“With this algorithm and some meter data, I know more about what’s going on in that building than the people that occupy and maintain it.”

Here’s my entry for the New Yorker cartoon caption writing contest.  It’s a joke, but I’ve heard statements very close to this more than once in listening to the buzz about Big Data and building energy efficiency.  I think these boasts fall into the category of ‘investor storytime.’ In a now famous lecture, the influential Internet programmer Maciej Ceglowski explained,

Recall that advertising is when someone pays you to tell your users they’ll be happy if they buy a product or service.  Yahoo is an example of a company that runs on advertising. Gawker is a company that runs on advertising. Investor storytime is when someone pays you to tell them how rich they’ll get when you finally put ads on your site…Most startups run on investor storytime.

In his August article in The Atlantic  “The Internet’s Original Sin,” Ethan Zuckerman builds on Ceglowski’s lecture notes.  The sin he is referencing in the title is the over-reliance on real  and promised advertising revenues which he points out has led to “surveillance as the predominant if not sole, internet business model.”  When Google bought Nest the direct connection between advertising and energy efficiency surveillance was made. Advertising business models succeed  as a function of volume of targets informed and engaged, hence the boasting by Digital Economy start-ups about how some flavor of analytics can scale across many building types and use cases.  It has to be this way for the storytime.  The storytime gets more press than any more real physical-world building-by-building rollout of an efficiency program because the digital press is an advertising supported business that depends on investor storytime too.

I have to thank Gigaom’s Stacey Higgenbotham who “covers consumer efforts around the Internet of Things” (her phrasing) for pointing out both Zuckerman and Ceglowski’s writings.  She believes we’re headed for the “ultimate culture clash” between companies enmeshed in the  old-line physical world and those manufactured by new-line Digital Economy startups. She writes:

In old-line businesses, there is an abundance of caution, not just driven by a lack of digital expertise, but by the concern about how this shift will impact their business. Questions I hear discussed range from, how long can I warranty a Wi-Fi module, to how can I support a cloud service for a decade. Others revolve around privacy and making sure data isn’t inadvertently leaked, because unlike Mark Zuckerberg, the CEO of GE or GM can’t just post an apology in a blog and expect any perceived or actual lapses to go away.

I’m wondering if the clash she is describing is actually more likely to happen between the story tellers and their investors, than between the digital versus physical economic worlds.  I think the physically grounded world will just keep chugging on with its own data-driven approach to energy efficiency and the IoT.  Stacey’s posts and podcasts are always thoughtful and I’m an avid fan of this content which I consume for free due to Gigaom’s advertising supported business model.  Why does Stacey maintain such a disciplined focus on the Consumer side of the IoT?  Is it as simple as there are more potential advertising/surveillance targets?

In response to a commenter, she writes “I tried to steer clear of the [commercial building] industrial side of things here because it’s a completely different model. Their businesses will pay for integration and services that consumers typically balk at.”  However many consumers also balk at surveillance stuff in their houses.  I think the reason Stacey strives to steer clear of the [commercial building] industrial side of things is that Gigaom itself is on the Digital Economy side of the Culture Clash  – which is good for BuildingContext.me because I like to talk about commercial building Big Data/IoT which goes largely ignored.