Category: Collaborative Age value production system

How Decentralized Organizations Can be Effective

“In the early 20th century, big companies were synonymous with efficiency. In the late 20th century they were synonymous with inefficiency.” writes Paul Graham in his post ‘Refragmentation‘.

centralize_decentralizeThis is of course a bit simplified, however it fits with the historic trend of outsourcing and contracting a lot of the value chain out of the main industrial conglomerates into networks of suppliers and contractors, and the emergence of loose networks of small entities that prove to be more flexible and resilient than large organizations.

At the same time to be successful in large endeavors and projects, large organizations are still needed to leverage the appropriate financing and create the local conditions of low complexity and alignment that are necessary to make these endeavors successful.

It is difficult to combine the flexibility of networks of small, relatively independent entities with the coherence and leverage that are necessary for large endeavors. There is no fixed recipe, however that is probably quite the form of organization that will be the future in the Collaborative Age. We need to find the right approaches, and that is certainly one the challenges I encounter on a regular basis in my consulting activities.

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Why We Should Reconsider The Reason We’re Doing Startups

In this refreshing post ‘Reconsider‘, David Hansson, the cofounder of Basecamp, exposes his philosophy of startups and why he considers the general view of looking for fast-growing, billion dollar valuation startups to be a general conspiracy.

Life is too short not to to do something that matters“Part of the problem seems to be that nobody these days is content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.”

On the contrary, David explains his approach: “I wanted to work for myself. Walk to my own beat. Chart my own path. Call it like I saw it, and not worry about what dudes in suits thought of that.” He then declines it on several dimensions:

  • “I wanted to make a product and sell it directly to people who’d care about its quality.”
  • “I wanted to put down roots. Long term bonds with coworkers and customers and the product.”
  • “I wanted the best odds I could possibly get at attaining the tipping point of financial stability.”
  • “I wanted a life beyond work.”

I am personally rather on his small, human adventure side. What serves to develop a great venture that will eat me out? Let’s make a significant dent in the universe and stay small and human. And we can do so today with the internet and the Fourth Revolution. Be small and have a global impact.

“Life is too short not to do something that matters”: It can matter immensely and still remain small and human.

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How Powerful Algorithms That Shape Our Lives Still Rely on Human Creativity

The great Quartz post ‘The magic that makes Spotify’s Discover Weekly playlists so damn good‘ gives a wonderful insight of the positive brought to us by advanced algorithms and basic Artifical Intelligence.

spotifyIt goes into the details of how Spotify proposes new playlists based on one’s own preference, the playlists of other members with close preferences, and advanced algorithmic to bring all together into a wonderful proposal of new music tracks.

What I find extremely interesting is how the basis for the value that is created is actually human-produced: the playlists of other people. The algorithm does not find new tracks or discover new musicians by itself. It relies on the curiosity, the knowledge of its members. The algorithm exploits the community effect to create value for all members, leveraging the efforts and chance encounters of all subscribers.

“Spotify is also using deep learning—a technique for recognizing patterns in enormous amounts of data, with powerful computers that are “trained” by humans—to improve its Discover Weekly picks“. That’s where AI comes in to further improve the algorithm. But still at the core are the lists of others and how they interact with them to fine-tune their preferences.

All those algorithms enhance the power of the community but can’t replace it. All original creative data is still created by humans. Algorithms are still only powerful crutches to create value in our lives putting together all these individual contributions.

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Why Increased Accessibility to Ideas Correlates with Overprotection trends

Broadening on our post on the recent trend in US colleges to overprotect from potentially offensive ideas, there is much more happening in the world with a growing contradiction with the much easier accessibility to all sorts of offensive ideas, pictures on internet and the increasingly defensive behavior of society.

caution-internetFor example, in some respect the development of head covering and niqab in the Muslim world (where in the 1960’s uncovered hair and face was the most common) is also some sort of reaction to this wider accessibility of non politically or socially correct sources.

