COMRADITY

Disrupt the Creative Block

Internet Guru, Clay Shirky, wrote a book entitled "Here Comes Everybody" in 2009.  He predicted that the free "social web" would unearth new ideas which galvanize people more efficiently and more authentically than top down organizations ever could.

As welcome and refreshing as his prediction is, it turns out that encouraging everyone to take the dive is generating more quantity but not more quality. 

Leveling the playing field by making it easier for people to publish isn't like "giving them a fish."  It's like giving them a fishing pole but not teaching them how to use it.  And with everyone crowding around the edge of the water, the people who know what their doing can't get to them to demonstrate. 

To further complicate things, the internet is a multimedia and interactive technology.  Even professional creative people aren't prepared for all the disciplines involved.  Some have studied writing, or visual design, or music composition. Editing is something few are really good at.  So there are very few professionals who can demonstrate how to do it all.  And most universities still teach these expertises in a vacuum.  There are no advanced degrees in multimedia offered.

So we can sit back and wait.  Hope the next generation figures it out.  After all many great artists have learned to draw, musicians to compose, and storytellers to write.  But learning to create is a lot easier when the choice of medium is limited to music, or writing, or visual composition.

Where does one begin to develop the story and the workflow?  The choices are abundant - words, images, music, movie, organic or electronic, in real time or archival, dynamic or static, etc., and which language (knowing your work will be automatically translated into other languages adds a whole other dimension to carefully choosing your words).  Oh and remember that the audience can respond, how do you anticipate what comes next?

Each additional choice or consideration adds another brick and more mortar to the "creative block".

No one person can master all these skills.  With technology evolving so quickly, mastery isn't even durable.  So both natural insecurities about collaborating in a creative process and continually re-learning how to apply one's expertise add reluctance to the creative block.

Sure young people may be willing to take the dive and figure it out.  But the truth is independent creative professionals have a head start.  And young people who work beside them will benefit from that (and I don’t mean as free interns). 

To disrupt this creative block, we are encouraging independent creative professionals to work with us to blaze the trail, in three ways. 

First, we're creating a directory of independent creative professionals who want to blaze this trail here.

Second, we are raising funds to develop COMRADITY Digital Arts Resource Centers, a physical place for independent creative professionals - web developers, producers/project managers, visual designers, music composers, writers, editors - to share resources by co-working, co-learning, and co-creating. We will provide support services, such as tech and admin, to free time.

Third, once we have freed time, we will offer a “Cooperative,”  a business structure used by  artisan farmers, to overcome uncertainties professionals have about working together in a collaborative creative process.  One project we’d contribute to the COMRADITY.COOP is this workshop we are developing to help amateurs learn how to use images and music in addition to words to express more complex and nuanced concepts, mediamashing workshops.

Don’t hesitate to contact Katherine Warman Kernor Jim Kern with any questions, ideas, suggestions.

On Many Wishlists: BE MORE CREATIVE

A great infographic from the ADOBE Download Adobe_State_of_Create_Global_Benchmark_Study (April 2012) reinforces that, indeed, there is a "Creative Block" .

The Better Crowdfunding Platform

Reportedly there are at least 400 Crowdfunding Platforms ready to take advantage of The JOBS Bill.

You may wonder what a jobs bill has to do with Crowdfunding platforms. But that's because you probably didn't realize that "JOBS" is an acronym for: Jumpstart Our Business Startups.

The premise is fair - that jobs will be created by more small business startup's.

It's the assumption that's flawed: the way to start more small businesses is by making it easier to raise capital from inexperienced investors.

The Crowdfunding business model is based on the idea that customer/investors will desire a proposed product or service so much they are willing to invest in the company before it has hired anyone to build its offering. They believe customers will "invest" in advance of being able to see or experience a product or service because, in return, the customer has the potential to profit from the success by being an equity holder.

But the odds of jobs and profits are not great. If the company survives the start-up phase and hires people, more investors will be needed. That's when the early stockholders are crammed down, making the premium paid by that early stage customer/investor infinitely higher than the $900 I paid for my first VCR.

