Excapite

Revisting the Law of Plentitude 15 years on

2012-02-26T23:16:00.000-08:00

So can we use the New Rules for the New Economy as the basis of a proforma template to organise our thoughts into something more concise and readable? Something fresh and original like the 12 much newer new rules of the network economy?

Perhaps not but I think it is worth revisiting rule number 2 - The Law of Plenitude or the idea that on the newtork more gives more - before we move on.

Curious things happen when you connect all to all. Mathematicians have proven that the sum of a network increases as the square of the number of members. In other words, as the number of nodes in a network increases arithmetically, the value of the network increases exponentially. Adding a few more members can dramatically increase the value for all members.

The benefits of the Law of Plentitude are self evident if we map the world wide growth in the number Internet Subscribers against the growth in global online advertising revenues between 1995 and 2009.

Even if you factor in the growth in click fraud the economics of the network effect are there for all to see. The growth in revenues has been far greater than the growth in subscriber numbers.
Put very simply the revenue creating capacity of the network is significantly more than the sum of its parts.

Of course the growth isn't quite so impressive when you convert it into percentage terms. Even if you discount click fraud from the equation the growth in online advertising is only growing 3 times faster than the number of subscribers.

However the problems really set in once you factor in the growth in the number of web sites. You see the benefits of the network effect may be self evident, if somewhat marginal, on the customer side of the equation. But not on the supply side of the equation. i.e. Where the money is made. At least in content circles.

You see the growth in web sites over the same period is 10x that of the advertising revenues supporting the network. 32x the number of subscribers. Plus the growth is exponential. 235 Million websites in 2009 became 500 Million in 2011. Supply is outstripping demand. The network is flooded with unlimited inventory.

This of course is the story that we uncovered back in November 2010 when we undertook an indepth analysis of Mary Meeker's Web 2.0 online advertising data. (e.g. Web Economics 101 or why the Long Tail of the web is free and Why the online vs offline ad spend is still out of whack) Here we discovered that, based on 2009 advertising revenues, the web economy could only support about 20,000 media web sites (Think So just how many web sites can the advertising industry support?).

This journey ultimately lead to the creation of this infographic and the post on why the fall in print advertising and the growth in online advertising isn’t a zero sum game

So the real story of the economics of the Network Effect isn't about a network of plentitude where increasing the number of nodes in a network increases the value of the network increases exponentially. A network where adding a few more members can dramatically increase the value for all members.

The real story of the economics of the Network Effect is about fragmentation of wealth.

A network economy where more means less. A lot less. For the majority of members on the network. Particularly once the economics of the Zipf curve are factored in.

You see the great tragedy of the network effect is the value of the network economy is worth significantly less than the sum of fits parts. Not more as the theory predicts.

In the end though what interests me most about the Law of Plentitude isn't the immediate economic impact of a network awash with unlimited inventory. It is the long term impact the Law of Plentitude is having on innovation.

You see on the network of plenty, the network of infinite abundance, the only talent that thrives is the talent for discovery or replication. The cost of origination is simply just too high.

This then is the Law of Plentitude 15 years on...

Curious things happen when you connect all to all... and it is not what the mathematical models predicted.

Of Mumbai and Starlings

2012-02-26T14:26:00.000-08:00

I watched the final episode of The Code on TV last night. The Code is a 3 part documentary series by Marcus du Sautoy on the "mysterious mathematical code" that underpins the world.

While watching the series I couldn't help notice but how "dumbed down" TV documentaries appear to be these days. At least compared to those of the 1970's and 80's.

Most run like an episode of Mythbusters. i.e. If you have just tuned in since the last ad break then this is what you have missed. So the net effect is rather than encountering one new big idea every 5 to 10 minutes you encounter 2 maybe 3 big ideas repeated over and over again over the course of an hour.

So where as the old documentary format was.

"I think that..., Here let me show you..., See what I mean... which means I now Think..."

today's model appears to be

"What if..., Let's find out..., Did you see that?, Let me show it to you again in case you missed it the first time".

Or, in other words a program format that is designed to hook channel surfers rather than engage serious and thoughtful deep investigation of the subject matter.

Which means one hour of TV is now padded out to be a 3 hours of TV. I guess you'd call it engagement 2.0.

While watching part three two ideas came to mind. The first when the magic number of 7 was mentioned in relation to the mathematical models that emulate flocking (e.g. the flight path of starlings) and the second being the 1.15 magic number in relation to the growth of cities vs average wages.

Within the context of The Code the number 7 is the number of other birds a bird has to watch if it is to participate in the activity of flocking. This lead me to speculate that, if this was correct, then wouldn't it follow that a social network where each member is limited to just 7 friends be more viral, and therefore more orientated towards monetization, than a social network where the average number of friends is 135+?

I thought the 1.15 growth number was also worth exploring. Just to see if it provided an insight into the financial value of the Network Effect. So I reran the figures of that 2000-2009 US online advertising model to see if 1.15 was hiding in the patterns.

This chart illustrates the percentage change in growth over the period 2000-2009.

As you can see there is no correlation between the growth in the number of subscribers, the growth in advertising revenues and the value of 1.15. Even subtracting factors like the decline of print, the growth Google and the growth in click fraud into the mix failed to deliver a correlation.

What is interesting of course is the apparent lack of any network effect in this market over this period once you factor in the growth of click fraud into the model. Revenue is growing at the same rate as the growth in network subscribers. Which of course raises the question. What happens to growth in the US online advertising market once the number of subscribers reaches saturation point?

The answer to that of course is the network fragments into multiple channels (e.g. Google+, Facebook, PinInterest and Twitter) with advertisers offered exclusive access to the "amazing" subscriber growth in these new emerging networks.

Moving on. The ITJourneyman sent me an email over the weekend asking the question if Silicon Valley is the new Hollywood does that make Mumbai the new Bollywood?

In many way Bollywood represents where the post industrial West has come from, rather than where it is heading. There is a joy for life in Indian cinema sadly lacking in much of the fare Hollywood serves up today.

In contrast the software industry in India probably represents the future of the industry.

I say that simply because India has taken the Silicon Valley innovation model (i.e. using small innovation teams of star performers to out perform large corporate incumbents) the next logical step and reinvented it as an 'innovation as a service' factory.

These factories take advantage of the fact that, thanks to the network, proximity to the market is no longer a competitive edge in the information economy.

They then leverage their unit product cost advantage to radically change the innovation paradigm at the granular level.

Silicon Valley VC's fund smart teams to disrupt the market leaders by fragmenting the business model. Confident that a viable solution will emerge from the chaos.

Indian outsourcers fund dozens of low paid, low qualified programmers to disrupt American and European software developers by fragmenting the customer's requirements. Confident that a viable solution will emerge from the chaos.

All of which suggests that, if Silicon Valley's innovation model is efficient, then India's IT sector has taken that model to the next level of efficiency. i.e. Innovation as a service as opposed to innovation as a business model.

This of course assumes that Silicon Valley's innovation model is efficient. This of course is debatable.

Wired for chance

2012-02-24T17:35:00.000-08:00

I found the time this morning to follow the link from GedCarroll’s analysis of f-Commmerce back to 1997 and the Wired Magazine forecaston the New Rules for the New Economy.

It is always good to go back to the euphoria of the dot com years justto see how far our ideas about the web have evolved over the past 15 years.

Of course all the Wired party pieces are there. Here for all to see is the birth of Free andthe Network Effect. Plus a great deal prosaic insight that could best be described as pure sophistry(e.g. Because value appreciates inproportion to abundance, a flood of copies increases the value of all thecopies and If services become morevaluable the more plentiful they are (Law #2), and if they cost less the betterand the more valuable they become (Law #6), then the extension of this logicsays that the most valuable things of all should be those that are given away).

But, part from the abundance of the almost Pythonesque "Witch = a Duck" logic scattered throughout the prose what I found most interesting over the 12 pages of commentary was thissummary insight

The net is like a country, but with three important differences:

1)      Nogeographical or temporal boundaries exist - relations flow 24 by 7 by 365.

2)      Relationsin the Network Economy are more tightly coupled, more intense, more persistent,and more intimate in many ways than those in a country.

3)      Multipleoverlapping networks exist, with multiple overlapping allegiances.

Yet, in every network, the rule is the same. For maximum prosperity,feed the web first.

In particular I found the idea of Relationships in the Network Economy being moretightly coupled worth exploring further.

Why? Simply because perhaps the most interesting thing about Facebookis it is in the networked relationship business but it has no relationship its network of users. In fact it doesn't even have customers. All it has is traffic.

What relationships that do exist on Facebook are between by the usersof the service.

Facebook is relationships as a service. Sans the most fundamentalrelationship in business. The relationship between the customer and the service provider.

It is an interesting paradox but it highlights the gap between what Iconsider to be MobCon thinking and Fauxionary thinking.

You see the MobCon Thinker still believes the Wired World Mantra of the value of the network can bemeasured by the size of the network because the underlying assumption is relationsin the Network Economy are more tightly coupled, more intense, more persistent,and more intimate in many ways than those in a country.

In stark contrast the Fauxionist believes that all the evidence collected to date onNetwork Economics clearly indicates this statement to be demonstrably false.

The Fauxionist believes the reasonwhy the network economy has proven so difficult to monetise is relationships inthe Network Economy are loosely coupled, transient, superficial and largelyimaginary constructs. We have confused Xe.Mes for relationships.

We operate not in a Network Economy but in an Blip Economy.

All of which means the future was never going to be about f-Commerce when both the opportunity and the challenge for retailers going forward is better understood as Blip-Commerce.

Waiting for GO.DO

2012-02-23T13:06:00.001-08:00

Before he started blaging with bits of film Eisensteinwas a theatre director best known for his ideas about a theatre of experiences.A theatre of Xe.Me if you like.

Now I have been contemplating the task of updating Beckett’s Waitingfor Godot for the iGeneration for some time now.

The idea of two people on stage waiting for Googleto send them traffic has been brewing in the back of my mind. Waiting for the network effect can kick in. So they canmake a living out of blogging. It appealed directly to my sense of the absurd.I just couldn’t see it lasting longer than a 3 minute comedy sketch.

Then GB sent me a link to this campaign for BBCWorld - See both sides of the story around the same time Idiscovered this photograph of anAnimal Naturalis demonstration to promote vegetarianism in central Barcelona.

And I thought. There could be more to this than justa couple of bloggers hanging around for the world to love them. This could be atrue MoRoCo mash-up. Think Heart of Darkness meets Waiting for Godot.

Anyway I haven’t written the dialogue yet. But Ithought I’d jot down my thoughts so far just to see what you all think.

We’ll begin by setting the scene.

There are two actors. Could be man/woman, or itcould be man/man or woman/woman. Doesn’t really matter.

The stageis empty apart from the letters GO.DO at the back of the set. These letters actas a projection screen. Above each letter is a camera pointing out towards theaudience and the back of the actors. What each camera “sees” is projected as alive feed on to the letter. So the illusion is a mirror. i.e. the audience cansee themselves watching the actors or simply watch the action from behind.

The twoactors have iPhones or iPads. The front and back camera from the iPhone is alsofeed into the projection feeds illuminating the letters.

Thedirector can remotely switch the feed for each letter between any of the 8cameras (i.e. 4 letters and 2x2 iPhones) plus a series of stock images andvideo footage that make up the scenery.

Theactors will use the cameras to tweet and send images to the audience and toeach other.

Theaudience can interact with the actors during the performance via Twitter.

The Twitterfeed is displayed on one or more of the letters throughout the performance.

The setsare displayed on the letters. For example The G may the bathroom. The O theEntertainment Room. D the Dressing Room in the Shop and O the Office.

The firstact is Deconstruction.

It is a45 Minute act in which the two actors initially decide to become So.Mepersonalities and then proceed to deconstruct their personalities as theydesperately try to attract an audience.

The scenariocalls upon both characters to revel their inner most secrets via a series of tweetsand images using their iPhones.

As theactors become fully engaged in the deconstruction they will disrobe as part ofa series of increasingly more revealing sext messages that they post to eachother.

Once bothactors are fully exposed and standing naked before the audience they becomeaware of the fact the audience is watching them and as they stand naked in thespot light, in shock and confusion the lights fade to bring the first act to aclose.

The second act begins where thefirst act finished. Both actors are naked facing the audience. But thediscarded clothing from the first act is replaced by two bags.

The first bag is feminine itcontains cosmetics, stencils and body paints. The second bag is masculine. Itcontains a book of blank pages and a flack vest mocked up to look like a suicidebomb.

The choice of bag is a randomselection. Indeed both bags are identical to the audience.

During the course of the secondact the two actors assist each other to put the contents of their chosen bag ontheir naked bodies.

The owner of the cosmetics bagwill end the act covered in stencilled tattoos of the worlds’ leading Lovemarks.These tattoos are a reflection of the advertising messages they encounter ontheir iPhone during this part of the performance.

The owner of the second bag putson the suicide jacket while reading and responding to tweets in an intense caseof cyber bulling or perhaps better still no response. By the end of the actthey are equipped to blow up the audience.

This then is the knife edge ofthe conflict of So.Me man revealed. The Branded Life vs. the Life of the SocialMartyr.

Once they are in costume theyturn and look at each other in the letters of the Go.Do signage at the back ofthe set. Then a clock appears in one of the O on the side of the stage occupiedby the suicide bomber.

The end of the world as we knowit is ticking down. Second by second.

They use their iPhones toTweet/Txt to the audience a request: “what should I do?”

If the audience responds then thedialogue begins and the rest of the performance is filtered by the input of theaudience. The objective being for the audience to convince the bomber to disarmthemselves and walk away.

If they get no reply from theaudience they Google the question on their iPhone “What should I do?”. Theythen ask Siri the same question. Then Twitter. Then Facebook.

If the audience becomesaggressive or suggestive or confrontational with the performers then theSuicide bomber explodes the bomb in a flash of bright light and an earshattering bang. Paper shrapnel covers the first few rows of the audience and theperformance is over.

As the 15 minutes counts down thenoncombatant pleads with the Audience to get more involved.

After the clock hits zero theconversation continues as long as the audience is engaged and is notaggressive. As soon as the audience disengages or fails to interact with the SuicideBomber the performance ends with the bomb exploding.

Upon leaving the theatre eachmember of the audience will be text a digital photograph of the expression ontheir face when the bomb exploded.

A copy of their personal Xe.Me.

Upon reflection maybe it would bebetter as a dance? Or even a Broadway musical. Phantom of the Network anyone? Andwhat about the sound track album?

Again a PinkFloyd pastiche comes to mind.

Hello. Is there anybody out there?
Is there anybody left sitting in those seats?Hey you. Don’t go. The show’s almost over. Just a few more minutes left here.Before I blow you all to bits...The dream is gone.
I have become comfortably numb.

Till next time...

f-Commerce provides more proof that online traffic != customers

2012-02-22T13:35:00.000-08:00

It has been just over a year since I asked the question how easy will it be for Facebook to profit from f-commerce?. It was part of series of posts in which explored who was in a best position to exploit the potential of the network as a commercial hub: The Mobile Handset manufacturers, the Telcos, the established eCommerce players or the Social Networks.

Now with the news this week that major retailers are now closing down their f-Storefronts it would be easy to go back and examine why Facebook's "Play with us, Buy from them" old media model was always going to be challenged in a new media world of "Browse with us, But From Us". Why there's no business like So.Biz. But we've already been there and done that. It's time to nail why our ideas about the value of the network are fundamentally flawed.

You see our ideas about the value of the network are shaped by two things. The number of nodes and the number of connections.

Facebook is valuable because there are over 800 million nodes (i.e. Members) with an average of 135+ connections. Facebook's social graph is valuable because it gathers big data on those 800 Million nodes and the types of interactions each node has with those 135+ connections.

Aggregate the number Mobile Phone users and you have potentially an even larger network. Same goes for the aggregate number of Internet subscribers

It is simple maths. The value equation is very simple. It is called Metcalfe's Law or Reed's Law. It all depends how much blue sky you are looking for in the valuation.

And yet we have seen time and time again that big networks don't translate into large numbers of active customers (Think: The Great Google Gamble: Does traffic equal customers?). Indeed large networks don't even translate into active participants (Think So what’s the economic value of a follower on twitter? or Is A 0.014% Ad CTR Facebook's Weakest Link?)

So why is there no correlation between traffic and customer value?

The simple answer was provided in yesterday's post.

If you made the effort to read Phil Ball's article (i.e. The one that married Spinioza, Revie and Barcelona into a single catch phrase) you would have read about the young lad who made the decision to transfer to a new team simply because the full back passed the ball to him more times in the trial than his team mate had all season.

The point being that in a football match the difference between two teams isn't the number of nodes or connections. After all both sides have 11 players and the same number of permutations when it comes to passing the ball. It is the frequency of the interactions between pairs of players, that prove to be the catalyst that allows one team to out play the other. Or what Spinoza described as the useful associations.

The example given in Phil Ball's article being the Messi-Iniesta relationship is one of the most memorable in the history of modern football

You see the real value metric isn't traffic. Nor is it the size of the network.N or even the number of connections. The real value metric is the number of useful associations as measured by the frequency and quality of the interactions between pairs of nodes.

If you are a developer you should be looking to monetise the useful associations. Not the network. Likewise if you are an investor you should be seeking to invest in useful associations. Not the network. Finally if you are an advertiser you should be looking to build (and eventually harvest) Useful Associations. Not buy time on the Network.

The Network = The New Traffic

Number of Useful Associations = The New Value Metric

It's not rocket science. And it's nothing new. It really just about getting back to business basics. i.e. Customer Lifetime Value.

After all what would you rather be? A Strategic Partner or Freemium Provider?

Out on the piste

2012-02-21T16:30:00.002-08:00

A one act play for four people

[Setting the Scene]

After a long day at the Excapite conference a Fauxionist, and Xe.Meist and a MobCon artiste adjourn to a Karaoke bar in Liverpool.

Having ordered a couple of warm beers and a dry martini - shaken, not stirred - they are looking forward to the opportunity to perform their individual party pieces. Revolution, Tomorrow never knows and The Magical Mystery Tour. Sadly the So.Me guru already has the mic and having just completed a rather dour rendition of George Harrison's "I Me Mine" is now launching whole heartedly into Sinatra's My Way.

Having pondered the fate of Eleanor Rigby the discussion quickly turns to matters of the day.

Football.

[Draw the curtain open]

MobCon: Did you see that piece on Leeds United by Phil Ball? The one that married Spinioza, Revie and Barcelona into a single catch phrase. What was it?

Fauxionist: You only develop or progress in life when you make significant associations.

MobCon: That's it. You only develop or progress in life when you make significant associations.

Xe.Meister: Yes. Phil Ball said Spinoza felt that the whole of our lives boiled down to a search for these 'associations', and that the rest was just decoration. Which means that a team can begin to improve if it has just one useful association. The more associations. The better the team. This is what makes Barcelona great and Liverpool... Well...

Fauxionist: Do those associations include the referees? and the administrators?

MobCon: What? Get out of here. No a football team is just like a network. Build a stronger network. Build a stronger football team.

Xe.Meister: So does that make Barcelona the perfect team?

MobCon: Well they have it all don't they. Great players, Great movement and Great passing. What's not to like about them? They share the ball around and have so many options. The opposition spend most of the game chasing shadows.

Xe.Meister: So what does football teach us about the future of the Internet and the Web?

Fauxionist: Actually nothing. The illusion between Football and the Network is largely superficial... at least if you take out the assumption of match fixing. You see we look for simple ideas to explain complicated systems and behaviours. And yet the analogy and the reality are mutually exclusive.

At least until we have football matches played by robots and men.

The web is an electronic network consisting of a potentially infinite number of footballs and an infinite number of real and robot players. It has infinite potential for growth. Unlike football which has 22 players, two goals, one ball, a fixed area of play and set of rules.

The web is chaos. Football a game.

We look for these associations simply because they have currency in a free market. Not because they provide answers to the problems of operating and profiting from the free market.

In the 1800's there was a market for Fairy Stories. Today there is a bubble market for books on business and management based on the unlimited power and potential of networking... in all its forms. Social, Commercial, Interest. You name it. If a line between two points can be drawn it now constitutes a network theory. Better still if the line is between two ideas.

[They all turn and look in despair as the So.Me guru, without missing a beat moves into his next song. "What about me?"]

Fauxionist: Looks like we'll never get our chance at the mic the way he's going at it.

MobCon [Hoping to change the topic]: So did you think to Ged Carroll's idea about the Internet and the Perfect Market? and that Facebook is the digital equivalent of the Hotel California. You an your data can enter, but never leave.

Fauxionist: The problem with the perfect market theory is it assumes equilibrium. And yet any chemist will tell you that once a solution reaches equilibrium then essentially the catalyst is used up and the reaction stops. Markets thrive on activity. Not equilibrium.

As Ged points out Commerce on the web has been little more than a series of arbitrage plays. A game of low hanging fruit. Take the arbitrage play to its logical conclusion and we'll see a world in the not too distant future were people walk down the street taking pictures, or capturing the sounds of the world around them, with their mobile phone and then sending orders for what they have discovered directly through to the manufacturers and what's left of the arbitrage plays.

