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Posts Tagged ‘business’

The aim of most businesses is to create wealth for those working at it. Generally it is preferred to do this in a sustainable, scalable fashion so that wealth may continue to be generated for a long time. The specific methods may involve seeking public valuation in the markets, selling more and more product directly profitably, private valuation and investment and more. The aim of most technology based companies to make the primary activity and product of the business involve technology. Most common understanding of the “technology” refers to information technology, bio technology, advanced hardware and so forth – i.e. tools or methods that go beyond long established ways of doing things and/or analog approaches. So the aims of a technology company are to create and maintain sustainable, scalable wealth generation through technological invention and execution.

Perhaps there are better definitions of terms and clearer articulation of the aims of business but this will suffice to draw out an argument for how technology companies could fully embrace the idea of a platform and, specifically, a technological platform. Too often the technology in a technology company exists solely in the end product sold to the market. It is a rare technology company that embraces technological thinking every where – re: big internet media still managing advertising contracts through paper and faxes, expense reports through stapled papers to static excel spreadsheets and so on. There are even “search” engine companies that are unable to search over all of their own internal documentation and knowledge.

The gains of technology are significant when applied everywhere in a company. A technological product produced by primitive and inefficient means is usually unable to sustain its competitive edge as those with technology in their veins quickly catch up to any early leads by a first, non technical mover. Often what the world sees on the outside of a technology company is The Wizard of Oz. A clever and powerful façade of technology – a vision of smoking machines doing unthinkable things. When in reality it is the clunky, hub bub of a duct taped factory of humans pulling levers and making machine noises. If the end result is the same, who cares? No one – if the result can be maintained. It never scales to grow the human factory of tech facade making. Nor does it scale to turn everything over to the machines.

What’s contemplated here is a clever and emergent interaction of human and machine technology and how a company goes from merely using technology to becoming a platform. Consider an example of a company that produces exquisite financial market analysis to major brokerage firms. It may be that human analysts are far better than algorithms at making the brilliant and challenging pattern recognition observations about an upcoming swing in the markets. There is still a technology to employ here. Such a company should supply the human analysts with as much enhancing tools and methods to increase the rate at which human analysts can spot patterns, reduce the cost in spreading the knowledge where it needs to go and to complete the feedback loop on hits and misses. There is no limit to how deeply a company should look at enhancing the humans ability. For instance, how many keystrokes does it take for the analyst to key in their findings? How many hops does a synthesized report go through before hitting the end recipient? how does the temperature of the working space impact pattern recognition ability? Perhaps all those details are far more of an impact to the sustainable profit than tuning a minute facet in some analytic algorithm.

The point here is that there should be no facet of a business left untouched by technology enhancement. Too often technology companies waste millions upon millions of dollars updating their main technology product only to see modest or no gain at all. The most successful technology companies of the last 25 years have all found efficiencies through technology mostly unseen by end users and these become their competitive advantages. Dell – ordering and build process. Microsoft – product pre-installations. Google – efficient power sources for data centers. Facebook – rapid internal code releases. Apple – very efficient supply chain. Walmart – intelligent restocking. Amazon – everything beyond the core “ecommerce”.

In a sense, these companies recognized their underlying ”platform” soon after recognizing their main value proposition. They learned quickly enough to scale that proposition – and to spend a solid blend of energy on the scale and the product innovation. A quick aside – scale here is taken to mean how efficiently a business can provide its core proposition to the widest, deepest customer base. It does not refer solely to hardware or supply chain infrastructure, though often that is a critical part of it.

One of many interesting examples of such platform thinking is the Coors Brewing company back in its hey day. Most people would not consider Coors a “technology” company. In the 1950s though it changed many “industries” with the introduction of the modern aluminum can. This non-beer related technology reduced the cost of operations, created a recycling sub industry, reduced the problem of tin-cans damaging the beers taste and so on. It also made it challenging on several competitors to compete on distribution, taste and production costs. This isn’t the first time the Coors company put technology to use in surprising ways. They used to build and operate their own powerplants to reduce reliance on non optimal resources and to have better control over their production.

