IN my daily quest to read all of the internet (I fail badly, as everyone else does) I ran across an interesting opinion piece of Techcrunch. In a story called Stop The JerkTech, Josh Constine (@joshconstine) called out the creators of certain types of apps that appear to be to make money by helping jerks. The two he cites are a public parking space app, and a restaurant reservation app. In both cases, they are selling what is otherwise free for a fee.
I found the story to be quite entertaining because it’s a solid poke at some of the insane business models that seem to be getting financed these days. Some of them like the jerk tech are designed to make money by reselling things that are generally free, others by trying very hard to wedge themselves into normal transactions as a form of middleman. A third group of the truly vapid business models are the ones with no real business at all, based on the fantasy of build a really big audience and hope someone buys you out before you run out of funding.
I find it all interesting because much of it shows the lack of morals that exist in the tech world. The phrase often tossed around is “tech allows it”, so it must be okay. Jerk Tech is pretty much something that tech allows, but in social terms is not the best idea at all. The restaurant reservation app works by having their people make fake name reservations for all of the top restaurants in the San Francisco Bay area, and then selling those reservations to people for $10 or so. The problem is that they appear to monopolize the market place, making it impossible for normal people to just call the restaurant and get a table. Moreover, the eatery doesn’t get a cut, but suffers if all the expensive reservations are not sold and become no shows. It’s a somewhat automated version of being a really big jerk – and making money while doing it.
Middlemen business models are very popular as well, in part driven by a deep understanding of the Google business model. Google’s job is to get involved in as many transactions as possible. Everything they do to take over markets, such as giving away a free operating system, browsers, mail, search, and all of those other things is about gaining eyeballs and selling ad space. They also sell ad space on many, many websites (including this one) and take 50% of the income for doing it. They are very rich middlemen.
As a result of this, you have plenty of middleman business models. Some of the most common prey on people’s narcissistic desires to be famous. Those are companies who “help your band get airplay” or “publish your book”. Vanity presses for writers have almost always existed, they have generally been a pretty scummy way to make a living, getting the author to pay for printing books that will likely never sell. Online, “tech allows it” means that you have literally tens of thousands of these things in everything from help your band to getting your dog a job in movies. All of them are middlemen, trying to get between you and the real resources.
In fact, the internet is in fact one giant middleman contest, with the goal to remove as many of the end retail players from the game. Amazon.com is an amazing success story, and it’s business model is exactly to become the middleman in books (and a whole bunch of other things). Their goal is to make it so that instead of going to any other retailer, you go to them and they deal either directly with the manufacture or even get the other retailers to sell through their system. This gives them incredible power, and the problems that exist currently between Amazon and Hachette publications is a perfect example of the power of the all consuming middleman scenerio.
In fact, the middleman world is the fastest developing part of the internet, and in my next post, I will talk about how the middlemanware and jerk tech worlds are often one and the same.