by Rob Paterson
June 16, 2011 at 10:32 am · Filed under
Economics, Innovation, Innovator's Dilemma, New Realities, Personal Branding
How much would a nice hotel room cost you in a really cool part of Manhattan? At least $350 a night. A grotty room maybe for $250. Can you get any hotel room in the Plateau (the most Bohemian part of Montreal)? The quick answer is no.
But if you use AirBNB – you can get a really nice place for maybe $100 in Manhattan and $70 in Montreal. As with eBay you also get the advantage of a trust mediator.
Here is the core idea – AirBNB and other sites like it – there are 3 that have just got major funding – are run along the lines of eBay. You have a flat or house or even a room in your place. You use the aggregating power of the mediator to position your place and to control the trust issues. You are a traveller. You are exposed to the content which is highly personal – with a number of trust issues dealt with by rating and how the money works. In essence good behaviour on both sides is good business. Both sides are rated.
The barrier for travellers is to get over the idea that Hotels are it. Once you do, you may never go back and the hotels – as with newspapers and Craigslist cannot compete. For they have fixed costs like a newspaper that they cannot reduce.
Who wins? Well you do. My wife intends to stay in Montreal with my daughter in the fall to help my daughter in law who will have new baby. We have found a 3 bedroom flat 100 yards away for $75 a night. More than ideal. The renter can now get a return on her place that was impossible before.
Once again the Personal Brand will trump the corporate brand – for we can truly trust a person.
Of course, as with newspapers, the best brands will be ok – But what about all those budget hotels or those mid level hotels? Armageddon I think. Others agree and have valued Airbnb at 1 billion dollars
The process of the Innovator’s Dilemma will now take place.
This is truly a game changer for all involved. Who would ever have thought?
by Rob Paterson
October 18, 2010 at 8:18 am · Filed under
Adoption, Barriers, Economics, KETC, NPR, Organizational Design, Public Media, Social Media, education
After many years of thinking and talking, here Sir Ken I think nails the problem and gets the direction for the right new path correct. Helped a lot by the guys at RSA.
So what can we do with this insight?
My experience in public radio and TV – which also is at a crossroads from one culture to another – is that we must not underestimate the power of the entrenched culture. Most people inside pub radio/TV and in education are so invested in the old that they can only fight an alternative. This is not because they are bad or stupid – it is because they are human and their identity is the system as it is. So to change it means that they have no place. So they cannot go to the new.
If you long for a better education system – you are also worried about how to breakthrough all these barriers. You don’t know how to change the system. I think that we can look at what is happening in media and find a way.
So where is the change happening in media that we might use to help us in education. As I write them I can see how these factors apply to education - can’t you?
- The long term effects of the poor economy is pressing the system
- The school system is under huge funding pressure too
- In higher ed – the degree also costs too much now and drives loans that canot be repaid
- Kids will seek out new ways – they have to
- In the next 10 years the pressure to find a new way for the money will become unbearable – thus creating the same kind of context for change that we see in media
- There are organizations like Craigslist that are killing the economics of the old and forcing economic pressure – the old way leads to economic starvation and sets a context for change
- There are new online schools such as the Khan Academy that offer kids a wonderful alternative to school
- Great Schools like MIT have put a lot of superlative content online
- Kids are voting with their feet - better content will be available online for next to free as with Craigslist and personals that will ad to the economic pressure
- The web has a bunch of new tools such as Twitter, YouTube, Netflix, iTunes, Apple TV etc that are empowering new sources and new ways of finding, producing and using content
- Same for Ed - iTunes, YouTube are already there
- Why take Math with Miss Jones when you can get the world’s best math teachers on your time at your pace?
- Parents will buy into this too
- There are entirely new organizations – Huffington Post, Daily Beast, Politico – Greenfield that go through no transition but start with the new model – they are forcing competitive pressure
- There are a few old leaders who get it and have enough critical mass inside to go for it now – The Guardian in the UK and NPR – they are forcing change on their system
- Athabaska and Phoenix come to mind in higher ed – they are moving to the mainstream
- Soon there will be Grade Schools that have the same features
- There are few local small organizations that have the leadership to go for it too and are making enough progress to show the rest - KETC is the one I know the best.
