Intention markets for financial markets
Doc Searls writes in Linux Journal:
Hence my idea: The Intention Economy.
The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.
The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.
The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.
The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.
The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.
In The Intention Economy, a car rental customer should be able to say to the car rental market, “I’ll be skiing in Park City from March 20-25. I want to rent a 4-wheel drive SUV. I belong to Avis Wizard, Budget FastBreak and Hertz 1 Club. I don’t want to pay up front for gas or get any insurance. What can any of you companies do for me?” — and have the sellers compete for the buyer’s business.
Makes sense right? Actually if you think about it, wholesale financial markets in many respects and in many instances already operate like this. Think of an RFQ (request for quote) for a price on a security. Or a beauty contest for an underwriting commitment on a new bond. The buyer is very often very much in control with sellers competing for her business.
However, in many (most) cases this process is either relatively poorly organized (or at the least certainly not industrialized) or the process is channelled through a proprietary silo (think multi-bank ECN’s.) Also, there is scope to improve an experience more analogous to Doc’s car-rental scenario. ie Rather than asking for a specific security, a mechanism whereby the customer can articulate certain investment (or financing) goals and have the sellers compete not only on price or availability but on the range of similar products that might fit the buyer’s requirements equally well.
Actually there was a company called Visible Markets that in some ways looked to provide this type of service (albeit in a siloed pre-open source kind of way!) in 2000 but despite powerful technology and an interesting vision they didn’t make it past the dot-com implosion:
Take Visible Markets. It was started in early 2000 by two 20-something MIT grads, one of whom had already made a fortune on another start-up. Brian Robertson cofounded PlanetAll, an online date and address book, and sold it to Amazon.com in 1998 for $100 million. Visible Markets set out to be the “eBay of mortgage-backed bonds” and raised $25 million in three rounds from respected investors, including Waltham’s Greylock Partners and State Street Corp., the Boston-based investment and custody giant.
Anyhow I think the idea of ‘intention markets’ should resonate easily within the world of wholesale financial markets and I look forward to seeing the open-source/Web 2.0 community start to develop tools and products over the next year or so that take advantage of this fertile ground.