Examples like this abound. One might conclude that any company delivery product at scale can be classified as a technology company – they all will have a significant platform orientation. However, this does not make them a platform company.

What distinguishes a platform technology from simply a technology company is one in which the platform is provided to partners and customers to scale their businesses as well. These are the types of companies where their product itself becomes scale. These are the rare, super valuable companies. Google, Apple, Intel, Facebook, Microsoft, Salesforce.com, Amazon and so on. These companies often start by becoming highly efficient technically in the production of their core offering and then turn that scale and license it to others. The value generation gets attributed to the scale provider appropriately in that it becomes a self realizing cycle. The ecosystem built upon the platform of such companies demands the platform operator to continue to build their platform so they too may scale. The platform operator only scales by giving more scale innovation back to the ecosystem. Think Google producing Android, offering Google Analytics for Free and so on. Think Facebook and Open Graph and how brands rely on their facebook pages to connect and collect data. Think Amazon and its marketplace and Cloud Computing Services. Think Microsoft and the MSDN/developer resources/cloud computing. Think Apple and itunes, app store and so on.

It’s not all that easy though! There seems to come a time with all such platform companies that a critical decision must be made before it’s obvious that it’s going to work. To Open The Platform Up To Others Or Not? Will the ecosystem adopt it? How will they pay for it? Can we deal with what is created? Are we truly at scale to handle this? Are we open enough to embrace the opportunities that come out of it? Are we ready to cede control? Are we ready to create our own competitors?

That last question is the one big one. But it’s the one to embrace to be a super valuable, rare platform at the heart of a significant ecosystem. And it happens to be the way to create a path to sustainable wealth generation that isn’t a short lived parlor trick.

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Isn’t one that solves a particular problem but instead opens new opportunities….

Just a thought.

Especially with the internet. Not everything has to be about faster, cheaper, more targeted.

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Great, actionable post from Seth Godin.

The certain thing is that you can change everything…

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Recently, for a variety of interesting and uninteresting reasons the logic driving the selection of my projects and company affliations warrants explanation.  Why?

Well, you, the reader/partner/associate, can decide if my explanations pertain to you, matter to you or make any sense at all.  Most likely this exposition concerns me alone – a letter to myself.  I figured that we’re all not so different though – so perhaps you, too, struggle in finding or creating projects that matter to you and this essay might help you in your processes.

I value projects and experiences with non-trivial consequences.

I think of consequences as both direct outcomes as well as side effects, learnings, connections and follow on projects.

Non-trivial is the crucial concept here.  Non-trivial is somewhat hard to define as you almost have to assign that status to a consequence retrospectively.  Let me leave that concept alone for a moment and instead focus on the trivial.

Trivial consequences in projects and business include:

  • Money alone – getting rich to get rich, getting rich as the only outcome
  • Fame alone – fame for fame’s sake
  • Career Move – an outcome that only moves a career forward regardless of the other consequences
  • Isolated Impact – it impacts you and you alone
  • 1000 Monkeys – an outcome so trivial that a 1000 monkeys in a short amount of time could produce the same result
  • 1 Monkey – worse than a 1000 monkeys is 1 monkey “in the right place and the right time regardless of experience or skill” could produce the outcome
  • Been Done Before – an old project with a new audience does not add value (usually)
  • Time and Space Dependence – a non repeatable “stuck in time” outcome.  i.e. pet rocks in the 80s.
  • Can’t Explain To Mom – a project that doesn’t impact mom or is too embarassing to tell mom usually is trivial
  • and combinations of any or all of the above.

Generally projects and companies with trivial consequences are easy to spot.  Thought experiments following the format “suppose this all worked out perfectly” generally reveal whether the basic consequences would be trivial.

I certainly have knowingly worked on projects and companies with trivial consequences.  Generally I work in such situations if the methods (work) is appropriately trivial (cost effective).  In fact, I cannot avoid, nor do I think anyone can avoid, a certain amount of trivial work – its often the trivial work that pays the bills in the short term.  Also, trivial work serves as practice or warm up or learning steps to non-trivial work.

