Example One: The Ambiguity of Making Money. Fred Wilson posted “How We Measure Success”, in which he answers this question: “would (you) be happy if Stack (whose president is quoted as saying he and his team is motivated about making the internet better, not making money) didn't make profits but did make enough money to sustain itself (a non-profit?).” Fred responded with a “yes, but” answer (see the post to read it yourself) and then went on to say that “our number one goal . . . is very large networks of engaged users. We believe if they do that, they will build value for themselves and us.”
Analysis: Fred Wilson is a VC. His very
large networks of engaged users strategy is an example of disrupting
the ambiguity by making better stuff and making money: Anyone can get your attention with a novel
product, but only products with meaningful benefits will engage. If the product is good enough to engage,
then early adopters are likely to talk about it, forming a network. And if the product is really good, that
network will scale up to be very large. But, the weakness in this strategy is treating customers as users. Let's face it,
the idea of users is hardly innovative. Big
media companies “used” creatives for content and the audience to generate
revenue from advertisers. When one party
in a relationship is treated like a user, eventually they rebel. So it’s not surprising that when Stewart Brand
said “Information wants to be Free” no one heard the rest of what he said,
which brings me to example two . . . .
Example Two: The Ambiguity of “free”. Michael Hirschorn writes in The Atlantic
about “Closing the Digital Frontier”. He
reveals that Stewart Brand’s seminal “information wants to be free” statement was
only part of the point. The rest of his
statement demonstrates the ambiguity of “free”: “it came with a significant
disclaimer: that information also wants to be expensive, because it can be so
important” (this is how Hirschorn paraphrases it with reference to actual quote
as shared by Walter Isaacson in a second article in The Atlantic, “Information
Wants to Be Paid For”). Hirschorn goes
on to point out the reason Apple’s market cap just surpassed Microsoft is the “app
model, where content is more likely to be accessed via smartly curated “stores”
like iTunes, Amazon, or Netflix, (which) signals the first real taming of the
Wild Digital West.”
Analysis: This article suggests the timing for “Disrupting
the Ambiguity” of “Free” and therefore the concept of “Users” is nigh. Michael Hirschorn is in independent television
entertainment production and he is about what “sells” not what will “innovate”: "The stuff I think
will change people's lives -- that's the stuff that usually doesn't sell,"
he said. "I think you're always trying to work in a little spinach into
the cotton candy and a little cotton candy into the spinach. You need to find a
way to exist somewhere in between."
However, I do
think he sees the ambiguity,
which is a lot more than many do. But who will lead the way? Which brings me to example three . . . .
Example Three: The Ambiguity of Leadership. In “The End of the Free Market. Who Wins the War between States and
Corporations?” author Ian Bremmer
explains how countries like China have been funding innovation to compete in the global Free Market to sustain their power: “the (authoritarian)
state is using markets to create wealth that can be directed as political
officials see fit. . . the ultimate motive is not economic (maximizing growth)
but political (maximizing
the state’s power and the leadership’s chances of survival).”
Analysis: Wonder if the US isn't the model for this "state capitalism" since both Roosevelt and Kennedy accelerated innovation by providing government funding to start-up companies who could help the US achieve objectives related to national security (first, building a military complex to fight in WW II and second, building the capability to go to space). The Roosevelt administration helped one of today's largest, still family-owned, consumer package goods companies, Mars, capitalize on its patents, shipping chocolate by candy-coating it (M&M's), shipping rice by par-boiling it (Uncle Ben's), and canning meat (Kal Kan).
Wonder if it will take government intervention to lead the way and decide which business and investor leaders will have the advantage in the market.
