The Coming of the Database Economy - Hold Onto Your Opinions

Last night over dinner, an interesting conversation about how MapQuest worked emerged - don't ask how. My buddy mentioned that the company which provides Yahoo! with maps was going public soon (we all assumed it to be MapQuest and were corrected). What was amazing about this topic was two-fold. First, we spent a good deal of time dissecting how we would design the database and queries to retrieve the information we needed (we're still figuring). The second part is the more important part. My friend informed us that the company going public is actually comprised of a bunch of two-person teams, one driver and one cartographer of sorts that records physical traits and directions. Naturally, we didn't believe him that the process was so manual.

I got up and went to the restroom. For some reason, as I was heading there it came to my mind that the world at large is moving towards a database economy, one fundamentally supported and nurtured by the existence of massive public and private interwoven data warehouses. Being the constant entrepreneur, it is clear to me that there are still lots of opportunities available to us.

Consider this. Right now, our government processes are largely still paper-based, though they are rapidly changing. More and more savvy businesses are putting their business information and offerings online in public storefronts. In many ways, social software has heralded a new era in online identity and reputation as well. So where's that money? Well, it's still possible, for us at least, to compile and build databases of any of the myriads of facts that we really need to have. Think about some of the companies that have done well with this (InfoUSA, MapQuest, CarFax). These databases are largely composed of public information but their coherence as a searchable index has brought them tremendous value. For now, if you can find a topic that's not easy to get at digitally and can bring it online in such a manner, you've possibly got a profitable venture.

I should emphasize the "for now", though. Why? Consider data and information. A mass of facts and figures is nothing more than data. Information is that which is gleaned from that data once it has been collected and collated. Put another way, the opportunity is in the collection and collation phase, at which point you can charge a toll to access your "information".

In the future, the question will largely shift from "Should I archive this information" to "Should I query this information". When everything is moved to the point that it is searchable, getting "new" information from a system is more a function of programming than brute force. Whoever has the biggest, fastest algorithm wins.

So where's the long-term value then? Fortunately for us, these things always repeat themselves. As one force fades to the background a new one emerges. In my eyes, that new force is opinion, which I'd wrap in a Reputation bow. When there are millions upon millions of points of data to consider, knowing which the best is becomes far more important.

Consider that for a moment. What drives the value of Amazon, for example? In the beginning, it was simply enough to have the database of books since no one else had it. What pushes me back to Amazon, more often than not, however, is not the database (I assume everyone has it now). I am drawn in by things like the User Reviews and Ratings, not to mention, the Recommended Reading lists and other hooks like that. Given too many choices, I often find myself polling constantly for external benchmarks to evaluate with. Despite the best efforts of the AI community, I still have little faith that I would outsource my opinions to a server farm or that I would trust the wisdom of a crowd of robots in personal matters.

One last point to this discussion is that participation in the new Database Mesh will be an absolute requirement. Playing Devil's Advocate, my friends questioned if every little Mom & Pop out there would participate in this. I defended my case. I noted that I see almost no possibility that the paper phone book would survive another 20 years. This alone would leave most people compelled to list themselves online. However, add to this potential regulation and government efforts (from registering the business to renting property to paying utilities) that would also provide a more generalized shadow profile for every business entity. Lastly, businesses need revenues and to get them they need to ensure customers can find them when they want them. I pointed out that something as simple as Google SMS illustrates this.

Can you think of a pizza shop that doesn't want to show up in an SMS from Google when someone searches for "pizza 10011"? Even if they don't get it now, they surely will and that's going to be very soon, relatively speaking.

Last night, I promised myself that I would blog this.. and now I have. I know you see the change coming, how's it look from your vantage point?