Eric Schmidt: Don’t bet against the internet.

Sun, 2006-11-26 00:41.

… what’s surprising is that so many companies are still betting against the net, trying to solve today’s problems with yesterday’s solutions. The past few years have taught us that business models based on controlling consumers or content don’t work. Betting against the net is foolish because you’re betting against human ingenuity and creativity. …


In 2007 we’ll witness the increasing dominance of open internet standards. As web access via mobile phones grows, these standards will sweep aside the proprietary protocols promoted by individual companies striving for technical monopoly. Today’s desktop software will be overtaken by internet-based services that enable users to choose the document formats, search tools and editing capability that best suit their needs.


Driving this change is a profound technological shift in computer science. For the past 20 years a client-server computing architecture has dominated digital infrastructures. Expensive PCs ran complex software programs and relied primarily on proprietary protocols to connect to bigger—and even more expensive—mainframe servers. The data and the power lived in these computers and their operating systems.


Today we live in the clouds. We’re moving into the era of “cloud” computing, with information and applications hosted in the diffuse atmosphere of cyberspace rather than on specific processors and silicon racks. The network will truly be the computer. … Cloud computing is hardly perfect: internet-based services aren’t always reliable and there is often no way to use them offline. But the direction is clear. Simplicity is triumphing over complexity. Accessibility is beating exclusivity. Power is increasingly in the hands of the user.


… put simple, intuitive technology in the hands of users and they will create content and share it. The fastest-growing parts of the internet all involve direct human interaction. … online communities are thriving and growing. The internet is helping to satisfy our most fundamental human needs—our desire for knowledge, communication and a sense of belonging. …


We’re betting on the internet because we believe that there’s a bull market in imagination online.

Link

The Del.icio.us Lesson - Personal Value Precedes Network Value

Tue, 2006-05-09 22:45.

When it comes to successful examples of Web 2.0 social networking services many people see Del.icio.us and Flickr as the primary candidates. Their stunning success influenced all sorts of business models for start-ups, that are being built around the idea of generating network effects through social software architecture to create both value for the user and revenues for the providing service. However some business plans might be at risk looking at their role models from a different perspective:

The one major idea behind the Del.icio.us Lesson is that personal value precedes network value. What this means is that if we are to build networks of value, then each person on the network needs to find value for themselves before they can contribute value to the network. In the case of Del.icio.us, people find value saving their personal bookmarks first and foremost. All other usage is secondary.

As people use Del.icio.us more, and in order to gain more personal value, they use tags to be able to find their bookmarks later. Tagging isn’t even the primary function of Del.icio.us. Most of the tagging done on Del.icio.us is done secondarily, and for personal use.

The social value of tags on Del.icio.us is only a happy side-effect. Even though most of the ink spilled about Del.icio.us is about the social value, it’s really not the reason why people use it.

Similar to Google aggregating links that were originally created for taking readers from one document to another, Del.icio.us can aggregate tags in order to find out how people value content. If 1,000 people save and tag the same bookmark, for example, that’s a good sign that they find value in it. But to think that people tag so that this information can be aggregated is to give people a trait of altruism they just don’t possess.

Joshua Porter is a keen observer of design and technology trends associated with the emergence of Web 2.0 and for those interested in these topics his writings are highly recommended.

Thomas Friedman awarded as "Webby Person of the Year"

Tue, 2006-05-09 22:07.

With their Special Achievement Award the Webby jury honors the work and activities of Thomas L. Friedman as author of the book "The World is Flat: A Brief History of the 21st Century" and as columnist at the New York Times.

For those who are still unfamiliar with his viewpoints I highly recommend the video lecture he was giving at the MIT as an introduction:

http://mitworld.mit.edu/video/266/

"Are you enjoying globalization yet?"

Sun, 2006-01-29 22:51.

Irving Wladawsky-Berger, Vice President for Technical Strategy and Innovation at IBM comments on an interesting article (pdf) published by Mercer Management Consulting:

"Globalization is changing the nature of competition and value creation in ways more subtle and fundamental than simply cost. By incubating scores of new business models that can unseat established companies, globalization is creating opportunities for new value creation and highly profitable growth at the two ends of the value chain––new customer connections at one end and new models of innovation at the other."

"Globalization makes strong business designs stronger, and weak business designs weaker. That’s true in part because new competitors from all corners of the globe are combining low cost and high technology to build market share very quickly."

In a world where customers have more and more choices from a vast array of increasingly commoditized products and services, highly personalized customer connections are a company's best opportunity for differentiation. Products and services might be commodities, but you never, ever want your customers to feel like they too are just commodities. A successful business will make each of its clients feel special by understanding and addressing their unique requirements.

This presents a seeming paradox: the more global and commoditized the economy, the more local and personal the customer relationship must become to ward off competition. This is not easy. It requires a deeper knowledge and more specific management of distinct customer types and segments, "a new game - call it the Cambrian explosion of new segments - with new rules" the article says. A business has to be very good at market segmentation and at serving those markets as efficiently as possible.

