Socialnomics & Ownership

I had an interesting exchange with a very reputable business associate yesterday, during which the topic of "ownership" came up as central to his business objectives. We all understand the notion, dedicate yourself to a company, build it up for years and then perhaps sell it for a premium value as you sail away into the sunset. As I woke this morning having thought about the prior days chat, another friend, Rasmus Elmann Ingerslev, had recommended a video on socialnomics that I watched, shown below. I am uncertain if most really understand what socialnomics signifies, as I've concluded its only the beginning of a far larger trend with greater implications beyond those of my facebook account. Similarly I am unclear if most business owners understand what the value of something really is and how these trends will impact it. Hence this post.

What socialnomics represents is the first wave in a series of approaching changes brought on by technology, which will deconstruct numerous and long standing economic paradigms including, among others, distribution, value creation and value exchange. How ? Because social technologies decentralize everything by empowering choice through the ubiquity of information. Social media is but the beginning of a series of tools that will provide users complete control over what is authentic, valuable and meaningful to them, thus obfuscating centralization in any and all systems. This is the essence of "socialnomics": economic rules redefined via new "social media", I call it technological,  tools.

How economics are redefined by socialnomics is very simple. In the past people created wealth largely through one basic principal - they had information others did not and exploited that information to their benefit at the cost of others. These information disparities could last for extended periods and therefore organizations could be sustained for periods of time wherein an advantage existed. In the new economics this will become increasingly difficult because of the ubiquity of information. In "free markets" margins are driven towards zero. Therefore, value will have to be created in new ways, largely via increasingly short term creations of unique solutions. Thus value will be driven increasingly by what customers choose - not in how they are exploited by sustained information disparities or anomalies: a concept shared by the like of Toffler, Anderson and others.

The implications to organizations are enormous because competitive advantages will be increasingly fleeting. In Fung and Wind's book Competing in a Flat World, the notion of value and network organizations is craft fully set out, particularly how organizations must reengineer to become valuable. I've posted on the matter previously. In the old paradigm you could create something of value, build a fence around it and get someone to covet it enough to purchase it. In the new world, the platform is the value, change is too rapid to maintain an extended advantage and in the end your value is only that which your customers deem you deserve. With increasingly lower barriers to entry and free information too many alternatives are available. Think about it, who "owns" Google ? Truthfully, its customers do. If tomorrow everyone stopped using Google its "value" would be zero. Socialnomics reflects a free market in the purest sense and therefore, I ponder if many in business have grasped that fact when they imagine their sailing away into the sunset as a result of something they've built over years. That, I think, will becoming an increasingly rare occurrence.

Prepare for More Augmented Reality

 The combination of the physical and digital world is occuring before our eyes. Its possibilities are as limitless as ones imagination. Increasingly you will see examples of these applications. Be it the GE smart grid promotion or business cards created by Zehnder Communications; both shown in the videos below. This is just the beginning. If you want to learn more, and you should, Kevin Bonsor shares a great article on the topic here. Discover how the integration of digital and physical will increasingly impact our lives.

GE Smart Grid - Augmented Reality from mike geiger on Vimeo.

The Business Card Meets Augmented Reality from Zehnder Communications on Vimeo.

Business Email On Life Support ? Enter Salesforce.com Chatter

Let's face it, email has become an extremely undisciplined form of collaborative communication for organizations. From my own experience I see it every day. It starts with a question or comment, copied among a group, and then spreads, unknowingly, to become a waste of resources and time. What to do ? Well we've all been participating increasingly with social networks and there are a lot of potential there. Its just that organizations using social networks haven't been able to leverage their potential as efficiently as they could be until the advent of tools like salesforce.com's chatter.

Salesforce.com announced at its Dreamforce event in San Francisco this past week something called Chatter, a "collaboration cloud" platform that integrates social network features. Chatter proposed to bring the flexibility and ease of use found in applications such as Facebook to businesses, enabling feeds from business applications, content and users that can be followed, profiled and shared. Salesforce.com plans to begin offering Chatter in 2010. The end of email as the mainstream method of communicative collaboration is approaching.

Innovation - Changing Mindsets

Innovation; as Vijay Govindarajan, Professor at Tuck and co-author of 10 Rules for Strategic Innovators mentions in the interview below, is about 2 major things. First, you must accept things are changing and figure out how your organization can adapt. Second, change is not a technical problem its a people opportunity that is reflective of "mindsets". Therefore to enable your business to adapt you must introduce new mindsets. To create an innovation mindset, managers must bring in fresh voices from outside their company, encourage collaboration, and consider how emerging markets' needs can spur ideas for innovative offerings. Interesting - sort of chicken and egg. Leaders must first be open to realize they need to change - often they do not realize the need without having outsiders who stir up their thinking.

Apple's Retail Strategy - Its About the Customer

"Only by getting people to "Shop different" will Apple get people to "Think different" . . . and ultimately, to Buy different", that was the comment shared by David Lang a number of years ago and he was some what correct. Despite possible channel conflicts and other challenges, Apple's is becoming a retail powerhouse, unveiling another 50 stores this year in 8 countries around the world including the new Manhattan location on the left - watch the video on abc news here and from the WSJ below. Impressive to say the least.

According to an article at MacCentral, Apple concluded that "'destination' locations such as Best Buy and Office Depot won't work for the 95 percent of non-Mac computer users." In doing so they realized the need to create "experiences" via retail space that engages consumers to understand unique attributes of their products and brand to grow market share. In this case bricks and mortar distribution is a synergistic strategy that serves to educate consumers in a unique way. This strategy integrates physical retail into a largely digital distribution model. When considering how other concept retailers like the  "Discovery Store" or Sharper Image were unable to make this work, we'll see how sustainable Apple's strategy for retail will be in the long-term. Regardless, when visiting these new locations - they certainly are all about the customer.