Wouldn't it be a fairer deal for the early stage customer to pledge to pay a premium for the product after the start- up hires people to make it? At least the customer gets something for their money - a product or service they think is worth paying for - and jobs are created.

Investors would have a reliable validation of the product or service before risking capital. By the time the company goes public, the risks and rewards are much more transparent.

Hope we don't have to go through another bubble and bust to get there.

A Method for this Madness

Personal Empowerment.  That's what the personal computer, digital media and the internet were supposed to do. 

But a barrier exists. Whether you are a college applicant, job applicant, or entrepeneur, even a mass media company, the internet has exponentially increased competitive quantity so much that quality is hard to find.

"Experts" promise they have the secret to success.  But when everyone does what they recommend, it doesn't work anymore - because everyone is doing it. There are new companies who have capitalized financially by magically offering a service for free and figuring out a way to make money from someone else by "NOT doing evil."  How on earth do you run a business of tens of thousands of people by telling them what not to do and know what they are doing?

The opportunity is for a new business that really does empower the individual.  Importantly, empowers the individual by helping them build productive relationships - to learn, to work, to live, to have fun.  Help individuals find their own voice, take advantage of digital technology's potential to communicate nuances and differences, reveal hidden connections, and anticipate the journey so you can enjoy it.  A business and its employees doing these things don't have time to "do evil."

There are methods - known and intuitive, traditionally and technology driven - used by businesses to do all of these things.. There is an opportunity to re-direct those methods to help individuals understand themselves better, communicate better and make decisions that are better aligned with who they are. 

Disrupt the Creative Block II (or a review of Steve Jobs Bio)

In Walter Isaacson's biography of Steve Jobs, he writes in the final chapters that Jobs told Ann Bowers "I did learn some things along the way . . . I did learn some things. I really did."  

Ann Bowers was from the distant past - the HR director of Apple during Job's first ride there. Isaacson describes her as one of the few who could manage his confrontational leadership style. 

So you'd think Jobs meant that he learned he needed to temper that leadership style.  But in Jobs own words at the end of the book, "I was hard on people somethimes, probably harder than I needed to be. . . . But somebody's got to do it." 

Instead I think he learned something that isn't really articulated in the book.  He learned that creativity is the undervalued asset - the competitive advantage . . . even in the tech industry.

Maybe he doesn't acknowledge this because using the word creativity in a business context is a credibility buster.  No one believes it is an asset in business.  Ask any creative in an ad agency and they'll tell you it is the result of lots of hours of trial and error.  Because creativity is the serendipity of fixing an error and discovering something wonderful.  Without errors there is no creativity.  But there is no guarantee that errors will spark creativity. Even Apple didn't have a 1.000 batting record.  Who would want to be in the error business?    

Apple did.  Jobs was willing to take the time to make errors and had no fear about creating the conflict to fix them. People paid a premium for it.  As Isaacson points out: "In 2010, Apple had just 7% of the revenue in the personal computer market, but it grabbed 35% of the operating profit."

Although he never acknowledges it to Isaacson, Jobs had to learn a lot about the financial value of creativity from his Pixar experience. Initially thinking  Pixar's value was in licensing its animation technology, he refused to give Disney an exclusive right to license the technology. Jobs was willing to give up rights to the characters and future film development rights to maintain control over licensing Pixar's animation technology.  In the end, there's no reference to him ever licensing the technology to anyone else. And Disney bought Pixar - not for the technology or characters which they already had the rights to - but to have rights to all future creative developed by Pixar. 

If appreciating the value of creativity is was what Jobs learned, then he still wasn't sure how it works.   In his own words: "We try to use the talents we do have to express our deep feelings, to show our appreciation of all the contributions that came before us, and to add something to that flow.  That's what has driven me." 

I wonder what he would have figured it out if he had more time . . .

