Jeff Bezos spoke recently at the Economic Club of Washington where he shared his thoughts about a wide-range of topics. In listening to the discussion, we couldn’t help but see parallels between his early assessment of the power of the internet with what we see today in the cryptocurrency ecosystem and what we are trying to build at Suredbits.
Jeff Bezos’ observation about the “gift the internet brings” i.e. free, global distribution, seems obvious to us today but it wasn’t so obvious then. The idea of monetizing data APIs via micro-transactions; of taking expensive data subscriptions and unbundling them so people can stream smaller, discrete, customized feeds— isn’t obvious today and some may even believe it just a bit crazy.
But Bezos knew that the Washington Post and media broadly, had to switch from making a lot of revenue per reader on a relatively small customer base, to a smaller amount of money per reader on a larger, broader (or even massive) reader base.
So too is it time for holders of data — financial exchanges, sports, gaming companies, etc. — to embrace the advantage of free, global distribution with the power of cryptocurrency — and open their data to a broader audience. With the growth of cryptocurrency and specifically the emergence of the Lightning Network, it is now possible to build APIs that empower users to stream what they want, when they want it, and to pay for what they want to use. There has quite literally never been a better time — and truthfully a more opportunistic time — to change their business models and open their data in ways not possible previously.
Using the Washington Post as an imperfect analogy, imagine going from an install base of 45 million to 72 million- a roughly 60% increase. That is a lot more customers relying on and using your data, building their applications off of it, and creating new experiences and products.
Bezos did this not by putting up walls and restricting access but by making The Post more open, accessible and easy to engage with — by making less revenue per reader but having many, many more readers.
Bezos looked at the book industry and saw barriers to entry — limited selection of titles based on geography, the need to go to the store every time to purchase a book, the time spent looking for specific titles — and leveraged the power of the internet to completely disrupt not only books but all of retail.
Having gone thru some of the sign-up and vetting required to purchase and access some of the traditional sources of real-time and historical data, we know how difficult and time-consuming it can be. Depending on the type, amount and intended use of the data, it can take weeks or months to execute on a contract. And that is just to access the data. There are still reporting requirements (mostly due to regulations) and ongoing fees. From the company’s perspective, there is still technical overhead for maintenance and development, customer support, sales & marketing, and so forth.
But what if those costs could be spread across a customer base of not hundreds or thousands, but hundreds of thousands or even potentially millions of people? With cryptocurrency and the solutions being built on top of Bitcoin, you are closer to delivering value to customers faster than ever before and recognizing the revenue immediately.
If it isn’t clear by now, we really believe in the power of crypto to transform data and API business models. And we agree with Jeff Bezos: free, global distribution is a gift. With crypto, data can now be valued for its use and not priced based on overhead or monthly credit billing cycles.
We love writing about crypto and business models. We will write more about our thoughts on what can be applied from Bezos talk to the crypto world next week. Specifically, we will be talking about his insights on growth.