“Khanna tells us, point blank, “pretending the world should be equal – or even can be equal – harms development.” He proposes, “rather than even talk about poverty, we should focus on need. Poverty is amorphous and sounds incurable, but needs are specific: food, water, shelter, medical care and education.”—http://www.paragkhanna.com/?p=1269
“But although this ought to be an opportunity for financial services providers, there is something of a mismatch between the brand values and service propositions which millennials look for and those which financial services providers tend to have. Millennials want to see ‘authenticity’ in brands, and they want easier access to services (for example when they’re ‘on the go’ or using dead time to catch up. There are some easier wins for financial services providers – for example, they may be able to nudge them to some good but low engagement behaviours (such as saving more for retirement) by smart service design. But there’s potentially a big win here. The provider which gets this right, at a time when many millennials are financially squeezed, could capture a cohort of customers for life.”—http://blog.thefuturescompany.com/2011/02/07/millennials-and-money/
Never hire or promote in your own image. It is foolish to replicate your strength. It is stupid to replicate your weakness. Employ, trust, and reward those whose perspective, ability and judgment are radically different from your own and recognize that it requires uncommon humility, tolerance, and wisdom.
1. Pursue what you love. Passion is an incredible motivator. It fuels focus, resilience, and perseverance.
2. Do the hardest work first. We all move instinctively toward pleasure and away from pain. Most great performers, Ericsson and others have found, delay gratification and take on the difficult work of practice in the mornings, before they do anything else. That’s when most of us have the most energy and the fewest distractions.
3. Practice intensely, without interruption for short periods of no longer than 90 minutes and then take a break. Ninety minutes appears to be the maximum amount of time that we can bring the highest level of focus to any given activity. The evidence is equally strong that great performers practice no more than 4 ½ hours a day.
4. Seek expert feedback, in intermittent doses. The simpler and more precise the feedback, the more equipped you are to make adjustments. Too much feedback, too continuously, however, can create cognitive overload, increase anxiety, and interfere with learning.
5. Take regular renewal breaks. Relaxing after intense effort not only provides an opportunity to rejuvenate, but also to metabolize and embed learning. It’s also during rest that the right hemisphere becomes more dominant, which can lead to creative breakthroughs.
6. Ritualize practice. Will and discipline are wildly overrated. As the researcher Roy Baumeister has found, none of us have very much of it. The best way to insure you’ll take on difficult tasks is to ritualize them — build specific, inviolable times at which you do them, so that over time you do them without having to squander energy thinking about them.
“When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is probably wrong.”—Arthur C. Clarke via Seth Godin
A father on Christmas Eve puts into one son’s stocking a fine gold watch, and into another son’s, a pile of horse manure. The next morning, the first boy comes to his father and says glumly, “Dad, I just don’t know what I’ll do with this watch. It’s so fragile. It could break.” The other boy runs to him and says, “Daddy! Daddy! Santa left me a pony, if only I can just find it!”
“Before, the right business strategy was to put 70% of your attention, energy, and dollars into shouting about a product, and 30% into making a great product. So you could win with a mediocre product, if you were a good enough marketer. That is getting harder to do. The balance of power is shifting toward consumers and away from companies. The right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it. If I build a great product or service, my customers will tell each other.”—Jeff Bezos talking to Charlie Rose
In the 5 or so years since design thinking got big in the boardroom, I’ve experienced, over and over again, business ROI getting the better of design thinking. Awesome product propositions anchored by critical insight, technology, and business potential, gets killed or watered down because risk adverse businesses believe they can’t sell enough to justify the product’s existence.
Isn’t that what a business has to do?
It can be argued back and forth about whether the ‘risk averse businesses’ are right (and it will be almost certain that their calculations were wrong and projects with positive ROIs were rejected), but to dismiss ‘ROI thinking’ in its entirety shows a naivety that perpetuates the design-business divide.
Even Apple, the paragon of ‘design-thinking’ drove itself to the brink by ignoring the ROI constraints.