The challenge involves avoiding trivial consequences requiring non-trivial methods.  Many projects require elaborate set ups and execution (and generally a lot of people). Finding simple ways to do things is very difficult (it requires thought! and practice!).  However, more damaging to the pursuit of non-trivial consequences is our (my!) confusion between methods (the pursuit, the work) and the consequences (the outcome, the goals).  I often fall into the trap of “if the work is hard, the outcome must matter!” Wrong! … usually.

In short, I do trivial work if and only if the methods are or can be made trivial (usually through the use of a computer or sub contracting).

And now the hard stuff!  Non-trivial outcomes can be hard to predict.  The metrics for non-trivialness are not obvious nor standardized.  The outcomes typically maintain challenging contingencies and/or are the result of hard to spot initial conditions.

This much I’ve identifed about non-trivialness in projects:

  • There is a barrier to entry/getting started – usually not monetary barrier – it is a skill, experience, concept barrier
  • The number of people potentially impacted is not small, that is, there is a generalization possible
  • Cut and Paste Is Not Enough – it is not a simple repackaging or reordering – synthesis or genesis must be involved
  • Unknown personal impact – you cannot predict its rebounding impact on you (your methods, your personal network, your experience)
  • Discomfort – it involves a level of discomfort, a struggle, a slight doubt about whether you can pull it off
  • Beauty – there is something beautiful in the methods and the result.  Perhaps a cleanliness or cleverness or visual beauty or structure – hard to define in words but easy to spot, hear, taste, feel.

Amazingly, non-trivial results often do not require non-trivial executions.  I can think of our best modern example – Google PageRank.  Hugely impactful and can be explained in laymans terms in one page.  I have many other examples for interested people (and, no, most of them are not computer or internet related!)

I suppose we can evaluate whether the original question or problem statement generating a project or company is trivial or non-trivial.  Usually though I do not see much correlation between the original question and the eventual execution.  I prefer to look at the current state of affairs to judge trivialness.  Again, we have many examples where the original question is quite trivial but the results are not or the eventual executed project is not (see James Burke’s “Connections” series for a fun exposition of such phenomenon)

I want to attack the idea of “homeruns” in business head on.  Many people seek the big idea in business, the big success, the huge windfall.  I conjecture most pursuits of the business homerun fail because the Get Rich outcome is trivial.  It is trivial to Get Rich in method and outcome.  Where does fortune alone lead?  If I had a big bag of money, what would I do with it?  Methods of just getting rich are tried and true – sell sex, invest in stocks, drugs, organized crime, arbitrage (fuel, clicks, tickets), corporate ladder hopping and variations on those themes.  Many people engage in these things – usually without knowing how trivial it is (so they do a lot of work!).  This is not for me.

Homeruns in business, the kind I like, are not predifined.  I don’t think “homerun” has a generally applicable definition.  I don’t know the distance to the fence.  I don’t even know if I’m playing baseball.  (metaphors suck so lets drop them.)  Point is… I don’t look for what is an obvious business success because if it were obvious (a) everyone is already doing it (b) it’s probably not as successful as it appears.

The key effort for business sucess seems to be in creation of value through conversion of resources.  Can I take my raw materials (experience, insight, networks, handiwork) and produce something people will buy or rent?  That is, can you take something without a price (that isn’t already in monetary/market form) and get the market to price it (value it)?  Yes, there’s a way to make money by reducing the cost of something that already has a price and so forth.  Again, that is trivial in most cases (though there are cases where reduction of cost is not a trivial task and the reduction in price resulting takes something with small impact to a very wide audience).  Again, for some margin management works for them.  For me it does not.

Defining and refining the project selection strategy is non-trivial and this is not my final effort.   The methods are trivial – write it down, test it, edit, test, repeat. (oh, and don’t go broke while testing project selection / creation strategies!)

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Well, are we all amused…? You know, things going your way, life better than it was a decade ago or at least a couple of birthdays ago…?