Under this scenario commerce will be little more than a game of mobile discovery and instant gratification delivered directly to your door.

MobCon: Actual even that doesn't take it far enough. If everyone has 3-D printers at home. Then It will be waiting for them on the printer when they get home.

You see the economic challenge of our day is not to seek the perfect market.

The optimisation of the old economy.

It is to use the MobCon, the convergence of everything into the mobile web, as the catalyst to reinvent our whole economy.

You see the network is the answer.

Fauxionist: So does this mean the future of the western economies will be dominated by the network, manufacturers of mobile gadgets and 3-D printers and purveyors of bags of magic dust? If that's our future then I reckon the network is the problem.

Xe.Meister: Sounds brilliant to me. Hey. Who knows we may even be able to print out a whole new team of footballers for next season?

MobCon: You mean like those printable drones?

Xe.Meister: Yeah. They can't be any worst than the current crop we have playing for.

Fauxionist: I suppose the networked future might not be all that bad. Who knows we might even be able to beat Barcelona. Wouldn't that be something after all these years.

[The So.Me Guru starts to sing a mournful rendition of "You'll never walk alone"]

Xe.Meister: You know lads. I don't think this guy is ever going to give the mic up. Who's for a singalong or bit of Guitar Hero followed by a game on the X-Box?

I'll be Man U.

[They all get up and walk off. Draw the curtain and dim the lights]

Botonomics. Or why the system already is self aware

2012-02-20T12:47:00.001-08:00

I was reading Thor Russell's analysis of Why Robopocalypse, Skynet Or A Distributed Cyber-Mind Will Not Emerge From The Internet and I couldn't help but think that, although the data demonstrated how far we have to go technically before the network becomes the application, within the scope of being a living conscious. A complex adaptive system. The reality is the Internet and the Mobile Network Economies have been self aware for quite some time.

You see if you factor in click fraud, fake or zombie accounts, download bots, PageRank, SEO, EdgeRank, advertising, product placement, blogging, fake reviews, Traffic Bots, Twitter Bots and all the other legitimate and illegitimate activity that has emerged to help entrepreneurs, investors, marketing managers and consumers game the network in their favour then it could be said that the system - be it the Internet economy or the app economy or even the financial markets - became self aware within a very short period of time.

Indeed it could be argued that Judgement Day has already passed.

It was Friday, March 10, 2000. The day the Dot Com burst and the financial markets went into free fall.

After all, if you take new debt out of the equation, the US economy, as measured by GDP, hasn't grown at all since the crash. It is too busy dealing with the creative destruction being wreaked on the US ecomony by the global "Cyber Mind".

Hooray for Hollywood!

2012-02-19T15:03:00.000-08:00

Just read a rather interesting piece on How Gordon Moore Invented the Talent Economy (and Changed The World) and I thought I would quickly jot down my response now. Simply because it contains the key that unlocks the puzzle to why Silicon Valley is so innovative.

The key insight within the post is "In Silicon Valley, we take venture capital for granted but few people realise what a fundamental shift it represented in the relationship between capital and labour.... The introduction of venture capital essentially reversed these roles with capital now chasing talent. "

The insight being: VC's chase talent. Not ideas or innovation.

Now of course Silicon Valley didn't invent the VC/talent model. It is a Me2 of the Hollywood model introduced by United Artists in 1919. But that is the point. Silicon Valley is a Me2 of Hollywood therefore it operates under the same investment model.

The Hollywood producer is in the business of manufacturing Movie Stars and packaging them up in Box Office Blockbusters. Silicon Valley VC is in business of creating Web Stars and coupling them with Game Changing IPO's. It is the same model. It is just the product is different. Both revolve around the idea of leveraging Bankable Stars to get punters to hand over their hard earned cash.

So the driver isn't game changing ideas or technologies. Ideas and technologies are like scripts. They are a dime a dozen. The driver is the cult of the personality. It is about creating techstars (and the occasional starlet) and then profiting from their bankability.

We have looked at these ideas before in Blockbuster Innovation: Another look at what makes Silicon Valley so innovative where we discovered that the key to success with the Blockbuster Innovation model lays mostly in the ability of the sponsor to pick winners. i.e. It is the quality of your VC's that counts. Not the talent pool or the ideas you have to work with.

Those that at excel at this must have the right mix of financial wizardry and PR smarts. They are the ringmasters of the dog and pony show that is the three ring circus of Silicon Valley.

This then explains why, despite all the metrics we have gathered on why Silicon Valley is so innovative, there is no correlation between the level of Venture Capital activity and growth in the US economy and why, prior to the release of the iPhone, the US fell a decade behind Japan and South Korea in the MobCon innovation race.

It also explains why most of those government funded tech parks and Silicon Valley look a likes now sprouting up around the globe have fundamentally missed the point. i.e. Just because you have more sunshine than southern California doesn't make you the next Hollywood.

Innovation Capital

2012-02-19T13:20:00.000-08:00

The final video in Kirby Ferguson 's excellent series "Everything is a remix" deals almost exclusively with the ideas behind intellectual property and the impact any revision of copyright and fair usage laws will do to innovation on the Internet.

Of course intellectual property is a very narrow view of the value of business or corporate "intelligence". I much prefer the ideas explored by Leif Edvinsson and Michael Malone in their book Intellectual Capital. First published in 1997 it explores the idea that organisations should apply the same techniques they use to measure, monitor and manage their financial capital to maximise the ROI on their intellectual capital.

You see Intellectual Capital is part of that portfolio of "intangible" assets that fail to make the company balance sheet.

More importantly it introduces us to new ideas about how an organisation's portfolio of Intellectual Capital in all its forms can be leveraged to improve shareholder value and customer satisfaction.

If we cross fertilise these ideas about Intellectual Capital with Treacy & Wiersema's Value Drivers we discover a new design paradigm that closely links organisational creativity to value creation.

Design Value is the Intellectual Capital created and "banked" by the organisation. The design driver is the motivation for generating new value.

For example: In this context Social Capital is best understood as the Intangible Asset of market reputation. It is perhaps the best economic argument you could mount for forgetting about ROI for Social Media. Indeed elevating the primitive ideas now in circulation about social business into Social Capital Management takes the opportunity to whole new heights for the management consulting industry.

Agility is of course your organisational capability to respond to change, and other disruptive market forces (e.g. changing customer and investor expectations).

Seasoned observers will recognise that these three Design Drivers are largely incompatible. For example we have seen before that in the cement industry Efficiency and Agility are like oil and water. You can have one but not the other. The same goes for the hamburger game. You either get a Big Mac quickly or you wait patiently at the gourmet burger bar to get one made to order.

What the Internet offers is the potential to achieve all three or at least two of these drivers simultaneously. This was alluded to in those much earlier posts. e.g. In Isn’t it time we became more innovative about how we innovate? and Why agility and efficiency are the new benchmarks of Innovation.

Which brings me to my final observation about everything is a remix.

Episode Four in the series opens with meme and how ideas are like cells. The divide and replicate.

Perhaps the two most compelling memes to come out of the meme are Chaos theory and Network theory.

At the heart of chaos theory is the Fractal. At the heart of the Network the node and the connector.

Unlike memes they are both building blocks that allow complex structures to be created. The strength of meme of course is they are simple messages that remain simple and are therefore easily transmitted across the network.

What I find fascinating about the network paradox however is we assume the network allows us to create complex webs of information and structures (e.g. Facebook) and yet when we look at the history of the underlying technology we do not see a history of construction. We see a history of fragmentation.

Take for example the screens. At the beginning of the 20th century interaction with screens was a community experience. People gathered together in large numbers to watch films on big screens. By the middle of the century this experience had fragmented into a family based activity in from of the TV. By the end of the century it had become a personalised activity on the laptop or mobile phone.

The same applies to messages. Where once we read a newspaper or a magazine from cover to cover. Today we simply read 1 or 2 key stories from a list of headlines on the front page of the publication's web site. Or, more likely, Facebook, Google or Twitter.

The same applies to music 30 years ago we bought albums. A collection of songs. Now we buy singles on iTunes.

The same applies to organisations. At the beginning of the 20th century corporations amassed large workforces to manufacture products and deliver services. Now thanks to the agility and efficiency provided by the network corporations are fragmenting through outsourcing, offshoring and teleworking.

Which leads me to suspect that far from everything becoming a remix. We face a future where everything becomes just a fragment. A meaningless fragment, lost in a meaningless network. Awaiting on us to remix it. To bring it to life. To give it meaning. To make it Xe.Me something.

Where do our concepts of intellectual property stand within this context? Within this highly personalised experiential moment?

After all what is the value of a meaningless fragment scattered across the network? Is the value to be calculated before or after it is remixed? Before or after new meaning is applied?

And what does that make us? Who owns the copyright, the intellectual property, to all the fragments of experiences that constitute you? Who owns your Intellectual Capital? The fruits of your creative labours?

More importantly where does the true creative moment, the creation of value, now reside in the value chain. With the author who creates the fragment? With the audience who goes in search of meaning by connecting the fragments? With the network that makes the here to impossible connection and allows you to navigate towards the message, the experience, the moment? With the application logic that allows you to make everything a remix? With the database that stores the originals, the copies and the remixes?

Who has the right to harvest and ultimately profit from our collective Intellectual Capital?

These are the real questions that need to be asked in a world where everything is a remix.

A blage of nests and lists

2012-02-18T14:06:00.000-08:00

It has been a big week for digital nests and endless lists. What with Antoine's musings on the subject the other day on turning lists into behaviours that transform and Francis Irving's presentation it appears that a wider conversation about these ideas beyond me typing to myself is emerging and that is a good thing.

So let's move the discussion forward by exploring what the Do.Me... the idea of the network becoming the application... can tell us about the future lists and nests.

We'll start the discussion where it began. The desktop OS.

In this case the original PC GUI OS, The Apple Mac.

A brief glance at Mashable's Evolution of the Mac OS will reveal that, apart from the evolution of the graphics card from black white to full colour and the occasional substitution of the mouse cursor for the finger or stylus, there hasn't been a lot of innovation on the operating system UX/UI design over the past 30 years.

Be it mobile, tablet, laptop or desktop we are still interacting in a world of folders, icons, drop down menus and lists.

Or, as I like to describe it. Lists, nests and nestbling.

Little wonder then that our digital world appears to be stuck in a time warp.

We may oscillate between OS and surrogate OS. Windows and Web Browsers, Android and Facebook. But our experiences can be measured in optimal functionality rather than the shock and awe of the new.

At the end of the day you are either in the business of designing list engines, digital nests or bling for those nests.

The lineage of the list engine can be found in the old command line OS's like DOS and of course the spreadsheet (the original killer app that launched the PC revolution) through to the killer app of the web... Google.

The lineage of the nest can be traced from Facebook back through the desktop and the folders of the WYSIWYG GUI of the Mac/Windows OS.

The bling of course are the apps and media we choose to furnish the nest.

The bling offers experiences beyond the endless lists but inevitably we seem to prefer to interact primarily with list engines. They are by far the most efficient way it seems to navigate information.

The question of course is what's next. Or is this all there is? Just a future of variations on the theme of endless lists, digital nests and nestbling?

After all Apple didn't reinvent the wheel when it launched the iPhone or the iPad it just repurposed a stripped down version of the same old, same old and applied it to the problem of navigating a mobile device. As did windows before it. Just folders, icons, buttons, drop down menus and lists.

Arguably Apple's iOS is a simplification of the Mobile UX. After all Blackberry, Nokia and Windows provided mini keyboards as part of their UX.

It should be noted before we move on that for obvious reasons the relationship between the OS and device are symbiotic and together they constitute the nest. Facebook, being a surrogate cross platform OS, is of course best understood as a digital nest in the clouds.

To move forward we need to recognise that to discover the future we need to disrupt Apple. It is about rejecting the constraints of the Apple conscious that has dominated our ideas about information for the past 30 years. We need to render Apple thinking obsolete. Forget Think Different. It's time for Xe.Me Thinking.

What's lacking is the imagination to ask the simple question what happens if the network becomes the nest... What would the Networked OS look like? what would it feel like? how different would the UX be?

The simple answer of course is it become the ultimate Blage. The continuous mash-up.

Take ideas like intelligent agents, augmented reality and mash them together with the list engines and the nest bling and you have a nest that is no longer a destination that needs furnishing but a 24/7 amusement park that changes your world every time you interact with it.

Draw a picture, sketch a word or take a photo and immediately you can click on it and have access to a drop down menu (a list) that allows you to discover things about it, do things with it or add things to it.

Think of Photoshop as a network app. Spreadsheets as a network app. Visio as a network app. Angry birds as a network app. And then try and imagine them fragmented and mashed together so you can takes bits of functionality from each and mash together your UX on the fly.

Want to send somebody in the room a picture? Use the Angry Birds slingshot as the delivery platform. Just point your phone at them, take aim and fire away.

Navigation and messaging becomes play and entertainment.

This is the potential of the Do.Me revolution. Xe.Me's that are no longer limited by endless lists of likes and the furnishing digital nests.

Think about it. Rejoice. Get excited. But most of all get out there and build it. Make it happen.

A true original

2012-02-17T15:26:00.000-08:00

I was contemplating Kirby Ferguson's excellent series "Everything is a remix"in its entirety trying to find the ideas that reside in the negative space in between the four short documentary films.

If you have yet to see this series then follow this link to watch the series in full. I haven't included the videos here simply because I think it is important to explore these ideas at their source.

My initial impression of the first film was it reminded me of Peter Sellers reciting the Beatles's Hard Day's Night as Richard the III or She Loves You as Dr Strangelove. We are left with the question is it a cover, a remix or has he created a new and original piece of work. e.g. If it is a cover. What has been covered? Shakespeare, Laurence Olivier or the Beatles? A song has become a piece of theatre made for TV. A minor performance art piece.

The same applies of course to Orson Welles and his radio broadcast of HG Wells's War of the worlds. A novel becomes a radio play that also becomes a performance art piece.

Then there is Sergei Eisenstein who, like his contemporaries in early Soviet Film, learnt how to make films by editing (i.e. mashing) together old films from the state film vaults simply because the revolutionary Government couldn't afford to by new film stock. A case study in necessity being the mother of invention if ever there was one.

All of which leads us nicely into the second film on the remix in cinema...

My initial impression of the second film was it reminded me of that old design school adage "A Designer is only a good as their reference". Where by I would always counter you're a wrong. A designer is only as good as the questions they ask of themselves and others.

It also prompted me to contemplate what set apart true creative genius from the rest and the best of the field.

Over the years I have managed a variety of innovation teams. Both large and small. And upon reflection I have come to recognise that chaos is a strong indicator of creative talent.

You see anyone who can live in chaos. And by chaos I mean chaotic thinking, chaotic work space, chaotic work practises, chaotic life. Anyone who can juggle all that chaos and still produce great work must have both a great memory and the ability to construct order and meaning from chaos on demand.

They must be able to ask themselves the right questions just to survive and live with the chaos they create around themselves.

On the other hand the designer with the ordered desk. The clean workspace. The Filofax lifestyle (Yes it is an old prehistoric word for the iGens. So go Google it.). The one with all the answers before the question is asked. They are hiding something. You see all that order. All that preparation. All that organisation in their life is making up for a mind that is not so sharp as that of the chaotic personality of the true creative.

You see the true creative doesn't just remix. They don't just amp up the volume on the feedback loop. They 'Blage'. They don't just mash-up they smash-up ideas together to create something new. As Sergei Eisenstein said. Art is Conflict. You find the new stuff in the friction.

The lesson here then is if you want to build something great you need to learn how to introduce and manage chaotic elements into your team.

At the heart of film number three is the premise "Nobody starts out original. We need copying to build a foundation of knowledge and understanding. And after that… things can get interesting."

Here I suspect Kirby like much of his generation is fundamentally wrong. You see I believe that Everyone starts out as a original and we need play with ideas and questions, tools and techniques to build a foundation. And after that… things can get interesting.

You see I fundamentally disagree that the basic elements of creativity are copy, transform, and combine.

The idea that creativity is simply about copy, transform and combine is merely an expression of the digital tools we use to create with today. These Ctrl OCVZXS machines that now shape the way we think and act.

Where pen, paper and conversation once provided an infinite forum for observation and the exploration of ideas and dreams we now limited our imaginations to the finite capabilities of the Crtl OCVZXS time machine - The Illusion of Life

Plus, in a market driven economy, the most effective innovation strategy is a ME2. It doesn't matter what business you in, be it Finance or Media or Information Technology or Telecoms, if the goal is profit then who cares who created the original signal? The main objective it to amplify the feedback loop and take home the biggest share of the money from the noise being generated.

You see the basic elements of creativity in any profession - be it words, pictures, numbers or people - are questions.

Your actions follow the questions you choose to ask of yourself, your tools, your environment and of course others.

After all Sergei Eisenstein didn't learn by copying. He and his generation of Soviet filmmakers learnt by cutting up the past and reassembling it into something radically new. The film montage.

Today is no different. But unlike Soviet Russia we are awash with media to play and experiment with.

So much so that today we are faced with the infinite potential of the endless mash up.

Which means we face an (un?)enviable choice. We can blage to create a new world or we can be simply absorbed, consumed and excited by the activity of blaging.

We can blage for entertainment. For play. Live life as a blage if you like. A Bloogle or a Faceblage, a bucket list of Xe.Me's, or we can Blage to create something new. A better world for all humanity.

The choice, as they say, is up to you.

The brand stripped bare

2012-02-16T16:49:00.000-08:00

I have a computer in the office. It is a HP Laptop with Windows Vista installed. It was bought within weeks of Vista being launched. What makes it unique isn't that it is slower than the old 386 Toshiba notebook that I have in the cupboard but the fact it can't keep time. Never has. Never will do. Most days it lasts an hour then resets itself. Some days it is only 5 minutes. It all depends how busy the processors is.

Why do I keep it? Two reasons. The first being it stands as a testament to my ongoing theories about the quality innovation in Silicon Valley. Secondly it allows me to teach others a valuable lesson in the basics of business and branding.

You see the problem was never one of QA. It was one of product design. The product should never have been manufactured. Never mind sold. Simply because there isn't enough "grunt" in the hardware to run the OS. Never mind any software applications.

This then is my HP Windows experience. What does it mean to me? Probably not what the brand manager or the product manager had in mind when they decided to put it on the retail shelves.

What do I think when ever I see a HP or Windows ad? Xe.Me Excapite.

(Hint: Xe.Me = Experiential Meaning and Ex Capite is Latin for "From Memory")

You see business and banding is very simple equation. Business is all about having better people, processes and products than the competition. Branding is all about providing a better experience. Be it an experience with the product, the people or the process.

The genius of Treacy & Wiersema's Value Drivers was to take that simple equation and wrap it up in the new language of values.

The genius of the eBusiness and Social Business movements is to take these ideas and automate them using information technology. Thereby making it easier for everyone to hit the industry benchmark. The paradox of course being if everyone has access to the same technology and automated processes what is the differentiator that provides the customer with a meaningful experience (i.e. the Xe.Me) apart from price?

This also suggests, as Pepsi has discovered, that if your investment in Social Media(So.Me) and Social Business (So.Biz) isn't significantly reducing your costs of doing business you must be doing something wrong.

This then is the new language of our day.

The word Process has evolved to become all things eBusiness. The word People has evolved into all things So.Me. The word product is now the Xe.Me.

A tale of two colas

2012-02-16T14:18:00.000-08:00

If you take the time to learn your value drivers then it doesn't take very long to figure out that not every business is going to benefit from investing in the So.Me.

This is simply because of the three value drivers only Customer Intimacy really calls for the giving customers the So.Me treatment.

This probably explains why Pepsi has seen such a poor ROI on its investment in the So.Me. (e.g. A refreshing look at Pepsi’s “Refresh your world in 60 seconds”, More Pepsi Refresh Social Marketing Campaign Metrics)

After all is Pepsi really in the business of identifying specific customer needs and matching services and products accordingly? Hardly. They are in the soft drink business. They are about putting products that deliver moments of Xe.Me into their customers hands.

If your value proposition is Customer Intimacy then your customer is thinking – “I like doing business with you because…”. Now compare that with Coca Cola and the Product Leadership value proposition. Here the customer is thinking “I’m Excited by you because…”.

Now your customers are standing next to the shelf and you have a choice. Do you want to be excited? or merely Liked?

Yes folks even the famous Like preexisted Facebook as a Customer Intimacy strategy by 15 years.

This is what Coca Cola continues to do. It continues to excite the market with Xe.Me's that make it the most socially recognisable brand on the globe today.

As does Apple. Who, as we have seen before, easily tops the So.Me charts even though it doesn't invest in the So.Me.

The message here then is if your value driver is Product Leadership then you own social not by being social but by being exciting. After all who needs to be doing the talking when you are the one being talked about? Just let your customers do the talking. After all isn't that what the referral is all about?

Understand this and then you'll understand that the prestige of the So.Me Guru is a lot like that famous line out of the movie of the same name. The one where Micheal Cain explains the art of the magician or the illusionist. The Pledge, The Turn and then Prestige.

