Strategy

Digital Storage Is Free, Collaboration Is Priceless

Mary Meeker of Kleiner Perkins recently released her 2014 Internet Trends Report and amongst the data rich content, one slide really stuck out to me. It’s an important slide that reinforces a key element of the Bloomfire business model; our customers do not pay for digital storage. It’s free.

And for good reason—because it is in fact virtually free. According to Ms. Meeker’s data, since 1992 the cost of a gigabyte of storage has declined by 99.9965% from $569 per gigabyte in 1992 to 2 cents a gigabyte in 2012.

Digital storage is cheap, and continuing to get even more inexpensive. But digital storage frequently just sits there. The content, information and knowledge that resides in these online repositories often lies dormant—gathering dust like the odds and ends that fill the storage container from your last move that you still pay $59/month for but have long since forgotten.

But digital storage with Bloomfire is different. The content on Bloomfire lives and breathes. The data, information and knowledge assets that our customers have on Bloomfire are living assets that people and teams use to get their jobs done. Any content, anywhere can be brought back to life through Bloomfire. The communities and collaboration that takes place through the information assets on Bloomfire help make teams smarter and more productive. Teams sell more, service customers better, engage employees more effectively and in general just perform better.

We don’t charge for storage because it is in fact so inexpensive. Collaboration is what matters, so why pay for something that’s basically free. We’ll give our customers digital storage for free, because it’s the collaboration that they find truly priceless. 

Vital Blooming Mountains

photo 1.JPG

Last week I attended the Global Innovation Summit in Silicon Valley put on by Victor Hwang (@rainforestbook) and his T2VC team.  That's me on the right together with the Kauffman Fellows team. "Vital Blooming Mountains" is an anagram for "Global Innovation Summit" that I think pretty effectively summarizes what the objective of the week was.  

Officially, the events stated mandate was to answer the question "How do we design entire ecosystems to drive entrepreneurship, technology, and economic impact?" I was excited to experience #GISW14  and help sow the seeds of innovation in the environments that I work across.  

My table had quite an eclectic group of participants that hailed from Saudi Arabia, Australia, Illinois, Iowa, DC, Silicon Valley and LA.  We had Burning Man, APLU, Aramco, Skoolbo, Purdue University, Stanford, The Gazette Company and Somark (a company that tattoos mice) represented.  I was happy to share my thoughts on the early childhood education ecosystem we are creating with www.skoolbo.com.  Skoolbo's challenge is to replicate the success we've had in Singapore with our game based social learning platform throughout the other 159 countries where we have over 300,000 users.    

It was an atypical event, creatively done with very strong participation from the attendees.   Here are my key takeaways:

-Systemic innovation doesn't happen on it's own

Serendipitous innovation can deliver the occasional breakthrough, but systemic progress over time needs help—it is possible, and necessary, to design and architect for this.  

-One size doesn't fit all

Blooming Mountain.jpg

Picking up the Silicon Valley model and replicating it isn't the answer.  Creating a unique ecosystem where innovation thrives over time is specific to the surroundings and environment that it exists within.  Every economy, city, or company is unique—and their own innovation ecosystems will be as well.   

-Innovation doesn't always happen at scale

Sometimes innovation is small, but a lot of small innovations can add up to entirely new ways to approach and do things.  I think we're seeing this today with the Internet of Things.  IoT is the convergence of a lot of complimentary tools, technologies and developments that are starting to change the way that we interact with each other, products, services and our environments— bit by bit, piece by piece.

-Things can be much better than they are, and they need to be

The world isn't exactly hitting it out of the park.  There was a universal (although obviously biased) belief that we can run ourselves, our planet, our businesses, our governments, our economies MUCH, MUCH better than we are.   This group believes that the future is much better than the past, and is working to make that happen.  

Want to create your own vital, blooming mountain of innovation?  Then join in and help us spread the word.   

Your Company Is A Computer Based Interactive System

Frankenstein.jpg

What is your company?   At it's basic level it's a bunch of people working in some sort of organized fashion to create and capture as much value as possible—cooperating (usually) to achieve some common objective.  

