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.


 
Sunday, March 26, 2006


The Snowball is the New Blockbuster

About a year ago, I began thinking about how the dominant media (in fact, consumer) strategy must shift from Blockbuster to Snowball, given the tectonic economic shifts that were taking place.

I haven't talked about this a great deal lately.

But today, when I look at consumer industries, I see the Snowball Effect everywhere - I see my prediction turning into reality much faster than I ever thought it would.

Here's a very small example - a video on YouTube exploding.

But in the last few days, we have had a much more dramatic example - one so obvious, it's almost invisible; the Ben Domenech story.

How did Domenech get fired? Because his plagiarism was found out. If we trace back the causality, we see it started with a single diary at DailyKos.

From there, numerous blogs picked it up and ran with it, discovering much more plagiarism, pseudo-racism, etc. This is a limit case of the Snowball Effect in today's world: in the end, the Post was forced to ask Domenech to resign, the NYT has covered the story, etc.

Now, when you think about this, don't think about blogs and bloggers - or even about media necessarily. That's missing the forest for the trees.

Understand that this is cheap coordination - the self-organization and regulation of complex, interdependent collective action. Further, I hope you will see that this is inevitable; it's the nearly bulletproof outcome of the economics of the edge, and market power shifting to consumers.

From an economic point of view, this is an amazing thing; I think it is almost without parallel.

Now, the most incredible part to me is that nearly every boardroom in the world still has no idea how to leverage the Snowball Effect; even "viral" marketers are really tapping just a fraction of the productive possibilities of the edge.

So in the next few months, I expect some fairly incredible things to happen at the edge.

Final note, Snowballs are not "nichebusters". Nichebusters have very different dynamics; they are simply blockbusters sliced more thinly.

-- umair // 10:52 AM // 10 comments


Comments:

Great post.

I watched that video about the girl and her webcam with some people at work. I was pointing out to them how YouTube can make (and is making) nobodies into celebrities overnight. They could care less about that and were really interested in the fact that a webcam could do all the things that logitech cam was doing. That's a clear message if I've ever heard one.

I had my own experience with this recently as I cut a mash-up video and posted it onto YouTube, partially for the experience of doing it from a business/marketing perspective, partially just to share something creative I did with other people.

It didn't get much traction at all in the beginning when it just sat on YouTube but then I submitted it to Screenhead (Gawker's internet video site). The webmaster there picked up on it and it started to explode.

At first, I was getting tens of hits an hour and then suddenly it jumped to thousands. YouTube allowed me to track this over time and really see how it was spreading.

I think the Snowball effect is the next gen of the marketing world. It kind of fits into the whole 'Pinko' marketing manifesto of Tara Hunt as well.

The interesting thing I discovered is that you most definitely need someone to start the snowball running down the hill (in my case the link from Screenhead). But once it's going, it takes on a life of it's own.

FYI, my YouTube video is here:

http://youtube.com/watch?v=vFPTZmm_DJQ

Warning: It's got some NSFW language.
// Blogger Gavin Purcell // 6:07 AM
 

The bigger question is when do "pros" start trying to leverage this (it doesn't seem that hard)? OR, will they use the tried-and-true formulat of waiting for people to come to them in the form of going viral themselves, then selling out when they hit critical mass? If there really is a media revolution, those who make their own fame via the network won't have to ever sell out, as they'll be better off without the entertainment (or whatever) machine.
// Anonymous Ted // 12:11 PM
 

[quote]
Now, the most incredible part to me is that nearly every boardroom in the world still has no idea how to leverage the Snowball Effect; even "viral" marketers are really tapping just a fraction of the productive possibilities of the edge.
[/quote]

Well, you say this like, there's a whole lot available value out there *beyond* trying to make something viral. And, I guess you think you know what it is, that's why you're teasing us, right? :-)

But I can't think of it. I can't see that this snowball is all that "manipulable". You can't just order one up anymore than you can order up a lotery win.

Beyond the basic insights like these ( http://www.dfj.com/cgi-bin/artman/publish/steve_tim_may97.shtml and http://www.dfj.com/cgi-bin/artman/publish/steve_may00.shtml ) what else are you suggesting?
// Blogger phil jones // 2:35 AM
 

Big old media companies can still "get it." Check out this fantastic analysis of the phenomenon of ABC's Lost by Dan Hill. Dan points out the second- and third- order ripples of the Lost universe being created by fans. I hadn't realized the extent of the fan commitment, nor the degree to which ABC and the show's creators have relaxed and even encouraged the development of a fan-generated universe around the show.

I think Dan's post starts to point at ways that dinosaur media corps like ABC can synthesize something new, compelling and profitable out of big-budget projects combined with an understanding of the edge.
// Anonymous Andrew // 4:31 PM
 

Umair,
No one loves you more but isn't the snowball effect OLD. We would use it in music all the time, band focuses on core and let them spread it out to the masses. Before you know it Eminem is HUGE.

Or am I missing something...

p.s. I still haven't gotten a price for your paper...
// Anonymous chartreuse // 4:36 PM
 

great post - snowball is an awesome way to describe how a microchunk breaks free from the long tail - nice one
// Blogger David Gibbons // 3:35 AM
 

Hey guys,

Thanks for the comments.

Many of you are missing the point. This is about much more than viral/buzz marketing a la DFJ or Eminem.

Domenech got rocked by people coming together to *do* something. Not just transmit messages to each other. Rather, to work together and do things even the Post couldn't (or didn't).

The Snowball Effect is about value multiplying because coordination is cheap - people can stand on the shoulders of others. It's about the creation of value outside the boundaries of the firm.

This is far more powerful than the relatively weak leverage that results from the viral transmission of messages.

Check Andrew's link for a simple example, or think about how what happened to Ben Domenech is way (way) beyond viral marketing, because people built on each other's discoveries of plagiarism, etc.

Andrew,

Thanks for that phenomenal link.
// Blogger umair // 10:49 AM
 

Umair, this is one of your best all time posts. There are a fascinating number of edge competencies that can only be leveraged IN the edge not BY companies trying to MANAGE the edge. Right thinking organizations will cede control and trust that coordination by self interested parties at the edge will create tons and tons of value. Great stuff and great example. Have fun in London.
// Blogger Dick Costolo // 11:14 PM
 

Ahhh...o.k., I get it now.
Jeez, way different than the Eminem shit I was thinking about.

And Andrew, that link ROCKED.
// Anonymous chartreuse // 3:51 PM
 

Umair,

One of the great snowball effects is happening here in China. Have seen it blogged before (even maybe by you) but it is still amazing.

Consumers coming together online to form buying groups; then using the mass purchase to obtain substantial discounts from sellers.

Example, I walk into a dealer and tell them I have 50 people who want to buy a BMW 3 series. You think I'll get a better discount than if we went in alone?

It is happening a lot here - a girl in my company helps organise these groups.

This is less about a company being able to leverage this than how are they going to be able to protect themselves from this.
// Blogger NicolasZ // 8:54 AM
 
 

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