Design depends largely on constraints…[the] key to the design problem [is] the ability of the designer to recognize as many of the constraints as possible (and) his willingness and enthusiasm for working within these constraints—the constraints of price, size, strength, balance, surface, time.
“In November 2009, nine researchers from MIT’s prestigious Media Lab were among the eleven authors of a paper that espoused the value of programming as an essential skill for all. For those who cannot program in the 21st century, they declared solemnly, “It’s as if they can ‘read’ but not ‘write.’”—
I understand their sentiments but I believe that this is imbalance happens with every revolutionary new technology. Early users of the printing press had to have an intimate technical understanding of the process, rather than just being able to focus on creating content. Cars required their owners to be mechanics as much as drivers when they first emerged. The same will be true of computers - at first users must understand the technology, however the technical knowledge barriers to use gradually lower until they become invisible. We can see this already with blogging and web design software - it is now possible to create content and webpages with no technical understanding of HTML and code (indeed 500m people now have complex, interactive personal webpages hosted on Facebook) The opportunities are to enable people to ‘write’ in the digital realm without needing to know how to program
Is it just B2B businesses that have to create a clear architecture of participation?
Interesting article from John Sviokla over at FutureLab, however I think he simplifes the B2C world.
By and large, in B2C firms, the primary task is to automate and scale cognitive work.
He sets this against B2B business:
The core of B2B work is about coordination, collaboration and creative problem solving — not codification and scaling.
This is the core process in B2B work because one of the central distinctions of industrial marketing is that you have a complex buying group within the buying firm being serviced by a complex supplying group within the providing organization. Therefore, coordination and collaboration is baked into the very mode of value creation within the business.
In this realm of the B2B businesses, the core challenge for executives seeking to create a more productive organization is to create a shared information environment which can act as a platform for that innovation.
In addition, B2B businesses need a clear architecture of participation.
While automation for scale used to be a safe method of delivering secure profits, now it’s brands that can manage the interplay between individualism, personalisation and co-creation to create strong brand communities that are thriving.
Indeed I would argue that the quotes above are appropriate to every business, not just B2B ones.
The fragmentation of consumer demand represents the complex buying group, while a supply chain that involves consumers in a web of participation is at least as complex as any B2B network.
It sounds like I was super-productive. Every extra minute, I was either producing or consuming.
But something — more than just sleep, though that’s critical too — is lost in the busyness. Something too valuable to lose.
Being bored is a precious thing, a state of mind we should pursue. Once boredom sets in, our minds begin to wander, looking for something exciting, something interesting to land on. And that’s where creativity arises.
Starting a new social tool in the post-Facebook age
A friend pointed me towards Pearltrees, a new visual social bookmarking tool.
The problem that I have with these sites is that I already use Delicious which is very similar. So unless a newcomer offers an ‘import’ feature they will struggle to convince me to switch. However, from their POV, the more open the architecture, the lower the switching costs facing their users when someone else comes along with a new fancy site…
That’s the problem with network effects - great if you’re Facebook, but it makes it very difficult to gain traction if you’re starting from outside the network.
I wonder if this is a Facebook/ Twitter exit play - this tool would have REAL value if you could integrate across your social graph on existing networks…
Hardware is now a commodity. The differentiation is in the data
Accenture have an interesting report on 'Next Movers', organisations that are looking to push beyond the initial scope of connected devices (PC and mobile) to cars, energy systems, appliances and even toys
Adding networking to a device it is not your usual bell or whistle. Instead, it is a transformational act that goes to the heart of the device’s value proposition…[which] fundamentally alters how devices are marketed, priced, supported, and used.
Examples they cite include health clubs where users can review the data they produce when working out.
The next opportunity (that isn’t really addressed in the report) is allowing companies to make sense of this deluge of data - because once all devices are networked, ‘Export to CSV’ is not going to cut it…
It seems that the spirit of the underground is hard to maintain.