Put very simply they take the Brand's equity (its Xe.Me), make it disappear and then miraculously bring it back nicely wrapped up and packaged in a box called the So.Me.

Now how's that for a bankable prestige?

To Xe.Me is to Dream

2012-02-15T14:41:00.000-08:00

I said a couple of day back that the Xe.Me is about designing activities that embrace the wonder and delight of people being engaged in discovering the experiential meaning of the moment.

Understand this then you will realise that if you want to disrupt the market leader then you need to design a better Xe.Me.

The question then becomes one of what is the Xe.Me of the market leader?

Yes, here again the I speak of the importance of beginning with the design question not focusing on the design answer. Discover the market leader's Xe.Me and then you can begin to unlock the opportunity.

So let's begin with a couple of easy ones. Apple, Facebook, Google and Visa.

Take a look at Facebook what is it's Xe.Me? Is it the Social Graph, the GUI or the simple fact all your friends are already there?

How about Google? Is it because you can find what you are looking for quickly?

or what about Visa? Is it the convenience of being able to manufacture your own money supply on demand (albeit at a significant cost)?

Finally, what about Apple? Do they really build better mobile phones than the competition? or is it the App Store or iTunes? is it a phone or a gaming device? and what about the iPad? What is Apple's Xe.Me?

I've done enough talking about Apple over the past two years so let's go looking for some insight elsewhere on the web.

This then is an extract Tom Asker's short post Does You Brand Impute? in which he focuses on Apple

"Leadership brands, like Apple, don’t make promises. They create and fulfill expectations through thoughtful and precisely crafted associations... it’s about signaling meaning... It’s about unearthing what people need to feel good, smart and special, and then giving it to them."

You see disrupting Apple or any of their products isn't about building a better gadget. It's about making people feel smarter, more special and more important using your gadget than using Apple.

It is about building a more meaningful experience. It is about building a better Xe.Me.

This is why Motorola and Nokia were so easily disrupted. They thought they were in the business of building better and more stylish communication gadgets. In the end they were disrupted by a better Xe.Me.

This is why a Windows phone just isn't going to cut it. Windows =! a better Xe.Me than Apple.

What about Facebook? Facebook is interesting in that I still stand by my original impression that Facebook is a game for girls. Therefore if you want to disrupt Facebook you simply have to build a better game for girls. The emergence of Pininterest adds fuel to that argument. What interests me more about Facebook is that Coca Cola still owns Social. Facebook may be a place were you hang out with friends but Coke is the real Xe.Me in this space. Add Coca Cola to any social gathering and it immediately amps up the volume. Coke is coda for friendship the world over. Has been for generations. But more on that later.

Continuing on with our search how about Google? How do you disrupt Google? Build a better search engine? And, what about Visa? How do you disrupt Visa? Build a better credit card or mobile payment app? Hardly. Both Google and Visa deal in Trust and Convenience. To disrupt their Xe.Me's you need to not only disrupt the illusion of Trust that it so carefully manicure but also provide a faster, more convenient service.

From where we stand today each of these Xe.Me's looks unbeatable. Apple owns smart gadgets, Google search, Facebook social and Visa personal credit.

How does the great disruptive design thinking begin?

It begins by taking a step back into the history of the MobCon and revisiting the relatively old idea of Treacy & Wiersema's Value Drivers.

Here we discover that the Xe.Me landscape is populated by

Product Leadership (e.g. Apple)

Operational Efficiency (e.g. Google and Visa)

Customer Intimacy (e.g. Facebook).

The theory being if you want to disrupt the market leader with a Xe.Me in the Product Leadership space you need to start thinking about a Xe.Me that operates in either the Operational Efficiency or Customer Intimacy space.

We see this already with Apple. Google's Android, as with MS Windows before it, is growing its market share by focusing on the building a Xe.Me in the Operational Efficiency space. i.e. Just like the Big Mac isn't ever going to be the best hamburger you are ever going to buy at least it is a quick and easy and reliable solution to the problem of eating.

This also suggests that if Nokia wants to get back in the game it should be looking at a Customer Intimacy Xe.Me to differentiate itself from the competition.

Of course, as we have seen before with The Discipline of Innovation Teams it is never that easy. Culture always plays a big part of creating the Xe.Me and as both Nokia and Microsoft have discovered it isn't easy to change your thinking from Product Leadership to Customer Intimacy or Operational Efficiency.

After all everybody likes to believe they have the best product in the market. It makes it so much easier to go into any sales call or presentation and say we have the right answer. What ever your problem is we have the right answer.

Are there just three value drivers in the market place? Realistically in world of infinite relativity the simple answer is probably not but three is a good number to start with. It is easier to learn the principles of value drivers with three than with 100.

The same goes for Xe.Me's. Counting Xe.Me would be something akin to counting angels on a pinhead. A meaningless academic exercise. So let's just say there are as many Xe.Me's to be discovered as there are unanswered questions.

The main message I want to get across is this. Tomorrow's Xe.Me's are today's unrealised dreams.

So dream large, meet the challenge and design your future, disrupt your world by creating new meaning and ultimately you will prosper through your experiences.

Dream large, disrupt your world and prosper. or, as the Nike brand management team would say. Just Do it!

Plastic Experiences and Liquid Meaning

2012-02-14T19:32:00.000-08:00

Finally found the time to visit the Picasso exhibition at the NSW Art Gallery. Hadn't bothered to rush. Mainly because of the crowds these events attract. Plus I had seen the collection in Paris a few years back and was largely underwhelmed by the experience.

Happily the collection appears to have expanded since that viewing in the mid noughties and the display was well worth the effort. If only to reacquaint myself with such works as The Bathers (1918), Two Women Running on the Beach (1918) the Acrobat (1930), Figures at the seashore (1931), Nude Woman seated in Red Armchair (1928) and Bullfight: Death of a Toreador (1931) and Massacre in Korea (1951).

Of course Picasso, just like the oft quoted Sergei Eisenstein, was one of the great artists of the early 20th Century.

Just as Eisenstein and his generation fragmented our perception of time and then made it liquid and plastic. So too did Picasso and his fellow traveller do the same thing with the 2-D and 3-D image.

Thankfully the layout of the exhibition helped express this narrative to the passing parade.

As I wandered back through the gallery for my reverse perspective of the timeline I couldn't help but wonder who are the great artists of our time experimenting with the great unbundling, the fragmentation and ultimately the plastication of the network?

This of course is the very antithesis of the Facebook.

It is a vision that explores the fragmentation, rather than a consolidation, of the network. Something akin to the cubist stage of the great networking experiment.

What follows is the plasticisation of the network.

The Do.Me. A future where the network takes on many forms simultaneously to reveal total new and unique networking experience.

This then is undiscovered country. The landscape of the next generation of pioneers.

A 24/7 4-D networked world of Plastic Experiences and Liquid Meaning.

It was not always so

2012-02-14T14:57:00.000-08:00

Some of you delight in sending me emails and the occasional tweet pointing out how deliberately obtuse and opaque are much of typings these days.

None more so than Bronwen Katsaros who has sent me this delightful satirical poem to illustrate just how absurd my vocabulary has become over the past year.

In the loss from Chaos to Nihilism
I'm in wonder of you, oh XeMeium
You let me explore
Of ravages and more
The questions of pure So.Meium

Easily the most creative and incisive piece of writing posted here in over two years of hammering away at the keyboards.

But in my defence I freely admit to being an author in the Tomi Ahonen school of literature (i.e. more attune to the merits of the quantity and the content rather than the quality of the prose).

But I digress. The point being the opaque and increasingly obscure nature of much of what is now being posted here.

Again in my defence is will point out that it was not always so. In the early days of the MobCon the posts read like a collection of ready made answers as we explored example after example of how this mobile convergence technology was being used to change the way we do business.

There was Point, click and discover the future of advertising where we discovered the advertising industry was buzzing with ideas to repurpose old technologies like QR Codes and Bar Codes into mobile tagging and branding campaigns. It was also the post in which we introduced the most popular image: The MobCon Value Chain.

Then there was the post asking the question is the mobile phone a media platform or a fashion statement? This is also where we first described the design objective of the handset and the app designer was to have their customers walk into a crowded room and say: If you think that’s cool then take a look at this!... and what about that series of posts on the new "plastic fantastic"? Here we explored bar codes scanners, loyalty programs, credit cards, mobile payments and the See it, Click it and Buy it online economy.

This set also included that other popular image of the world map of mobile payments innovation circa 2007.

Finally there was that post in which we Imagined all the people, living a Mobile Life. Again this included that very popular image that summed up the MobCon challenge at the time of the launch of the iPhone.

This then was the first 90 days of the MobCon. A collection of answers expressed in words and pictures.

If you read between the lines. In the spaces between the posts. You will see elements of the Xe.Me and Do.Me thinking hidden. Unrevealed. Waiting to be exposed and explored.

You see the problem with the original MobCon was it represented Design Unthinking. It was all about the business of providing answers. Generating Google Hooks.

The journey since those first 90 days has been all about getting back to my design roots. The great unbundling and unpacking that brings me back to the point where I can honestly say I'm now asking the right questions.

Needless to say it has been a long and, a times, mundane, mostly disappointing journey. Lots of experiments that have failed. Abandoning the cosmetics of design is never easy. Not some much the shock of the new more a shock of the idea stripped bare.

The introduction of words like So.Me and Fauxionary was a conscious decision to change the way I was thinking about Mobile Convergence (MobCon). After all New words = New thinking. They replace answers with questions simply because these new words need to be furnished and polished if they are to assume meaning, become useful and ultimated accepted.

So contrary to what some of you are thinking the path towards the opaque isn't about exclusivity. It is about creating the definitive question: What the FAUX is he on about????

This then is the great shift from the MobCon to the Xe.Me. If you have come here looking for answers (i.e. via Google) you'll be disappointed. Go spend some time exploring the early days of the old blog.

On the other hand if you have come here to join a conversation about unresolved questions then welcome to this endless roadtrip of the mind. This vertitable expose of the Xe.Me.

Excapite, at the root of the Xe.Me is some very old ideas that I have long held about how people choose to interact with the world around them.

” All men [and women] are designers. All that we do, almost all of the time, is design, for design is basic to human activity… To put it simply design is the conscious and intuitive effort to impose meaningful order. It is central to man’s existence and his increasing domestication of this planet.” Victor Papanek, Design for the real world.

In this context the Xe.Me is about designing experiences that allow people to impose meaningful order to their lives.

It isn't a method. Maybe not even new way of thinking. Perhaps nothing more than a simple idea. Expressed in a new acronym that allows us to rediscover the meaning of design and the ongoing challenges we will have creating compelling and rewarding experiences in a MobCon world.

Put very simply, it is the very question that fuels and provides meaning to Negroponte's answer

Till next time...

From Chaos to the Xe.Me

2012-02-14T02:14:00.000-08:00

It has been said more than once that the Excapite is nothing if not opaque. Particularly when it comes to the over use of acronyms and mashed up words.

So, just like The Moment the Universe Changed, this is one of those jigsaw puzzles that takes us from the beginnings of the Excapite journey through a series of ideas leading up to formulation of the Xe.Me.

We begin as always with The day the universe changed, and the simple idea that we now live in an age where we can navigate our way through unimaginable treasuries of online knowledge and change the way we think by simply clicking on yet another hyperlink.

We then leap forward to Forget So.Me. The future is So.Us! where we discovered that it is advertising that provides us with meaning in modern market driven economy.

Why? because, to paraphrase Don Draper of MadMen fame, it is advertising that shapes our desires and expectations in universe that doesn’t care. Within this framework advertising can be seen as a direct descendant of Catholicism – via the Protestant schism. If you doubt this line of continuity in western thinking go check my earlier post on the 7 Deadly Sins of Advertising.

We explored this idea a little further in a subsequent post on how in the beginning there was the word… and in the end it was Google. Here we discovered the original idea was that in the industrial age it was the advertisers and marketers who became the “Keepers of the Word”. And by this I mean they shaped the meaning of the words we use.

The question then became one of: If Advertising provided meaning in the industrial age then what provides meaning in the information age? The answer being: If Google has become the gatekeeper of the meaning of the words you type in every time you conduct a search for an answer. Then it is Google that has assumed the role of the new “Keeper of the Word”.

Fast forward to The Numbers Narrative that was posted a few days ago. Here we discovered that if you are in the business of constructing or deconstructing truth and meaning, it is the numbers, and not the words, that constitute the building blocks of the MoRoCo narrative.

This is because, in a world of value relativity, the illusion, or perhaps that should be delusion?, persists that it is the Numbers that provide us with the Truth buried in all the chaos and the patterns.

Now jump back a seven months to when we explored the fractional economics of the So.Me.

Here we made the quantum leap from fractional Federal Reserve banking practices to the McLuhan observation that “For tribal man space was the uncontrollable mystery. For technological man it is time that occupies the same role.” Which in turn led us to be thinking about Marshall McLuhan and the emergence of the Time Wallet and the So.Me value equation of Eat Time = Freemium. Create Time = Premium.

This ongoing discussion about profiting from the manipulation of "mobile" Time ultimately lead to the post on Experiential meaning and some more thoughts on why the Mobile Phone is more important than the web. Here it was determined that meaning is created by the audience at very personal level by the way they choose to actively engage with the experiences you offer them and it was this idea that evolved more recently into the Xe.Me (i.e.Experiential or [perhaps] Experimental or Explored Meaning).

So much for all the pieces in the jigsaw puzzle. Now let's express the culmination of those ideas by updating the time line originally created for the post on Forget So.Me. The future is So.Us.

This then is the Xe.Me.

Not an idea. Not a word. and definitely not a number.

A unit of action that changes the way you behave and ultimately what you believe in... at least for that moment in time.

Now, before we finish up here, let's address one final question. How do you pronounce the word Xe.Me?

Upon reflection I think the Xe.Me offers the potential for a wide range of articulation and expression.

After all the Xe.Me is about designing activities that embrace the wonder and delight of people being engaged in discovering the experiential meaning of the moment.

So I suspect we will hear it in the sedated "Zzzzzeeemmmeee" of the dopamine rush of Angry Birds or Farmville through to the gentle, or perhaps even more enthusiastic, gentle "Screams of delight" that come from finding an in store bargain using your iPhone bar code scanner, communicating with Siri for the first time or while singing a duet on SingStar.

Thinking about Design Unthinking

2012-02-13T13:02:00.000-08:00

After watching this TED video on Design Thinking over the weekend I couldn't help but think that at the heart of the malaise in Western Design today was the simple idea that our education system is more concerned with the pursuit of answers than the search for questions.

I say that because the Enlightenment prized questions. We live in a world that prizes answers. This is perhaps why we seemingly live in an age where Rationalism has come full circle. Indistinguishable from the Clericism it replaced.

We have taught our children to sweat the answers rather than to sweat the questions.

The system fails simply because failure is not an option.

You see teaching design thinking is easy. You just spend 15 minutes with your students explaining to them that the answer isn't the design objective.

The design objective is the question.

Ask the right questions, of yourself, of your customers, of your technologies, of your processes, of your materials... [yes, yet again the list is seemingly endless], and the right answers will appear, as if by magic.

The real challenge for any teacher of design is the great unpacking. Of teaching students to seek and impose meaning on their world through questions, not answers. To see through fresh eyes when they go looking. To hear things through fresh ears when they are listening. To feel things through new hands when they touch things. To taste and smell things through clear palates and olfactory nerves.

This is why anyone who mouths the popular truism "Those than can, do. Those that can't, teach" is mistaken. Great Design Teachers, as with all truly great teachers, Don't DO. They are the catalyst that ultimately challenges us and encourages us to change the way we think. So that tomorrow we can meet the challenge and ask the questions that will allow us to encounter the ideas and discover the innovations that will change our universe.

This I would suggest is the underlying flaw in Nicholas Negroponte's solution to educating the developing world. The whole idea of children "learning for themselves" fundamentally dismisses the role the catalyst.

More over it is a classic example of MoRoCo Design Unthinking. i.e. We have an answer. Now what can we do with it.

I say that because if technology was the answer to educating the developing world then why hasn't Radio or TV played a bigger role in the past? After all putting a laptop in the hands of a generation of developing Googlers is perhaps tantamount to providing them with a TV and a typewriter 50 years ago. It didn't appear to be a rational solution to the problem back then. So why is it considered to be the solution today?

If Ernie, Bert, Elmo, Big Bird and the rest of the Sesame St gang can't make it work what chance have a generation of Google Boys?

What good is Google if you don't know what questions you could be asking of yourself and your world?

Indeed if technology is the answer why a laptop? Why not a mobile phone? or Even a Nintendo Game Boy with purpose built software?

The answer of course is because this, once again, like much of what constitutes "game changing" innovation in the age of the Internet, is little more than a solution in search of a problem.

Till next time...

The numbers narrative

2012-02-11T12:58:00.001-08:00

If you work in the advertising and marketing industry you will be no doubt aware of the growing number of Accountants, Auditors and Management Consultants now attempting to disrupt the industry with a new type of offering.

An offering best described as the emerging science of Brand and Consumer Numeracy. Or, more simply, you are what you measure. So what are you mesuring today?

The obvious question we need to ask ourselves is what do these men and women of the numbers have to offer that the mainstream advertising industry doesn't? After all isn't the business of advertising, and its symbiotic partner Public Relations, about casting spells, and telling the occasional story, with words and pictures?

The simple answer is we now live in world where we use numbers to construct meaningful stories and narratives.

Accountants, Auditors and Management Consultants are disrupting the advertising and marketing business simply because they are the traditional authority on truth and meaning in narratives constructed out of numbers.

The next question of course is why have numbers replaced words and pictures as the basis of the new narrative?

Again the simple answer is, in an uber-rational world, where truth is relative, words, unlike numbers, no longer hold the magical power of authority they once had.

Despite the dismissive rhetoric about 'lies, damn lies and statistics' truth today is expressed as number. We live a world where we construct and deconstruct meaning with numbers, not words. Words merely act as a signifier to the numbers.

We shape expectations and behaviours using numbers not words. So much so that economics, game theory and statistical analysis have replaced psychology as the new science of persuasion.

That's why, as I have said before, the old agency model of market leadership creative partnerships is long past its use by date. If you think hiring the best creatives, art directors and writers is what is going to win you business in the future then you are in the wrong business…

In the future advertising agencies will be more interested in employing graduates who understand game theory than color theory.

and,

The old science of advertising was based on psychology the new science of advertising will be based on mathematics.

We may appreciate the hook in the art work but it’s the science that does the selling… and the new science of selling is all about manipulating the metrics – the numbers – in your favour.

Understand this and it becomes self evident that today, if you are in the business of constructing or deconstructing truth and meaning, it is the numbers, and not the words, that constitute the building blocks of the MoRoCo narrative.

This was the mistake Allan Bloom made when he lamented in 'The Closing of the American Mind' we no longer "furnished the mind" with the great books. The reason the great books no longer hold an audience is simply because in a world where truth is numeric they are fundamentally redundant.

It isn't words that shape the modern rational mind. It is numbers.

In a relative world Numbers hold the only opportunity to discover the Truth buried in all the chaos and the patterns. They provide clarity and insight. Dealing not only in probability and possibility but also knowns and unknowns, histories and forecasts and, most importantly, absolutes and significance.

The risk and the return on our collective investment in what constitutes meaning in our uber-rational, MoRoCo, MobCon lives.

That's why Americans, indeed the whole of the modern world, graze on a steady diet of transient 24/7 data, stats, charts and metrics.

That's also why, if you are to survive and ultimately thrive in this MoRoCo world, you too need to learn how to construct, deconstruct and reshape meaning and truth using numbers.

To become a master of the numerical arts. A manufacturer of numerical myths. The orchestrator of the MoRoCo's Der Ring des Numerical. The composer of the BinaryMotifs of the digital ballet.

Simply because the money, the free market's ultimate expression of what constitutes the Truth, is now in the numbers. Not the words and pictures.

Finally, if you are worried about the opportunities for creative expression, you need not be.

One only has to look at the role of the men and women of numbers in the great Numero Operatic works of the past 25 years (e.g. Enron, WorldCom, Savings and Loans and now the Great Financial Crisis) to understand that we can be just as creative with the numerical Truth as we have been in the past with words and pictures.

# MoRoCo Post Modern Rococo

I've got the moves like Michael

2012-02-10T14:18:00.000-08:00

One of the MoRoCo projects I would most like to see is a revisioning of Pink Floyd's The Wall for the Facebook generation.
Both the movie and the album.

I can just hear the refrain now...

My X's updated her new status
Leaving just a memory
Instagram on the Facebook timeline
Honey what else did you leave for me?
Honey, what'd'ja leave behind for me?!?
All, All in it's just another post on her wall.
All, All it was all just posts on her wall.

followed by

Hey You,
Playing with your phone,
Looking lonely standing alone,
Can you like me?

and then of course

Hello,
Is there anybody out there
Just retweet if you have read this
Isn't anyone online?
...
I have become socially numb

as for the visuals, well I'll just leave those up to your imagination. At least for now.

Of course the real lesson here is the past is another country. The wall means something so very different to this new generation. Which of course makes it all the more ironic that their parents have raced to join them so eagerly on Facebook. We talk about the network effect. But what about the parenting effect? or the 'family pet' effect? or the 'my dolly' effect? when it comes to accelerated growth on Facebook?