It may well be that the development of these overprotective trends is the consequence of the wider access to disturbing ideas. The world would then be increasingly split between those that can deal with these disturbing ideas (without necessarily condoning them of course), and those that can’t or won’t.

Over time, this might become a bigger split in the world’s population than the issue of internet access, with pockets of overprotective societies in both developed and less developed countries.

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How Collaborative Networks Always Rely on Few People

In collaborative networks, forums and wikis, actual production only relies on a small percentage of users. This is confirmed in a business environment in a post from the Harvard Business Review ‘Collaborative Overload‘: “In most cases, 20% to 35% of value-added collaborations come from only 3% to 5% of employees“.

cogsThe reasons are multiple:

  • Collaborative systems act as complex systems and hence, contribution follow a ‘long tail’ curve: major contributors really produce a large part of the value (however the aggregated value of the contributions of all the others should not be neglected)
  • Most users generate interactions of low value to the community
  • Most users are swamped by daily urgencies and do not have the time to do longer term contributions.

This small percentage has an interesting implication when it comes to organizations’ internal collaborative networks – they can only work if there is a sufficient number of potential users so that the core group of 3-5% of users generating most of the value is large enough. That is why a minimum of a few hundred to a few thousand potential users is necessary for successful internal collaborative networks.

The entire HBR’s paper is quite an interesting read as it focuses on the emotional drain for the key collaboration contributors and the fact that their contribution is often not recognized enough.

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Is the Smartphone Tax on our Time and Attention Worth It?

Following up from our previous post ‘How Mobile Phones Distract Us – A Real Life Example‘, Seth Godin speaks of the ‘Paying the smartphone tax‘. Because we are constantly distracted by the device, because we confound urgent and important, and because it seems that it only takes a short time to respond, our lives are deeply transformed. This is a tax on our time and attention. Is it worth it?

phone on trainWhat I personally find annoying is the amount of focus that smartphones tend to command when I am looking at something or interacting with it. It is extremely dangerous – even if I forbid myself to interact with my phone in clearly dangerous situations such as driving, I find myself sometimes in awkward situations because I was not paying attention to my surroundings (missed a bus or train stop looking at his phone anyone?). So the tax is sometimes very high.

Seth concludes “Like most things that are taxed, smart phones are often worth it, creating connections and giving us information when we need it. Perhaps, though, turning our phones off for six hours a day would be a useful way to cornering us into creating work we can’t live without”.

Our lives have become more interesting as a result of having a smartphone, but the tax we pay for it on our time and attention might sometimes not be worth the value. Maybe it is time to do an assessment and decide that there might be situations worth shutting the device down?

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How Mobile Phones Distract Us – A Real Life Example

A restaurant happened to analyze surveillance tapes from 2004 and compared to 2014 to understand some productivity issues (read Restaurant Watches Old Surveillance And Shares Shocking Results On Craigslist). The results are clear: nowadays, mobile phone distraction significantly uses up our time.

mobile in restaurant

Customers use time trying to connect to the wifi, taking picture of themselves and the food, which leads to much more time spent before placing the order and enjoying the food. Waiters’ time is also spent taking pictures of customers and helping them with their connection. And much more time is spent looking at stuff on the phone which adds delays in the entire process.

The issue here is not the impact on the restaurant’s productivity and turn-around (although that must be a huge concern to the restaurant owner because at the end of the day productivity is easily impacted by 20-30%), but this example shows dramatically how mobile phones use our precious time. And in the meantime we also kind of forget to connect with the people we have dinner with in the first place!

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How to Identify Quality when Products Become Commodities

Following up on our previous post ‘Why Democratization Creates Commodities‘, let’s dwell on the issue of finding quality products in the midst of the avalanche of available products and data.

5 star ratingPeer ratings are essential in new Collaborative Age to replace the filtering and quality control by institutions.