So what to do?
Don’t think about changing the whole system!!!!! It’s too big and powerful.
Instead take advantage of these powerful forces.
If you are a learner – Explore the new world of resources – do not feel trapped in school as it is or feel that you have to wait – enough change is here for you to take full advantage now
If you are a parent – see the whole picture for you child – help line them up into that is now available that is more fitted to them and at a cost you can all afford. Vote with your feet.
If you are a school board - Learn how to make the shift from the old to the new – Do a KETC – pick a school with the right leadership and try the new in ONE place – learn from this – use this test bed to expose others to the new from their peers.
If you are a teacher – Learn how to be the new – participate in the new world – be a citizen teacher – offer content or coaching – learn how to be an entrepreneurial teacher who can hang up their shingle on the web or locally. Be the math coach or the history coach in your place or globally!
If you are a social entrepreneur - Build the new a place together so that you are the convener of the a place where kids can be together and yet be part of the a larger universe of resources that fits them!
It’s coming folks – the forces in play are too great to stop it. BUT you have to be a player now if you want to benefit.
by Paula Thornton
July 14, 2009 at 1:46 pm · Filed under
Economics, Enterprise 2.0
“No word in the current business arena is more used with incorrect applicability than the word ‘innovation’.” — Richard Saul Wurman
Before all the cards and letters pour in, I’m taking semantic liberty with the title to make a point — one that is enforced by Scott Berkun in his 2007 book, The Myths of Innovation:
“Any seemingly grand idea can be divided into an infinite series of smaller, previously know ideas…in the work of innovation itself, for most, there is no singular magic moment; instead, there are many smaller insights accumulated over time. The Internet required nearly 40 years of innovations in electronics, networking, and packet-switching software before it even approximated the system Tim Berners-Lee use to create the World Wide Web. The refrigerator, the laser, and the dishwasher were disasters as products for decades before enough of the barriers — cultural and technological — were eliminated, each through insights of various kinds, to make them into true business innovations.”
The basis of my point: there’s a lot of innova-ting that is required to get to successful innova-tions. Focusing on the latter isn’t what gets you there.
There are some who suggest that the real issues of innovation today are in the lack of execution and funding of good ideas. Berkun’s evidence might suggest this not to be the case. Are execution and funding an issue unique to innovation or a fundamental attribute of the business model and its operations?
Organizations operate today leveraging techniques and methods that were optimal for manufacturing — in the early 1900’s. One hundred years later, they (and the highly-protective behaviors that go with them) are ill-suited for survival in today’s economy.
Companies, for the most part, are “enterprises” by legal definition only. To emphasize this point on occasion, I interject the phrase, “There is no Enterprise” — to suggest we’re relying on or blaming something that doesn’t really exist.
From The Matrix:
“Do not try and bend the spoon, that’s impossible.
Instead only try and realize the truth….There is no spoon.”
In reality, for the average worker, the only thing about an enterprise that is real to them is their workspace that sits before them. Decade after decade, survey after survey, the number one complaint from employees: lack of communication. And yet, all the monies and efforts to change that have been for naught. Employees still feel ‘isolated’ in their efforts. Imagine, the millions of people who go to work each day to do their work in isolation from each other — isolation that actually costs a lot of money to provide.
Any real interactions between people on a day-to-day basis are likely engaged via 3 primary business channels: meetings, phone, email. Such interactions are typically focused on: status, issues, actions.
Anything inherently flawed with this scenario thus far? It depends. The evolution of these interactions were shaped by necessity and available technologies. Even the hierarchical nature of organizations was originally the ‘ideal’ for the effective distribution of information. Clay Shirky notes in Here Comes Everybody:
“The value of such hierarchies is obvious — it vastly simplifies communication among the employees. New employees need only one connection, to their boss, to get started. That’s much simpler than trying to have everyone talk to everyone.”
While this might have been true at one time, for the past 1.5 decades the managers I’ve had either don’t have the information I typically needed, don’t have the time to get it (as soon as I need it to do my job), or sadly, tell me the wrong information (the latter has been increasingly the case).
