The final destiny for the future of the company often seems to be the “virtual corporation”–the corporation as a small nexus with essential functions outsourced to subcontractors. But there is an alternative vision of an ultimate destination–the company that is only staffed by customers. No firm will ever reach that extreme, but the trajectory that leads in that direction is the right one, and any step taken to shift the balance toward relying on the relationships with customers will prove to be an advantage.

Just recently E-trade, the pioneering online stock broker, took the bold step of setting up an online chat area for its customers. We’ll see more smart companies do this. Whatever tools you develop that will aid the creation of relationships between your customers will strengthen the relationship of your customers to you. This effort can also be thought of as Feeding the Web First.

Ultimately the worth of a technology is judged by how well it facilitates an increase in relational activity. VR pioneer Jaron Lanier has proposed the Connection Test: Does a technology in question connect people together? By his evaluation telephones are good technology, while TV is not. Birth control pills are, while nuclear power is not.

By this measure, network technology is a great deal. It has the potential to link together all kinds of sentient beings in every imaginable way, and more. The imperative of the network economy is to maximize the unique talents of individual beings by means of their relationships with many others.

That means not being connected at times. Silence is often an appropriate response in a conversation. Privacy is often advantageous in a networked world. The dimensions of relationship extend into not knowing as well as into the known. It is one of many mysteries in the human condition that will be wired into the technologies of the network economy.

Caller ID, unlisted phone numbers, unlisted email address, individual-free aggregates, personally encrypted medical records, passport profiles, temporary pseudonym badges, digital signatures, biometric passwords, and so on. These are all the technologies we’ll be using to sort out the messy business of creating relationships and trust in a network economy.

If only we knew precisely what relationships were. Industrial productivity was easy to measure. One could ascertain a clear numerical answer. Relationships, on the other hand, are indefinite, fuzzy, imprecise, complex, innumerate, slippery, multifaceted. Much like the net itself.

As we create technologies of relationships we keep running into the soft notions of reputation, privacy, loyalty, and trust. Unlike bit or baud, there’s no good definition of what these concepts mean exactly, though we have some general ideas. Yet we are busy engineering a network world to transmit and amplify reputations and loyalty and trust. The hottest, hippest frontiers on the net today are the places where these technologies are being developed.

We keep no records of anyone’s visit. Or,
We keep records but only use them ourselves. We know who you are so that when you return we can show you what’s new, or tailor content to your desires, or make purchase transactions easier and simplified. Or,
We keep records, which we use ourselves, but we also share knowledge with like-minded firms that you may also like.

Those three broad approaches encompass most transactions; but there are as many subvariations as there are sites. (To post the badges or seal, sites must submit to an audit by Truste, which guarantees to the public that a site does adhere to the policies they post.) But the seals are only labels. The real work happens behind the scenes by means of very sophisticated R-tech.

Here is a hypothetical scenario of a visit to a Truste-approved commerce site a couple of years hence. I visit the Gap clothing store online. They notify me that they are a level 2 site; they remember who I am, my clothes size, and what I bought or even inspected last time I visited–but they don’t sell that data. In exchange for information about myself, they offer me a 10% discount. Fine with me! Makes life easier. I visit the site of Raven Maps, the best topographical maps in the world. They let me know that my visit with them is on a level 3 basis–they trade my name and interests, but nothing else, with other travel-related sites, which they conveniently list. In exchange they will throw in one free map per purchase. Since the friends of Raven Map look very intriguing, I say yes. I visit CompUSA. They want to know everything about me, and they will sell everything about me, level 3. In exchange, they will lease me a multimedia computer with all the bells and whistles for free. Okay? Ummm, maybe. Then I visit ABC, the streaming video TV place. They declare that they keep no records whatsoever. Whatever shows I watch, only I know. They keep aggregate knowledge, which they use to lure advertisers, but not specifics. A lot of people are attracted to this level 1 total nonsurvelliance, despite the heavy dose of commercials, and keep coming back.

For trust to bloom, customers need to know who knows about them, and the full details of what they know. They have to have knowledge about the knower equal to what the knower knows about them. I would be a lot more comfortable with what the credit companies knew about me if I knew with great accuracy what they knew about me, how they know it, and who else they told. And I’d be even more at ease if I derived some compensation for the value they get for knowing about me.

Personally, I’m happy for anyone to track all my activities 24 hours a day, as long as I have a full account of where that information goes and I get paid for it. If I know who the watchers are, and they establish a relationship with me (in cash, discounts, useful information, or superior service, or otherwise), then that symmetry becomes an asset to me and to them.

The standard rejoinder by firms to objections from customers for more personal information is, “The more you tell us, the better we can serve you.” This is true, but not sufficient. An individual can’t comfortably divulge unless there is trust.

Take the trust many people feel in a small town. The interesting thing about a small town is that the old lady who lived across the street from you knew every move you made. She knew who came to visit you and what time they left. From your routine she knew where you went, and why you were late. Two things kept this knowledge from being offensive: 1) When you were out, she kept an eye on your place, and 2) you knew everything about her. You knew who came to visit her and where she went (and while she was gone you kept an eye on her place). More important, you knew that she knew. You were aware that she kept an eye on you, and she knew that you watched her. There was a symmetry to your joint knowledge. There was a type of understanding, of agreement. She wasn’t going to rifle through your mailbox, and neither would you peek in hers, but if you had a party and someone passed out on the porch, you could count on the neighborhood knowing about it the next day. And vice versa. The watchers are watched.

Privacy concerns were once exclusively aimed at Big Brother government, but net residents quickly realized that commercial entities–the little brothers on the net–were more worrisome. James Gleick, a technology correspondent for the New York Times put it this way: “Whatever the Government may know about us, it seems that the network itself–that ever-growing complex of connections and computers–will know more. And no matter how much we bristle at the idea, we nevertheless seem to want services that the network can provide only if it knows.”

An entire book could be written about the fundamental conversation between what we want to know about others and what we want others and the net itself to know about us. But I will make only a single point about privacy in space of an emerging new economy…