Of course it has drawbacks (creating trends and popularity which might not be entirely warranted) but not necessarily worse than the personal preference of an editor. The main issue is that while the opinion of an editor might be known, collaborative rating has a somewhat unpredictable outcome that might be influenced (and even possibly manipulated) through early ratings generated by supporters. Still when a domain becomes mature, collaborative rating does become effective and less influenced by initial ratings.

Democratization without a peer rating system won’t work. Both need to develop together. Be suspicious of democratization drives that would not be accompanied by a strong peer rating system!

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Why Democratization Creates Commodities

When capabilities are democratized, handed over to anyone that wants to contribute, they become soon a commodity. This means that their price plummets (often close to zero), and this also means that institutions that were create to vouch for quality disappear.

Flickr - democratization of photography
Flickr – democratization of photography

A typical area is photography. It is now possible to produce great pictures with mobile phones. If you invest in a dedicated camera, all sorts of automatic settings will help produce pictures of professional quality. While press photography still exists in a more restricted sense, more and more amateur pictures are available and used.

Because amateurs don’t care so much about being compensated because they are having fun, the marginal price of photography is close to zero. Of course there is a lot more average pictures available but among the choice one can still find great pictures.

An ongoing area is education. With online Moocs the institutions that were created to vouch for course quality (universities) will have a hard time, while education will be more available to everybody. At the same time many courses may be more average, but who cares?

Hat tip to Christopher Penn

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How Having Great Customers is Essential for Product Development

One of the benefits of the ‘lean startup’ approach is to seek customers very early on the basis of a ‘Minimum Viable Product’.

customer perception is your realityHaving first customers for a startup provides feedback on two levels:

  • customers are ready to buy the product: the product is bankable!
  • get real-life feedback from the usage of the product by the customer

The second type of feedback is essential as well and it is important to make the effort to collect it. It is also why the quality of the customers is essential: great customers will provide great feedback which will greatly, in turn, improve the product!

“A great customer wants you to be world class, and is willing to help you get there. Learn to spot them early, and then treat them like gold. Enough said.” – Gapingvoid

From the experience of developing a product in our new startup, I cannot agree more with this statement.

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Why the Winners in the IoT Space Will be Those That Will Overcome Security Issues

The Internet of Things (IoT) means that an increasing number of “things” are connected to the internet. It’s coming, and it is going to change the industry.

Hacked_car in ditch
Hacked car in the ditch (Wired)

Read the now well-known story how hackers managed to compromise completely a Jeep Cherokee in Wired. Don’t you find that scary? And that is just the start of the problem as more and more objects get connected.

We can heap up all sorts of security layers, once something is connected to the internet, it will always be possible with sufficient effort to hack it (it needs to be worth the effort of course!). The questions about security, safety and privacy linked to the Internet of Things are substantial, and they have no obvious answer yet. This excellent article in Forbes summarizes the challenges. Now it is clear that for the moment “Connectivity [of things] has outpaced security“.

The winners in the Internet of Things space will be those that implement a comprehensive security approach – like those who won in the area of peer-to-peer online payments (like paypal) were ultimately those who were the best at avoiding fraud. It is about implementing a comprehensive systemic approach to security, and not a device-based approach.

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Why the Internet of Things Will Lead to the Emergence of New Industry Giants

The Internet of Things is coming: more and more objects have sensors that can be connected to the internet. We are actually lagging behind the available hardware to invent applications. But the actual capability is now present.

iot-infographic-212-billion“The big game changer is that when all these physical objects can sense, analyze and interact on their own, it changes how and where decisions are made, and who makes them. The important thing to remember though is the embedded device by itself is not the game changer….it’s the combination of the applications, the people, and the processes around the ‘things’” (from IBM Center for Applied Insights).

Implementing the IoT will take time, and many trials and inventions. A good summary of the challenges in this ParisTechReview paper ‘From flowerpots to containers: a subtle anatomy of Internet of Things’.

We can already predict the emergence of new giant players that will master the applications in the Internet of Things, like Google and Facebook emerged from the first and the second version of the internet. And it is not a given that this time they will emerge from the Silicon Valley. The game is open!

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