From Studio East in the still-under construction Westfield to the Friday Food Club it is clear that the era of the enthusiastic amateur is being replaced by professionalism and corporate experience in the supper club world.
Supper clubs or underground / pop up restaurants took off last year as enterprising amateur chefs took advantage of Facebook and Twitter to promote small, informal (technically) illegal restaurants in their homes.
Now, as professional chefs and big corporations get involved, the movement faces the same challenges as all underground pursuits - as they grow in popularity, does increasing professionalisation and ‘quality’ detract from what made them special in the first place?
Does the unique experience of eating on top of a building or having a top chef prepare your meal at home trump the original bohemian chaotic charm?
This presentation from Morgan Stanley certainly suggests that 2010/11 may be when the internet becomes divorced from ‘computers’ and just becomes an expected feature.
The implications of this are clear - the gap between online and offline will continue to shrink, social networking and location based apps will continue their explosive growth and real-time information will become pervasive.
(NB. Slide 25 should terrify anyone working in print or TV, showing that legacy ad planners continue to overspend on these platforms relative to users’ time.
A saving grace may come as content increasingly converges and such a graph becomes meaningless - with TV and print content all migrating to a digital environment which can’t be labelled as ‘the internet’)
In a world of virtually limitless choice, the act of consuming becomes a statement of identity rather than the satisfaction of basic needs. Consumer spending remains driven by desire for status as always but the source of that status has drifted from a straightforward price-value relationship. Consumers have their own perspectives that govern perceived status depending on their priorities and values. All objects or experiences should allow the user to tell a story that resonates with their audience and enhances their status in that particular group. With a dazzling array of potential areas to spend your money, people’s consumer choices are as much about defining themselves to others as satisfying any basic needs. In hyper-mobile societies where new connections are made on a daily basis, consumption provides a short-cut to getting to know people with little background knowledge.
Generic package skiing holidays are not enough now. Operators should look to capture a clearly defined niche and provide them with a platform for self expression: Freestyle ski camps, heliskiing in Alaska and the Himalayas, and the music festival ‘Snowbombing’ all attract very different crowds.
Hipsters who buy fixed gear bikes are broadcasting who they are to others. They are not trying to be particularly individual, but try to identify themselves with other fixed gear cyclists.
'Pop-up' restaurants - customers get to tell a more interesting story than simply going to the latest hot restaurant, support innovation and have an experience that money alone can't buy (you need to know about the restaurant via word of mouth)
The common theme with all of the examples above is that they enable people to tell a story that will clearly define themselves to an audience. All brands need to consider how their identity can be reflected by their customers.
(NB/ This is very Western-centric and aimed at mature markets. For developing markets - a ski holiday in itself offers the status story and experience. Despite globalisation, trend positioning is always relative to the local culture)
Is home ownership going to go the same way as a job for life, fondly remembered as a relic of the 20th century industrial era?
Owning your own home made sense when people could hope to hold a job for most or all of their lives. But in an economy that revolves around mobility and flexibility, a house that can’t be sold becomes an economic trap, preventing people from moving freely to economic opportunity.
While economic mobility is probably economically optimal, what about socially? Is it healthy to the development of a child to constantly be changing his environment? What about the effects of a rent-driven society - who will actually own the property and collect the profits from them? Sounds rather like serfdom to me; my company provides me with healthcare, an apartment and a job…god forbid I get fired.
Homeownership also drives investment in an area - stable communities attract business as they know they won’t be moving. A transient society won’t have those same opportunities. The same with the individuals making up the community as well; they have a vested interest outside of their immediate short-term well being in making sure the community does well.
History shows that economic imperatives often win out over socially desirable outcomes.
But society can certainly be shaped by the rules and regulations that surround renting - in Germany it is common for people to rent for long periods but tenants are much better protected than in the UK/US.
Certainly without regulation the possibility of a segregation similar to the French labour market could emerge, but divided by property - Marxism in action 200 years late.