While multinational firms will have to learn again to "think local" for global competitive reasons it also gives great opportunities for flexible regional companies, that are really closer to their markets to find a sustainable niche for their products and services or to integrate into specialized innovation networks.

Brand Eins: Schwerpunkt Komplexität

Sat, 2006-01-07 13:42.

...Das Wort "kompliziert" stammt vom lateinischen complicare, das bedeutet: verwickelt, verflochten, undurchsichtig. Das Komplizierte ist ein Knäuel, in dem kein Zusammenhang erkennbar ist. "Komplexität" kommt hingegen von complexus. Es steht für die Begriffe "umfassen" und "flechten". Komplexität ist also das Ganze, der Zusammenhang...
Zum Artikel

brand eins, issue 01, January 2006
Schwerpunkt Komplexität

Paris plans DSL for free

Fri, 2006-01-06 22:55.
This announcement could potentially have a huge impact on various levels within the community of Paris and the example further proofs, that fast internet access will be more and more publicly commoditized as competitive advantage among international urban regions.

The Location of Innovation

Mon, 2006-01-02 20:12.

Further extending the discussion around the role of cities in the global competitive economy there are two influential positions taken by Thomas L. Friedman and Richard Florida. Friedman proposes in his latest Book "The World is Flat" that due to the egalitarian and open nature of the Internet, modern communications and travel, innovation need not be concentrated in historic urban centers.  Richard Florida, avid promotor of the "Creative Class" concept, on the other hand suggests in his article "The World is Spiky" (PDF) that these same forces actually increase the gravitation toward acknowledged centers of innovation.

As always, John Hagels take on that discussion is very much on the spot:

The greatest insight will come from understanding the paradox that the flattening of the world is creating opportunities for even greater spikiness.

Creativity, Design and Business Performance

Mon, 2006-01-02 20:10.

Richard Florida, Charles Landry and Jane Jacobs would probably like to hear that the concept of creativity as a driving force of innovation and urban development is finally taking off.

Especially in the UK the idea is gaining ground with the release of two studies, that underpin the importance of creativity and design innovation as a competitive advantage and critical success factor especially for small and medium enterprises.

1. Cox Review of Creativity in Business: Study by the Chairman of the British Design Council

2. DTI Economics paper: Creativity, Design and Business Performance (PDF)

3. Creative London: The strategic agency for London's creative industries.

The World City Network

Mon, 2006-01-02 20:07.

"The rise of transnational interactions has produced a new economic globalization in which cities and their regions are the prime nodes"

This is quintessentially summarizing the subject of a study, that is focussing on the economical impact of global connectivity for regions and cities:

"As cities aim to position themselves better economically, they must remember that they operate in a global marketplace. Cities able to grow and attract globally-connected, high-value service firms can access, and benefit from, a worldwide array of customers, workers, and contracted services, ultimately boosting quality growth at home."

 
Link
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The shift from a complicated to a complex world

Fri, 2005-11-18 11:43.

A synopsis of a recent breakfast meeting with Dave Snowden, head of the Cynefin Centre and thought leader on complex systems and narrative and their application in business.

As he described his learnings and discoveries about complex adaptive systems and how pervasive they are in our business and personal lives, I began to realize that appreciating enterprises, organizations and systems as (mostly) complex rather than merely complicated is more than just a basis for re-framing business methodologies, it is a completely different way of sensing and dealing with the world. It changes everything. Here are just a few of the extraordinary paradigm shifts that this reframing provokes:

Complicated World Complex World
Assumption of order ("research this to find out if there's a market for it" Realization of unorder ("let's explore what might happen if we did this")
Importance of aggressiveness and charisma to "lead the change" Importance of collaboration and humility to participate in the evolution
Actions driven by authority-based direction Actions based on learnings from conversations, consensus and freedom to act bounded by personal responsibility
Top-down hierarchical communication and knowledge transfer Peer-to-peer (networked) communication and knowledge transfer
Military win/lose competitiveness Natural win/win cooperation and coexistence
Emphasis on action (making decisions quickly and 'expertly') Emphasis on paying attention (making decisions continuously, improvisationally)
Assumption of rational choice ("tell people why they should buy X") Realization of entrained behaviour ("study people to discover if they might buy X")
Primacy of objective reality ("what's happening here") Primacy of perception ("what do people think is happening here")
Changing the way things are Understanding why things are the way they are
Assumption of intention ("why did this happen") Realization of meaning ("what do we learn from this")
Assess causality Look for pattern and correlation
Focus Experiment
Leadership is everything Membership is everything
Strive for stability Strive for resilience
Exploit weaknesses, opportunities, needs via speed-to-market Explore weaknesses, opportunities, needs via continuous environmental scan
Mechanistic (machine) models of behaviour, relationship, order, connection Organic (natural) models of behaviour, relationship, order, connection
How do we solve the problem How do we deal with the situation
Set "go-to-market" mission, objectives, strategies, actions Understand the market and actors' identities and influence the attractors and barriers that bring the market to you
Market as rational

Market as emotional

 
Link via Dave Pollard's Blog