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Posts Tagged ‘business models

Social Media Fatigue

Earlier this week, Umair Haque wrote of his growing despondency with social media. It’s not an uncommon sentiment.  People are learning that social media is a tool that allows us to work and organize in novel ways.  It is not a panacea for all societal ills.  Indeed, like all tools, social media amplifies evil as easily as it amplifies good.

What is social media exactly?

Adrian Chan of Gravity7 sums up the issues better than I can and in suitably formal language.

Social media  “facilitates asynchronous communication between people whose mutual connectedness online can make them present to one another in a fashion that transcends the limitations of physical co-presence. And which, for its capture and storage of that communication in the form of a digital textual artifact, renders this communication in a way that, within the medium only, lends it some persistence and durability. All of which leaves behind content for later use, re-use, recontextualization, and what have you. That’s what it’s good at: mediated communication and interaction.”

In plain language, this means.
  • Social media allows us to talk more easily to more people than we can by phone, email or in person.
  • Our connection online allows us to work on projects together.
  • Social media keeps record of our communication with little effort on our part.
  • We can remix our communication for other purposes.
Social media is just a tool of communication that allows us to interact through digital media.  No more or less.

Why I am fascinated by social media

It’s what we do with social media that is interesting.  And for me, anyway, it is the possibility of ‘pull’ models that is interesting.

But just because we can do interesting things doesn’t mean to say that we do.  Nor does the presence of boring things stop us doing interesting things ~ well not so far.   It is not like work where you can be forced to do dull, useless things all day long.

That is why I am interested – the potential of organization structures that are vigorous and successful yet do not require people to do dull useless things all day long.

How, of course, are organizations that require us to do dull useless things profitable, we might ask.  Dull we know about.  Jobs were divided into small parts and done repeatedly to produce uniform products at speed.  We get MacDonalds.  Not all bad, but not fine food either.

Useless comes when the food value of a hamburger is no longer food.  How does that come about?  By what is known as “rents”.  The system allows people with vested interests to impose exploitative relationships.  Social media won’t make that stop.  We would all like to impose rents.  We plan to.  We aim to.

But social media make it possible to create new business models that don’t have to pay those rents.  That’s why so many institutions are coming under pressure.

Who will win or lose remains to be seen.  That’s the entertainment of the teen years of the 21st century.  What undermines ‘rents’?  How do ‘rent-seekers’ respond when their rents are undermined?  How does the battle play out?

The rent-seekers can still win.  This is an open-ended story.  We have to wait to the end to find out.

I listened to Warren Buffet speaking to MBA students a few nights OK.  Lest I forget them, here are some of the pearls of wisdom that I jotted down.   They work as a healthy reality check.

  1. Make money out of stability (inactivity).  Strip out transactions and movement that just make money for brokers.
  2. Go away for 20 years.  Will the business opportunity still be there?
  3. What will the industry look like in 10 years time?  Who will be making money in ten years time?
  4. What are the barriers to entry?  What is the moat to the castle?
  5. If you had all the money in the world, how would you break the company?
  6. Stay in your circle of competence.  You may have 6 wonderful businesses.  You won’t get rich from your 7th best idea.
  7. Don’t expect more than one really good idea a year.
  8. Do what you love.
  9. Don’t risk what is important for a marginal gain.
  10. Don’t confuse the terms of a deal with the quality of the business itself. (Find out what is for sale before you look at the price.)
  11. Identify what is knowable and what is important.
  12. Use businesses to generate revenue not to generate a quick capital gain.
  13. Support designs for the world which create 8 billion lives that you wouldn’t mind living if your were born into anyone of them

Fill each other’s cup but not drink from one cup

I am reading Khalil Gibran’s The Prophet.  His words on marriage might well be a manifesto for modern day careers and organization.

“Fill each other’s cup but not drink from one cup.”

Careers & work of the future

Switching to contemporary times, if you want to skate to where the puck will be rather than where it is now, find opportunities to work in exchange with others, “to replenish their cup”, rather than subsumine yourself to the goal of a larger institution or one boss or teacher.

Careers & sustainability

But also remember, Khalil Gibran’s words

“When you love you should not say, “God is in my heart,” but rather, “I am in the heart of God.”

In prosaic contemporary terms, think about a wider system that provides enough to drink for everyone.  We don’t need to share one cup except when there is only one.  When we make many cups and fill each other’s cups, then we we are in a healthy place and we want to strive to make that so.

