over 7 years on 2009-11-15

INFORMATION'S VALUE, RESTATED VIA RESTAURANT RECOMMENDATIONS


last weekend i spent a wonderful lunch with a good friend, mollie chen, who is an editor at conde nast traveler... as often happens, the conversation moved towards content, and the future (what an original topic for me to get hung up on, i know)...

that said, i espoused my normal position, which is that the value of information is based on scarcity, and really is just a function of scarcity.  that means that there will always be a way to sell content.  the business of information isn't going away at all, in fact there is an argument that it will become more potent -- but what constitutes 'scarce' information / what sells is changing...

in the process of the conversation, we came up with a new description of what is really happening via the metaphor of restaurant recommendations, which i think is interesting if not elegant

regardless of whether it was 1910 or 1990 or 2015, if you want to know where to go to dinner in new york, you have various means of discovery at your disposal along a continuum.  the more you 'spend', in time or effort, the better an answer you get.  you can 'spend' in the form of time, money, or social capital - and your 'return' is based on how you value the correspondingly better restaurant experience.

your restaurant picking mission is simple -- you are looking for the highest roi answer based on how you value your time/money - and how you value an incrementally better meal -- (you are not necessarily looking for the 'best' answer). 


general options along that scale that have always existed:

1.  (lowest cost bracket) you could base your decision on your own memory and personal experience to date (basically free - fast and cheap - likely a relatively bad answer, unless you have already built up a very large private data store)
2.  you could ask a friend or two...  of various knowledge levels (spend social capital perhaps, requires legwork/time)
3.  you could ask a lot of friends...  and try to ask good ones (more social capital / more legwork)
4.  you could hire a food taster to go around the city for you and/or socialize the cost by publishing an annual guide (more expensive in cash/less expensive in time)
5.  you could hire lots of food editors to go around the city for you and/or socialize the cost by publishing an annual guide (more expensive in cash/less expensive in time)
6.  (highest cost bracket)  you could personally go and eat every dish at every restaurant, create and catalog your own personal and specific judgments, and decide where you want to take your gal (almost infinitely expensive - but probably gets you the right pick)

what is changing?

same thing that is changing for every other industry - absolutely nothing except the cost of data acquisition, storage, processing, and publishing.... which is changing the locally optimized answer.

150-100 years ago - your best answer most nights was to go with the bar/club/restaurant you knew because the friction of finding something better was too high for the incremental bump in meal quality/experience... (surprise surprise, there was a club culture then) - if you really wanted something special you could ask a friend or two if they were in your office, sure.

30 years ago - your best answer day to day was to collectively hire a bunch of people to review restaurants and compile a guide.  this took a lot of the margin out of 'knowing' locally all the 'best' restaurants...

1 year ago
- your best answer day to day was to ask twitter or yelp.  this took a lot of the margin out of the guides.  lower cost answers from both a time-to-answer perspective (better interface), relevance, and breadth

0 years ago
- your best answer day to day is to ask socialgreat.com.  this uses real-time data to take most of the margin out of twitter and yelp, by giving you insight into real trends, with higher relevance, etc.

but

the reality is that any of these technologies only get you a 'locally' correct answer if you value your time and money on a normal curve 
if you don't/if you are looking for premium answers - that is where guns for hire / buying content - will save you.

put differently...  restaurant guides/basic communication wiped out the 'eating club' culture that dominated 100+ years ago.  current tools like yelp are putting serious pressure on existing reviews.  social tools are putting serious pressure on yelp, but none of these tools is really putting serious pressure on the michelin guide.

or - more information/cheaper communications means that more information is commodity.  the bar goes up... and it goes up fast.  but there is still a bar, and there is still incremental return on premium services that get you to the next level of knowledge/access.  those premium services will have to get better and better at adding value by mixing the available tools with incremental information/perspective -- but it is very doable.

- the data that is cheaply collected and socialized may make people happier/more efficient, but it is technically worthless
- 'social graph' data / other semi-private conditional information is a leg up further, but if it is shared it has limited value (and you are only as good as your friends)
- the real juice comes in with premium content when you want a better answer than you can get for free from friends... and that is the future of restaurant reviews.

so - once upon a time - your restaurant picking was only as good as your personal experience/memory  -- now - your restaurant picking experience is only as good as your friends -- in either case, you are still willing to 'buy' better information. 

a hiccup to consider


what if asking people isn't a social capital cost, but a social capital credit?  if asking for help is a positive value/a granting of credit then that changes the equation somewhat (do you like it when people ask your opinion, or just hate the interruption?)


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