 

The Next Big Thing

Music can be a leading indicator of many trends. Maybe that's because almost everyone has made music at some point in their lives. You could say that it is the first form of communication when you listen to a parent and an infant communicating with each other. First, digital technology added a new dimension to modern music production by making it possible to add visuals. Second, digital technoligy made it possible for everyone to publish music they make with visuals. Third, digital technology makes it possible for everyone to stream the music they make with visuals in real time. Advances in technology can make things better by removing the potential for human error. But human error can be the catalyst of creative magic in music. There's no guarantee that human error will lead to great things, as evidenced by 99.9% of the amateur music videos on YouTube. But when humans master the instrument and that human being is compelled to express their own, unique message - the chance human error will lead to something compelling is much greater. Until now, mastering new electronic instruments has been about preventing or correcting human error to publish music for the archives. When mastering the use of electronic music and visuals for live performances, the human errors which lead to discovering new music magic are much more likely to happen. A renaissance of human creativity is upon us.

This economy will resist even the irresistible.

There's a lot of hand-wringing going on right now about an economy that doesn't respond.  The economy is us.  And we are not responding.

We don't respond to more advertising on the TV at home nor on our computers at work or school or on our smartphones "en route" or while at play.  We don't respond because we don't believe it. It doesn't matter how much you've spent on packaging, keywords, social media experts, morning drive time, primetime rotations, or late night news when no one believes the message.

Imagine if you had a really irresistable new breakthrough for preventing cancer but no one believed it?

There are many reasons why we don't believe.

Too many businesses have used up all their "benefit of the doubt" chips. Too many next big things turned out to be NOT. We've been disappointed so many times we've even lost the "want to believe" unless it is about something we really care about.

Innovation today is inherently sophisticated, requiring some knowledge to appreciate. So we need to do more than hear about it, we need to learn about it.

Finally, no one can control the message. So it is best not to generate awareness until enough people really care about it, are educated, have tried it and can educate others from experience.

Mass advertising is for products which don't have something to prove.

The world needs a different form of marketing and media designed to find those who care enough to learn and build mutual confidence.  A different marketing expertise and media vehicles designed for  innovation today. The return on investment will be market growth.

Confidence

The one thing most analysts, pundits, politicians agree on is our economy suffers from low confidence.  Low consumer confidence.  Low business confidence. 

They all disagree on what it will take to restore confidence.  But that’s because they disagree on whether or not low confidence is justified.

If you think confidence can be restored with “stimulants” like low interest rates and government spending, then you think the low confidence is unjustified.  Demand is "pent up" just waiting for a nudge to reverse momentum.

But what if low confidence is justified?  Maybe consumers and business know, intuitively and otherwise, that we are on the cusp of a fundamental transition to new economic drivers. 

The last time the economic drivers shifted was in the 1980’s.

The economy grew exponentially from the 1940’s to the 1970’s, when today’s US Fortune 50 companies expanded from successful local businesses to national companies.

I worked with Fortune 50 companies during the 1980’s, United Airlines, Hallmark, Heinz, Procter & Gamble, M&M/Mars, McDonald’s, Wm. Wrigley.   After decades of exponential growth, the eighties were a transitional period.  Growth had slowed during the 1970’s.  To turn the corner, a lot of ideas and money were invested in developing new products and line extensions.  There were a few successes.  None generated the kind of growth realized during previous decades.  But the scope of experimenting was narrow.  Take laundry detergent as an example.  During the 1980’s, brands were researching and introducing new and improved ways to remove stains to promise superior cleaning power.  However superior cleaning power wasn’t the driver when the laundry detergent category was growing exponentially.   

When the packaged laundry detergent category was introduced, women washed clothes with soap they hand-grated from bars.  We can’t even imagine all the benefits beyond superior cleaning power of packaged laundry detergent.  It freed women from the drudgery, time, and scratched knuckles of grating bars of soap.  Increased discretionary time, self-esteem, and prettier hands are all very good reasons to pay more for something – especially at a time when the country was moving from an agrarian/rural to an industrial/urban society.  