 

Today it’s…

  • The Pope
  • The Supremes (Court that is…)
  • Playoffs – pick your sport…
  • Market(s)
  • War(s)
  • Civil law changes
  • Constitutional law changes
  • Pollution outlook
  • Gangstatainment
  • Food shortages in developed countries
  • Creation of diseases to use pharma’s research results
  • Barrel of pain @ $115
  • Oh, and that political thing going on…makes a person bitter just watching

 

Nothing’s perfect of course so there are some things going well and others in or headed toward the big porcelain bowl.

 

Check out a February, 2008, U.S. government statistic that estimates that 77 million workers will leave the workforce in the next few years.   Most are members of the baby-boom generation.  I guess that makes them “Gen B” in modern marketing parlance.

 

Look to the left, look to the right, we’ll lose 6 to 10 % of the workforce by the time you all notice changes in your environment…as opposed to a written prediction that you find here.

 

The up-“and thinking about it” generations of workers will not be nearly large or skilled enough to replace those Gen B workers, figuratively or literally.  Technologies promise is being fulfilled but the billion days of experience encased in those that leave the workforce can’t fulfill the needs to use the technology that exists.  It’s impossible. 

 

So what we have here is a great potential for those that have a work ethic that they are able to promote to the highest bidder.  We also have a bunch of Peanut-like cartoon characters who want what they want which is not inline with what the workforce needs, the world needs or the mall needs.

 

Already we have a shortage of talented workers.  That means that there are skills gaps all over every industry, every sector of commerce and every level of employment.  Again, it is contextual.  If you have the juice to do the stuff that is needed, it is a VERY good thing for you as an individual contributor.  If you have a skateboard in the living room next to your direct connect Facebook profile or your iPod tree of accessories, you may find the coming years a challenge…assuming of course that you recognize challenges when you trip over them.

 

Amidst the impending shortage of workers and looming skills ‘black holes’, there is an increasing demand for results and continued pressure to improve the ‘bottom line’.  Now, there is not a big difference between the shareholder’s bottom line, the employer’s bottom line and your bottom line. As we are all finding out, we are all interconnected.  Not by some fuzzy, energy-laced icon, or a pillar of metaphorical musings or soft and romantic notions of nationality or piety but by relatedness in the absolute sense.  Screw up the aspirin formula in a lab in Malaysia and those in Germany and Mozambique get sicker, not better.

 

We are all related in numerous ways that we don’t attend to.  We do things and others do things and together we interact and do other things.  We are related by the context of what is around us.  What is around us is that which is going on in Bosnia and Boston, Denver and Dubai.  THAT context is the context that will never grow smaller, never become diluted and never disappear.

 

Today is always different than yesterday or tomorrow…[I know, heavy!]   But now, in this time period, we are more aware of things going on all around the world. With our greater access to everything we have greater potential for confusion when competing values must be confronted.

 

With workforce changes exerting their effects and economic complexities exerting theirs, it all leads to increased pressures on whatever we are doing.  The rapid pace of business, the demands of families and the need to have some ‘stakes’ in the ground in different areas of our life… all make for a world more competitively primitive like that from which we evolved millions of years ago than a world provided by a John Grisham or some contemporary historical romance author.    

 

So, here is the warning bell.  Take note… to overcome the losses from Gen B leaving and increase the probability of a single employee will be able to perform the work several employees have done in the past, there is going to be a wholesale changes in business performance software. Everything gets measured.  People are the ‘Business.’  Commerce uses what commerce needs.  Skill gaps identify contribution to cost.  Skills equate to value. 

 

All this will be confounded by little attention for “casual Fridays” or a need for a window office.  Gen-NEXT will be hired based on performance at every measureable level, get evaluated seamlessly, will perform where needed, get tracked to available tasks and get paid only for results rather than ‘work’. 

 

It’s already started.  There is less need to build robotics if you can get maximum production out of employees that need to feed their kin or code content.  There is a mushrooming interest in empirical learning and training that will come to dwarf philosophical and quasi-political niceties.  Get ready. 

 

Oh, and then we’ll need to figure out the other parts…those family relationship changes, social community interactions and the individual identity agony that is sure to follow. 

 

Hang on.

 

 

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