / network/ ecosystem/ community that makes money and that makes everyone’s work easier.

 If one clever little app can create a boost economy of 30 million happy users, what could your business do? 

 

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Data shame

It’s such a striking concept, it’s hard to believe that “data shame” gets only two legit google hits — one in a blog post and another in a glossary.

I only heard the term a few weeks ago in a presentation at Social Media Week NYC about Open Data for the Public Good about the challenges of working with governments to open their data.

Data Shame  is an organization’s resistance to opening up their data to outsiders because they fear that, if they did make their data visible, someone would find out how bad the organization’s data really is.

What struck me about the concept was not the idea that an organization would have a less-than-perfect data set. Every research paper I’ve ever read has had an inadequate data set— that’s the norm. What was surprising was the idea that organizations would experience shame about their data.

data shame

‘Data’— cold, hard, rational — doesn’t seem to fit with ‘shame’. Shame is so acutely human it’s hard to connect it to the numbers, labels, and measures that pile up inside machines.

Whoever coined this phrase was articulating something painful about the experience of our data being inadequate. And what I wondered was— how is pain like shame involved in creating boost relationships between organizations?

Business to Business Relationships that Boost Both Partners

Boost relationships require a particular type of openness between the partners.  For the relationship to give the participating organizations a ‘pop’ of energy, a pump of momentum, that they use to carry themselves forward, the relationship has to be closely fitted to what the partner organizations deeply need.

Boosts can come from (1) effective transactions and exchanges that accelerate what is, (2) combining our organization’s strengths to create something new, and (3) helping each other fix something that’s not working well.

If an organization needs something fixed (e.g., their inadequate data), but are reluctant to share this because they feel shame about it, how can they create the kinds of boost relationships that will actually help them? Here’s what I’ve come up with so far:

All Data Is Inadequate

Data shame is a “rampant if little acknowledged condition.”  It’s rampant because its nearly impossible to have built a data base that’s error free and perfectly suited to today’s information tasks. Data shame is little acknowledged because who wants to let other businesses know that their business has done something (anything) poorly?

Think about it. Who wants to tell a prospective business partner
Hey, our organization is kind of broken because we messed up. Can you lend us a hand?”

“Help seeking” is too often interpreted as a sign of weakness. In the business world, admitting weakness is akin to saying
“Please, come take advantage of us. Get a better deal because we’re not able to take care of ourselves.”

We’ve been taught to expect that when a business sees a weakness in a potential partner, that business is less likely to help than it is to pounce. Thus, we don’t feel good about business weaknesses, and in some cases we feel shame.

What Shame Says About An Organization

Shame is about being ‘not good enough’.

Data shame reflects that the organization knows it’s screwed something up with their data. The data might show something embarrassing about the organization’s results or the data maybe be misused. Sometimes the database itself is poorly designed or incomplete. And even worse, the data that exists and the forms in which it exists can reflect bad decisions about what the organization thought was important enough to measure.

Internally, data shame creates a challenge for the organization because the data isn’t able to meet the needs of the people who have to use it. And when organizations want to work with each other, data shame gets in the way of building a relationship.

Dealing With Data Shame

The organization with the inadequate data has to deal with data shame, and so does its potential business partners.

The organization with the inadequate (shameful) data has to find the courage to disclose that their data is, indeed, flawed. They have to own the fact that imperfect data is what they’ve knowingly been using. Imperfect data is part of what they’ll bring to the partnership. And, the organizational flaws that the data exposes come along too.

Bryce Gartrell of The Gartrell Group describes what disclosure looks like:

In projects where our firm has been brought in to help people lasso their data, we have come to expect the moment of pause, then followed by apologies and looks of mild embarrassment, just before our clients reveal the uncomfortable secret of their data’s deficiency… and the workarounds, assumptions, and wild guessing that they are forced to do in order to get work done despite imperfect information.

Disclosing that their data is inadequate makes an organization vulnerable, because data shame demonstrates one or more types of organizational incompetence.

Let me illustrate with a simplified example drawn from the Open Data talk:   A city’s Housing Agency wanted help with building a data-reporting application that showed which homes in a damaged area had been inspected, which ones had been condemned, and which ones were already demolished. When the consulting developers started working with the Agency’s data, they uncovered entire categories of missing data and incorrectly entered data. When they went to analyze (learn something from) the data, the consultants discovered that different inspectors from the Agency had visited the same houses to evaluate them twice, demonstrating inefficient routing. They also discovered that inspectors had given the same house different evaluations, suggesting that their conclusions were arbitrary. In the meantime, citizens were waiting for insurance checks that depended upon their house’s evaluation.

Bad data, bad information, ineffective management, and upset citizens. No wonder they were reluctant to share their data.

Can we get past the shame of shame?

Given how exposed and embarrassed an organization could be if others discovered their inadequate data, what could encourage them to share their data anyway?

It turns out that a little disclosure can go a long way in building a strong relationship with a business partner.

Disclosure.   Disclosing the organization’s weakness(es) and asking for a potential partner’s help is the only way to get the kind of boost that fixes things, because only real disclosure shares the specifics about the organization’s deep need.

Acceptance.   If an organization reveals their data deficiency, their potential partner needs to affirm that the business relationship is important enough that they’ll move forward — despite the data deficiency and the organizational failings the data deficiency suggests.

Helping.   Once the potential partner has a sense of what the organization’s weaknesses actually are, they can establish a connection that provides specifically what the organization genuinely needs. In the example of the Housing Agency, the consulting partners might offer help with data base design (a new facet of the relationship) as well as the mobile apps for inspectors that they were initially contracted for.

Disclosure + Acceptance + Helping = Boost

The disclosure-acceptance-helping dynamic does more than build functional interdependence in the business to business relationship. It also helps to build trust.

Being able to trust a business partner to accept your organization’s weakness and help you learn how to work through it expands the potential for the relationship itself. Trust makes it more likely that the two businesses can contrinue to explore how they might boost each other’s capacity.

If data insufficiency is rampant, then organizations shouldn’t be ashamed of it. And good partner organizations will be ready to deal with it. As Gartrell explained:

The thing is, data could always be better.  And helping define and get to ‘better’ is what we do.

Gartrell noticed that the organization his was partnering with worked through their data shame. Instead of holding back, he writes that the organizations found

“There is a strong sense of commitment to change, and I’m gathering that it is now being accompanied by a growing sense of optimism that the changes they seek are within reach.”

Should organizations feel Data Shame?

Of course, we should question whether or not organizations ‘ought’ to feel shame about their data.

Data systems are never complete, 100% accurate, or fit to the questions we have weeks, months and years after they were first designed.

No organization ever has perfect data.

Where the shame resides seems to be in what that data says about the organization: The organization is inadequate, The organization is imprecise, The organization has low standards, and so on.

Data shame is actually organizational shame.  

But maybe the way that organizations learn to deal with the dynamics of  shame around data can help them deal with the shame around organizational inadequacy and failings. Maybe working through ‘data shame’  can create a special kind of opportunity:

If we can figure out how to help organizations disclose, accept, and help each other with data inadequacies, we might be able to open relationships up so that organizations help each other fix deeper inadequacies. These might be the kinds of boost relationships that lead to real organizational transformation.

 

See also:

Data Shame, Big Data, and the Need to Tell a Story, by Bryce Gartrell
Open and Active: the Politics of Data for the Public Good: Jennifer Pahlka and David Eaves Social Media Week NYC 2012

Image: Hector Swims, AttributionNoncommercialShare Alike Some rights reserved by lifebeginsat50mm

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