But that's part of the problem—cooperation works but only up to a point.  

Collaboration is what companies aspire to and what they think they have, but they sabotage themselves with antiquated views and business management practices that give them cooperation when they want collaboration.  

Cooperation is a stitched together series of parts and activities that hopes to create a pre-determined outcome.  It's a hierarchical division of labor, much like the assembly line thinking it was modeled upon, hoping to achieve a desired objective.   Unfortunately this frequently doesn't work out as planned which unleashes havoc and dysfunction in the most well-intended environments.  

Collaboration Is Much Better Than Cooperation 

Collaboration on the other hand, which is what most companies want, and frequently think they have, is a collective undertaking that produces a shared outcome.   People working in unison and creating a truly integrated and mutual outcome.  Collaboration can only be accomplished jointly.  

Cooperation can take place in isolation on an assigned task that when accomplished, get's added to a bunch of other tasks to hopefully add up to the desired outcome.  Because of this, it will never achieve what collaboration can achieve.  

Frankenstein's monster is the result of a cooperative model.  A baby on the other hand, that's pure collaboration.  

Happy Baby.jpg

Cooperation as a business management model has delivered all it is capable of.  It's had a good run, but the future is about collaboration at scale. And finally, we have the tools to enable a truly collaborative work environment.  That's what today's social technology brings to business management.    

Collaborative Systems Drive Innovation

Every company, whether they realize it or not, is now a computer based interactive system that has the potential for breakthrough collaboration within it. The real time and spatial relevance that your social technology enabled employees, customers, partners and investors are and will increasingly demand, presents this opportunity and also requires that you view your company along these lines.  

sys-tem: a regularly interacting or interdependent group of items forming a unified whole.
— Merriam-Webster

The experience that you deliver to your markets through these tools means your entire organization now needs to work and function like a collaborative real time system, not a cooperative assembly line—chugging along producing widget after widget with each corporate silo completing it's assigned task.    

Screen Shot 2013-11-26 at 10.09.49 AM.png

Customer experience is no longer about "have a nice day" it's about "have an integrated one." Creating seamless engagement, interaction, connectivity and unique experiences throughout the computer based interactive system that is your company is the next business management paradigm that leaders need to understand and embrace.   

If You're Not SOCIAL, What Are You? 

The ability for your markets to enable collective action in real time has created a permanent shift in market power away from every company.   The only way to fight this shift is with the very same technology that created it.  

Today's social technologies enable you to control new domains—the last mile of connectivity has been bridged with space and time based relevancy through these new tools.  What can you do differently and what can you do better to enhance the experience that your collaborative organization brings to your markets through these technologies and new domains?

Hanging onto a cooperative model won't give you the potential for breakthrough innovation and will eventually create havoc everywhere.  However, the collaborative computer based interactive system that is inside every company, and wanting to come out, will create innovation and happy markets everywhere.   

The Secret Signal In The Twitter IPO

Mile one.jpg

Is Twitter's IPO the end of social?   Or the beginning of something else?  If you're a student of how social technologies have evolved throughout history, you'll know that the Twitter IPO is an important milestone in the development of this latest group of social technologies.  

It does indeed signal the end—but the end of the beginning.  And the next part of the evolutionary journey of today's social technology is where the really exciting stuff starts to happen.      

The 4C's Change Everything

Twitter's IPO, like Facebook's, LinkedIn's and the many other tools that have recently been created to change the way we connect, communicate, collaborate and create and shape communities (the 4C's) brings sustainability to these technologies.   Not just a fad (which is exactly what people called the landline telephone over 130 years ago) an IPO demonstrates that the market validates the inherent value within the tool to improve on the 4C's. These tools work in new ways and are an improvement over what we were using before to enable the 4C's.  Tools that impact the 4C's in a foundational way, stay around for a very, very long time and force us to rethink the way that pretty much everything gets done and how we shape our world.  

Further Development Ahead! 

And most importantly, the IPO's fund further development of the tools and guarantee that the technology will remain around for the foreseeable future.  Social isn't going away anytime soon, in fact it is morphing right before our very eyes because we're onto something.        

