James Wilding's Weblog

Every so often, I read about how the internet is massively changing the way businesses and customers interact. Today I read a Guardian book review that explained how

“Networked markets are beginning to self-organise [...] People in networked markets have figured out that they get far better information and support from one another than from vendors.”

A lot of people think that the internet creates new forms of customer behaviour. I disagree: I think the internet primarily gives more emphasis to existing forms of behaviour.

Anyone who’s ever worked with small businesses will know that word of mouth is extremely important, and that customers will naturally organise themselves into ad-hoc groups which support individuals and offer a way for newcomers to get information on what the Guardian calls “vendors”.

If that sounds too theoretical, think about restaurants. You probably know a few friends who can offer restauarant reviews or suggest a new place to eat — even explain wine lingo if you’re new to that side of things. There’s your self-organising community: all the information and support you need.

Here’s the important point: you don’t have to go online for any of this. These customer communities have existed for hundreds of years: do we really believe that before the world went online, everyone just called up their local restaurant and said, “Hi. Are you good at cooking?”…?

The power of the internet is that it supports and encourages these communities, and in some cases makes them possible where they wouldn’t have been before. But the communties themselves aren’t new phenomena: there’s no magic here, just progress — old things appearing in new ways.

We really should be cautious about claims that the internet is changing the basic nature of business: it’s not. What’s happening is closer to evolution than revolution, and those who tell you otherwise are probably trying to sell books.