Umair Haque / Bubblegeneration

Tuesday, November 13, 2007

Research Note: How To Kill the Massconomy

Lots of you guys keep asking me for strategies and business models. I don't have (unfortunately) time to talk to all of you.

But I've already told you a big part of the answer for the last couple of years: markets, networks, and communities.

Latest example (well, ok, kind of latest, anyways).

You should note just how intensely these new forms have exploded in the last year. It's difficult, if not impossible, to keep track of just how many social nets, ad nets, virtual worlds, ad exchanges, vertical communities, etc...are out there.

So if you wanna think radically - here's a (really) easy way. Take the dominant business model/strategy in your market space, and use a market, network, or community to invert it...like Wikipedia, Google, Myspace, Facebook, etc.

This doesn't mean do something superficial, like a social net for hairdryers. Rather, it means using markets, networks, and communities to shift resources and capabilities from core to edge.

Bonus reading - how to totally and completely misunderstand the economics of networks.

I'm not sure what Mike's talking about when he says things like:

"...The company still claims to be the largest women's site on the net, and still talks about those big unique visitor numbers. But their real position is much different - they rely completely on their partners for page views and advertising inventory."

Ummm...sooo..that's kind of exactly what a network is.

-- umair // 3:19 PM // 2 comments

Comments:

Sorry but to my mind it's Glam that is misunderstanding the power of networks. They've built nothing of value, they're simply paying higher CPMs to selected sites, many of which are highly untargeted pieces of garbage. They're overpaying, not creating anything of real value other then the paycheck for their 'affiliates'. That's not what networks do. Networks create real value for 'affiliates'. Simply placing ads and paying higher rates while losing money, is not getting it done.

I'm surprised you've fallen for it.

# //

Anonymous // 10:29 PM

hey,

that may all certainly be true.

but you're talking about poor execution of the idea, which i'm not really concerned with - if it's not glam, someone else will simply do it - it's the idea that's the point.

thx for the post.

# //

umair // 11:40 AM