Strategies for a discontinuous future.

Consulting & advisory, research notes, in the press, about bubblegen,
next wednesdays.

Monday, January 02, 2006

Strategy 2006

1) The rise of the edge (= value creation external to the firm) continues. Incumbents across industries start thinking about edge competencies (and not just cause I told them to :)

2) Strategy decay at the core begins to kill. The music industry dies; no one cares.

2.5) Because the music industry's busy being reborn (Last.fm, Pandora, etc); everyone notices but VCs, who will still be busy talking about how "media companies" are terrible investments.

3) Publishers (news, books, etc) finally get it, and start investing seriously (versus just dabbling) in the new value chain and actively shepherding it's emergence.

4) Search makes even more $$$, search players across verticals start seeing nice exits, PPC doesn't die - it gets more and more efficient, and extended into newer and newer domains.

4.5) Yahoo shows the world how not to build edge competencies; minimizing value creation from "social media", and failing to do anything with most of their acquisitions. They're forced to keep acquiring social plays, feeding the vicious circle. Google demonstrates how to build (and leverage) edge competencies, using liquid and plastic ads and content to disrupt more and more traditional ad markets.

5) TV and Hollywood's strategy decay accelerates, instead of actually doing something innovative, they a) explode ad time and b) make even dumber content.

5.5) By the end of the 2006, the only two people still watching TV and going to the multiplex are Cary Sherman and Jack Valenti.

6) The social = anticonsumption. People talk more and buy less; consumer industries start getting qwned.

6.25) Brand strategists realize that the century-old strategy of engineering social meanings into products is decaying fast, because social meanings themselves are undergoing hypercommoditization. They begin searching for a model of post-branding, but struggle to find one.

6.5) VCs completely don't get that this is an enormous gap in the consumer space for all things 2.0 to be beyond disruptive, and miss the entire strategic point nicely.

6.75) This accelerates the disruption of the current model of funding innovation, creating huge incentives for the smarmy 20somethings that keep saying, "dude, venture money sucks" to actually do something about it.

7) The manifold problems with future econ - peer production, the social, communities, anticonsumption, etc - become glaringly apparent. In these models, people often make bad decisions, they're irritating place to be sometimes, they're prone to navel-gazing, information contagion, and error cascades.

8) Despite that, the market will begin to tell us they're still more efficient than firms in many cases - and so their growth continue to accelerate; they begin to create serious value in physical, not just digital industries - targets: fashion, print, CE.

9) New management innovations emerge for these modes of production. Editors, execs, and managers at the edge become something resembling DJs, leaders of cells, curatorial shoppers, underground artists, connected consumers; to do this, the assumptions behind management behind to shift seismically.

9.5) Incumbent inertia is magnified: most corporates see these management innovations as more massive threats than opportunities.

10) The creativity explosion: all of this begins to unlock a huge, much needed surge of (real) creativity. We're already seeing the beginnings: machinima, fan flicks, snowballs vs blockbusters, social search/finance/everything etc...

11) The world becomes a much more interesting place...

-- umair // 11:57 PM //



Let's keep our fingers crossed.
// phil jones // 11:46 PM

I like, especially number nine which has the potential to dramatically upset and rebuild loads of floundering industries and create brand new ones. Interesting...
// paulpod // 12:56 PM

Your blog just gets better and better. You're now my number one blogger - keep up the great work in 2006!
// PeterCashmore // 9:37 PM

On number nine, don't miss the new Forbes interview with the MySpace founders.
// Meme chose // 3:01 AM

I love your blog too, but i'm honestly concerned that i feel stupid every time i read it...i have to re-read sentences and paragraphs a few times to fully take in what you're saying. I need the cliff notes :)
// eric goldstein // 4:39 AM

every time i read your blog i tell myself i need to go back to school and get a masters in economics. (thats a compliment, not a jab at how indepth your blogging is).
// Brian Breslin // 5:06 PM

Your comments on brands are spot on. Traditional brand models are on the way out, as are conventional �branding� practices. They are a total dead end. Taking their place will be a new brand model based on architectures of participation. The new brand mission will be to create customers by delivering value customers can use. Instead of telling customers what to think, or how to feel, brands will help customers get things done.

Thus, the whole process of brands is now being redefined, reinvented, reborn. Brands are moving from a sub-text of advertising to a pivotal role in value innovation. This is great for companies (the smart ones), customers, and brands themselves.
// Brian Phipps // 8:17 AM
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