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Strategies for a discontinuous future.












Saturday, August 13, 2005
 


The Zero-Intelligence Corporation (aka Peer Production Goes Meta)

So for the last couple of years I've been harping on about what I call the zero-intelligence corporation to my friends and mentors. Most of them are annoyed, because I haven't done a great job of articulating the concept.

Essentially, it's open-source business: a corporate form without managers, C-level dudes, or know-it-all strategists like yours truly. How can such a form exist? Well, essentially because hyperefficient info-sharing mechanisms can make coordination almost costless (which is why all of the aforementioned exist, in the first place; see my peer production ppt for more).

The standard academic answer to my simple argument is that strong complementarities exist between value activities, and the isolated workers that are assigned those activities can never identify and exploit them properly. Presumably, because managers are smarter (Yeah, I always thought this was a specious line of reasoning as well).

Anyways, it looks like [email protected] has decided to launch the Business Experiment, which is possibly the first really truly zero-intelligence play. I think this is immensely interesting, so I will be watching closely.

-- umair // 8:40 AM //


Friday, August 12, 2005
 


Deregulation - Cleantech Market Structures

You must read Vern Smith's J op-ed on deregulation - it's essential.

-- umair // 11:08 PM //


 


Open-Source Valuation

I spent a few mins making a really (really) basic spreadsheet for Web/Media 2.0 comps at NumSum.

I'd like to open it up for everyone to add to and play with - you should feel free to change any numbers (most of which are probably inaccurate at the moment), structure, add more data, etc. The username/pass is comps/comps - have fun.

-- umair // 11:05 PM //


 


Yahoo + AliBaba

I've got to say, I don't think this is the greatest play. Besides the fact that I don't agree with the strategic rationale (viz, auctions != Yahoo competence IMHO), the valuation is rich, even factoring in expected hypergrowth, and perhaps you'll agree that sentiments like these sound a lot like famous last words, 1999 style:

"...He boasts that Alibaba now has the financial muscle and local expertise to deal a significant defeat to eBay and Meg Whitman, its high-profile CEO. "I know the Chinese user market and users better than Meg Whitman," says Mr. Ma, clad in a lime-green shirt and sipping a cup of tea. "Once we start to charge, we can be profitable in 18 months."

-- umair // 8:39 PM //


 


Technorati in Play

The saga continues. We all know who the most likely candidate is (begins with an F), but for my money, it should be Ask, because a Bloglines/Technorati combo would give them de facto control of a huge part of the micromedia value chain, since now each has evolved to compete in complementary spaces.

Either way, good luck to the Technorati crew - they deserve every penny of it, and I think they've timed it well, because Fox now seems to be ready to spend more than the usual suspects (uhh...if it's Fox, that is).

-- umair // 8:36 PM //


Thursday, August 11, 2005
 


I find the argument' between creationism/intelligent design and evolution to be somewhat ridiculous. Namely because intelligent design is a philosophical debate where as evolution is a scientific debate. I just don't understand how the two mix, and to be quite frank, I think the United States is heading head first in to the Dark Ages version 2 if they believe that intelligent design has any place in a science classroom.

What really irks my ire however, is those that try to argue that science is itself some sort of religion. This just doesn't float. I don't mean to be crass, but the bible (or any other religious book for that matter) is not truth as I understand it. It is assumption, based on a lack of understanding, and essentially an early form of thought control. Religion had its place, and now the times have changed and it should be relegated to the dustbin of history. Of course this is only opinion. People are free to believe what they want, be it an almighty Christian God, a universe based on a turtle, a snake, and some milk, or hyper-intelligent mice and singing dolphins. Science, on the other hand, proposes theories, which are tested and modified if required. There is no book of truth in science, based solely on ignorant speculation. Evolution is what it is, a proven scientific phenomenon. Are intelligent design proponents going to teach their poor children that some higher power, for some unknown reason, mutates bacteria so they become resistant to antibiotics and complicate all of our lives??? Wouldn't any rational human being find this to be not only ludicrous, but unnecessarily over complicated based on the available evidence?

-- dhd // 7:42 PM //


 


Now reading...

Rebel Sell

Quite an interesting book about the relationship between counter-culture and consumerism. I posted the Economist's review of this book earlier.

-- Mahashunyam // 12:29 AM //


Wednesday, August 10, 2005
 


MAKE: Blog: HOW TO - Crafting in virtual worlds... (via BoingBoing)

Peer production shows up the world of MMOGs. Lately, I've been thinking a lot about innovation potential in MMOG space based upon Umair's peer production ideas. Don't miss this cool acount of a virtual entrepreneur's life from the BoingBoing post.

-- Mahashunyam // 10:04 PM //


Tuesday, August 09, 2005
 


Buying success in online gaming

Online trading in virtual artefacts is creating huge revenues.

-- Mahashunyam // 3:15 AM //


Monday, August 08, 2005
 


Does The Long Tail Exist?

Chris has a post detailing methodological issues around the LT - new methodologies revise the LT downwards.

OK. This is a nice example of where and when to use intuition to make assumptions in strategic analysis, and why a lot of analysts who rely on total data end up in paralysis (not Chris, but the many discussions that are happening now about whether the LT really exists).

I think it's safe to assume that The Long Tail does exist. Simple economics gives us pretty strong intuition and anecdotal evidence should provide more than enough evidence to confirm. For example, my old prof Gary Hamel called it the shift from distribution to search economies in 1999 - and he had tons of examples even then (Amazon, eBay, blah, blah). Whatever we wanna call it, the basic economic insight should be what you focus on: that cheap information shifts the tail of the media curve up. This is essentially an income effect.

This should be intuitive; the more people save in search costs, the more they can consume. As I point out in my media ppt, the demand curve should shift up by roughly the value of search costs saved.

So, I think at this stage to ask whether the LT exists is the wrong question, which strategists shouldn't be looking for huge amounts of data to answer. If you buy the above relationship, you'll ask the right question - if you buy that cheap info shifts the demand curve outward, you'll ask how to create cheap info; not busy measuring your marginal LT.

This will lead to you to things like coordination economies and distributed economies of scale - leveraging communities to create liquid markets for preference and expectation information. Smart players are going in this direction (but not far enough, IMHO).

-- umair // 9:29 PM //


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