This is just one example of the life-changing improvements during a period of exponential growth.   As these new products expanded distribution into new markets, advertising return on investment was visible. Newly stocked shelves were emptied in a day.  That's because advertising's value is primarily as an awareness builder.

During the 1980’s, line extensions and marginal product improvements were not so life changing.  With established brand awareness, there were few examples of advertising generated increased sales.  So by the 1990’s a full transition in economic drivers happened.  Improving efficiencies of large scale enterprises was the most likely way to increase earnings. In this environment, the Tech industry has grown exponentially in the US.  Fortune 50 companies have capitalized on the improved efficiencies of new technologies to improve earnings in the US even though per capita consumption is not growing.

Also, during the 1990’s and into the first decade of the 21sts century, these companies have grown exponentially outside of the US.  The impact has probably been as socially significant for women in emerging nations and Muslim countries as it was in the United States.  The return on investment of advertising in these countries has continued to maintain the belief in a traditional business model of free to the consumer, advertising supported media.

But emerging economies are maturing.  They are becoming competitors in their own right.  Low confidence in the US economy is justified.  A transition is necessary to re-fresh the economy just as it was necessary in the 1980’s.

Ironically, the transition will shift in the opposite direction, from a focus on efficiency to premium quality worth paying more for.  For example, the premium price of local food is not perceived as higher when one realizes the hidden health and environment costs of cheaper, large scale production food.  The gourmet kitchen appliance category is evidence that making food from scratch is becoming an aspirational luxury, not a burden, associated with better health, parenting, and quality lifestyle. 

A systemic shift to an economy of premium quality across government, business, and consumers will not only improve confidence, grow the US economy and create new jobs.  It will grow the US economy without resorting to isolationist foreign policies which could have an unintended negative consequence on economies outside of the US and national security.  Additionally, it will position US companies for future growth outside the US.  Our growth outside the US is possible because our products have been aspirational – either better than the local alternative or a way to improve one’s quality of life. 

The implications for technology is to shift purpose from efficiency to premium value.  Having lowered the cost of distribution, marketing, and information, technology has inadvertently created a scarcity of time and knowledge.  So technologies which teach people how to use their time effectively and make more money will be worth paying more for.

Laughing at Yourself May Resolve Conflict Better than Anything Else

Political grandstanding, corporate siloes, the "revenge of the nerds" aren't resolving conflicts.  Operating in a vacuum, isolated from each other, they don't question themselves even secretly. What will provoke each side to face the other?   

I recently saw a special on public television featuring the "Laugh-In" television show, which aired on NBC from 1968 to 1973.  It faced the cultural conflicts of the "Greatest Generation" and the "Baby Boomers" head on with really clever humor.

The humor was clever because it made both sides laugh at themselves. 

I'd bet that was not the writers' intention.

"Laugh-In" aired over 5 years before I started worked in the advertising business, when we never would've cleared what they did through the networks' legal departments. Ever.

Seeing the show highlights retrospectively, I realized how much of the humor was about the clash between writers and the network legal department.  For example, references to "Funk and Wagnall's" (a dictionary publisher) thumbed a nose at a legal department which probably wouldn't even let them use the word "funk."  That insight may seem inconsequential, but I suspect that if the legal department had not existed and "Laugh In" writers had said whatever they wanted, the show would not be remembered today.

"Laugh-in" accomplished what some other shows, like "All in the Family" and "MASH," also did at this time of significant social change.  They provoked everyone to question themselves and even laugh at themselves. 

The writers may have set out to make fun of bigots and prudes, representing the thoughts of the younger counter culture.  But I imagine pressure from the established networks and their advertisers forced the writers to also portray how silly the younger generation could be too.  The result is that these shows became rich, multi-dimensional stories about social change and earned wide popularity. 

I don't know if anyone has ever studied the influence of these programs on changing sentiments in the US during the 1970's, but in my own anecdotal experience, watching one of these shows with my Dad accomplished a lot more to bring us together on issues we disagreed about than arguing with him. 

