Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, November 22, 2005

Research Note - Two Sentences on Thinking Strategically About Micromedia

If I can make a suggestion: perhaps it's more useful to think resources and (edge) competences, rather than features and technologies. I think you will find it much easier to find how and where to create powerful sources of new value creation by doing so.

-- umair // 9:46 AM // 7 comments


Great point. The feature set that I'm looking for is the leveraging of those edge compentencies.

Richard McManus extends the the feature set in a slightly better direction, but still misses the mark. We don't want monolithic siloed anything. Everything in atomized chunks, like molecules being sorted into an infinite number of non-mutually-exclusive chambers with semi-permeable boundaries. We're looking to become cells in this global mind-body that metabolizes information.
// Blogger meme_pool // 5:38 PM

So here's a question, then. Say we get media down to atomized chunks, where people can find exactly what they want. Now comes the pricing model.

With a world of atomized content, and without a viable or useful micropayment system, what is the best way to sell this content?

We see itunes (in the music world) going in the direction of individual, variable pricing. We also see subscription services. How can a company selling valuable content figure out what pricing model works best?
// Anonymous Anonymous // 6:04 PM

Monetization is the question right now, right? It's not per piece (itunes), or subscription (Times Select). I don't even think it is micropayment, if the underlying currency is dollars.

We need a cyber currency that is only loosely connected with real-world (think Linden dollars in Second Life). Before you moan and groan, give it a second thought. Something like attention-credits, which has a variable rate of exchange.

If I listen to an itune, and that attention is logged, I'm prosuming, not just consuming. The real-world currency metaphor is broken because it is so tied to the idea of consumerism.
// Blogger meme_pool // 6:12 PM

Yes but how do you convert an online currency when it comes to paying employees, keeping the lights on, etc. And at that point, what's the difference between an online currency or real money?
// Blogger A.Q. // 7:18 PM

re: pricing. it's a good question. developing an edge competence in liquidity lets you price stuff. think google with adsense, or now /root.

to make it clear, think how much better off apple would be with regards to pricing if it actually used itunes to do something beyond sell music - to meaningfully aggregate preferences, a la this would give them powerful pricing info.

meme pool, your atention credits are exactly right - its actually a very nice example of liquidity. the trick is convincing the media industry that their rights models cannot hold in such a world...
// Blogger umair // 7:46 PM

So, part of what you're saying is that by having that edge competence, you will gain insight into potential pricing strategies based on user preference/behaviour/feedback?

That's an interesting way to look at it, and makes sense in the abstract, but it's hard to wrap my head around when the comparison is adsense-- where you have people competing for something in limited demand (top spaces available)-- rather then people buying the same digital product over and over again.

It seems to me the trick is to leverage the information you get from your users, but then create pricing models which are inherently attractive... with the key breakthrough being pricing models that keep adding value to the product-- things like allowing users to contribute data, bring in other customers, do micro-work for the company, in order to gain currency or reduce their costs. Kind of just thinking this out as a type it, but there's something to that, I think.
// Blogger A.Q. // 1:18 AM


Pricing strategy can be expressed many ways, and is several steps removed from higher level strategy. Basically, edge competences give you market power. Google uses that market power not by setting prices, but by making a market. But there are many other ways to utilize market power through plasticity; check out Zazzle.
// Blogger umair // 1:42 AM

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