Monday, December 19, 2011

Tom Friedman's "Help Wanted" -- FairPay as a step toward freedom

I commented at NYTimes.com on Tom Friedman's 12/18 column that suggested the emergence of a new level of democracy in many domains, in which consumers are gaining more equal power with organizations of all kinds.  We are only at the beginning stages of this (as Friedman quotes Dov Seidman): "when people are creating a lot of ‘freedom from’ things — freedom from oppression or whatever system is in their way — but have not yet scaled the values and built the institutional frameworks that enable ‘freedom to’ — freedom to build a career, a business or a meaningful life.” Friedman observes that we need leadership to find the "to."

FairPay is an attempt to suggest one "freedom to" that can change the world of commerce for the better -- the freedom to set prices, constrained only by a responsibility to be fair about it.  FairPay also provides an institutional framework -- an architecture for dialogs with customers that enable the freedom to do just that.  The FariPay framework works by linking that consumer freedom to set prices to complementary methods that give sellers the freedom to manage the pricing risk related to that new buyer freedom.

My comment on NYTimes.com, Friedman column, 12/18/11, 11:12pm:

This is very apparent in the world of digital commerce, and I have suggestions on how "freedom from" will lead to "freedom to." The crisis in pricing digital offerings and the revolt that "content wants to be free" is just a start.

We moved a century ago from negotiated prices to seller-imposed prices and widespread price “discrimination” by sellers that enabled efficient mass marketing, but distanced the seller from the consumer. Now digital products and networks have changed the game, and we have movements to free, "freemium," and even "pay what you want" and "name your own price." Digital businesses have found it challenging to adjust to this, and no current models really do the job.

I suggest the next stage of institutional framework for a "freedom to" will bring deep two-way connections of consumers and businesses--in the form of individual dialogs about the value of offerings, as actually realized by each user in their specific contexts. This can be done with a structured balance of powers in which the consumer sets an individualized price they think fair, and the business continues to permit such transactions as long as they agree that consumer is "fair" about the price. That can improve margins and efficiency, and empower relationships based on fair value exchange (a buyer-agreed-to form of price discrimination). Think of a privilege that is earned and maintained -- a zone of pricing freedom, a "FairPay Zone." (This is described in my blog by that name.)

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