Fuelled by the rise in Minipreneurs, increased ease of remote and freelance working, this is one trend that’s only going to get bigger as baby boomers approach retirement age with the money, time and energy to make up for all those years at the corporate watercooler.
Has the death of the TV-industrial complex been exaggerated?
Interesting to see Microsoft and Google advertising Bing and Chrome via mainstream media - print, billboards and TV slots.
Is this is a recognition that power of the TV-industrial complex remains significant, and that the mass market will not be reached solely through ‘new media channels’ - e.g. word of mouth, having a better product and other such revolutionary post-industrial ideals?
I’ve been thinking a bit about how change permeates into people’s lives and it seems that there’s a pretty consistent pathway:
Technological => Economic => Social => Cultural
Now this isn’t a strict hierarchy, and it omits important lenses (political and legal?), but the basic route of innovation often broadly follows the above pattern.
Innovations originate in technology. These could be in hardware or software.
Technological developments alter economic logic. This is frequently by creating new abundances and destroying previous scarcities. Or it could be by shifting control over the means of production.
Innovations do not exist in a vacuum. Technologies become integrated into society though use by people. Broad deployment into society’s productive endeavours can only occur when the underlying economics allow, or even encourage use of a technology.
The final sphere that technologies influence is cultural. Each stage of the change process takes longer than its predecessor, and this is especially true of cultural change. The cultural implications of technological change are gradual, indeed often imperceptible to participants, however as a result they are the most profound.
Two hundred years of change.
Perhaps the best way to illustrate the change pathway outlined above is by looking at examples from both the Industrial and Information revolutions – and seeing what parallels can be drawn across different eras.
Numerous dissertations could be written on the economic, social and cultural impacts of technological development in either period so this will be an extremely high level view of some observed similarities, blissfully ignorant of the historical nuances and subtleties
Starting with technological innovation:
- the Industrial Revolution was about mechanisation, both in hardware (the steam engine or printing press), and in ‘software’ (assembly line production techniques in factories)
- the Information Revolution was driven by computational power and the rise of digital networks – computers, the internet and accompanying software – from blogs, to Flickr, to Napster.
These developments create a new economic logic:
– industrial capitalism, based on mass produced, standard manufactured physical goods.
– the information economy, where digitisation flattens distribution networks, production is democratised and value resides in digital goods and services.
The prevailing economic order shapes society by governing people’s interactions:
- population growth and the changing nature of labour (as paid employment supplanted feudal self-sufficiency) led to urbanisation.
- the ‘flattening’ of distance and hierarchy gave rise to online relationships while the explosion of information made attention a most valuable social resource.
Social structures eventually leave their imprint on culture:
- mass education, political participation and later consumerism can all be viewed as outlets that developed in response to social pressures unleashed by the industrial revolution
- the full effects of the information revolution are still unclear, but shifting expectations around privacy, the fragmentation of ‘mass culture’ into hyper-individualism, and identity-based consumerism can all be viewed as potential emerging trends.
The cultural effects of technological change can take generations, and do not emerge neatly or consistently.
This is why Mark Zuckerberg’s claims that privacy was no longer a social norm was so shocking for many people. Sitting at the centre of a transformative technology his perspective is understandably different from casual users.
The long term implications of social trends will not be obvious for generations – how will global mobility affect national cultures, what will the cultural effects of the decline in the stable, long-term employment contract be, is there an online culture, or cultures?
