Strategies for a discontinuous future.

Saturday, August 06, 2005

What Business Can Learn From Open-Source

You may wanna check out my peer production ppt if you're into this kind of thing.

-- umair // 9:53 PM //


New Blogs

Stylesignals is essential reading if you're going to track the drivers of the emerging aesthetic economy. Highly recommmended.

-- umair // 9:23 PM //


Bad Management Theories

Mnot discovers Sumantra Ghoshal's later work:

"...Ghoshal, who died in 2004 at the early age of 55, argued that putting shareholders� needs first was based on the outdated notion that they were the risk-takers who made capitalism possible.

In fact, he said, shareholders took little risk. If they were unhappy with the company�s management, they could sell their shares. The real risk-takers were company employees, he said. For dissatisfied employees, moving jobs was much harder. It was also more difficult for companies to recruit talented and committed workers than it was to find investors."

Just before Prof Ghoshal passed away, I met with him to discuss researching this. It kind of blew my mind when he told me about it too...I thought it was one of the few revolutionary things in the theory of the firm that I'd heard for a loong time.

I didn't actually end up doing the research, because I was working with another LBS prof at the time; but I really hope one of his collaborators at LBS (ar elsewhere) is pursuing it.

-- umair // 9:12 PM //


Peer Production

Wikipedia to tighten up editorial control...a tiny bit, by 'freezing' undisputed entries.

I think this is a bad idea - the marginal benefit is almost zero, while the marginal cost is pretty high; distributed economies of scale happen because peers are ultraspecialized, so you don't want to freeze anyone out, since his/her microchunk of knowledge is potentially worth a great deal.

-- umair // 9:08 PM //

Friday, August 05, 2005

Media 2.0 Thoughts

Little blogging time today, so I'll keep it short and sweet.

Media deflation is beginning to take hold across media markets (as we've been predicting/discussing for a while now). Why is this a surprise to many insiders? It's because if you're staring too hard at the numbers - the small picture - you miss the economic revolution that's underway - big picture.

At a recent engagement, I tried to make this point. I met with a team of strategists who were fairly obsessed with tracking the usual metrics - growth rates, ad rates, subs, etc. The problem is that these are all lagging indicators - they usually reflect strategy decay when you're already in a competence trap.

Sometimes, when industries are being disrupted by radical innovations, you have to rely on intuition - and have the confidence to build analysis on it.

Like media: looking at the innovation landscape, and seeing Blogger, Technorati, podcasing, OurMedia, Wikipedia, OhMyNews, etc, it's not exactly following a risky hunch to understand that micromedia is going to fundamentally reshape media economics in simple ways (namely, that supply explodes relative to demand, and so media deflation is an almost unavoidable short-term consequence). What's far riskier, if you ask me, is relying on metrics that read obsolete industry economics - metrics that are themselves about to be disrupted.

-- umair // 9:55 PM //

Thursday, August 04, 2005

So Yahoo acquires Konfabulator. Konfab will lead Yahoo's open source initiative starting with the use of Widgets on your desktop (check it out very cool). On the other hand Microsoft is going after a patent acquisition spree because Bill Said So. The DNA of the company (Yahoo) is so radically different from the geeks at Microsoft, and not just from the basic open source perspective. Compare the two initiatives and you'll see the core of the Yahoo philosophy is to master edge competencies beyond the core, a pure brain play. The Microsoft approach is far more Soviet in it's steamroller approach, purely brawn.

-- Kashif Hasan // 12:02 AM //

Wednesday, August 03, 2005

In the Bay Area

Hi folks - apologies for the light blogging. I've been taking some time off.

I'm currently in the Bay Area - if you'd like to meet up to discuss a gig, workshop, or just have a coffee and chat, drop me a line.

-- umair // 9:34 PM //

Monday, August 01, 2005

China and the world economy | From T-shirts to T-bonds

"China's impact on the world economy can best be understood as what economists call a �positive supply-side shock�. Richard Freeman, an economist at Harvard University, reckons that the entry into the world economy of China, India and the former Soviet Union has, in effect, doubled the global labour force (China accounts for more than half of this increase). This has increased the world's potential growth rate, helped to hold down inflation and triggered changes in the relative prices of labour, capital, goods and assets.

The new entrants to the global economy brought with them little capital of economic value. So, with twice as many workers and little change in the size of the global capital stock, the ratio of global capital to labour has fallen by almost half in a matter of years: probably the biggest such shift in history. And, since this ratio determines the relative returns to labour and capital, it goes a long way to explain recent trends in wages and profits."

-- Mahashunyam // 4:20 AM //




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