In the beginning stages of any social technology there are always skeptics who don't understand the tool and what is foundationally changing, i.e., the 4C's.   What's unique about these latest tools, including Twitter, is that there are billions of people using them.  We are the early adopter pool and it's gigantic!   The laggards are not usually who you suspect when a new transformation and productivity tool presents itself—business is the social technology laggard.   

wake-up-call.jpg

The secret signal within the Twitter IPO is the same as it was with Facebook's IPO—Twitter isn't going away anytime soon.   Business is starting to get that.  When companies lift and shift the ability to change the 4C's into the context of work and getting things done within a business, change happens in a big way and in a good way.   

The customer is always right is a an overused business cliche.  But customers everywhere are telling business that this technology is better than what they had before.  

The secret signal in the Twitter IPO is another wake up call for business about the value inherent in social technology—it's time to go to work with these tools.  

Why Outsourcing Loves Social Technology

Outsourcing.jpg

I spoke recently to the Southern California Chapter of the IAOP—International Association of Outsourcing Professionals about the impact that today's social technology will have on the practice of outsourcing. In short, history teaches us that outsourcing will not only continue to flourish, but it will explode as a practice and move up the value chain, all because of today's social technology.  

Not just a labor or cost arbitrage play anymore, outsourcing will take on more of a value creation mandate as tightly linked ecosystems will work seamlessly together to not only drive productivity but also to drive innovation—with the following caveat.  This will only happen if these ecosystems are enabled through the efficient use and application of today's social technology.     

The Late, Great Diminishing Firm

Why do companies exist?   What's the economic rationale for their existence?  Ronald Coase answered this question in 1937.  They exist because it's a more efficient way to organize resources when compared to transacting with the external market.  At least it was in 1937, when all manner of costs existed in transactions between different unrelated parties, e.g., slow information flow, slow and expensive travel, misalignment of incentives, poor communication quality and velocity, high search costs, cumbersome contracting processes, etc. etc.  

The world of business today is much more efficient and the world of engagement between parties is becoming even more efficient.           

Now, enter today's social technology.  When business has an economic incentive to do something, it will be exploited.  Today's social technology embeds intellectual and productivity advantages in it's ability to change how we connect, communicate, collaborate and create community between people and between companies.  Exploiting these economic advantages will drive a new wave of outsourcing and create tightly integrated ecosystems from the individual contract employee to the outsourced IT function, where a monolithic corporation existed before.     

Outsourcing For Innovation

As engagement costs continue to drop, transacting with the external market becomes easier, less expensive and increasingly seamless.   The need to organize and control resources under a corporate umbrella goes away—there's no longer an economic incentive to do this.  However, there is an economic incentive inherent in getting more out of the business partners that support your company.  From the individual contractor, to the IT outsourcer, to your extended suppliers there is unrealized value in these networks.  Your company and your business partners are a contextual social network, with one thing in common, your business success.   

Outsourcing will not only continue to exploit cost arbitrage opportunities but as a practice it will start to be viewed upon as an untapped source of innovation.   Service providers will be seen as an under leveraged wellspring of ideas and innovations.  As a result, they'll start to be more tightly integrated and entwined with the buyers of their services—but this will only happen through today's social technologies—because it's the most efficient way to do it.    

The Whole Ecosystem As A Value Creator

The whole will be greater than the sum of the parts in these social technology enabled corporate ecosystems.  The self-employed who understand this will be able to link in and out of different ecosystems through social technology with a level of efficiency that will drive high levels of engagement, interaction and creativity.  Service providers and suppliers who start to socially re-imagine how they engage with the buyers of their products and services will provide a new source of competitive advantage around their offerings.  One focused on value creation, not just cost arbitrage.    

The economics of the corporation tell us that when transaction costs with the market decrease, the size of the firm will as well because there's no longer an economic disadvantage to engaging with the market.   This isn't your grandpappy's 1937 anymore, it's the future.  And the future of outsourcing has never been brighter.  Want more value creation in your business?  Your business partners are waiting and social technology is your ticket to leveraging them.  