Clay goes on to point out:
“Running an organization is difficult in and of itself, no matter what its goals. Every transaction it undertakes — every contract, every agreement, every meeting — requires it to expend some limited resource: time, attention, or money. Because of these transaction costs, some sources of value are too costly to take advantage of. As a result, no institution can put all its energies into pursuing its mission; it must expend considerable effort on maintaining discipline and structure, simply to keep itself viable…the problems inherent in managing these transaction costs are one of the basic constraints shaping institutions of all kinds.” [emphasis added]
Who’s responsible for managing these transaction costs and optimizing them? Who’s watching them and measuring them and making sure that they’re in line with ’standard deviations’? The Chief Operating Officer? The Chief Financial Officer? Even if they accepted responsibility for these things, how could they manage them when the effort to create needed metrics would cost more than any potential gains?
The Internet changed everything. It allows for the cost of transactions (i.e. one form of an interaction) to approach zero. And yet, wherein are we capitalizing on this same economic opportunity for all of the critical business interactions (ala. transaction costs) internal to an organization?
Businesses who capitalized on Web 1.0 and successfully transact with consumers online achieved success the same way industrial designers optimize manufacturing floors: by design. But have we simply traded one manufacturing paradigm for another? Online transactions are still fundamentally linear. Business is not linear. We artificially force it into being so, that we might make it repeatable (via algorithm) and lock out the variability for ‘quality’ (via binary code). In doing so we lock ourselves into specific scenarios. The minute ANY of the conditions by which the process was optimally designed change, the process is sub-optimal and must be changed. The reality is, conditions ALWAYS change. That means ALL process-driven systems are sub-optimized to reality (unless you’re making widgets).
By focusing on innovation as the output of a business’s mission, businesses fail to do what Clay Shirky noted was important for viability of the business itself: manage the transactions costs of doing business. This is, by my definition, where innovating is differentiated from innovation.
Enerprise 2.0 — and the related premises fundamental to its purpose — is the means to provide the infrastructure to facilitate lower transaction costs and support continuous innovation: innovating.
Looking for ROI to justify E2.0 technology investments is the wrong approach. The technology will get you nothing of value (well, unless you’re using Clayton Christensen’s definition of technology “the processes by which an organization transforms labor, capital, materials, and information into products and services of greater value” — but nobody does).
The real value of E2.0 is unmeasurable by projection (estimates). The real value has to be ‘attained’ by optimizing the factors of the context — the reality of the moment. Many ROI-approved initiatives never ‘attain’ their true value — they don’t need to, they passed the ROI test — a truly regressive form of measurement.
The true potential for optimizing E2.0 investments is to focus on lowering transaction costs, with technology, by design (the proportion of people-focused design investment — including changes to facilitate adaptation and continuity — to hard technology investment should be at least a 9 to 1 ratio).
The Internet lowered transaction costs to the point that many enterprises lose the primary economic advantages that originally made them viable: concentration of capital resources for output. Barriers to entry were lowered for competition, not just in the market but in operations as well. For knowledge workers in particular, most individuals have the necessary resources they need (or can access them) from home — concentrating capital in a central building has lost its former economic advantage, for many business models. Yet we continue to do it, because it’s what we’re familiar with — it’s comfortable…all the way to the collapse of the business under the weight of its own transaction costs.
While there is real threat of traditional businesses being undone by new forms of business models, at the very least traditional businesses need to do everything they can to minimize transaction costs and facilitate continuous innovation to have some hope of survival, to have time to reinvent their methods of doing business.
There are a variety of transaction costs and many ways to minimize them. An immature E2.0 implementation might attempt to facilitate sharing more effectively via blogs or wikis. Does this minimize transaction costs or simply add more transactions? Clay Shirky very brilliantly points out that the true potential is in moving “from Sharing to Cooperation to Collective Action”.
Trying to figure out what all of that means ahead of time to create an ‘optimal solution’ is meaningless. Like knowledge, it defines itself and its relevance within the business context, guided by a design strategy. This is the primary reason that the ‘internet as platform’ is so relevant. This is the same reason that any E2.0 solution should not be an ‘application’, but a flexible platform to accommodate a variety of structures that can be tailored to ‘fit’ situations as conditions change. It means that we need to move from an application-focused paradigm to an architecture-focused one, where we leverage ‘bits’ of structure that are ‘applied’ for a given set of circumstances in the form of: templates, filters and functions.