  • Take your cup, allow others to fill it.
  • Take your cup, and fill those of others.
  • Ponder those who have no cup and no one to fill it.

Using the old wisdom of Khalil Gibran to extend management theory

All this is obvious though not so if you teach management theory.  Old management theory charges us with drinking from our line manager’s cup and ultimately from the company’s cup.  There are legal reasons (and mainly legal reasons) for this.

We could also train young people to understand the company as a mega-system that must benefit all stakeholders ~ all stakeholders ~ if it is to sustain itself.

We can train young people to understand power, its use and misuse, and how to work thinkingly yet safely with people who deny others their own cup.  But never to give up their own cup.

I want to see young people exploring the whole system in their online portfolios.  I would like to see youth support systems put youngsters in situations where they must sort out which cup is which, who is filling which cup, and how they can act in small & gentle ways to drink from their own cup, to fill the cups of others, and to influence the wider econ-system.  It’s an important skill to learn and many of us lose it along the way.

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Think change in your market, not growth

The 1st opportunity that marketers have kept to themselves is that we can change with our markets.  Markets flex and morph quite naturally.  If we are fixed on growth, or grabbing market share, we are sadly missing the point.  Our reports need to be about change.  How is our market changing?[!]  When we closely in touch with the heaving, sighing, pulsating, shape-changing nature of the market, then we are in the game!

The 2nd opportunity marketers don’t tell us about is that we can move up the value chain. We can expand the margin in each hit.

Noobes and margins

Now I know that when we are new in business, we are obsessed with getting any hits, making any margin!

Please don’t be distracted though. Psychology comes into play here.  Getting started is fundamentally linked to getting finished!  If there is one thing that psychologists know, it is that when we know what we want, we ‘go like a train’. If we are not ‘going like a train’, if we are procrastinating, we don’t know what we want.  It is really that simple.

And how do we know what we want?  By getting out there and trying out the choices. We humans think better when real experience is in the mix. We don’t get anywhere when we are going against the flow or when we are telling people that we want one thing one day and another thing the next day. We confuse them and ourselves.   So we get out there, to learn how the world works, and to be clear about the parts we want to be part of.

That’s why noobes are no different (except psychologically) from people who have been in the game a while. We are constantly learning the market and figuring out what part we want to ‘play in’.

Low cost or high differentiation

Business strategists will tell us one of the first things we must think about is whether we are going to “buy them cheap and stack them high” or “do something very special for a few people and charge a lot”.

Obviously, in real life, there are permutations on the theme. The point is to be clear in our own minds what we are doing and experiment wisely so that we get clearer and clearer as we take small steps to get experience.  When we are unclear, we muddy our offering and our customers are unclear what they are buying and unsurprisingly, don’t buy!

Use social media to figure out whether to be low cost or high value

Now social media, doing business in virtual space or via the cloud, gives us opportunity for experimenting safely in the ways we can’t in real life.

We get window shoppers in the real world.  In the virtual world, we get a lot more. If we are wide awake, we might notice slightly different people arriving to have a peek.

Real life is so constricting

Let’s take an example.  Let’s imagine that a granny comes and peeks in our teenage store. In the real world, we have limited choices. We can’t run down the street and talk to her – who will mind the shop? We can’t drop what we are doing to entertain her – we have other customers. We can’t change the entire shop’s display to answer her questions.  We have teenage customers who come to do teenage things.  The real world has constraints – real constraints.

In the virtual world, it is dead simple to add another room!

But in the virtual world, we can add another “room” quite easily. Granny can look around our teenage store and we can lay out another page that allows grannies to talk to other grannies about their concerns. We don’t have to shut them out or exclude them. We also don’t have to demand that they pretend to be teenagers with teenage concerns. Any social media site like Facebook, Ning, etc. allows them (and us) to set up new pages, new groups and new activities.

We can also ‘run down the street’ after some who just peeked and didn’t stay. Google Alerts give us some idea of where they go. We can go and look and ask them, or people like them, what they are looking for. Herein lies the possibilities. Our peekers may be shy but we can get them to open up!

Stay clear by keeping your ‘virtual bundles’ clear

How does this relate to being clear, you might ask?  Teenagers and grannies? Aren’t we getting mixed up. Quite possibly. We can mix up anything.