Thank you to the IAOP for having me and also to the sponsors and hosts of the event Toyota, Avasant, HCL, Morrison-Foerster and CGI.  Here's my Prezi from the meeting.   

Steve Jobs Most Important Management Lesson

This Friday "Jobs" the movie opens in theaters everywhere—and it's just in time.  It's just in time because there is an important and vital management lesson in Steve Jobs approach to business that companies everywhere need to hear, learn from and adopt.  I'm sure there's great entertainment value in the movie in and of itself, but the really impactful message for business is the most important part of Mr. Jobs management philosophy—   

Value Creation Rocks! 

Value creation is what REALLY matters.  

Unfortunately, the last twenty years of business management theory and practice have focused on value redistribution.  Anyone can, and anyone has outsourced, offshored, laid off, sold, bought, scaled, monopolized, duopolized, oligopolized, etc. etc. their way to corporate profitability.  It's no surprise that in America when corporate profits are up, wages are down, and vice versa.  Taking from Peter to reward Paul Inc. is a time honored and proven management tactic.  Here's a recent blog post I did on this issue, with the data that backs it up.  

Now don't get me wrong, doing things more productively is not something I'm against. Productivity gains, i.e., getting things done with less are an important and vital part of the overall equation. But they are only one part of the equation—and business leaders everywhere have been overly focused on this one dimension of business management, at the expense of it's counterpart, value creation.  Why?  Because, it's comparatively easy to do, it has short term impact and they are handsomely rewarded for it through stock based compensation.            

Steve Jobs?  He was obsessed with value creation.  Steve played the long game.  As far back as his iconic 1985 Playboy interview, he told us as much.  

This revolution, the information revolution, is a revolution of free energy as well, but of another kind: free intellectual energy.
— Steve Jobs, Playboy Magazine 1985

Larry Ellison just referred to Steve Jobs as "..our Edison. He was our Picasso." in his interview Tuesday with Charlie Rose.  The world of business needs more Edison's, more Picasso's, more Steve Jobs.  We need fewer Chainsaw Al Dunlap's.  Remember that guy?  

The Duality Of Economic Growth

iPad Cooking.jpg

Here's why.  Economic growth only comes from an incessant focus on BOTH doing things with less, AND by doing things better.  Economist Paul Romer explains this with a an effective metaphor from the kitchen that I particularly like:

The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking.
— Paul Romer

What's passed as business management and leadership for much of the past few decades has been focused on the practice of redistributing value, not creating it—except for the few, like Steve Jobs.   Mr. Jobs and the company he built have created new tools and techniques that have changed the world in many fascinating and unpredictable ways.  These innovations will continue to wash over us, influence our lives and most importantly enable all of us to think of new ways to do things better, not just with less.  Today's social technology is not just a productivity engine, it's an innovation engine for every company, everywhere.  

The Future Of Business

The future of business belongs to those leaders and the companies who can create value, not just redistribute it—value creation has no boundaries, value redistribution does.  Steve Jobs incessant focus on creating value, is his lasting legacy.  

Fortunately, he's not only shown us the way, he's created some incredible tools that every company should be exploiting to rethink how they deliver an experience to their customers, employees, investors and suppliers.  Today's social technology like the iPhone, software from other companies like Salesforce.com's Chatter, the entire cloud, the infrastructure of the internet and yes even tools likes Twitter and Facebook, are all pieces of an incredibly powerful new social technology landscape that is changing human behavior in foundational ways.  When human behavior changes, business changes.  These tools introduce new ways to engage with your markets, design your products and services, make money, save money, save time, etc. etc.  These tools are competitive weapons for businesses that understand them, like Steve Jobs did.         

What’s important is that you have a faith in people, that they’re basically good and smart, and if you give them tools, they’ll do wonderful things with them.
— Steve Jobs

Steve Jobs believed in himself and the power of value creation.  More importantly, he believed in you.  What are you waiting for?  Let's get cooking and create some value.  

Buy Social Inc. Here Now!