Could it be that age forgoes the passion of youth when offered the opportunity to drink from the fountain of youth? Or, as Janis Ian once sang... 'Cause, there's no fool like an old fool in a new school.

The music has also changed. Where as yesterday we immersed ourselves in the angst of Roger Walters today we simply whistle along to the Maroon 5 and their latest hit I've got the moves like Jagger.

Of course it didn't have to turn out this way. The revolution didn't have to be tweeted. We could all still be singing and whistling about it.

In Gregg Alexander the US had unearthed a singer song writer with the passion and the potential to be the next Mick Jagger. All he lacked was the moves.

Sadly he proved to be too world weary, too grown up and much too easily jaded to play the role of the Next Jagger in Waiting. He moved on to the other side of the mixing desk after just one ground breaking album, Maybe You've Been Brainwashed Too.

Today he sedates his talents writing and producing for the likes of Rohan Keating, Santana and Enrique Iglesias. Licencing out his musical legacy to any advertiser willing to pay the price for the piper to lead the a new generation in a rousing chorus.

So. Yes, although today we may be tweeting, rather than singing about a revolution, I suspect we'll still discover in a free market economy, the revolution will still be a neatly packaged product that can be bought and sold. Just like breakfast cereal, ice cream and soap.
All of which brings me to a true revolutionary of his generation who had all all the moves like Jagger. Plus whole lot more. Michael Jackson.

"His influence today proves him to be one of the greatest creators of all time, but Jackson's art--like that of many black artists--still doesn't get the full respect it deserves". - Joseph Vogal in The Atlantic's The Misunderstood Power of Michael Jackson

You see the thing I find interesting about Michael was, once you put all the other baggage aside, he, like many from his Black musical heritage, was a creative original.

Jagger on the other hand is probably best understood, at least in the early days, as an interpreter, or perhaps even the repackager, of other people's music.

Jagger cornered the "Revolutionary & Dangerous" brand leadership position by repackaging Black music for White consumption. Jackson on the other hand, like so many Black artists before him, was packaged up to make them palatable for White consumption. So while Jagger, and Elvis before him, will be remembered as White and Edgy. Jackson, despite all his efforts at being Bad & a Thriller, will be remembered as Black and Soft.

Just a song and dance man in the well worn Black tradition. "Slick & Shallow" as opposed to Jagger's image of being "Rough, Tough & Street Smart".

"All the forms of popular music from jazz to hip-hop, to bebop, to soul [come from black innovation]. You talk about different dances from the catwalk, to the jitterbug, to the Charleston, to break dancing -- all these are forms of black dancing...What would [life] be without a song, without a dance, and joy and laughter, and music. These things are very important but if you go to the bookstore down the corner, you will not see one black person on the cover. You'll see Elvis Presley, you'll see the Rolling Stones...But we're the real pioneers who started these [forms]."- Michael Jackson as quoted by Joseph Vogal in The Atlantic's The Misunderstood Power of Michael Jackson

The history of the free market has shown us time and time again that a progressive and aggressive brand narrative and well packaged Me2 will beat the pioneers at their own game every time. Simply because, as I said before, in a free market economy, the revolution continues to be a neatly packaged product that can be bought and sold. Just like breakfast cereal, ice cream, soap and now Apples.

In the end, if the Michael Jackson story has anything to teach this current crop of innovators it is simply this. Don't let the market define you. Redefine the market in your own image. Then leave it to the rest to cry Me2, Me2, Me2!??

Till next time....

The life abundant we share under the Harvest Moon

2012-02-09T16:22:00.000-08:00

If the Internet could solve the real problems of the world. Problems like food, energy, medicines and water. Then the world would surely have something to celebrate. For here, as the Telcos, Google and now Facebook have discovered to their financial gain, is a natural and infinitely abundant harvest that is self pollinating, self fertilising, self irrigating and most importantly very quick growing.

A variable global fecundity of knowledge, ideas and social intercourse.

Now regular followers of Maria Povova's BrainPickings will have already seen in this video by Michael Rigley but I have shared it here simply to remind you that we all live our virtual lives abundant, under a harvest moon.

Network from Michael Rigley on Vimeo.

And that's why, when I was watching the Wall St (the late 1980's Movie) last night, I couldn't help but think yet again just how little our world view has evolved over the past 25 years.

For, putting aside the fact all the high tech gadgets have now gone mainstream (e.g. The mobile phone and the banks of computer monitors on the trading room floor), we discover to our chagrin that even in a world of infinite sharing, a new global networked economy, swooning in a veritable sea of likes and tweets, the game remains ultimately one of limited choices.

You can choose to be the Harvest or the Harvester.

The secrets of blogging success revealed and other amazing stories

2012-02-08T15:14:00.000-08:00

Of course the recipe for becoming a successful blogger is a pretty simple one.

You focus your energies on writing about other people (i.e. Gossip) and/or how to make money using the power of the Internet (i.e. The Feedback Loop).

Of course if we take this simple recipe into account then Excapite would be considered to be something of an anti-blogging recipe. A recipe for blogging failure. We spend all our time exploring ideas and exposing the fauxion of the network effect.

I guess the question then is why. The answer to that in many ways was the discovery within the first 90 days of launching the blog that a Top 10 Page rank on Google for hot topics like making money out of eBooks and iPhone games delivered on average less than 5 hits per day.

This meant if your business plan was to make a living by writing for Google Hit Parade then the equation looked like this

Your effective CPM per post was between $1 to $2 per year so if you wrote 1 post per day for (i.e. 5 per week over 46 weeks) then you would earn less than $500 for your efforts. This of course assumes that every post you write is going to be a Top 10 winner.

You see Google is an annuity for content not the principle.

Bloggers make their money out of repeat traffic (i.e. the regulars) not search engine traffic.

Hence the magic recipe is to write about people (i.e. Gossip) or about the power of the Feedback Loop.

The Gossip formula works because the easiest way to get people's attention is to talk about them. The feedback loop works simply because everybody wants to believe that making money on the Internet really can be as easy as writing a Blog or, if you are a programmer, developing a mobile phone app or Facebook game.

In the end Excapite has been more a journey of exploring a belief system. A new kind of faith or techno religion than a recipe book on how to make money out of the MobCon.

That's why in the end I'm am somewhat surprised it has gathered any following at all.

If there is a central message here it is simply this. Markets work not because they are inherently efficient or a better way of doing business. They work simply because, like any other religion or structured belief system, the believers believe despite all evidence presented to the contrary.

If you're not making money as a blogger, or having success with Social Media, or see any ROI from your efforts on Twitter or Facebook it isn't because it doesn't work. It is because you must be doing something wrong. This is the message from the new priest hood. Peddle harder because if we all stop peddling then we'll all fail. Together we'll make a new economy. We just need to peddle harder.

What's missing in all of these arguments of course are the simple questions where are we peddling too? and Who's benefiting the most from all this peddle power.

This in the end is the MobCon question. Why embark on a journey, a veritable road trip into the future of our children's economy, without first asking the simple question: What are the benefits we expect to find when we reach our destination? What will the world look like once what we first imagined and now seemingly believe in comes into being?

With this question in mind I think it is worth exploring very briefly two simple ideas.

The first is Slow Media. We have had the slow food movement and now the slow cities movement. Perhaps it is time to start a slow media movement.

A slow media movement that embraces the idea that people come together to create a shared media experience in a shared space using old media forms (i.e. Musical instruments, Pens and Paper, Chalk and Board, Sand and Sticks, Paint and Bark). Why? To rediscover that the medium wasn't always the message it was the experience, the magic of creating the message that shaped who we are. i.e. We are the message.

The other idea worth exploring is Terry Gilliam's collaborative "fil-teur" or that of the anti-curator. The simple message being that it isn't what you collect but what you choose to reject that makes John West and, of course, Steve Jobs the best.

"In the end film is a collaboration of a lot of people, and I’m the filter who decides what goes in and what stays out" - Terry Gilliam

A simple case of word substitution creates a similar message

In the end developing the iPod, iPhone or iPad is a collaboration of a lot of people, and I’m the filter who decides what goes in and what stays out - Steve Jobs(?)

Now trying rewriting your world view in 25 words.

"In the end LIFE is a collaboration of a lot of people, and I’m the filter who decides what goes in and what stays out" - YOU

Till next time...

The $100 Billion Question

2012-02-07T12:47:00.000-08:00

So if Facebook is the new Yahoo! Then who or what is the new Google?

Simple question, and the simple answer is, if you still need to ask it then I would begin by saying that you know nothing of my work, because, if the pivot for the dot.com was search, then the pivot for the So.Me will be reputation.

Which natural brings up the next question: So the disruptors will be Kred and Klout?

The answer to that is probably no. After all the search business went through a number of iterations before Google discovered the magic formula and just because linkbacks worked for pages doesn't mean it or its offspring (i.e. Likes, Tweets, Followers, Friends) will prove to be the magic formula for accurately unlocking the reputation puzzle. Plus we should note that even after it discovered the magic formula it took some time to figure out how to monetise search.

The same experimental road still has to be travelled by those wanting to own the reputation pivot.

Of course Facebook appears to have the edge for the moment with its much higher traffic volume, higher levels of engagement and its first cut at solving the reputation problem (i.e. the Social Graph). But so did Yahoo! 10-12 years ago. History suggests the secret to unlocking the reputation puzzle is more likely to be found outside Facebook than it is inside Facebook.

After all Yahoo! started off in the search business but ended up just being another web portal. Will it be a case of U2 Facebook? or Do they have the smarts to own the platform and the pivot?

I guess that's the $100 Billion question investors are asking themselves today.

Of course one shouldn't dismiss the idea of Facebook being disrupted by Google.

After all the only thing Google really has to do is reposition itself out of the search business and into the "Trust" business and it will render the growing debate over the value of Facebook's social graph and the wider reputation economy largely mute.

What it wouldn't solve however is the virtual absence of the world's top Brands from advertising on the Internet.

Of course the virtual absence of the Global Brands either makes the growth in online advertising over the past 15 years something of a mystery or a miracle. Maybe even a combination of the two.

From this distance a retrospect glance would suggest the growth in online advertising can be attributed to a number of factors. Large and small. But perhaps the most important of these would be in order of influence Google, Click Fraud, The Network Effect or Delusion (i.e. Everybody else has email... a web site... SEO... Facebook Page... Twitter Account... etc... so why aren't we), eCommerce (i.e. Browse with us, buy from us), Web Portals and ePublishing.

Put very simply the growth in online advertising is a reflection of the growth of the online economy.

Unlike TV advertising, that feeds growth in the "real world" economy, Online advertising tends to feed and fuel the growth in the Online economy. In this way it is a part of the wider online feedback loop.

This again provides more evidence of why the global Brands have not invested heavily to date in online advertising. Unlike the global web brands (e.g. Amazon, eBay and Facebook) they operate in the real world where traditional online advertising has struggled to drive sales. eCommerce Yes. In store much less so.

Today the world's top brands are experimenting with Facebook in much the same way they experimented with Yahoo! prior to the dot com crash. But what about tomorrow?

Again that is part of the $100 Billion question investors will be asking themselves.

In the end though, with all the hype surrounding Social Media we tend to forget that when you tear off all the trimmings and illusions Facebook is in reality the next generation of Database Marketing. Its DNA and its heritage are not mass media but direct marketing. With its Social Graph business model it finds itself in a big bucket of targeted marketing products like Direct Mail, Telemarketing and Email Marketing.

This then is perhaps a pointer to why so many Brands have struggled to find that elusive ROI for the Social efforts on Facebook and the other Social Media properties. After all who chooses to like or become a fan of Direct Mail or Telemarketing? Indeed who goes in search of Direct Mail? It comes to you. Most of it unwelcome garbage or spam unless you have chosen to receive the correspondence directly from the marketer.

This then raises the question of will Facebook disrupt email to become the world's biggest direct marketing platform?

Again, this is yet another part of the $100 Billion question investors will be asking themselves.

What if there is no MobCon?

2012-02-07T01:05:00.000-08:00

Ended up with the dreaded "blue screen of death" yesterday and so I now have answer to that most important of MobCon questions: What takes longer? Rebuilding a Windows box or the SuperBowl.

The answer of course is rebuilding Windows... and that's why I was all the more amused when the first Tweet I read upon reconnecting to the Internet was the extraordinary claim the Internet contributed 21% to GDP growth in the developed world over the past 5 years.

My mind immediately went back to my earlier thoughts on Google economics and the original report from McKinsey that tends to be the source that fuels (or is that fools) an increasing number of these infographics about the growth in the Internet Economy.

If you take the time to read the original document you will see that McKinsey nominate a figure of 15% for the Internets contribution to GDP growth over past 5 Years in the USA.

To which I can all hear you draw a collective gasp of WOW!

What McKinsey failed to point out in the report of course is that, once you take debt out of the equation, the US economy hasn't grown at all over the past decade (See Michael Pascoe's US already half way into a lost quarter of a century).

This means, if we take McKinsey's nominated value and times it by the real growth in GDP of the US Economy, we end up with a dollar value of $0.00.

So in real terms it wouldn't matter if the Internet contributed 0% or 100% of growth in GDP the real contribution of the Internet to the growth of the US economy would still be $0.00.

Indeed if there is an argument to be made in relation to the Internet's contribution to the growth in GDP then perhaps we could use the estimate to calculate the Internet's nominal contribution of US Debt.

After all US Debt has risen by $10 Trillion in the 15 years since the Information Superhighway revolutionised the US economy.

Exhausted? Dulled by the magnitude of the magic numbers. Me2.

In the end I was left to contemplate the increase in productivity (i.e. GDP) that the Blue Screen of Death has delivered to the economies of the Western World.

But then another one of those Fauxionary thoughts hit me... like a bus in the street.

What if there is no convergence? No MobCon. What if the reason we can't measure value of the benefits of the so called Internet Economy is because it isn't about convergence at all. It is about divergence. It is about fragmentation. It is all about increasing, rather than decreasing your costs of doing business. What if the reason we cannot measure the ROI of the Internet is simply because there never was, and never will be, any ROI.

Then I wondered what this new model would look like.

So how I suspect it would look something like this.

In the middle is the value of the MobCon. The convergence of the 3 industry sectors (Media, IT and Telecoms) that now generates less than 10% of the combined industry revenues across each of these three sectors.

Growing out of this convergence are the 3 industry sectors (still doing what they did before the arrival of the Internet) generating over 90% of their revenues via none Internet Activities.

The larger outer triangles represent the explosive growth in each of these sectors by new entrants and the digital DIY'ers.

Finally the inner cross-over triangles represent the revenue income being generated by those harvesting (and ultimately profiting from) all of this new growth (e.g. Google and Facebook).

What we can see by this new model is the levels of investment to generate this level of output must be enormous. What is also self evident is that those harvesting this investment are only extracting a fraction of the wealth being invested in "making this online economy happen".

Or, put more simply Analog Dollars = Digital Pennies isn't just a problem for the media sector. It is a problem for the whole US Economy.

A quick update to my thinking at the moment

2012-02-05T14:16:00.000-08:00

I passed a fleeting glance over the weekend at a snap shot of a white board with a list of expressions [or should that be impressions?] of what you do with the various social media properties.

I don't have a link simply because I didn't think too much of it at first. It went something like this:

Twitter I'm eating a #Donut
Facebook I like Donuts
Foursquare: This is where I eat donuts
Tumblr: Here's a vintage photograph of my donut
LinkedIn: I have experience eating donuts
LastFm: Listing to the sound of eating Donuts

My initial thoughts where funny, a terrific piece of communication design and the Do.Me would provide you with a meta function to take care of delivering all these social communication fragments with the ease of a single button.

Why? Because, or at least I suspect, the Do.Me will be about the design of easy to use automated [i.e. Time Saving] message aggregation and distribution functionality [and perhaps who knows even platforms].

It will be a movement [how big is yet to be determined] that profits from the "curation" the fragmentation of functionality across the network. Which in turn will create more fragmentation... but that is another story.

Where once we bought Photoshop as an application today we populate our mobile devices with fragments of functionality. Function points that will need to be aggregated if we are to achieve a level of usability beyond what pre-existed with Photoshop.

Anyway I thought I would try my hand at a similar piece to summarise my recent thinking.

We'll begin with origins

Print Media = Constructed or Deconstructed Meaning
Electronic Media = Patterned or Threaded Meaning
Database or Networked Media = Fragmented or Separated or Absence of Meaning

Fragmentation or Separation of Meaning hasn't so much created but accelerated the growth of...

Find.Me = Searched or Discovered Meaning
So.Me = Shared or Exchanged Meaning

At the same time it has created significant barrier to the growth of

Me.Me = Collective or Crowd Meaning

This is because Mass Media (i.e. TV) is a more efficient way of distributing memes than hoping content will go viral across the network.

Moving forward I anticipate [at least for the moment] the emergence on new high value networked media models

Do.Me = Aggregated or [re]Connected Meaning
Xe.Me = Experiential or [perhaps] Experimental or Explored Meaning

What is the difference between the Do.Me and the Xe.Me?

Simply this. The Do.Me will provide you with the tools to try and make sense and create order out of the chaos. The Xe.Me will simply allow you to create more chaos [i.e. Experience the chaotic moment].

What if Facebook is disrupting Windows?

2012-02-04T16:39:00.000-08:00

I followed @arjwright's advice and checked out a post that discussed a new innovation equation

{invention or discovery} leads to {ideas} leads to {genesis}

and the insight [buried at the end of the post] that explosions of industrial creativity rarely follow the invention or discovery of a technology but instead its commoditisation.

Which leads me speculate that this probably explains why VC's are in the business of branding and packaging innovation (i.e. the commoditisation) in readiness for market ignition, rather than the funding the R&D. It also helps to explain the lack of correlation between R&D investment by the market leaders and the potential for market disruption by new entrants.

It is a long detailed discussion that I won't try and precise here. Needless to say the recommendation is to follow Antoine's advice and check it out for yourselves.

Then I slipped over to AllthingsD to read Michael Jones, the former CEO of Myspace, and his take on why the Facebook IPO is the end of the Web 2.0 Era and why Social Media is now king.

Here I discovered an insight into the idea of Facebook being a Social Operating System, something that becomes an underlying platform for all things we do online, that creates continual connectivity between you and and all your friends.

Sadly he failed to elaborate further on that idea but it did lead me back to an old idea that I have been exploring for the past 7 years. Could it be that FREE is not just a problem clouding media's future but also the future of the software industry?

You see for all the euphoria and commentary about the rise of Social Media and the dominance of Facebook why has nobody asked the most obvious question?

What if Facebook (and by extension Social Media and the rest of the Web 2.0 movement) is disrupting MS Windows. What if Facebook is the new OS for a connected world?

After all what are people doing on Facebook today that they we're not doing on their personal computers 15 years ago?

Should we be surprised if Microsoft misses the Facebook moment? Not really. It chased Web Portals and Web Browsers while Search proved to be the game changer. Today it chases Search while Social is the newest game in town.

The great irony of this insight of course is, while everyone is now talking about how Microsoft's $240 Million investment in Facebook back in 2007 is probably the smartest deal Balmer has ever made, chances are it is now Facebook, and not Google, that is the biggest threat to Microsoft's core revenue engine.

After all who needs to buy into Windows, Office, Outlook, Live and the rest of the Windows Ecosystem when you can get most, if not all, of it on your Mobile device via Facebook for free?

A brief history of the Faux Design movement

2012-02-04T04:13:00.000-08:00

Now I know that some of you have dismissed the Faux Design movement as little more than mere “Bubble Wrap” for the MobCon.

Indeed it has even been suggested that Fauxion is the sound you hear when you rummage around in a box full of bubble wrap.

However let me assure you that the lineage of the FAUX Design movement can be traced back though the rest of the 20th Century to the very beginnings of the UX industry (i.e. motion pictures).

Just as Sergei Eisenstein experimented with the art of the montage (i.e. Mashing pieces of film together to create new meaning) so now do the Fauxs assemble Fauxages (i.e. Mashing activities and messages together to create new meaning).

Nor is the Faux made up of a single design movement. Under the Faux umbrella resides a number of reactionary or breakaway movements.

For example we have the Memealists who specialise in the art of the Memeblage which is of course the assemblage of memes (i.e. virus or replicable units of imitation). This movement of course shouldn’t be confused with the Meowalists who specialise in viral Cat videos.

There are also the Usualists - from the Latin usus - whose pioneering work in the area of usablage during the in 1950’s led to the realisation of the endless lists of likes.

Then there is the cross over group that combine the work of the Memealists and the Ususalists into the Meusblage of personalised experiences (e.g. the digital nest).

For the early filmmakers it was the frame (i.e. the Stage) that shaped their ideas about how meaning is created. Eisenstein himself emerged from the theatre, having theorised about the “Montage of Attractions”, before making films. So whereas Eisenstein pioneered the juxta-positioning of film to create meaning. The Fauxionists have pioneered the juxta-positioning of actions to create meaning.

