The Digital Soul, Part V: Decisions constitute business

April 13, 2011 | (One Comment)

Decisions constitute business.

In the industrial age, those decisions concerned, largely, the extraction, manipulation and production of physical goods.  The information businesses of the 19th and 20th century were smaller, but important, predecessors to their 21st century counterparts, and dealt with non-material information goods.

In the Digital Age, decisions increasingly concern decisions, and the components of decisions, themselves — as examples, Google, Match, Netflix, OpenTable, and Monster sell decisions that humans make about their own behavior.  They do not themselves sell physical goods, nor (with the exception of Netflix) goods commonly considered “content” in the business press, but rather the ability and the propensity for humans to make decisions about their own behavior and information consumption.

In the IIII Hierarchy, in order for a human to behave, she must have access to information and intend, from which we can infer and provide the ability to interact at times and places, opportunistically inducing trial, testing, or diversion.

Indicated in bold above, the layers of the IIII Hierarchy constitute information businesses in the 21st century. Each layer facilitates and enables the next, and is itself constrained, in a regular and predictable way.

Each layer must be as whole, accurate, and complete as possible, as it is the infrastructure enabling the subsequent layer.  Capacity must be orders of magnitude greater than the likely utilization of the subsequent layer – as humans proceed through the component parts of decision making, they process, they think, they consume, far more information than they ultimately act upon.

This is a difference in kind with physical goods production where waste, by-products and breakage may account for 0.9%, 9% or even in rare cases, 99% of the usage of the raw materials or inputs.

In information businesses, 99%, 99.9%, or even in rare cases, 99.99%, of the information materials provided to humans via each layer are not acted upon.

Each layer can not charge, segment or apportion users for incremental quality or quantity.  Because users can not “comprehend without comprehending”, and because comprehension requires order of magnitude more consumption than will ultimately be utilized, humans are definitionally incapable of making decisions about the manner in which a layer is provisioned, instead being appropriately concerned with the information provided.

Each layer can vary how it provides by aspect: geography, subject matter, topic, source, etc.  As businesses, two different approaches to a particular aspect will generate differing sets of users; if we aggregate two or more of these approaches, this overlap, when combined, will be a max function, when kept separate, a sum function.

The provisioning of each layer enables the subsequent layer, where monetization occurs.  Therefore, for each layer, entering into the business of the subsequent layer conflates source and production, and typically leads to inefficient or ineffective performance of the present layer.

Next up!: we’ll proceed to a definition and examination of each layer in the IIII Hierarachy.