tag:blogger.com,1999:blog-6254679.post114093592978213784..comments2023-09-03T00:36:01.266+12:00Comments on South America Bidsta: Making It PaySimon Bidwellhttp://www.blogger.com/profile/08669045345877026955noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6254679.post-1141091123591885332006-02-28T14:45:00.000+13:002006-02-28T14:45:00.000+13:00Some well thought out and considered comments., Si...Some well thought out and considered comments., Simon.<BR/><BR/>This is one of those "the future is surely arriving but we don't know what it will look like" things. Often it is predictible like the ongoing general increase in average wealth or the invention of cellphones (though few predicited they would get so small).<BR/><BR/>More often the combination of human invention and the inventivness of how to use inventions leads to unpredicable changes, even the invention of new paradigms.<BR/><BR/>One of the most dramatic such changes continues to be the invention of science (i.e. if you do not understand something, work out a model for it and then try to prove/disprove it). This approach to understanding is so pervasive it is easy to forget this was one of the inventions of the "age of enlightenment & industrial age". Before this one consulted the gods, or wise men on top of mountains (or equivalent) who told you the answers.<BR/><BR/>Inventions in the last 100 years that have transformed our society in unforseen ways include the automobile, air travel, satallite then fibre optic telecommunications, the pill, radio then television and now the email & the world wide web on The Internet.<BR/><BR/>There has also revolution in Consumer finances. Once there was only cash (and vouchers) or "on account". Now there is credit unions (like building societies) bank cheques, personal cheques, credit cards, on-line debit cards and nore recently Ecash like http://www.paypal.com. What they all have in common is the need for TRUST. Being able to build "Trusted Relationships" between provider and consumer is what is missing from The Internet.<BR/><BR/>Simon, you are right that (yet another) middleman is probably needed. The cost of an Internet service to build individual trusted relationships directly with consumers defeats most of the cost advantages it has over other mediums. Equally, the individual cost to maintain more than a handful of trusted financial relationships is also too high. In steps the intermediate broker whose service is to "hub" large numbers of providers with large numbers of consumers on a financial basis.<BR/><BR/>All this seems obvious to me but why has it not happened ? IMO, it has yet to happen because trust relationships are expensive to build and maintain, especially with consumers. The normal Internet economies of scale do not work here. Equally, those organisations that already have an understand of this are (because this is very important to keep people trusting you) amoungst the most conservative and regulated businesses in existance. They are singularly unequipped to undertake the risky investment and invention required to become the brokers so desperately now needed.<BR/><BR/>These brokers will come. My prediction for who will do it first in NZ are:<BR/><BR/>1) Some small innovative Ebusiness doing it now, but yet to be noticed. Trademe is obvious - it already has Internet Trust relationships. Paypal is another example.<BR/><BR/>2) A current major consumer organisation that does packages of services to members (the Automobile Association springs to mind, as does Southern Cross).<BR/><BR/>3) Someone totally new, yes someone who is quite poor today will be richer than Bill Gates in 10 years time. Unencombered by current business and outside the watchful eyes of Microsoft et al, X will invent Y to solve the problem.<BR/><BR/>4) A major retailer with a good side business of financial services. The "Clicks & Mortar" model to provide trust is well proven. Here sit: Farmers, The Warehouse and NZ Post, but a smaller player (perhaps a petrol company) could crack it first.<BR/><BR/>5) Some current Internet electronic network provider, especially ISPs. They already sit between the consumer and the provider. We have seen in the past the ISPs have continued to add services on to the basic access package that is their core business. The thought that Xtra will be that broker does not fill me with joy, but stranger, more unfortunate, things have happened.<BR/><BR/>And why not some other obvious players being:<BR/><BR/>A) The international contant provider like Google, Yahoo & MSN<BR/><BR/>or<BR/><BR/>B) The banks<BR/><BR/>Well because they are so busy making sure one-one gets ahead in this they will both fight each other too much and be too late to change when someone "work it out" like Cable & Wireless (who is C & W ? Well they were the largest electonics company in the world, until the invention of the transister).<BR/><BR/>Then again we both could be wrong. After all prediciting the future is very difficult, especially in advance :)<BR/><BR/>TonyAnonymousnoreply@blogger.com