For the early Fauxs, or the DO's Fauxs as they are better known, it was the keyboard that shaped their ideas about how meaning was created. The Nouveau Fauxs were inspired by the mouse.

The Nouveau Fauxs are of course best remembered for their outrageous Avante Garde works like the truly terrifying "Blue Screen of Death" and more recently something called "Vista".

The more recent Faux movements include the highly respected Dot Fauxs, the So Fauxs and now of course, the newest generation, the iFauxs. A generation inspired by the potential of the Mobile Phone as a fauxionary new list engine and digital nest.

A cursory glance of the mobile app market suggests the future of the Faux Design movement looks to be in good hands. The app stores of all the leading smart phone vendors are awash with List Engines and Bling for the Digital Nest.

If there is any clouds on the Fauxs' horizon it is the emergence of a more experimental design movement. The Xemeisters.

The X's, as they call themselves, are a radical Xemeist group of young designers who excel in the art of the xemeblage. The mashing together of xemes (i.e. units of experiential meaning) into new, and by definition infinitely more compelling and more meaningful, mobile experiences.

Anyone who has read the Xemeist Design Manifesto "The list and its discontents" would instantly recognise that here is a group of young designers that have declared themselves no longer satisfied with merely transposing the desktop computing experience into a mobile world. They are seeking a world of mobile experiences well beyond another era of endless lists and bling for digital nests.

For this edgy collective even Google Goggles amounts to little more than pictures with tags. And, if the Fauxion is the sound of unpacking the bubble wrap then it must be said the Xemeisters enjoy nothing more than popping all of the plastic bubbles one by one. Or, as they say amongst themselves crossing out the fauxs.

This then is the highly competitive landscape of interactive UX design as it stands today. Much as it was during the Golden Age of the TV industry. A veritable xemeblage Faux and the X's.

Proof there was more money to be made by investing in a See it, Click it, Buy It business model

2012-02-02T13:04:00.000-08:00

Long time readers of the blog will recall that I spent much of the first year explaining how in a MobCon world the media model had fundamentally changed from the old media model of Browse with us, Buy from them to the new model of Browse with us, Buy from us.

Mashable provided additional proof of this argument during world FB day with an infographic illustrating how 9 tech giants traded after going public.

As you can see from this extract the new model easily out performed the old model as a long term investment.

The next question of course is what is Facebook's business model. Old or New?

The simple answer is of course, even though it benefits from a cutting edge FAUX Design and a fashionable So.Me business model, with its focus on generating advertising revenues Facebook's web 2.0 portal revisits the economics of the old rather than the new.

Celebrating a day at the faces

2012-02-02T03:57:00.000-08:00

To close off this festival of the faces. This ballet of the book. I thought it would be apt to finish off world FB day with a little bit of the old Haiku to sum up the day.

After all we've already done Warhol, Bono and Shakespeare over the past month.

We'll begin with the question everybody's lips...

Book of faces
Liked today
What about tomorrow?

Follow it up with a cupful of envy...

Twenty seven
You don't say?
Billion? Years

And finish it off with the an insight into the new capitalism

Built a wall
Biggest in the street
Graffiti? Pays the bills

The Principles of Faux Design

2012-02-01T16:01:00.000-08:00

If you haven't noticed it world FB day today and having just spied a RT from @ARJWright explaining the difference between UI, UX and Product Design...

1. UI Design is how it looks.
2. UX Design is how it works. And
3. Product Design is why it should work the way it does.

I thought I'd weigh into the analysis with my own thoughts on the little known and little understood Design revolution that has been sweeping Silicon Valley over the past 10 years.

It is Free & Addictive User Expression Design. Better known by its acronym, FAUX Design.

Most of you are actively engaged with FAUX Designed products everyday. You just don't know it. But that is simply because you are not attune to the cutting edge Design Principles of FAUX Movement.

So take heart. For once you recognise the signs and understand the rules you too could be a great FAUX Designer.

I'll begin by stating that the purest expression of FAUX Design is the List.

No ordinary list but a list that the user can create to their own specification and refer to repeatedly in real time.

In the end the list becomes a virtual expression of their own personality, desires, needs, wants, likes, loves, relationships... yes I'm afraid that this list of attributes too is endless.

In FAUX design the UI is best understood as the level of repeatable User Involvement. While the UX is the Level of User Expression or Personalisation.

Product Design? Well clearly that's all about providing the user with the (un)privacy tools and agreements to help them maximise their value to potential advertisers. After all, when it comes to the FAUX experience, the product is always YOU.

The key design philosophy behind FAUX movement is simply this. The less functionality you provide the user the more creative they will need to be if they are to find useful ways of enjoying the lists they create. Or, put another way, why put a lot of effort into designing functionality, usability or even a business model when your audience can design it for you?

FAUX Design is pure MoRoCo in both form and function.

So who are the greatest exponents of FAUX Design today?

Well I know you are a clever audience. Otherwise you wouldn't be wasting your time reading deep insights like this. So you tell me. Is there not something here worth Googling or tweeting about?

Till next time...

* MoRoCo = Post Modern Rococo

That Fauxionary moment when the Universe didn't change

2012-02-01T12:55:00.000-08:00

Upon re-reading yesterday's "tour de force" of the MobCon it has occurred to me that only one thing is missing... an explanation of the Fauxion.

The Fauxion is the counter point to the utopia of the MobCon.

Let's begin by saying, for those who struggle with the term, it's pronounced Fork-shon-airy. Or, just think of a fairy with a fork.

If the MobCon is an exploration of about how, thanks to the Internet, our Universe can change within an instant, then the Fauxion is an exploration of how the only thing that has really changed is our ideas about the medium.

So in its simplest expression the Fauxion is about how the Internet, and now the Mobile Phone, is shrinking, rather than expanding our world view, to the point where the only thing of interest is the medium and ultimately the actors (i.e. Me and You).

Or, As Stefano Bartezzaghi so aptly described the very public ascendancy of the Mobile Phone over a decade ago. More a Linus's Comfort Blanket than a tool for changing our world.

It expresses the idea that far from being a revolution of the mind (or the even the economy) the Internet is little more than the Emperor's New Clothes for the Telecoms and IT industry. More fashion statement than game changer. More fiction than fact. A slick marketing campaign designed to sell more electronic gadgets and wireless Internet connections.

Fauxionary ideas are everywhere. You can recognise them immediately. They cloud the imagination in much the same way the heavy fogs sit in San Francisco Bay. e.g. The Internet changes everything. Mobile changes everything. It's a new way of doing business. It's a new way of shopping. It's the new TV. It's a new way of ... thinking. It is going to disrupt everything. Software is eating the world...

And yet each time we peel back the layers we discover the Internet hasn't really changed anything. It merely feeds off what was preexisting and represents it to us anew... at a shiny new price.

Consequently the first and only law of the Fauxion is any statement about the growth and impact of the Internet, Social Media, Mobile, Telecoms and IT on the economy is a Fauxion until proven other wise.

The simplest expression of how a Fauxionist thinks compared to a MobCon "artiste" is in the ideas we have about money.

A MobCon thinker would argue that the transition from plastic to mobile payments is a revolution in the payments industry. Where as a Fauxionist would ask the question how has the Internet or Mobile Fundamentally changed our ideas about money? After all money is one of the purest forms of media (i.e. Information) we have ever created. And if Meaning is Irrelevant in Information Theory and by extension in the database and on the Internet, how does this idea fundamentally change how we think about and act in relation to money?

You see for our Universe to change, our ideas have to change. Mobile wallets don't change our Universe they merely change our habits. We have to explore the deeper questions of reputation and trust to understand how the Internet and Mobile Communications can radically and fundamentally change our ideas about money.

We need to ask the question does money still have meaning when today it is little more than bits of data pushed around the network? Does it suffer from the same Free economics or the economics of abundance that plaques digital content on the Internet? Has money and by extension all those other Financial instruments been rendered meaningless by the network? Did this two decade old road to meaningless on the Internet actually fuel and accelerate the path to the GFC? And finally, if the Internet has changed our world so radically why can't we use it today to solve the world's ongoing financial crisis and create a better life for all of humanity?

The Fauxionary answer to that of course is the Internet just isn't that special. We use it to optimise the performance of the existing systems. Not to create radical new ones. The whole concept of the disruptive Internet is fundamentally flawed. We should be talking about the optimalnet.

Hence the Fauxion holds the utopia of the MobCon accountable.

For the MobCon "Artiste" the Internet changes everything. For the Fauxionist the Internet is merely a funhouse mirror that distorts the way we see everything.

The Moment the Universe Changed

2012-01-31T22:11:00.000-08:00

On Twitter this morning Francis Irving @frabcus wrote [I] am trying to explain your theories to a friend, but is hard for them to get going with your blog. are there good first posts?

To be honest I am reluctant to look back. Simply because when I do it appears in retrospect that I have achieved so little.

If I was to apply Fauxionary logic to the question I could randomly select 6 posts (i.e. Six Degrees of Separation from the question to the answer) from the blog. I also suspect if you asked any of the other regular readers they would have their own 6 pack to share. But having the question some consideration I will now attempt to answer the question by providing so kind of thematic structure to this collection.

I'll begin by saying these are the very first words that I posted on Excapite back in October 2009 (Note: In retrospect they can be read as much as an introduction as a statement of intent).

Have you ever seen James Burke’s landmark 1980′s documentary series: The Day the Universe Changed?

If you haven’t, and you’re interested in where this world of the Internet, mobile phones and hyper-connectivity is taking us, then I suggest you track down a copy. The Day the Universe Changed is prescribed viewing for anyone who is interested in discovering how we arrived here and, more importantly, how our newly discovered hyper-reality will change our world forever.

What James Burke explored in this series was a very simple idea:

“Your world is a reflection of what you know today. Changed the way you think, by introducing new ideas, and you will change your world”.

Today we live in a world where we can navigate our way through unimaginable treasuries of online knowledge and change the way we think by simply clicking on yet another hyperlink.

Today your Universe can change in the time it takes to load a new web page or receive an SMS on your phone.

We are no longer thinking in terms of the The Day the Universe Changed. Our world view is in flux. If we are not already, then we soon will be awash with “Moments When Our Universe Changed”.

This I think is both the wonder and the challenge of our age.

Today I think, or at least I hope, I am back on message exploring this central idea. A manifesto for changing the way we think about media, mobile and the Internet by introducing new ideas and in some cases new words to express those ideas.

Two years and 700+ posts on is there an excapite manifesto that can be expressed in a single post or in 25 words or less?

Realistically the answer to that is probably no. But that isn't to suggest that we shouldn't try.

The excapite could be described as something of a personal road trip. But the idea of it being a sand pit is probably a more accurate description. It is a place where thought experiments are constructed and then levelled just as quickly to begin the process all over again. Veritable sandcastles of the mind.

We use words to construct thought experiments (i.e. The Fauxion). We use images to simplify and illustrate these Fauxionary ideas. And, we use numbers to validate the market mythology of Internet and Mobile (i.e. MobCon) economics.

If we look for patterns we see a number of themes emerging from the tapestry of words, pictures and numbers. And, if I was to summarise my thoughts at this time it would be this.

We began with the MobCon

The MobCon is about the convergence of networks (Telecoms), messages (Media & Data) and nodes (IT, Gadgets and Apps) into a unified MobCon economy

We reframed the discussion with the Kairos Moment where we discovered your ability to dominate, never mind manage or control, the network is inversely proportional to the size of the network.

You cannot manage the infinite (i.e. The Network) so to survive and thrive you need to manage the finite (i.e Time)

We changed up the discussion again with the Illusion of Life where we discovered that ideas may fuel your dreams but it is your actions that change your world. So it is your actions, and not your ideas, that really change the way you think.

“Reason leads to conclusion

Emotion leads to action
Action leads to transaction”

What followed was the endless lists of likes and the explosion in digital nests. Culminating in this graphical exploration of how the search for meaning creates chaos.

This ultimately lead to the idea of Experiential Meaning

The network is inert. In and of itself it has no meaning. Meaning is created by what we do with the network. With the Internet it isn't a case of I think there for I am. It is a case of You do therefore I am (Whatever you want me to be).

This in turn takes us back to the beginning of our journey and ultimately where we find ourselves today. A somewhat random collection of moments with seemingly no beginning, middle or end.

The MobCon is the business of creating experiences (i.e. Moments) that change our personal Universe (i.e. Meaning)

Or, what Umberto Eco would describe as the Carnivalization. In so much as the network doesn't satisfy our desire for playing with media. It sharpens it.

So these are the 6 logic posts that construct some illusion of momentary flow to the blog up until yesterday's post.

There are a number of other key posts and ideas (e.g. Browse with us, Buy from us) that have been omitted in this cook's tour but for now suffice to say enough of the logic.

Let's close off this retrospective with 6 Random Posts that demonstrate in some small way the idea of how“Your world is a reflection of what you know today. Changed the way you think, by introducing new ideas, and you will change your world”.

Are Facebook's revenues really growing faster than those of the Dot Com era Yahoo!?

2012-01-31T15:35:00.000-08:00

I just thought I would follow up that investigation on Irrational Exuberance or the Wisdom of the Crowd with this additional insight.

It is a commonly held belief that the growth in Facebook's revenues over the first 7 years may not be as high as Google's but it easy out performs those of Yahoo!.

Commentators who hold this idea to be true fail to account for two things. Inflation and the growth Internet Subscribers over the past 10 years.

Here then, adjusted for inflation and averaged against the total number of Internet Subscribers, is the comparative growth in revenue between the three companies.

Notes:
The revenues for Facebook have been estimated based on media outlet reports.
The collapse in Yahoo!'s revenues in it's 7th year was a due to the global collapse in online advertising after the time of the Dot Com crash.

Can you hear me Major Tom? or is that just a Network Oddity?

2012-01-30T20:23:00.000-08:00

I followed the link from our resident curator of all things McLuhan @alexkuskis to discover a tightly written thought piece on The English Language, Marshall McLuhan, and the Second Law of Thermodynamics.

It starts well exploring the impact of entropy (the second law of thermodynamics) on the English Language, moves elegantly into post-modern ideas about how meaning is shaped by the audience, and then closes with an unfortunate reference to how McLuhan's idea about "The Medium is the Message" has (d)evolved into "The Recipient is the Message".

It was sadly a step to far. Things would have been far more interesting if the discussion had moved from McLuhan to explore the idea of "the network is the message", preferably via Shannon’s decision to separate information from meaning, and how entropy, via the network effect, has fundamentally changed both the author and the audience's relationship with meaning (i.e. Meaning is irrelevant. I'm on the look out for experiences).

Thankfully Alex stepped into the discussion with this clarification on what McLuhan was trying to say in relation to the Medium and the Message.

"This often repeated phrase by McLuhan (“the medium is the message”) is his most misunderstood idea; it does NOT mean what it literally says and you have to understand it in the context in which McLuhan wrote it.

It means that we should pay more attention to the impact on the world that a medium has, consider how it changes society and the world both for better and worse, rather than its content, “the new scale that is introduced into our affairs”, rather than the messages that are carried."

Now let's see if we can clarify just as succinctly the final step of how in a network of databases meaning has been replaced by experiences.

In information theory meaning is irrelevant or more accurately meaning is separated from information so that it can be stored in a database and transmitted over the network. If the network is now the database (i.e. Internet) then it is self evident that on the Internet meaning is irrelevant. What matters is how we discover the information and we in our own way (re)use this information. On the Internet meaning is experienced (i.e. through our actions). Authors don't construct messages they construct experiences.

These experiences are best understood as units of engagement rather than units of knowledge. The most successful of these Authors have created what could best be described as List Engines that create personalised "Bucket Lists of Momentary Experiences" for each member of the audience.

Add all this together and we discover the Internet has fundamentally changed our ideas about meaning. Before the Internet the search for meaning was something of a life long road trip. You harvested what you gathered on the journey.

Today we experience (and in turn express) meaning in fleeting, apparently random and disconnected moments.

So where as the entropy equation in the original article read Room plus Child plus Time equals Mess. The new media equation now reads Message plus Audience plus Time equals Mess. Why? Simply because the message become disassembled and reconstructed into a new experience each time it shared across the network.

Discovering the DNA of Apple's Innovation Engine

2012-01-30T15:28:00.000-08:00

Over at Aysmco Horace Deidu and Dirk Schmidt have published an indepth analysis of [why] You can't buy innovation. Much the same as my July 2010 investigation the piece examines what make Apple's Innovation DNA so unique.

The key observation coming out of the report was that R&D expenditures on a stand-alone basis, in absolute or relative terms, do not correlate with disruptive growth. Essentially, you cannot buy innovation.

This of course pretty much sums up what we identified back in 18 months ago.

The pair then go onto say that Leadership in innovation is not the courage to spend but the courage to focus. Here I think our finding differ somewhat. Not because I disagree with the general observation that one of the key's to Apple's success is they have been marketing increasingly more portable variants of the same electronic "Blank Canvas" for well over 25 Years (i.e. Focus). It is simply because the data suggests the key to Apple's success has more to do with Brand Leadership than Innovation Leadership.

Without Brand Leadership, as Nokia and Microsoft have discovered, you cannot leverage the Supply Side Freemium model to significantly reduce your costs of doing business. Costs that include R&D and breaking in to lucrative new markets.

Here then is the original analysis from July 2010.

The news today that Apple has sold over 2 Million iPads in the first 2 Months has prompted me to take another look at how Apple’s innovation model is rewriting the innovation rule book.

We already know that Apple is recognised as a world leader in both product innovation and supply chain management practises. You may recall that Apple was the number one choice the of Corporate Executives surveyed by BCG for Business Week’s Top 50 most innovative companies.

Now let’s explore some more metrics that nay help us to understand what makes Apple the market innovation leader it is today.

We’ll begin the journey by taking a quick look at the correlation between R&D investment and the relative position of the Apple’s competitors in the Business Week list.

A Booz and Company report published by GizMag late last year lists the top 20 Corporate R&D spenders as – in descending order – Toyota, Nokia, Roche Holding, Microsoft, General Motors, Pfizer,Johnson & Johnson, Ford, Novartis, Sanofi-Aventis, GlaxoSmithKline, Samsung, IBM, Intel, Siemens, Honda,Volkswagon, AstraZeneca, Cisco Systems and Panasonic.

Surprisingly, as you can see in the table I have prepared below, both Apple and Google – the Top 2 from the Business Week’s innovation list – are not in the Booz & Company Top 20 list. Indeed Apple spends significantly less on R&D as a % of revenues than its competitors (e.g. Google, Microsoft & Nokia). So clearly Apple’s reputation as an innovation leader isn’t a reflection of the amount of money they spend on R&D.

BW Ranking	Company	R&D as % of Revenues	$ Billions
1	Apple	2.3%	1.1
2	Google	12%	2.8
3	Microsoft	14.6%	8.6
4	IBM	6.3%	5.8
5.	Toyota	4.4%	9
23	Nokia	11.8%	8.7

The next logical place to look for a correlation is Advertising. In the table below I have mapped the Business Week listings against the AdAge’s Top 100 Global Marketeers list. Again, largely thanks to Google, there appears to be no correlation between reputation spending and innovation reputation ranking. However Apple is spending more than its competitors on advertising as % of revenues.

BW Ranking	Company	AdAge Ranking	Advertising as % of Revenues	Advertising Spend in $ Billions
1	Apple	74	1.17%	$0.5
2	Google	No Rank	0.04%	$0.01
3	Microsoft	66	0.98%	$0.57
4	IBM	No Rank	N/A	N/A
5	Toyota	5	1.42%	$3.2
23	Nokia	80	0.89%	$0.45

“For 2010, the company’s advertising costs were $691 million. That’s up from $501 million last year. And it’s the first huge jump for Apple in recent years. In 2008, for example, they spent $486 million. And in 2007, they spent $467 million.” - Apple Massively Ramped Up Ad Spending In 2010, But Sales Grew Even Faster : TechCrunch

Thinking the elusive element to Apple’s success may be the quality of its people I examined the Revenue to Employee ratio on MSN Money. Again the results are mixed but Apple is a clear leader.

BW Ranking	Company	Estimated Revenue per Employee
1	Apple	$1,000,000
2	Google	$355,475
3	Microsoft	$640,258
4	IBM	$242,623
5	Toyota	N/A
23	Nokia	$411,536

With this insight I decided to widen the search to include the Fortune 500 list of the best 100 companies to work for. Glassdoor.com also provides us with an insight into what Apple’s employees think about life at Apple.

Surprisingly only Google (4) and Microsoft (51) rated a mention. Then I thought how about the CEO? What impact does the CEO have on a company’s innovation reputation?

Again I was somewhat surprised to discover that Apple’s Steve Jobs is ranked 71 in the Fortune 500 Top CEO list while Microsoft’s Steve Balmer & Google’s Eric Schmidt ranked 35 and 117 respectively.

These metrics suggest that to be the innovation market leader you need to spend less than your competitors on R&D, more on your advertising and be a company that nobody wants to work for. Plus you don’t need the top ranked CEO but you do need to extract 2 to 3 times more revenue from each of your employees than each of your nearest competitors.