“In a recent study, “From Predators to Icons,” the French scholars Michel Villette and Catherine Vuillermot set out to discover what successful entrepreneurs have in common. They present case histories of businessmen who built their own empires—ranging from Sam Walton, of Wal-Mart, to Bernard Arnault, of the luxury-goods conglomerate L.V.M.H.—and chart what they consider the typical course of a successful entrepreneur’s career. There is almost always, they conclude, a moment of great capital accumulation—a particular transaction that catapults him into prominence. The entrepreneur has access to that deal by virtue of occupying a “structural hole,” a niche that gives him a unique perspective on a particular market. Villette and Vuillermot go on, “The businessman looks for partners to a transaction who do not have the same definition as he of the value of the goods exchanged, that is, who undervalue what they sell to him or overvalue what they buy from him in comparison to his own evaluation.” He moves decisively. He repeats the good deal over and over again, until the opportunity closes, and—most crucially—his focus throughout that sequence is on hedging his bets and minimizing his chances of failure. The truly successful businessman, in Villette and Vuillermot’s telling, is anything but a risk-taker. He is a predator, and predators seek to incur the least risk possible while hunting.”—
Well, I thought it would be instructive to go back and look at a couple of industries that transformed this country much earlier in this century: automobiles and aviation. Take automobiles first: I have here one page, out of 70 in total, of car and truck manufacturers that have operated in this country. At one time, there was a Berkshire car and an Omaha car. Naturally I noticed those. But there was also a telephone book of others.
All told, there appear to have been at least 2,000 car makes, in an industry that had an incredible impact on people’s lives. If you had foreseen in the early days of cars how this industry would develop, you would have said, “Here is the road to riches.” So what did we progress to by the 1990s? After corporate carnage that never let up, we came down to three U.S. car companies—themselves no lollapaloozas for investors. So here is an industry that had an enormous impact on America—and also an enormous impact, though not the anticipated one, on investors.
Sometimes, incidentally, it’s much easier in these transforming events to figure out the losers. You could have grasped the importance of the auto when it came along but still found it hard to pick companies that would make you money. But there was one obvious decision you could have made back then—it’s better sometimes to turn these things upside down—and that was to short horses. Frankly, I’m disappointed that the Buffett family was not short horses through this entire period. And we really had no excuse: Living in Nebraska, we would have found it super-easy to borrow horses and avoid a “short squeeze.”
U.S. Horse Population 1900: 21 million 1998: 5 million
Warren Buffett in The Snowball to a celebrated group of tech entrepreneurs before the bubble burst.
An interesting perspective from an investor’s point of view about how sometimes it’s easier to spot who stands to lose out from particular trends than to pick the winners.
Companies, for instance, don’t actually pay tax, you pay it for them when you buy their goods or services; they just price in tax as another overhead. All that national insurance, corporation tax and even the income tax of their employees forms part of the price of everything you buy, with VAT on top.
His argument is that with a single tax on consumption:
- capital (both human and financial) would be liberated from wrestling with compliance and freed for investment and production
- underlying prices would fall, therefore the consumer would benefit
- Britain would become an attractive destination for international capital, with attendant job creation
- politically simple - pork barrel politics would be eradicated as favours couldn’t be hidden in the tax code.
Conceptually a very interesting idea.
The problem is that people will struggle to support a systemic change that appears to increase their tax burden. It doesn’t appear to people at the moment that they pay corporation tax - even if they do.
I think he massively skates over the regressive nature of this tax - or at the very least shows a blinding naivety as to how it would be portrayed.
How would VAT-free categories be decided? It could make or break a product by being classified as ‘childrens’ clothing’. Pork barrel politics by another name.
The army of bureaucrats wouldn’t suddenly be made redundant - they would just shift their focus.
To reduce the regressive nature staggered VAT banding could charge higher rates on ‘luxury goods’, but this would encourage the same jockeying for categorisation.
While the scale wouldn’t be as great as the current tax compliance industry, it’s a gross over-simplification to just imagine that everything would suddenly be crystal clear. There will always be loopholes in any tax system.
The argument is also exclusively domestically focused. I’m no expert on international tax law but surely not all of the Government’s tax revenue is derived from domestic consumption. So what happens to offshore trading, as well as imports/exports?
Imported goods would effectively become doubly taxed - unless other countries adopted a similar approach, foreign companies would shoulder their domestic corporation taxes before British consumers pay an additional consumption tax.
It seems unlikely that other companies take kindly to a flood of UK-produced goods, effectively subsidised by lower taxation at the place of production?
As one of the comments on the Times article said - smuggling would become big business.
