Monday, September 18, 2017

Data is the New Gold, but Not Everywhere

"We are largely collaborative –except when institutions get in the way." -- Nassim Taleb

If data is the new gold, how do developing countries compete when their homegrown companies don't typically own popular social media or other data-capturing apps? Let me tell you how not to do it. 

I wrote before how foreign capital from rule-oriented, developed nations is changing cultures in more communal nations; however, I did not predict the strange hybrid culture that would result from the tug-of-war between the old and new values. Unsurprisingly, I suspect the lawyers are to blame.

In the Philippines, I rented a condo through Airbnb. Though Airbnb is known for allowing you to stay in someone else's house or room, hotels and absentee owners of multiple condos also use it to generate revenue. When I rent through Airbnb, the advantage is I know Airbnb--they're based in S.F.--and if anything happens, I can go through a trusted intermediary. It's not the inventory or the technology that gives Airbnb its value--it's the fact that users can book a room online and know if they show up and unexpected problems arise, Airbnb will be there to assist. For a hearing-impaired traveler like myself, the need for a trusted intermediary is extremely valuable.

In the Philippines, as foreign capital and foreign-built condo residences have flourished, I saw a three-part comedy of errors:

1) condo associations are demanding additional, non-negotiated terms from their owners to keep track of Airbnb demand. I was asked to sign two legal contracts upon arriving at my condo (I initialed one innocuous one but refused to sign the other one until I'd had a chance to review the terms);

2) condo staff appear to have a new requirement to register with local governments rental contracts, especially for long-term visitors (perhaps to gain data the old-fashioned way about visitors?); and 

3) private security is asking guests to add details to a sign-in sheet every time we use the pool or other amenities, indicating a lack of trust due to few owner-occupied units or an attempt by the condo association to generate additional revenue from guests at the expense of common sense.

Elsewhere, Proctor & Gamble is cutting online ad spending, indicating the "new" digital world isn't always superior over its analog counterpart: 

“What it reflected was a choice to cut spending from a digital standpoint where it was ineffective, where either we were serving bots as opposed to human beings or where the placement of ads was not facilitating the equity of our brands."

Even with the Nasdaq near all-time highs, some observers can still differentiate between useful and non-useful technology. To sum up, when technology reduces human error and opportunities for hijinks--such as in food preparation--or improves customer service and trust, it is valuable. When it does not do these things, technology is not very useful. For all the talk of a new, new world, Airbnb's value isn't technology per se; it's the trust it builds between renters and owners and the opportunity for a human connection. In fact, Airbnb has a straightforward policy in case landlords or owners demand additional legal terms upon arrival: 
Policy as of July 31, 2017.

Just as I thought, I was right not to sign the additional legal terms given to me when I checked in. After some back-and-forth between the owner and myself, everything turned out fine, but few people and local governments will learn the appropriate lesson: people want to collaborate freely, and requiring terms or actions that do not increase trust or that do not reduce human error will backfire. 

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