Gustavo Montes de Oca ( @goldengus )

Posts Tagged ‘business model’

Contributor not consumer

In Uncategorized on February 9, 2011 at 12:45 pm

Rachel Botsman ( @RachelBotsman) at the British Library today clearly surprised a few old business heads. Some of us will be familiar with many of the examples she mentions as part of her Collaborative Thinking chat, and certainly the trends the examples reflect.  Her contribution is to go far and wide with examples from diverse sectors (travel, automotive, music, convenience) and introducing collaboration as a method to businesses. She is a great speaker deliberately speaking the language of business. (follow twitter chat on #collcons )

One concern I had was that bringing to light of these models and ways of working might help extend the reign of incumbents who really don’t “get it”. Nike’s Run Plus is held up as an example of collaborative consumption and community creation in which buyers are “contributors not consumers”. This, she says, has increased the amount of Nike products the ex-consumers buy. The lesson here to established firms is something like improve your marketing. Other businesses that take collaboration-lite may continue their dominance of markets by carrying out arms-length collaborative marketing excercises. Important to note that at the core of this model, the contributors are contributing to brand, not company, and contributing to shareholder value.

Maybe because many of the organisations Botsman used as examples are relatively new ( TaskRabbit, AirBnB), they have not yet dealt with the next collaboration that needs to happen for a real revolution – Botsman claims that the collaborative consumption model will be a revolution on the scale of the industrial revolution. I asked whether the new collaborative platforms, which apparently refer to users as “members not customers” are also collaborative in their ownership structures – are they including their members in share offerings? For now, said Botsman of the examples she knew, they include members in decision making and in parties they throw, but their funding comes significantly from the usual places – Sequoia in the case of AirBnB ( She did mention growing cooperative movement and the excellent People’s Supermarket @TPSLondon ). So, the collaborators are still creating value for shareholders. (OR is this the point, capital collaborates with people to create conditions in which capital gets what it wants and people get what they want?)

Towards the end Botsman touched on the concern over who owns the social graph and suggests that in future we could have reputational value. Perhaps using this would be a way to include the collaborators in the ownership structure. Afterall, Facebook needs the confluence of a whole lot of dollars and a whole lot of social graphs, so why not value the social graphs as a means to give some form of ownerhsip to ex-consumers. This way they could contribute to shareholders, fellow users and derive their own value from the service.

By the way, I have a copy now of  Whats Mine is Yours – let me know if you want to borrow it.

Advertisements

Parasite (v.) to Transcend

In Uncategorized on February 6, 2011 at 4:42 pm

An ant climbs up a blade of grass with a dedication which cannot be explained by its own biological imperatives, nor those of its colony. Gusts of wind blow it off and dew washes it back down, but it continues, driven by a parasite inside – a fluke. The fluke needs to enter the stomach of a sheep to complete the next stage of its lifecycle and so it drives the ant on which it parasites to the top of the grass, where it is most likely to be swallowed by the grazing sheep. (See Daniel Dennet on ants and ideas as parasites)

One type of transitional business model is also parasitic, though it doesn’t drive it’s unwitting host to self destruction in sheep guts, but rather to obsolescence.

Amazon parasited the bookshop chains, exploiting their bricks and mortar resources for its own survival. Waterstones, Blackwells et al were powerless to stop themselves becoming the real life browsing site for Amazon. Their advertising and marketing campaigns helping fuel purchases at the online retailer.

And then, as part of Amazon’s next lifecycle, it is working to replace the whole purpose of bookshops with Kindle designed to replace physical books and hence the need for bookshops.

At the same time, Amazon, having parasited on the infrastructure of bookshops, has created a symbiotic ecosystem infrastructure in which other vendors (potentially rivals) are invited to sell their own wares. The potential parasites are being brought into a mutually beneficial relationship. As these relationships grow, so do the storage needs of the Amazon system.

There is more to Amazon’s transitional business model. James Governor ( @monkchips ) of Red Monk reports that EMC CEO Joe Tucci said: “Amazon is clearly being subsidised by the bookstore at some level.

One reading of this is what I mentioned before, that the real life bookshops act as unpaid browsing counters for Amazon.

Another is that (if I understand Governor), Amazon is growing its data storage capacities because “everything drives storage” (see above link) and this could, ultimately be the real bedrock of what Amazon ends up doing. So, for now, Amazon is parasiting its own book selling business to increase its storage capacity and, perhaps, transcend its original business model once more.