I want you to remember that we didn’t begin by being all things to all people. Grannies arrived in the normal way that markets morph as their that underlying social networks twist and turn, shrink and replenish.

Our teenage store brings grannies to see.  People explore the world more readily online where they can window shop discreetly. Rather than shutting out unexpected visitors, we can draw them in.  In the virtual world, we can do that without watering down our offering to our primary market. Virtual real estate is very cheap compared to real shops rentals!

Some virtual bundles will allow you much better margins per hit

To continue the example- I have no idea what grannies will spend in your new store, or spend in the next door store buying gifts for their grandchildren, but you get the idea.

Your business will morph naturally with the morphing of the market – if you decide to dance in step with it.  If you try to make the market dance in step with you, you’ll get nowhere very fast.

Social media allows business opportunities to find you .  .  . if you want to be found

My message is this, by looking out for change you may find opportunities to increase the margin per hit.

It is a big mistake just to look at your numbers. At the end of each evening, also ask yourself how you were surprised. What was unexpected?

Are opportunities arriving at your site that you aren’t seeing because you have developed the tunnel vision (of greed)?

“In the next five minutes, my intention is to transform your relationship with sound . . .”

So said Julian Treasure at TED.   This 5 minute video is worth watching . . . for the sake of your health . . . and as a example of a great elevator speech.

In 5 minutes we find out what Julian Treasure can do for us. Oh how we wish we could sum up what do quite so neatly!

If you are serious about developing your business plan and your pitch, you may find these slides useful from Simon Stockley of Imperial College Business School. I found the slide on the order in which VC’s read business plans particularly useful for understanding what people want to hear when they think about a business.

I listened to the 11 o’clock news as I drove home today.  I counted 9 items.

  • One item was news – the value of the Footsie Index.  But they don’t announce that everyday, so why today?  Anything happened that was different from yesterday?
  • Another item was past tense but vague.  A woman pleaded guilty . . . no information on when, where or the context other than the charge.
  • Two items were advertising – one for BA and one for the Labour Party.
  • A handful were information from the National Statistics Office that rightly belonged in commentary as the data describes events of months ago.
  • And some filler stuff intended to be titillating.

What would happen if BBC became an honest filter and said “Nothing happened in Britain this morning that is worth bothering your head about.”

1.  They’d get back to the work mandated in the Reith vision.

2.  We’d say, Where did the news go?  My favorite part of the day!

3.  We’d realize that the BBC are not that good anymore and stop paying our license fee.

4.  We’d say cool.  Wake us up where something happens.

5.  Other

The test today is to fill in the Other scenario!

Or, pick one of the others and elaborate –

  • I am old and listen to the radio a lot.
  • I am young and rarely switch it on.
  • I am a journo and I am not going to bite the hand that feeds me.

I want BBC to live up to an ideal that is in my head.  Be the best filters in the world.  Provide structure to ideas in the top 20% of any profession.  Is that too much to ask?

Fast Break

There is nothing I relish more than a “fast break”. I love the way that we can turn a rebound into a few deft passes and race the opposition to a slam dunk.

Carpe diem ! Sieze the day!

Can you take the Fast Break when it comes?

The conditions are right. The rewards are there.

Are we organized to dispatch our fast break specialist, take that rebound and pass it down the court, with ball and fast break specialist arriving together – right foot down, left down, into the air, done! 2 points?

Are we organized?

Well, there are the permanent spectators in life.  There are some who have a go, but don’t really get it.

And there are some who understand the game.  They get ready in advance.  They practice with others.  And when the opportunity breaks, they are running immediately, moving at speed in coordination with their prepared team, and they score. Sweet!

What are you ready for?

1.  What is the equivalent of the ball and the equivalent of the basket in your business?  2. What do you win by putting the ball in the basket?

And when you can tell me that, tell me this.

  • 3.  Who is working with you? 4.  And who must you outpace to pull this off?
  • 5.  What is the signal that sends the fast-break specialist off?  6.  Who is taking the ball off the back-board?  7.  Who is the play-maker (mid-fielder) in the middle?
  • 8.  When do you train together?  9.  When do you celebrate your wins?   10.  How long will you play together?

10 questions . . . oh, but do remember this is a game.   When we are straining too hard, to get this done, it is time for a coffee break to think again.


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