I wonder how this conclusion sits with the latest management theories being taught in MBA courses around the globe? Certainly it isn’t an image Apple would have of itself. Nor do I believe that Apple’s customers, suppliers and competitors, or the media and Apple’s developer community are thinking of Apple in those terms.

Three years ago Apple wasn’t a player in the lucrative Mobile Phone market. What’s more its previous attempt to enter this highly competitive market (The Newton PDA) had disappeared without a trace a decade earlier. Today Apple has…

Developers building free software applications (Other people’s time, effort and ideas)
Venture capitalists providing investment funds (Other people’s money)
Media outlets providing lots of free promotion and/or content (Other People’s Time, Brand and Customers)
Customers who are product champions (Other People’s Time and Brand)
Market Brand Leaders building plug-in apps (other peoples time, effort, ideas, money, customers and brand)

With the launch of the iPhone product and the apps store in 2007 Apple has successfully leverage its brand equity as the “Prince of Techno Cool” to convince others to freely contribute their ideas, resources, time, energy and capital to build both a new brand and a new market for them.

That’s what makes it the undisputed innovation leader today and I guess that’s what makes Apple more than just a brand. It truly is one of the world’s great Lovemarks.

For every $1 Apple has invested into the iPhone and the App Store economy the iPhone Developer community has invested $10.

This then is the true value of the Apple Lovemark. The “Free” R&D investment by the Apps Developers means Apple spends a lot less on R&D than its nearest competitors.

Apple Lovemark is what I call “Bankable” Brand Equity. It allows Apple to leverage Supply Side Freemium economics to significantly reduce its costs of entry into any new market.

On the Web Brands Sponsor the Ritual of Celebrating the Ritual

2012-01-30T13:29:00.000-08:00

Social media may like to believe they are in the business of Branding the Ritual but in reality it remains peripheral to the main game. Tribal Rituals are by nature very public affairs. They are broadcast to the largest possible audience.

The trend towards personalising the broadcasting experience via mobile devices (see ESPN Deems Mobile First Screen) is testament to the increasing level of audience engagement with these rituals.

In contrast the So.Me is a private nesting place from which you nanocasting sporadic public declarations.

If the So.Me has played a role in the Branding of the rituals then it has been in the sponsorship of the actors (i.e. The Priests/Priestesses, Kings/Queens/Princes/Princesses and Heroes/Heroines) and/or the relics and offerings. This was highlighted over the weekend by The Next Web report on how Brands pay Celebrities for Tweets.

To understand the potential of So.Me in this context we need to ask ourselves to what extent are rituals conversations? and, therefore what role can the So.Me play within the ritual? Or, are we merely talking about conversations about rituals?

We also need to ask ourselves is the subset of the total audience engaged with Social Media during the ritual utilising Social Media as an expression of engagement with the ritual? Or, are they merely choosing to watch others watching the ritual as a distraction from being engaged with the ritual?

What is interesting about the Coca Cola SuperBowl experiment with the real time Polar Bears is the Brand has chosen not to sponsor the ritual but the rather to sponsor the ritual of watching and celebrating the televised ritual.

Of all the experiments to date, including the Pepsi Refresh from the past two years, this experiment probably best highlights the true nature and ultimately the unrealised value of social media to the Brands.

All that is left is to debate if this Brands Sponsoring the Ritual of Celebrating Brands Sponsoring Rituals is a Fauxionary construct or if it is a vibrant new layer of mass media that will allow advertisers and Brands to answer the question once and for all of what do Brands sponsor on the web.

On the Web Brands Sponsor the Ritual of Celebrating the Ritual

Is it the answer to the $175 Billion question? I guess we'll all have to think about that one for a while. But I suspect the answer, at least at this stage, is no.

Till next time...

On the Web Brands Sponsor ?

2012-01-29T14:28:00.000-08:00

Following on from yesterday's post we discover that the simple statement On the Web Brands Sponsor ? where ? = Experimentation explains a lot about the state of the advertising industry in the digital era.

For example we know that the agencies that thrive in the digital space are more like "Innovation as a Service" providers than the traditional Creative Agency of the TV era of advertising.

It also helps to explain why there is little or no ROI on most online advertising campaign. It doesn't matter if its Social, Video or old style Banner Advertising, ROI is extremely difficult to achieve when advertising purely online.

It also raises the question are we measuring the wrong things? Perhaps function points and patent applications would be a better measure of online advertising success than CTR's, likes, tweets, page views, traffic and the time spent on a page?

It also points back to a much earlier discussion we had about how advertising could disrupt Silicon Valley by reinventing the innovation start-up model. Rather than advertising on Facebook perhaps Brands should focus their marketing dollars on becoming the next Facebook?

If we assume that after 15 years the answer to the question "On the web Brands Sponsor ?" to be the right answer then mapping out the future of the industry is very easy.

Brands will invest even more resources and dollars into large scale marketing experiments like Social Media, Mobile Apps and Video.

Advertising agencies will morph into "Innovation as a Service" providers who specialise in servicing the Brands' desire to fund experimentation online and the other digital platforms (e.g. Mobile).

The problem with this scenario of course is it assumes that CFO's will be happy to see their marketing departments morph into R&D centres and quasi Investment Bankers. Somehow I suspect this is unlikely. CFO's just aren't that interested in marketing departments funding large scale experimental R&D projects that reside outside the core business. CFO's will be asking why the marketing department is spending money on high risk:low return experiments when it should be focused on moving goods and services out the door.

Digital experiments take time to gestate and mature if they are to take advantage of the "Network Effect". The simple reality is 90 day sales reporting cycles are incompatible with this time scale.

This is why, after 15 years of experimentation, Brand advertising remains to this day a niche player within the digital landscape.

On TV Brands sponsor rituals but on the web Brands sponsor ?

2012-01-29T02:18:00.000-08:00

Following on from those last two posts if we follow popular belief we discover that

On TV Brands Sponsor Programs
On the Web Brands Sponsor Pages

and yet what Marshall McLuhan taught us 40 years ago that

On TV Brands Sponsor Rituals

You see the disconnect?

What is the Web equivalent?

It can't simply be

On the Web Brands Sponsor Searches
On the Web Brands Sponsor Shares
On the Web Brands Sponsor Tweets

On the Web Brands Sponsor Games

Because the US ad spend data doesn't indicate this is true.

As we have seen before the Top 100 Brands allocated just 2.6% of their media budget's to online in 2011.

The reality is on the Web Brands Sponsor ?

With the ? = Experiments

The problem being of course that after 15 years of experimentation the statement remains incomplete.

On TV Brands Sponsor Rituals but on the Web Brands Sponsor ?

So let's explore what that ? could be. Simply because that ? is at the heart of solving the disrupt TV challenge.

It is the $175 Billion question

Get the answer to this one right and you'll be 2-3 times bigger than the rest of the online advertising combined. Even Google will look small by comparison.

The Google economy is based around the idea that advertisers sponsor your right to choose.

My actions online are all about choice. The reason online advertising CTR's are so poor is because the overwhelming majority of us choose not to click through any ads served up on the menu.

This also explains why Brand Advertising hasn't made the big jump online. Branding is about removing choice from the equation. Not encouraging it. It's about saying look at me. Not look at your options.

In the end the So.Me gurus and Silicon Valley VC who wax lyrical about Web TV in all its formats are wrong. The Disrupt TV challenge isn't about providing consumers with more channels or programming - and the same goes for Mobile TV.

It is much, much harder than that.

It is about finding the answer to this simple McLuhannesque observation

On TV Brands Sponsor Rituals but on the Web Brands Sponsor ?

If the web is going to disrupt TV it needs to start by being as engaging as TV

2012-01-28T15:30:00.000-08:00

It's almost February and it is that time of the year again. The So.Me press is full of Facebook speculation and viral SuperBowl ads.

Meanwhile Business Insider was kind enough to graph the cost of broadcasting a 30 second spot during the SuperBowl.

Anyway I thought I would mash together the two themes into a Crop Circle report that demonstrates how big the challenge is for Facebook, and by extension the rest of the web, if it is going to become the future of brand advertising (i.e. Disrupt TV).

You see the biggest challenge facing web media, be it DIY (i.e. Social) or Professional, isn't traffic. Nor is the potential size of the audience. It's engagement.

This of course appears to be somewhat paradoxically given all the talk about how TV is cool and Social Media is red hot when it comes to audience engagement.

The the reality is the web simply isn't sticky enough to compete with the SuperBowl or even Prime Time TV when it comes to sustained periods of repeatable activities that morph fragmented audience engagement into lifetime habits.

As Marshall McLuhan observed 40 years ago when asked what TV does best Brand advertising on TV is about the corporate sponsorship of ritual events (e.g. The Olympics, The Football Codes, Tennis, Golf, Baseball, Cricket, etc). That's why live sport is central to the TV experience.

In reality rituals are not part of the online media experience. Online its's all about choice. It is the activity, the game, of discovery. Sharing is a secondary activity. Creation a tertiary activity. The primary activity is one of choice. The game of discovery. A game dominated by one player... Google.

The only habits one acquires from sustained exposure to Social Media and the web are those of endless choice and discovery. Hardly the habits attuned to shaping the lifetime consumption of a single brand... and, after all, isn't that what Branding is all about? Creating lifetime habits of consumption?... as opposed say, to a lifetime of endless, and ultimately overwhelming, free choice?

Which brings us back to the Disruptive Web TV debate and the simple question: If you can't find something worth watching on 50 or even a 100 channels of TV how is creating 100's of Millions of channels over the next 10 to 15 years going to improve things?

In the end the web isn't about engagement with the message. It is engagement with the endless of activity of choice. The only question Brands have to ask themselves is do they want to be the message on TV or the activity of choice on the Web. ... Not a choice, but the choice.

Irrational Exhuberance or the Wisdom of the Crowd?

2012-01-28T13:47:00.000-08:00

With all the excitement surrounding the Facebook IPO at the end of the week I started work on a crop circle economic model to explore just how, and perhaps why, the markets over estimate the potential of the Internet.

It began with this rather complex crop circle diagram of the past, present and future of Google, Yahoo! and Facebook.

and yet when I began to construct the commentary I rather interesting pattern emerged.

Here let me show you.

By isolating the Google and the Yahoo! circles I discovered something rather surprising.

You see (as the blue circles suggest) the dot com speculators accurately estimated the relative size and market share of the online media market leader 10 years ago. They just picked the wrong company. It was to become Google. Not Yahoo!.

So what we now assumed to be irrational exuberance during the dot com craze perhaps under estimates, at least in retrospect, the ability of the Wisdom of the Crowd to predict aspects of the future scale of the market.

Which in turn leads us to speculate. Assuming the Wisdom of the Crowd has picked the size of Social Media market leader in 10 years time will it be wise enough this time to pick the company that will eventually win?

Or, put more simply: Has it learnt from its past mistakes?

The next question of course is 10 years on just how much more potential growth does the Internet Economy left in it? But we'll leave that one for another day.

A So.Liloquy for So.Me Man

2012-01-27T02:24:00.001-08:00

While I was painting the album cover for the Ballad of Miss So.Me I found myself contemplating the fate of her erstwhile partner.

What of The Ballad of So.Me man I found myself thinking as I shredded the lyrics.

Having stumbled so miserably in my efforts with Miss So.Me I felt the need to call upon something of a more existentialist, rather than materialist, pinspiration when exploring the depths of So.Me Man.

Consequently I found myself - somewhat unsurprisingly in retrospect - thinking of Hamlet.

Here then is the result. Twitter masquerading as Shakespeare. A travesty of the English language. A veritable So.Liloquy of the So.Me. More list than literature. A collection of seemingly unrequited tweets. In search of love and meaning.

But first the album cover. A Sidney Nolan inspired romp into the heart of darkness and emotional angst of So.Me Man to set the tonality of the piece.

So.Be or not So.Be. That is the question!

Is that really So.Me?
or, is it in retrospect, just So.You?

So.Us? So.Them!
So.In? So.Out!
So.What? So.Not!
So.When? So.Then?
So.Where? So.How?
So.Yes? So.No?
So.Long? So.Short?
So.Hip! So.Square?
So.Spent? So.Bent!
So.Love? So.Despise?
So.Like! So.Follow?
So.Shallow? So.Deep!
So.Common? So.Kitsch?
So.Rad? So.Gnarly!
So.Foolish! So.Wise?
So.Lost! So.Why?
So.Good? So.Bad!
So.Be! So.Fake?
So.Wow! So.Dumb!
So.Cool! So.Fail!
So.Undiscovered! So.Forgotten?
So.Now? So.Yesterday?
So.Talk! So.Listen!
So.Stop! So.Shush!
Be quite I beg of you
So.So?
Yes. So.So... At least for now.

So.Yawn and So.Dream
So.Maybe? Yes, So.Maybe!
You will So.Live. To celebrate.

Tomorrow, perchance?

For in the end isn't it just the pulling feathers from a hat?
The shooting of habits in a barrel?
Hooked by a book
and a Labyrinth of Lists?
No.More? No.Less?

Yes I know what you're thinking.

It's time to get a life.

Till next time...

The Ballad of Miss.So.Me

2012-01-27T02:24:00.000-08:00

I've just finished reading Tim Riley's excellent biography of John Lennon and I found myself thinking about what it would take to write a Ballad of the So.Me (Man and/or Women).

I was thinking less a Lennonesque "Ballad of John and Yoko". More a Dylanesque "Ballad of a Thin Man". But every time I sit down to write it I couldn't seem to get U2's Miss Sarajevo out of my head.

You know how it goes. It is the duet with Pavarotti.

First the Bono part...

[First Verse]

Is there a time for checking your emails?
A time to log onto Foursquare?

Is there time to update your status?
What about uploading your pictures on Flickr?

Is there a time to see what's happening on Twitter?
To check up on Katy Perry... and follow what she's doing there?

Is there time to take a picture of your coffee while you're waiting here?
Watch that cat video while you blog about what you're going wear... tonight?

[Chorus]

On Facebook.. Ohh!
Yes, She's on Facebook
On Facebook
You can see her. Everyday on Facebook

[Second Verse]

Is there are time for being connected?
For making sure your not out of the loop?

Is there a time for stalking past lovers?
A time for reconnecting with forgotten school mates?

Is there a time for playing Farmville?
or perhaps a round of Angry Birds?

Is there a time to vote for your American Idol?
or to catch up on what your boyfriend's ex is wearing... tonight

[Chorus]

On Facebook.. Ohh!
Yes, She's on Facebook
On Facebook
You can see her. Everyday... on Facebook

And then Luciano Pavarotti chimes in with the Tenor's spine tingling Aria inspired bridge... (Imagine this part in Italian... it'll probably be a lot easier to understand)

[Bridge]

Here she comes
Just another meme

Eyes on her iPhone
Head in the clouds

Ears plugged into P!nk,
Ke$ha and Gaga.

She won't see you.
Not while you're standing there.

Walks right past you
Doesn't even care.

But Everyone loves her.
Her Facebook wall tells her so.

But why is she so lonely?
Now she's globally exposed?

Shares everything with everyone.
Can't help herself.

It's not that hard to see
what's in her dreams.

She's busy thinking.
What about me?

If Rebecca Black can do it...
What about me?

As she screams at the wall.
Doesn't anybody care?

Doesn't anybody care! About Me?

What about me? Poor little me?

Then back to Bono to close off with the final verse

[Third Verse]

Did you find the time to sext your lover?
Listen into turntable.fm?

Have you downloaded all those new apps the gurls recommended?
Loved and liked your favourite fashion sets ... on Polyvore

Of course it lacks the heart, depth and clarity of the original.

More a Me2 than a U2. But as we all know the secret to a successful Me2 is in packaging.

Perhaps a Picasso inspired pastiche of platonic self love, self loathing and So.Me angst will do the trick?

Still doesn't solve the problem of what's on the B Side... But I'm working on it.

Facebook and the UK Debt Crisis

2012-01-26T14:26:00.000-08:00

After reading through Delottes report on the impact of Facebook on the European Economy I couldn't help but wonder what role Facebook could play in solving the European Debt Crisis.

Having neither the time or the resources to juggle the numbers across all the states in the European Economic Union I decided to focus my energies on the UK.

After all the 1 Trillion in GBP the UK now owes the rest of world represents the biggest single debt to GDP ratio in the G10 today. So if Facebook could turn around the British economy then Greece, Spain, Portugal and Italy should be a relative cake walk.

Before I show you this latest crop circle report a quick note on the methodology.

What I have done is taken the latest Facebook participation and engagement numbers and then applied the average hourly wage in the UK to create an estimate of lost productivity for 2011. The rest of the circles are courtesy of the Deloittes report that can be found here.

As you can see this crop circle report suggests that if the Brits abstain from Facebook for the next 3 Years, and put the saved time and ongoing business investment into creating value added goods and services for the UK economy, then the Brits should be able to pay off their national debt within 3 years.

This suggests that a Eurozone wide Facebook led economic recovery is entirely viable within the current economic climate... all they have to do is find something more constructive to do with their time.

Children of the Fauxion [Part 2]

2012-01-25T01:15:00.000-08:00

I suspect if he was still with us Spike Milligan would have relished the absurdity of living life as a So.Me man.

The tweet, the post, the like, the share, the digg, the +1, the followers, the fans and the feeds, the dogs, cats, birds and bots with their very own Facebook pages and Twitter accounts. All of these thinks - and things - would have fuelled his imagination and his love of the absurd... indeed the sheer comic madness of it all.

In the 60's you could turn on, tune in and drop out.
Today you can simply Tweet yourself into existence.

You see these days absurdity isn't just a mere literary genre, art movement or a TV series. It's an international lifestyle. A new global zeitgeist where personalities and egos are on display, much like pictures in a gallery, 24/7.

Now, as you can see by this video clip, Spike knew a thing or two about what was important when it came to reframing his world view.

I also suspect that he may have intuited that at the very heart of the So.Me lifestyle are destructive habits that will ultimately make life in a box untenable for all those who choose to live there.

You see So.Me man is the most imprudent of life's card players. A man who lays his cards face upwards for all to see and then wonders and worries constantly why all his best cards are either taken or trumped.

For not only does So.Me man show the world his face, his smile, his anger and his anguish. He also opens up his personal library, the very source of his power in a world of specialists and experts, for all the world to see. (Think Children of the Fauxion)

He also makes the mistake of exposing to the world his conversations and more importantly those who influence him and those over whom he has influence.

So.Me man shares endlessly the very things that decorate and define the box.

Ultimately turning what was once a sanctuary, where his darkest fears and lonely self, all those forbidden desires and wildest dreams, could be hidden safely from view, into a goldfish bowl.

A personal space where the rest of the world can turn out, drop in and be turned on.

Rethinking the education of the entrepreneur on the job

2012-01-24T14:18:00.000-08:00

I noticed this morning that the Next Web was covering a global startup competition to find the next Zuckerberg or Jobs and it left me wondering what sort of competition would deliver such a prize.

Then I found myself again looking at that NY Times expose on Apple's supply chain published over the weekend... and it was here that I came to the conclusion, if you want to remembered as the Genius in Jeans, the iEntrepreneur of the Century, then perhaps the only real skill you need is to be able to dig your heels in and pile more and more pressure on everybody around you until you get what you want.

I say that because we have seen this message before when journalists chose to focus on extracting the essence of what there is to learn about innovation from the Jobs legacy. (Think: Say no to a thousand things)

It was then that I found myself wondering what the America's Premium Business Schools would look like, and how much more competitive and innovative American business would be by international standards, if their academic studies were re-imagined as competitive sports.

For example would the innovation leadership conveyor belt be more effect is it introduced innovative new courses in say, advanced dummy spitting? Table banging for beginners? Intermediate report or even chair throwing? Or, as a nod to Asian Management methods, perhaps lessons in Tai Chi and Tae-Kwon-Do to help you in your technique when it comes to throwing others out of the sandpit.

How much more effective would the courses be if they invited internationally renown sports figures like Manchester United's Sir Alex Ferguson proving instruction to America's finest business minds on how to delegate instructions using his infamous "Hair Dryer Treatment"?

Basically a totally new program that explores the raw physicality and the all too (un)subtle tricks of the mind (and of the hand) required to be the world's next "game changing" entrepreneur.

Then it struck me. Perhaps the real lesson here is simply that to be a successful entrepreneur the secret is never to grow up. Focus all your energy on being a "kid at heart" and let all the adults in the room do the hard work. (i.e. Let them build your dreams for you just to keep you quiet for 5 minutes).

The problem of course is most people have grown up by the time they decide they want to become the next Tech Wunderkind and so I was left with the question. How do you reset the clock and get all those aspiring entrepreneurs in tune with their inner child?

And then (like a bus in the steet) it hit me: What would Spike Milligan do? and so I went in search of a collection of rare and, need I add challenging?, entrepreneurial insights from this extraordinary absurdist (or should that me absurd extraodinist?) to share with you... and here is what I found.

I hope you enjoy these insights from another creative time and place... Till next time.

On managing complex relationships (at home and in the workplace).

On establishing what your competitive edge is over the competition

and finally some quick thoughts on what it takes to unleash your inner genius (with out the need to be wearing jeans).

