B2A2C
The emergence of algorithmic middlemen
I’ve been talking about the concept of B2A2C for a couple of years now. I noticed an increased interest in this topic in recent months, and many more subscribers have joined this newsletter since I last mentioned B2A2C, so here’s a fresh take!
In 1995, Clifford Stoll tried to predict the future. In his Newsweek text, “Why the Web Won’t be Nirvana”, he wrote:
“Even if there were a trustworthy way to send money over the internet, which there isn't, the network is missing a most essential ingredient of capitalism: salespeople.”
Look, I get it. Predicting the future is hard. And back then, Stoll was right. Back in 1995, the Web was not a place where commerce happened.
A few years later, the inventor of the Web, Sir Tim Berners-Lee, was a bit more optimistic in his book:
"I have a dream for the Web [in which computers] become capable of analyzing all the data on the Web – the content, links, and transactions between people and computers. A 'Semantic Web', which should make this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy and our daily lives will be handled by machines talking to machines. The 'intelligent agents' people have touted for ages will finally materialize".
The concept of a “Semantic Web” has fizzled out a bit, with some of these ideas now hyped by “Web3” bros. But hype aside, in the past couple of years, we’ve witnessed the emergence of “intelligent agents” that Sir Tim predicted, the “salespeople” that Stoll was missing in the Web of 1995.
On the Web in 2023, almost thirty years after Stoll’s article, we can “hire” bots to be our intelligent agents, the middlemen between customers and businesses. See the gif below: a YouTube creator and “sneakerhead” Botter Boy Nova demonstrates how he uses bots to buy limited edition sneakers that he resells for profit.
What’s In a Name?
The business world loves its acronyms: B2B, B2C. But to describe the interactions that happen these days, we need to introduce a new one: B2A2C — Business to Algorithm to Customer.
Traditionally, businesses have sold directly to customers (B2C) or other businesses (B2B). With the advent of AI, algorithms can now step in as intermediaries. The algorithm sits squarely between the business and the customer, sometimes owned by one, the other, or even a third party.
Who Owns the Algorithm?
Imagine buying a smart speaker. The algorithm inside it? It is owned by the company that sold you the speaker. The algorithmic sales agent will act on behalf of the speaker manufacturer when dealing with you. When you say, “Alexa, find me the best deal,” who do you think will benefit more—you or Amazon? Not sure? Watch the video below, starting at 1:01.
As an exception, Sonos allows for multiple algorithm choices, but usually, the algorithm is under the business’s control. The business owns the “A” in B2AC.
There are also scenarios where the customer owns the algorithm. Hari Nagarajan created a bot, FairGame, that anyone (who can code a bit) can download from GitHub and use for their purposes. In his own words:
We built this in response to the severe tech scalping situation that's happening right now. Almost every tech product that's coming out right now is being instantly bought out by scalping groups and then resold at at insane prices. $699 GPUs are being listed for $1700 on eBay, and these scalpers are buying 40 cards while normal consumers can't get a single one. Preorders for the PS5 are being resold for nearly $1000. Our take on this is that if we release a bot that anyone can use, for free, then the number of items that scalpers can buy goes down and normal consumers can buy items for MSRP.
If everyone is botting, then no one is botting.
The Third-Party Facilitator
Don’t forget the possibility of third-party ownership, like DoNotPay, an algorithm designed to simplify transactions between individuals and businesses. In this case, neither the business (the B in B2A2C) nor the customer owns the algorithm, but it plays an essential role in facilitating interactions. A business indeed owns the “A” in B2A2C, but it’s a third party to the interaction.
Why Should You Care?
You might think that in B2A2C, the ‘A’ is merely a different sales channel. That’s oversimplifying things. These digital minions have their own autonomous rules. Understanding them will help businesses influence these algorithms to their advantage. If you’re a grocery store or a food manufacturer, it could mean the difference between a customer’s smart fridge buying your products or a competitor’s.
Why B2A2C Matters
In an increasingly automated world, B2A2C offers new challenges and opportunities. Customers will find value in knowing why a specific algorithm made certain decisions, and businesses will gain insights into attracting new kinds of ‘customers’—the algorithms. Far from being just another channel, B2A2C represents a new form of customer and provider.
So, are you ready to navigate the B2A2C maze? Because these digital minions are already shopping on your behalf, it’s high time we understand what makes them tick.