The rest comes from the most valuable resources business have — the most underutilized resources to date: human wetware. Unleashing the potential of the human mind within a working environment where they can connect with one another — innovating through sharing, cooperation and collective action — is not an option. It is now the ‘cost of entry’ for business survival.
by Joe McKendrick
June 5, 2009 at 5:38 pm · Filed under
Economics, Social Networking
More than a year ago or so, I talked on this blogsite about the impact information technology and social networking would make on the economic downturn. (”If there is a recession, will be it be ‘Recession 2.0′?”) That is, people would be in better control of their destiny, and companies in better control of their costs, thanks to all the incredible online resources we now have at our disposal.
This downturn would not be a repeat of 1975, when all millions of helpless people could do is collect unemployment and scan truncated newspaper help-wanted sections. Nor is it even 2001 for that matter.
We’re now emerging from the other side of the downturn (things are looking up), and evidence is piling up that social networking and IT is making a huge difference in mitigating the pain, and even helping people and organizations to thrive in new ways. Through the tough times, social networking has been an empowering force. I call it the LIFT factor — LinkedIn, Facebook, Twitter.
A recent article in The New York Times describes how one laid-off engineer turned to Facebook and LinkedIn, and soon found himself to be the object of a talent search by a hiring company.
For the engineer, the connection meant getting back to work and off the unemployment rolls. For the company, social networking is providing a valuable talent recruiting resource. “More personal pages, profiles and social networks are serving as fodder for companies looking to fill jobs,” the report states. To mine its employees’ social networking contacts for potential hires, a business can pay for services from companies like Appirio or Jobvite.”
Here’s how it works, as described in the article:
“A hiring company that uses Appirio’s product asks its employees to add an application to their Facebook pages. The tool will notify the employees when new jobs open and which of their friends might be a good fit. Appirio’s matching engine comes up with a list of friends whose job titles, geographic location and other keywords match their company’s available positions, and the employee can send them a referral in Facebook. The matching engine has access to the same information that a Facebook friend does. A friend who gets a referral can apply for the job if interested. If that person is hired, the company can use Appirio’s service to track which employee found the match and offer a referral bonus.”
Neat stuff. As we become more networked and connected, opportunities grow exponentially. Advice from a report in Microgeist urges active participation in social media to expand this range of opportunities:
“The continuing evolution of the Web comes not from immediate financial opportunities. The opportunity is the opportunity to participate and contribute. Those who provide research, insight and imagination will find themselves able to generate dependable traffic as and the consequent direct advertising opportunities. First and foremost, however is participation and contribution.”
Oh, and by the way, good riddance, Recession 2.0.
by Joe McKendrick
May 20, 2009 at 10:36 pm · Filed under
2.0 Design Thinking, Economics, Enterprise 2.0
In my work on the service oriented architecture side of the equation, there’s been quite a bit of controversy over the way SOA has been pitched to organizations. Many observers say there is too much emphasis on implementing “SOA” for SOA’s sake, instead of focusing on solving the business problems at hand.
Could Enterprise 2.0 proponents make the same mistake — trying to sell the business on “Enterprise 2.0,” instead of addressing specific business problems or opportunities.
Bertrand Duperrin, consultant at blueKiwi Software and Enterprise 2.0 thought leader, raised this issue in a recent post. Duperrin observes that “2.0 projects” tend to be “isolated from the ‘real enterprise’ in order to proven itself from any side effect of something that’s still not well understood…”
Duperrin recommends to help companies to visualize things “according to
what they are today and according to their very nature.” As part of this approach, he states that the goal should never to simply “become an enterprise 2.0″ organization.
The goal of any and all efforts is to “improve the way things are done everyday,” Duperrin relates. And this consists of identifying the primary goal of the enterprise, which is fairly straightforward: “Make money. Period.” He adds that this is “the only indisputable goal.”
That in turn leads to an “undisputable consequence,” he continues: “Companies spend their time trying to organize themselves in order to produce as efficiently as possible.”
Enterprise 2.0 approaches can pave the way to new efficiencies, and play vital roles in improving business processes, as well as open new avenues. And these are the points that will generate business enthusiasm for these new approaches.