Crop Circle Economics

2012-01-22T16:42:00.000-08:00

Of course one of the most interesting aspects of the MobCon is the fauxionary economic models that we use to hyper inflate the value of the Internet and its impact on our economy.

After much consideration on the matter I have come to the conclusion that these economic models are best understood as manifestations of Crop Circle Economics.

To illustrate this fauxionary new idea to you I will use the Australian MobCon experience, simply because, unlike the US, European and Asian Models, it is among the least complex of the models we have explored to date.

What we do know from our original study (See Digging out the value buried in Australia’s $43 Billion National Broadband Network Plan) is that during the first 12 years of the original Information Superhighway the Top 10 MobCon players (i..e The Telcos, Media and IT) spent $75 Billion trying to secure their piece of the action in the Internet Economy. We also know that in 2008 the combined revenues generated by this investment was just $1.25 Billion in online revenues. Finally we also now that the Australian Government has committed $43 Billion of taxpayers money to build the next generation information superhighway.

Now if we apply Crop Circle Economic Modelling methods we discover these numbers are expressed very simply as Red for investment to date. Green for Revenues generated by the investment to date and Blue for the proposed blue sky investment in the next generation Internet.

Basically we have mapped the past, present and future. The ideal model being of course a small past, a big present and an even bigger future.

If we apply what we know about the the economics of free and the effect of the Long Tail we can remap this raw data into a projected (albeit simplistic) estimate of the economic impact of the Internet on the Australian Economy over a 30 Year period.

A quick look at this diagram and the first question that springs to mind is why would anyone who has been burnt by the information superhighway invest more money in building a faster, better Internet tomorrow? The quick answer to that of course is the original players aren't investing. The next generation is being funded by a new player... The Australian Government.

This then begs the question of why?

To understand the answer to this question we need to expand our understanding of Crop Circle Economics.

It begins with a series of independent reports that provide us with an estimate the value of the Internet to the Australian Economy beyond the Top 10 players (e.g. See More Google Economics. This time it’s Australia). These reports use basic creative accounting techniques (e.g. including capital investment in the network as a function of economic activity rather than as a cost of doing business on the Internet) to inflated the level of economic growth created by the Internet. This equalisation of the data then results in a far more appealing past, present and future circle diagram.

As a result the value of the investment moving forward appears to be self evident.

These reports also tend to ignore the problem of putting the Internet economy within an historical context. For example there are the outstanding questions of how big was the pre-existing f-Ecomony (i.e. Fax)? and what will be the potential size and impact of the Mobile Economy that is now emerging? How much has the Internet improved Australia's productivity and balance of trade beyond what was already being achieved by the Fax Economy?

Again we do not know simply because the benefits and advantages of the fax economy were not positioned in the same terms as the Internet economy. Our underlying assumptions are the Internet economy arose from nowhere to change the world. The reality is it was just the next evolution of the Fax Economy. After all what is email marketing but eFax marketing? and what is eCommerce but the next iteration of the pre-existing fax commerce network which in turn superseded the telex, telegram and (snail) mail commerce networks before it.

Once we factor in the unknowns like the old f-Economy and the emerging m-Economy we begin to see the economic model for what is basically is. An economic model something akin to a crop circle design and arguable of as much practical value

So what value, if any, does this brief insight into Crop Circle economics provide?

I suspect it is simply this. Every generation creates its own mythology about its purpose. Of how it is reshaping what has gone before into something new and how it's role is primary in shaping what is yet to come.

The Internet, and now the So.Me, is core to this generation's self belief. It shapes this generation's thinking and imagination... These crop circles economic models, just like the Circles of Influence that are now so popular in Social Circles, provide us with a mile high view of how this mythology is manifesting a new kind of (hyper or fauxionary?) reality.

Till next time...

Messages, patterns and signposts

2012-01-20T15:30:00.000-08:00

Of course the question that follows on from our last post is why do list engines, and in particularly Google, dominate online advertising at the expense of all the other players (new and old) who busy themselves creating destinations overflowing with exciting new activities and messages?

The simple answer is messages are fundamentally redundant if people can't find them. Patterns are redundant if people don't discover them. The key to owning the network experience is to own the discovery process. This is what Google achieved when it pivoted old media simply by profiting from sending eyeballs to people willing to pay for the privilege of being discovered.

This then is the problem at the heart of the network experience that Marc Shillum's Brands as patterns thesis fails to resolve. You may be able to visualise the network as patterns of activity, people or messages but the simple fact is these patterns are redundant unless people can find them... and the reality is, thanks to powerful list engines like Google and Twitter, it is the consumer of message and not the author of the message, who creates and reshapes the patterns of discovery across the network.

The reason that Google and not Facebook or Yahoo! or AOL or MSN or the New York Times dominates the web is because it solves the primary problem (i.e. Discovery). The others simply resolve the secondary and largely redundant problem of delivering the message.

If we go back to the challenge facing Lady MeMe in her endeavours to build an online brand using social media we discover that Google resolves the challenge by rearranging the network (i.e. The Pattern) in her favour.

She becomes easy to find because Google turns her into the headline act. Or, better still. Top of the List. Making her the first and easiest choice for discovery.

She may wish to play the low value content/SEO game but if she simply chooses to advertise with Google then she becomes the first choice for discovery - independent of the quality of the message being advertised.

Google wins because it solves the real problem facing anybody who is trying to business on the web without an instantly recognisable Brand. Discovery.

Three Facebook headlines you probably won't see this year

2012-01-20T13:56:00.000-08:00

I was looking over the 2011 Internet in Review figures published by Royal Pingdom this morning and I couldn't help but notice that there was one or two, or maybe even three, headlines buried in the numbers that you probably won't read about in the year the world sets itself impatiently for the long awaited Facebook IPO.

To make them easier to find I have remapped the raw data as bar charts.

This first chart illustrates the year on year growth in activity (i.e. new subscribers, sites or accounts) across the various communication channels connected to the global telecommunications network.

Nothing new here of course. The mobile economy continues to dwarf the Internet economy.

Things only get interesting when you remap the numbers to illustrate where the growth is across the network. Then we discover that (surprise surprise?) the old fashion web and (even more surprisingly) old fashion email is growing faster than Facebook.

Things get even more interesting when we start to add some revenue numbers into the mix.

In this next chart I have added the NVCA Figures posted on GigaOm yesterday with Mary Meeker's global online advertising projections, Facebook's 2011 revenue estimates and Google advertising revenues to discover if the growth in the (Google) web and the Facebook economies are reflected in the growth in advertising revenues and investment.

Again the data doesn't really deliver any new headlines until we remap them to reflect the Year on Year growth.

As you can see once we do that the real story is Google's Mobile Advertising business is growing fast than Facebook.

Perhaps equally as interesting is the fact the growth in VC investment is now outperforming the growth in the core revenue engine of the web (Advertising). Particularly when you factor in that Google now represents 50% of the global online advertising market.

Oh! and before we wrap up. That other Facebook headline you probably won't see this year? Last year Google's advertising revenues grew 5x faster than Facebook.

SOPA or DOPA?

2012-01-19T13:45:00.000-08:00

I have been wading through the headline numbers of the SOPA Protest on AdWeek. 75,000 sites protesting and 10,000 blacked out. Trying to put that into some perspective. After all if there are now over 500 Million web sites that means that 0.002% of the web was blacked out by the event.

So if the protest has taught us anything is it probably more about the fragility of the web and the potential for catastrophic network collapse due to cascading network failure than any core understanding of the politics behind the campaign.

It also provided us with the opportunity to discover just how effective social media would be as an alternative to say Google or Wikipedia. Just how quickly can you find the answer to "The colour of George Washington's socks" by asking your friends and followers on Twitter, LinkedIn or Facebook?

At the heart of the SOPA issue is the idea that the majority - or at least a substantial minority - of web consumers subscribe to the Internet to pirate movies and other media content or at least consume content for free.

Now putting the issue of whether this assumption about consumer behaviour is true or not aside ask yourself two questions based on the SOPA dialogue: Who is winning at the moment and who is losing?... and then ask yourself who has the most to lose by changing the rules and who has the most to gain?

The wisdom of the crowd (or more accurately the crowdsong) will tell you the answer to both sets of question is made up of a combination of Google and old media (i.e. Print).

That answer, as we have demonstrated many times over the past two years, is fundamentally wrong.

Why? because as it is the Telcos and the equipment manufacturers that are banking the Internet dollars not Google, or the Web Portals, Facebook, Twitter or any of the other Internet new media start-ups (see Why Analog Dollars = Digital Pennies). Google are scavenging for digital pennies in much the same way as the rest of the media is struggling online. They just have a more efficient business model.

So will SOPA solve the real problem of the Telcos taking the lion's share of the industry value chain's revenues?

Realistically? No.

Will old media significantly improve its share of the industry value chain's revenues by cracking down on Internet piracy? Realistically? The answer is probably No. The increase in revenue will be marginal at best.

So assuming SOPA goes through and the end game results in unlimited free access to content being removed from the web due to copyright restrictions what happens next?

Well if the pro-SOPA supports are right in their assumption that the majority - or at least significant minority - of Internet subscribers are online just for the free ride the obviously the number of Internet subscribers will shrink significantly. After all if you buy into cable TV the programming is part of the deal. Who wants to pay upfront to obtain access to a content vacuum? A veritable network white noise? or should that be a media Black Out?

So ask yourself again who would be the biggest loser in this scenario if SOAP succeeds? Would it be Google and the other 500+ Million web sites our there scavenging for digital pennies by selling ads for eyeballs? or, would it be the Telcos and the ISPs currently making the tens of digital dollars from each subscriber?

The simple answer is a lot of the start-ups would be wiped out... but they probably will be anyway given the economic reality of life on the web. But in dollar terms it would be the Telcos and not Google or Facebook that would feel the biggest loss financially

Now ask yourself, if the Telcos chose to offset their potential losses by sharing some of their revenues with the established media players, is this problem solvable without reverting to the SOPA playbook?

Actually, as we have proven a while back with the music industry and the publishing industry , if you do the maths the simple answer is YES. All it would take is a monthly digital rights payment from each Internet subscriber billed directly by the Internet and mobile provider to offset the estimated lost revenues of the media industry.

How big would that monthly fee be? Well the estimates from our previous studies suggest between $5 to $10 subscriber. So how does that look against the Telco's potential losses if a significant number of their subscriber walk away from the Internet and (potentially) the smart phone revolution?

Well I have no idea what the average US Internet subscriber is paying for their access in today's market but if we assume an average fee of $50 per month then we can project the average loss to the Telcos, if say 40% of the market (i.e. a significant majority) walk away from the Internet due to the SOPA restrictions, at $20 per month. Or, 2x to 4x the estimated cost of the digital rights fee.

This of course assumes that the majority of people are on the Internet just for the free media. Which of course is an entirely different debate but if the media industry really is interested in resolving this problem then clearly the industry is chasing the wrong target if it wants to secure future access to ongoing digital rights revenues.

I say that because as we have seen before as the web grows the average revenue per web site is shrinking just as rapidly. In 2010 there was an estimated 255 Million web sites in 2011 that had ballooned out to 555 Million. Meanwhile the estimate growth in online advertising had merely increased from $54 Billion to $73 Billion. So the web is growing 3x quicker than the revenue base that supports it. Indeed the average revenue share per web site is now only 5% of what it was 15 years ago.

Clearly a case of more growth means a whole lot less for most of the players. You might just call it a veritable explosion in the long tail of the web economy.

Of course any industry observer will tell you that the chances of the media industry influencing Telco pricing is marginal at best. Even if the opportunity to add an extra $5 to $10 to the bill could be flagged as a new revenue stream. The Telcos know from experience most Internet and mobile subscribers just aren't that interested in paying for their digital media. They like it free.

So how about this for an idea? Why doesn't the Internet community lobby the US Government and the old media players to regulate the Telcos and set up a Digital Rights Management and Revenue Distribution Authority from which all the originators of digital content can benefit?

After all it is the Telcos who are profiting each month from managing the infrastructure and the wireless spectrum that distributes all this "pirated content". Google is only in the business of helping those who want it, find it.

This would make all the parties in this debate accountable. Not only for their actions today but also their ongoing contribution to the growth of the Internet. Plus the US Treasury could do with a new revenue scheme and what better way than to introduce an Online Entertainment Tax?

A universal Internet licence fee just like the UK Broadcast Licence fee. Collected by Governments around the world and redistributed by the UN. Complete with a management fee to help fund world peace.

What would we call it? A Digital Origination & Access Payments system perhaps? Or, maybe just DOPA for short.

Till next time...

Facebook. Digital Nest or List Engine?

2012-01-18T13:42:00.000-08:00

Francis Irving (@frabcus) ask the question yesterday what are the strategic differences between a Digital Nest and a List Engine? After all Facebook used to feel like nest (my friends/photos), now feels like [a] list.

We had a look at why Facebook's revenue model - just like the other pre-existing media models - was fundamentally flawed - by proving why Google's was so successful - when we reviewed the fauxionary ideas driving the trend towards the emergence of brands as media.

Lists are made up of actionable items. Destinations and lists are simply made of activities to keep you sticky. The problem with putting ads on the menu in a nesting space is you are actually asking them to leave a personalised place they have chosen to come to rest and play. Ads on a list are just part of the actionable discovery mix. Your leaving so selecting an ad over a list item is just a matter of choice. Rather than a change in behaviour.

The simple answer to the question then is I suspect Facebook has discovered there is money in lists but not in nests... at least on the web.

As say that because in this post I want to explain why the emergence of the iPhone economy has changed the paradigm somewhat,

If we map the four MobCon innovation business models into the matrix we introduced yesterday we discover that apart from dominating the list engine business Apple basically owns the iEconomy... and even here with the rumours of tie ins with Twitter there is some reason to speculate on who will be the primary list provider in the Apple iEconomy.

The comparative spread between activity and ARPU's also changes significantly in favour of the Nest provider. The reason being of course that the real Digital Nests werealways the gadgets we buy to access the network. Not the destinations that bring us to rest on the network.

These two diagrams also highlight Facebook's growth problem within the new smart phone economy. If the new nest is the gadget where does that leave the world's biggest social network? The simple answer is it is relegated to the bit part role of the biggest DIY hit factory... or as we have pointed out before little more than a DIY Yahoo!, AOL or MSN.

This leaves it with three clear strategic choices moving forward. It either builds a phone or it becomes a list engine... or it attempts the Google strategy and attempts to do both by becoming a surrogate mOS.

Of the three competing with Google and Twitter as yet another list engine appears to be the easiest option going forward.

Hence the initial astute observation: Facebook used to feel like nest (my friends/photos), now feels like list.

The MobCon Business Model Paradox

2012-01-18T02:33:00.000-08:00

Upon reflection the Laws of Crowdsong Innovation and The Crowdsong Innovation Paradox should have been called either the Laws of MobCon Innovation and the MobCon Innovation Paradox or the Laws of Networked Innovation. But I guess that's what happens when you play in a sandpit. Sometimes you don't recognise what you've built until you get up out of the sand and take a walk around. You need to see it from all the other angles before you begin to recognise its entire form.

Anyway one of the connections I failed to make was the relationship between the scale and function of innovation on the network and the wider problem of building a viable business model that feeds off the network.

But before I look at that issue in more detail I just want to look back very briefly at a couple of the other sandcastles we've been playing with here in the sandpit over the past few weeks. Specifically Marc Shillum's Brands as patterns and the old Digital Nests and Endless Lists paradigm.

The subtext behind Marc's dialogue is that in the Golden Era of TV and Radio the challenge was simply to create the most compelling message. In a network world you not only have to have a compelling message you also have to a compelling reason for people to go out and find your message.

With this in mind creating patterns may help to solve that problem but they may also help to magnify the problem. At a very fundamental level simply creating patterns doesn't address the real problem. Providing the target audience with a compelling reason to become actively engaged with the message.

This is where the Digital Nests and the List Engines come into play.

The differences between nests and lists are both obvious and at the same time subtle.

Digital Nests (e.g. Facebook and Wordpress or the iPhone or iPad) are places where the consumer gathers together the things they LOVE into one place. Contrary to popular opinion they are the real destinations scattered across the network.

The List Engines (e.g. Google and Twitter or the App Store or iTunes Store) are sign posts. They generate endless lists of (potential) LIKES that allow the consumer to roam freely around the network to discover new things to decorate the Digital Nest.

Digital Nests = Loves + Destinations

List Engines = Likes + Sign Posts

This insight in turn leads us back the four potential business models available to anyone choosing to make living out of doing business on the network.

To make this easier to understand we'll add some leading web brands into the mix and a simplified description of the business model.

Put very simply if you are operating at the platform level you are either operating a List Engine or a Digital Nest. If you are operating at the function point level you are either operating a Hit Factory or a Bling Factory.

What's the difference? If you operate a list engine you are in the business of profiting from sending the audience somewhere they probably weren't - initial at least - expecting to go. If you are a nest provider or a hit provider you make money by selling access to the audience. If you are bling factory you make your money selling digital goods and services to the audience.

Obviously hit factories are in the same business as the nest providers. However their business model is not as efficient and operates at a significantly higher level of risk.

Putting aside the mobile phone app economies and focusing on the web we discover that hit factories think they can profit from creating attractions to hook an audience. Nest providers think they can profit from letting the audience create the attractions.

Both models mirror the list engine model and its focus on selling the audience rather than the experience.

Of the four models only the bling factories makes money out of directly selling the experience to the audience.

Or, put another way the bling factory is the only model with customers. The other three deal in traffic or what we would describe as eyeballs.

Now if we map the overall level of activity across the network vs. the relative ARPU’s generated by each of the business model we discover that the level of engagement or innovation across the network doesn’t translate into higher revenues. In fact the opposite occurs.

Somewhat paradoxically the new value equation appears to be the less time spent being engaged the higher the ARPU’s. Or, what was described much earlier as the ARPMOE.

In this new paradigm engagement isn’t measured in the time spent with the activity but the quality of the time spent engaged with activity. i.e. Save Time is Good. Make Time is Better.

This then is the 4^th Law of MobCon Innovation .

Quality Time = Repeat Engagement = Higher ARPU’s

Why we need a RubRank

2012-01-17T16:01:00.000-08:00

One of the most obvious forecasts for 2012 that I forgot to include in my New Year's wrap up was that we will see a increase in the number of reports from credible (and not so credible) sources (e.g. Industry Courtesans like Management Consultants, Investment Bankers, VCs, So.Me Guru's, Tech Blogs, Tech Press, Ad Agencies, Ratings Agencies and Market Research Houses) demonstrating the positive impact that Social Media and the Internet in general was having on the US and the Global Economy.

I won't go into the reasons why this will happen. After all it is self evident that there is a lot of money on the So.Me table at the moment and a lot of players in the game looking to maximise their share of the "opportunity".

What I would like suggest however is that after reading Calvin Trillin's take on a new way of measuring pretentiousness that perhaps the time is right to introduce a new measure of credibility that can be stamped on any report proclaiming to measure the success of Social Media (and yes even the Internet) and its unique ability to change our world.

After all we have Standard Poors with their AAA debt ratings that measure the ability of the borrower to pay back the money you lend them. Google has the PageRank to measure how popular a web page is. Facebook has EdgeRank to measure who you really want to hear from in your news feed. Then their is Klout and Kred with their influence and reputation indices.

So why not a new metric. A new ranking system to allow us to quickly identify the relative value of a So.Me or Internet report from any given source. In particular a ranking system that allows us to determine if the report rates as the equivalent of "Junk Status" simply because it was funded or written by the Government Agency, Corporation, Advisory or Industry Group who would benefit directly or indirectly from the adoption or acceptance of the report.

I envisage an 11 point scale ranging from -5 through 0 to +5. Zero being neutral - Highest Score. -5 beginning maximum benefit to be gained by trashing the substance of the report. +5 being maximum benefit to be gained by over hyping the substance of the report.

Now I know what you are thinking. Let's call this new metric the FauxRank to reflect the Fauxionary economics of the So.Me.

But you would be wrong.

My preferred term would be RubRank. Simply because it reflects the relationship of the report writer to the beneficiary of the "unlimited" opportunity described in the contents of the report.

As for the icon displaying the 11 levels of the RubRank I'll leave that up to your imagination to decide what image would prove the most fitting to describe the majority of these relationships.

The Laws of Crowdsong Innovation

2012-01-16T14:50:00.000-08:00

The 1st Law of CrowdSong Innovation states quite simply that

To take full advantage of the network effect you will need an activity that is very easy to learn and share with others.

You may like to express this ideas as KISS (Keep it Simple, Stupid) or DEAD (Dopey Entertainment and Activities for Dummies) functionality.

The long term trend towards the dumbing down the user experience (to maximise the probability of the network effect kicking in to boost traffic or app sales) means that although the level of activity across the network is increasing rapidly the rate of innovation across the network is slowing. (i.e. the network is becoming dumber not smarter due to the inevitable replication and fragmentation of functionaility).

That's why the 1st Law of the Crowdsong Innovation Paradox simply states that

That the level of "break through" or "Game Changing" innovation activity across a network (i.e. the creation of new types of functionality, messages and connections) is inversely proportional to the growth in the network.