Rather than being quite so radical - perhaps he should have looked at another area that is relatively straightforward to administer - property.
Property can not be moved, is difficult to hide, and most importantly can be progressively taxed.
There will always be exceptions (e.g. value based taxes penalise those living in London or those who have seen large appreciations), but a combination of consumption and property based taxation could make the tax system both simpler and fairer.
Reading The Comeback Country echoed my thoughts in a previous post on Thomas Friedman’s pessimistic article on the imminent loss of America’s competitive advantage.
A major caveat to the article should be that while a clean-tech boom might be about to create a wave of new jobs, this is not going to be in the same way that the internet unleashed a generation of Ebay entrepreneurs.
Despite the decentralisation and democratisation of information production, energy production is still some way off.
Although given the future’s tendency to be both closer and further away than expected I expect be proved spectacularly wrong when home made solar cells spur an off-grid movement!
might be promoting a certain (hedonism-based) ideology that may actually push [people] further away from any meaningful engagement in politics?” That strikes me as a profoundly important question, and one worthy of more discussion. The most important political effect of the Net may lie in the subtle ways it reshapes our personal and social lives and attitudes. As far as opiates of the people go, the Internet is a particularly intoxicating one.
Thomas Friedman’s op-ed piece in the NYT made a compelling case for the links between job creation, startups and immigration.
One statistic caught my eye:
“Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less…that means the established firms created no new net jobs during that period.”
My emphasis - incredible indictment of the stagnation of established firms.
His basic argument is that economic recovery will be led by risk-taking entrepreneurs that are disproportionately likely to be immigrants.
This isn’t a particularly new argument - especially since American attitudes to immigrants (even skilled immigrants) have toughened since 9/11.
However I still feel that American commentators’ paranoia has echoes of Japan in the 1980s. While America might not be hoovering up the prime intellectual capital stock as before, no other country is stepping up to take their place. Certainly a Chinese or Indian Silicon Valley hub seems a long way off.
"The only systemic risk the VC business is creating for the financial system is attempting to put the current one out of business by financing entrepreneurs with new ideas for banking, brokerage, insurance, and other financial services. I’m not joking about this. I believe entrepreneurs will use technology to reinvent the way financial services are provided to consumers this decade."
Malcom Gladwell explains his lack of social media presence here.
He explains that he thinks the ease of organisation leads to a lack of engagement, and that the superficiality of connections ultimately weakens its power.
But his most interesting point concerns the potential longevity of social media:
If you’re looking for milestones, that would sound to me like a tipping point-ish type of happening. But it’s hard to know. The problem is, we’re still in the experimental phase. The thing about Facebook is, it’s insanely new. This world of the Internet, if we know anything from its brief history, it likes nothing more than to build someone up only to topple them. Who has an AOL account these days? Not that long ago, AOL was the single most powerful player on the Internet. Who has a MySpace account these days? MySpace sold for billions of dollars not that long ago. I’m very reluctant to crown Facebook king of the future. They certainly are flavour of the month. This is not a world that respects loyalties and longevity.
I’d make a couple of observations:
Social media (as a whole) is a game changer in that it offers a platform for visible customer interactions, that can’t be controlled by companies…i.e. both negative (complaints) and positives (evangelical customers spreading virals). Therefore companies need to have an authentic voice as otherwise the PR mask will slip at some stage.
About the transience of individual platforms:
There were no network effects supporting AOL specifically - email works across account providers, (and competitors worked to reduce switching costs with address book importers etc). Social media platforms are supported by being closed platform - i.e. Facebook and Twitter only allow you to interact with others on the platform.
MySpace is interesting as they were supported by these ‘walled garden’ network effects - however, while this is a strength during a site’s growth phase, should traffic start to decline these actually accelerate the process. If MySpace presences aren’t maintained due to declining traffic, users have less reason to return…
Perhaps this is why Facebook are taking steps (via Facebook Connect) to lower these barriers and ensure that the value in having a Facebook account ceases to be tied to the health of the main Facebook site.