The point is that in today's fragmented media world, the counter culture quarantines itself from mainstream culture to avoid being compromised and mainstream culture isn't benefitting.  What's missing is the place where they meet, they clash, and they laugh at themselves.

The remarkable creativity of the "Laugh-In" writers to overcome the challenge from the legal department instead of laying down their pencils and quitting is unacknowledged. 

Today's communication technology encourages isolation.  The great push to "personalize information" doesn't provoke people to face each other.  It justifies grandstanding.   

The real challenge is to design information so it provokes individuals to challenge the way they think and give them entertainment which encourages people with a common interest, but different perspectives, to laugh at themselves.

Capital Idea

Just finished reading "The PayPal Wars" by Eric M. Jackson. It is a riveting story about the rise of a start-up from the point of view of the trenches.

PayPal founder Peter Thiel saw an opportunity to capitalize on the internet's lack of borders to give the individual more freedom of choice in commerce and currency.

The business model was to earn money on the reserves held by "non-commercial" customers in PayPal accounts rather than charging fees, making PayPal a better bank for individuals.

But PayPal didn't execute this strategy. It wasn't international in scope, it was US based. To avoid banking regulations, it was a money transfer service (aka Western Union). But they never acknowledged this detour and adjusted the business model to include the fees a money transfer service is based on.

Jackson was hired and put in charge of marketing despite zero experience and limited resources. Although he joined the company based on Peter Thiel#39;s vision - free for individuals - his instinct was to find a customer to whom PayPal offered significant economic value. He targeted EBay auction sellers.

His instincts gave the company viability. PayPal value was so attractive for the big volume sellers that PayPal could weather competitive offerings and ultimately charge fees for services.

In a move which represents a true economic revolution, management rewarded these customers with accesss to pre-IPO options.

One wonders how much bigger and resilient the company would have been if they had started out by offering to share the wealth, similar to a local community bank or credit union. In fact, one wonders if the company would have been more profitable earlier, making it less reliant on investors for capital to grow. And if it did not have over $200 million of investment, would it have had to sell to EBay?

Jackson concludes that the factors leading to PayPal's need to sell to EBay inhibit entrepreneurship in general: competition, regulation, litigation, and ineffective law enforcement.

I'd offer that relying on capital from investors rather than customers contributes to a startup's vulnerability to all of the above. Raising hundreds of millions puts a startup on the radar screen before it even understands the dynamics of its market and customers. The life preserver for PayPal was knowing who the customers were that valued their service, where to find them and communicate with them efficiently, and the mutual respect between them.

A real economic revolution would be raising capital from customers to fund a start-up. This "creative destruction" would be irreversible by old economy competitors, the politicians who regulate capriciously, limit the interest in class action lawsuits, and engage citizens in collaborating with law enforcement.

Innovation doesn't always grow the Economy

This morning's news raises fear of a double dip recession.  Specifically, although corporate profits are at all time highs, they are not "trickling down" to more employing more. One explanation is automation.  In other words, jobs are being replaced by more efficient technologies which don't require humans to operate.

The implication is that the purpose of innovation has been to improve the bottom line more than creating new consumption.  The lesson learned: all innovation is not the same when it comes to potential for economic growth.

So as the politicians debate ways government can stimulate jobs, how about encouraging the factors effecting innovation associated with economic growth?

What would those factors be?

1) Competition: when multiple companies are competing, innovation's focus is more likely to be on better performance than lowering costs.  Any government intervention which raises the barrier to entering a market or protects existing companies from new competitors will be counterproductive.   This is not to rule out all regulations if it rewards those whose business model is inherently compatible with the regulation.

2) R&D: Investing in new technology to lower a company's costs should not enjoy the same tax incentives as higher risk R&D in new product or feature development to benefit customers.

3) Smarter Customers: Third party services (media, financial transactions, buying agents) which invest in information design technology to make customers smarter is more likely to create economic growth than technologies which exploit customer information to benefit other companies.

4) Capitalize on the Underemployed: Although educating the labor force is a good idea for the long run, there is a short term opportunity to apply the untapped knowledge and creativity of the underemployed.