The 2nd Law of CrowdSong Innovation takes this paradox to its logical conclusion and states quite simply that, contrary to popular management theories about the benefits and objectives of investing in innovation,

The dumbest network wins

Why? Simply because it attracts the biggest audience. It does this because its offering is the easiest to use for the largest number of people.

Note: You can substitute words like Search Engine, Platform, Social Network, Mobile OS, Web Browser for Network. and Simple, Safe, Cautious, Easy, Stupid for Dumb.

The 3nd Law of the Crowdsong Innovation explains why it is so easy to disrupt the established incumbents on the network that have progressed and consolidated into platforms (i.e. Private or closed networks)

Networks fail catastrophically when they try to become too smart (i.e. Innovative and complex) and are disrupted by new entrants that simplify (i.e. dumbs down) the experience

Put very simply Apple disrupted the mobile phone market because its smart phone experience was dumber than the rest. The same principle applies to Facebook's disruption of MySpace and Google's disruption of Yahoo!.

This then is the somewhat paradoxical and, yes admittedly, somewhat absurd message at the heart of the US tech innovation story. If you want to disrupt the market leader you need to think how you are going to be dumber, not smarter or better...

Till next time...

More thoughts on Apple, Nokia, Google and the Crowdsong Innovation Paradox

2012-01-16T04:20:00.000-08:00

Antoine RJ Wright's comments on the last post on how "Nokia also tried that strategy as well" reminded me of the absurdist nature of the much of the dialogue we hear on a daily basis coming out of the USA about innovation... and equally how much we enjoy exploring this absurist discussion to its logical (and at times illogical) conclusion.

You see, once you do the numbers, you discover that an investment in innovation just wasn't a big part of the winning equation when it came to disrupting Mobile Phone market with the smart phone.

After all Apple beat Nokia to the smart phone revolution by spending significantly less on R&D (while spending more on advertising) as percentage of revenues and although Google invests a similar percentage of revenues in R&D to Nokia it appears to have had more success with acquisitions than its R&D strategy.

Yet when it came to world's best design and innovation practice Nokia ticked all the right boxes. They consistently won the race to bring innovative new features like the web browser, MMS and video calling to the mobile phone market (See Nokia and Apple Mobile Histories side by side).

Meanwhile Nokia's new smart phone partner, Microsoft, spends more on R&D each year than the US VC's invested in Internet start-ups and yet it is generally accepted that, despite the heavy investment, its Internet Portal, Search, Tablet and Mobile OS strategies are significantly under performing.

Which raises the obvious question. Could it be that both Microsoft and Nokia are just too innovative to be market leaders today? Could it be that their heavy investment in R&D positioned them too far ahead, rather than too far behind, the curve? Could it be that by not leveraging the principles of supply side freemium to offset the ongoing costs associated with the innovation gap they have simply isolated themselves from the much touted benefits of the network effect that drives the explosive growth across the other mOS platforms (iOS and Android)? Could it simply be that thanks to the Crowdsong Innovation Paradox it is better to be a Me2 than the innovation leader?

You see if the Google/Apple vs. Nokia/Microsoft mobile innovation story has anything to teach us it is the winners appear to have focused on either branding or acquiring their position of market leadership.

Applying Occam's Razor to the Do.Me

2012-01-15T18:31:00.000-08:00

Of course if we apply the principle of Occam's Razor to the ideas behind the Do.Me we soon discover that the chances of the "Network becoming the Application" are in all probability extremely low.

I say that because history shows us that 99.999% of all innovation on the web to date comprises of new ways of creating and displaying web pages and/or endless lists from a database.

Just take a look at the latest round of social innovations like Pinterest, Polyvore, Paper.li or even Mobile Apps like Flipboard. Yes, even Facebook started life as little more than a DIY web page generator. The lists, games and apps came later. While Google and Twitter are the "killer" list engines of our time.

As I have said before the web is basically an industry built around the building of digital nests and the creation of endless lists of likes.

You see the limits to innovation across the web are limited by the functionality of the web browser... and at the end of the day the browser was designed to do one thing. Display an HTML page.

So realistically the only way for the web to evolve beyond the obvious limitations of the browser as an application delivery platform is for the browser to become redundant.

The other barrier to the growth of the Do.Me is of course the developers and the established platform (i.e. Data Base) owners. It is difficult to see the IT industry being as foolish as the media industry when it comes relinquishing control over their IP in exchange for the unlimited potential of the Internet. After all it is far too easy for the industry to reset the benchmark on a regular basis by introducing new Operating Systems (Think Symbian/Windows/Android/iOS) or Programming Languages (Think .Net/C++/Java/Ruby/C#/the list goes on and on) with the launch of new generation of devices.

HTML survives not because it is efficient or clever programming environment but simply because it is the most primitive of languages that deals exclusively with the problems associated with the presentation, as opposed to the application, layer.

For the Do.Me to thrive it needs to be supported by an environment that can support not only a complex presentation layer but also a complex application layer (Think Apple's iOS and Google's Android).

This then is piece of the puzzle that I suspect Nokia and the other players (e.g. RIM) missed in the mobile OS wars. The challenge they faced at the time of the launch of the iPhone wasn't to simply build a better smart phone. Nor was it to embrace social media. It was to create the world's best (i.e. easiest to use, integrate and personalise) Do.Me platform.

The challenge then wasn't about the phone. It was to render the web browser obsolete.

The challenge was to create a new paradigm that fundamentally changed the way we experience meaning when using this technology.

The good news for Nokia, RIM and the other players (including Adobe) in this space is that, although Apple and Google have made a good start at trying to solve the problem, the reality is the challenge remains largely unresolved.

The question then becomes one of do they see the opportunity for what it is?

Somehow I suspect the answer to that question is no.

Of innovation clouds and the Do.Me Portal

2012-01-15T15:00:00.000-08:00

Of course the other key new idea embedded in the The Roadmap from Metcalfe’s Law to the Crowdsong Innovation Paradox was that of the Crowdsong Innovation Paradox [CIP].

The CIP describes how these single activity based entities (e.g. Search, Messaging, Picture Sharing) grow very quickly via the network effect and then evolve into platforms as a range of additional activities are added to the core functionality to service the extraordinary growth in traffic.

There is nothing new about this trend. For example Search began as a single idea and quickly expanded into a portal (Think: Yahoo!) only to be disrupted by Google. A few years ago we saw Social begin as a single idea and quickly explode into a portal (Think: Facebook)... The question mark here of course is will it be disrupted by a new and more efficient type of Social Business Model based on the sign post rather than the destination model? Today we have Salesforce and the emergence of the cloud portals. Again the question is will these software portals be disrupted by a new and more efficient type of Business Model based on the sign post rather than the destination model?

In each case the extraordinary growth in traffic was achieved by a single core function. The "portal" activities followed the traffic rather than providing the catalyst. The underlying business strategy being to improve the overall level of stickiness by proving the traffic with more activities (i.e. reasons to stay) and in each case the resulting portal was disrupted by a new entrant that focused on improving the core function (again the primary example begin Yahoo!, Google and Search).

What is interesting about this portal activity. This perennial focus on turning the function point into a destination. Is it has a tendency to "cool", rather than stimulate innovation across the network. The traffic growth may be fuelled by search or it may be fuelled by photo sharing but once the traffic arrives you can expect to see the introduction of games, email, news feeds, messaging, photo sharing, search into the portal mix as the management team focuses its energy on turning the function point into a destination by introducing more activities to make it sticky.

This replication of functionality across the portals cools innovation across the web as developers focus on adding new features to service traffic rather than generating new function points that expand the overall capabilities of the web. This then is the subtext of the ongoing tension of the Web as a collection of platforms or destinations vs. the Web as an Application. Or, what we have come to understand as the Open vs. Closed Internet debate. Which model fuels innovation? The story is both do. The reality is closed systems tend to fuel replication rather than innovation. While open systems tend to fragment innovation towards single function point solutions.

A web of single function point solutions provides the global platform for the tiered evolution of innovation as new layers are added that sow together these functions points on as needs basis to create more complex applications. We see this at its most primative with things like the Mapping API's that allow you to create data visualisations using Google Maps. Another example that Antoine RJ Wright was kind enough to point out is ifttt.com - the online equivalent of a 1980's DOS batch file.

The Do.Me is about the next generation of developers who are clever enough to recognise like ifttt.com that the real opportunity of the endless mashup isn't in being the author of proprietary mashups but being the provider of the simple, easy to use interfaces and tools that allow everybody else to create their own mashups.

This is the Wordpress vs the New York Times story and the Facebook vs. the AOL story. Yesterday's Tools vs. Content debate becomes tomorrows Tools vs. Functionality debate.

Put simply yesterday's revolution was about providing everyone with the opportunity to become a best selling author (i.e. Blogger). Tomorrow will be about proving everybody with the opportunity to become a best selling developer... without having the hassle of learning how to code.

The So.Me (i.e. Blogging, MySpace and Facebook) provided everybody with a DIY WYSIWYG HTML editor that made the activity of creating web pages transparent to the act of creating content. Plus the tools to share in the discovery of this content (i.e. Twitter)

The Do.Me will provide everybody with a DIY WYSIWYG application authoring and development platform that makes the act of creating code and mashing together disparate function points into complex work flows transparent to the act of creating apps. Plus the tools to share in the discovery of there apps.

Search and the social unleashed the latent potential of the crowd to be the intelligent agents (i.e. Actors) within - what is for all intents and purposes - a "stupid network" to create what we consider today to be the most intelligent knowledge network mankind has ever invented. Surely the time is ripe for the world of software and application development to follow the same path?

An explanation of sorts of the ideas behind the Do.Me

2012-01-14T14:48:00.000-08:00

In retrospect suggesting that if you don't understand this go back and study The Roadmap from Metcalfe’s Law to the Crowdsong Innovation Paradox until you do was more a sign of fatigue than a viable answer to the questions you may have about the Do.Me

We'll start by going back to the beginning of the web and addressing the most fundamental Internet myth... That the Internet was a great leap forward for computing and information technology.

Actually the birth of the Internet represented quite the opposite. It took computing back at least 15 years. Maybe more.

I say that because if you owned a Windows or an Apple computer back in 1995 you probably had loaded on your computer a number of very complex applications. If you were a graphic or multimedia designer you would have had applications like Illustrator, Photoshop, Macromind Director or Authorware (i.e. Flash), Pagemaker. If you were an Architect you would have had AutoCAD. An Accountant would have had Excel and Word. A statistician Mathematica, A filmmaker Premier or one of the other EDL edit compositors... the list of applications is as varied as the professions that invested in these personal computers.

These application had been evolving since at least the mid-1980's and so they had accumulated lots of functionality. Each new release would have included new features and tools and file types to encourage the users to upgrade. It was a thriving ecosystem.

Now along comes the Internet and the surrogate operating system we call the web browser.

Rather than offer a whole range of complex functionality it does one thing. It reads a text file that utilises the HTML mark-up language and something called the Hyperlink to display text on screen and navigate to linked pages.

This revolution of the mind took computing functionality back to at least the 1980's. Simply because the mark-up language was the same markup language secretaries and typists used to create documents in WordStar.

The world in effect traded complex functionality for ease of navigation between text documents.

If we look at the functionality of social media platforms like Blogger and Wordpress we could make the case for their functionality being on a par with the very early versions of Word that shipped with Windows 3 or the original Apple Macintosh. With the advent of HTML5 these web services will graduate to the functionality of the early versions of page layout tools like Quark Express and Pagemaker. Again we are talking late 1980's and early 1990's in terms of direct comparison of functionality.

This would suggest that the rate of innovation and the evolution of functionality on the web has been comparatively slow by desktop standards (i.e. The early days of the Apple Mac and Windows). This is perhaps why the growth of the various Mobile Apps Stores have proven such a revelation to this current generation of entrepreneurs, VCs and developers.

The limits to growth on the web has always been the browser. The simple fact is in the beginning the browser was just a simple text reader and yet we always expected so much more from it.

Indeed most of the investment in innovation to date has been in trying to discover work arounds and plugins that allow developers to expand the limited functionality of the browser to deliver a compelling user experience (e.g. Flash, XML).

OK Fast forward to today and we see an innovation landscape based on bringing very small ideas to market. VC's and the tech community get very excited about small ideas (e.g. Photo sharing and 140 Character messaging). Essentially small ideas that in the old world of the 1990's era desktop app may have rated as a new feature, advantage or a benefit on the next release of Word, PhotoShop. PowerPoint or Excel. So the question is why have these "Function Points" become so revolutionary and important within the context of the web?

The answer is if you think of "the Web as the Application" rather than just the distribution network for media and messages then owning a single function point used by a Billion users around the globe has as much value today as owning the whole desktop application suite back in the late 1980's to early 1990's... maybe much more so given the general confusion that now exists between the value of customers and traffic

So, basically at best having stood still and at worst gone backwards for the past 15-20 years, it would appear that as the web comes of age as an application development platform the information technology industry is on the verge of the next real wave of innovation or what I call the Do.Me.

Now the Do.Me is the very simple idea that the web is awash with function points (i.e. nodes of activity) and these function points will continue to grow exponentially. So the real challenge is to discover ways of making it easy for everyday users to create, curate and consume functions and applications in the same way that they create, curate and consume messages and media, connections and relationships.

So just as the old Web Portals became obsolete once Google discovered you can make more money out of being a sign post than a destination. So too will the SaaS, PaaS and the cloud vendors become obsolete once somebody figures out the same trick for function points.

So, as I said yesterday, in very simple terms Google solved the Information Graph mapping and message discovery problem by turning the network into the database and allowing everybody else to solve the problem of identifying what was worth finding for them. Likewise Facebook has solved the Social Graph mapping and people discovery problem by turning our relationships into a database and allowing everybody else to solve the problem of identifying who is important for them.

I would suggest the next big opportunity is the Do.Me... and by that I mean allowing everybody else to solve the problem of mapping the Functional Graph by turning the network as an application and then identifying which function points are the best solution to any problem.

At its simplest level just imagine a Twitter or Google + for function points that allows you and your circle of contacts to create a Photoshop plugin, typeface or brush on demand. Or a Twitter that allows you and your circle to share datasets and graphing tools to create analysis constructs on demand.

A network awash with unlimited functionality, just as it is today awash with unlimited messages and connections. All you have to do is pull the bits (i.e. the Function Points) you need together, when you need them to create a solution or solve a problem, to create a new game or add new functionality or characters to an existing game.

Hope that makes these ideas at little clearer.

Till next time...

So what's the next big thing after the So.Me?

2012-01-13T12:56:00.000-08:00

One of the questions I am most frequently asked is (obviously) so what's the next big thing.

We have had Yahoo!, Amazon, Google, Facebook and now the App Store. So what's next?

Let's start our exploration of this question by updating the original roadmap from Metcalfe Law to Chaos Theory infographic with a few of the new ideas we have been exploring in more recent times. e.g. Thinking about Marshall McLuhan and the emergence of the Time Wallet, The Long Tale of the Zipf Curve, The fauxion will be an endless mashup, Just how efficient are Facebook, Twitter and LinkedIn as Real Time Media Channels?, If you are the product. Who’s buying?, You say you want a fauxion? and In the future which box do you want to call home?

Needless to say, just like the original mashup, it means something to me but I suspect that by now I have lost most of you in translation.

Now for the answer to the big question: What's next after the Find.Me, Buy.Me and the So.Me?

In very simple terms Google solved the Information Graph mapping and message discovery problem by turning the network into the database and allowing everybody else to solve the problem of identifying what was worth finding for them. Likewise Facebook has solved the Social Graph mapping and people discovery problem by turning our relationships into a database and allowing everybody else to solve the problem of identifying who is important for them.

I would suggest the next big opportunity is the Do.Me... and by that I mean allowing everybody else to solve the problem of mapping the Functional Graph by turning the network as an application and then identifying which function points are the best solution to any problem.

If you don't understand this go back and study The Roadmap from Metcalfe’s Law to the Crowdsong Innovation Paradox until you do.

Now some of you may thing that the App Store has already resolved this challenge. This is definitely not the case because the Apps in the app store are composed of multiple function points. So comparing the apps in the app store to the future of the network is like comparing Tolstoy's War and Piece with Twitter. It should also be noted that the Apps need to be downloaded from the network onto the mobile device. So the network isn't the application in the mobile app economy. It is still just the distribution platform.

Until next time....

Forget the Facebook IPO. Let's have a global GB day instead

2012-01-11T18:10:00.000-08:00

You have probably seen the Facebook IPO Infographic doing the rounds with the tech press and the So.Me bloggers today. Full of wonderful insights on the economic windfall that the IPO will bring the founders, investors and the US economy.

Anyway I thought I would offer this thought for your consideration.

This is GB. She is one of an estimated 5 Million people around the world currently on Facebook right at this very moment.

She was a girl with burning ambition. A writer with raw talent and ideas to burn. She found stories everywhere and delighted us daily with her narratives. Sadly today she whiles away her time and her talents on Facebook.

My message to you today is simply this. If you know a GB, and heaven knows there is at least 800 Million of them out there by all accounts, then ask them out for a cup of coffee (or maybe something more refreshing, or perhaps even stronger). Meet with them, touch their hand, smile and talk with them, and maybe even hug them, but most of all advise them to put Facebook on hold for a while and get busy reconnecting with the world around them.

Encourage them to do something Good and Brilliant (GB) with their lives.

Exhort them to live their dream and share their passion with others.

Show them how much more rewarding and special life can be when they reach out and infect the people around them with the GB!

Go on. Get out there and do it.

Help each other to create a GB economic recovery.

After all you'll contribute more to GDP by sharing a cup of coffee with a friend than you will spending a whole year sharing updates with them on Facebook.

Back on message

2012-01-11T14:14:00.000-08:00

Some publications rejoice in the mythology of the end of times (Think: The WatchTower). Others earn a crust celebrating the excitement of living in fauxionary times. And here I am thinking about publications like Wired and Fast Company who deliver our monthly does of how exciting it is to be a part of this special generation of disruptive thinkers.

Today Fast Company has launched its annual rebranding of the generation with the pronouncement that This is Generation Flux. Meet the pioneers of this new (and chaotic) frontier of business.

Its the same eclectic mix we have been reading for at least 20 years. Young upwardly mobile entrepreneurs using networking technology to change the world.

Admittedly the eCommerce mantra has be replaced by mCommerce. But the message remains the same.

These are special times. The new economy is real they boldly declare. Just as they did 15 years ago.

Industries are being revolutionised declares Mr Mashable. Just look at the growth in eBooks.

Meanwhile, just a little further across on the dying newsstand we see Forbes illustrate just How Amazon Ate Sears' lunch.

"Amazon is the new Sears," says Robert Spector, a retail historian who wrote Amazon.com: Get Big Fast, and other books on retailers. "It's also the new Walmart, the new Barnes & Noble and the new Best Buy." - How Amazon ate Sears' lunch.

Special times. Disruptive times. But does the myth of the special generation stand up to scrutiny?

After all, every generation likes to think it is special. So is this generation really as special as it thinks it is?

Let's pump it through a few numbers to find out if we are talking about a revolution in business or is it an illusion or perhaps even a delusion?

Is the Fluxion the new Fauxion?

After all if this generation is so special why is the economy outlook so pessimistic?

We'll begin with the Amazon is the new Sears meme.

To do this we would need to do a comparative study of how the eCommerce revolution compares to Chicago’s Direct Mail Catalogue Revolution.

Pioneered by Sears and Wards, and fuelled by the rail roads and the US Postal Service, the Mail Order industry revolutionised US consumer spending at a time when Retail Chains represented only 3% Of the market. Statistics from that period are very hard to come by but anecdotal evidence suggests the growth in eCommerce over the past 15 years has been marginal at best compared to the revolutionary “retail platforms” that Sears and Wards built in the 1890′s.

If we turn the clock back to 1920 we discover that the Chicago Mail Order industry accounted for about 0.1% of US GDP. Sears' share of that market has been estimated at 25%.

As the Forbes article points out: In its heyday the Sears' catalogue could be found in 75 Million homes (i.e. in excess of 85% of households in the USA at a time when the telephone had a reach of less than 40%).

Fast forward to 2011 and we discover that the comparative reach for Amazon was 96 Million in December or just 30% of the US Population.

As we saw recently, if we look at the adoption of eCommerce is the US vs the rest of the developed world we discover that far from being a world leader. If we map eCommerce expenditure as a percentage of the average wage by the eCommerce percentage share of retail we discover the USA would best be described as a "middling" nation when it comes to eCommerce adoption rates.

When we took our first look at the growth in eCommerce in the USA 2 years ago we discovered that once we discounted the pre-existing mail order catalogue industry from the growth equation (i.e. about 1%, in retail sales in 1990) we discovered that the eCommerce revolution added just 3% to the bottom line of America’s retailers over the past 20 years.

This was confirmed about 6 months later when we created a bubble chart of the US retail sector when we explored the question of just how important the Internet was to the US economy.

Again we saw the economic impact of the Internet on the retail was not overly significant in dollar terms and that despite the growth since 2007 the sector remains more of a niche than a mainstream player. Having said we acknowledged that eCommerce has disrupted a key sector of the retail economy (Think: Music and Print) and that customers are now using the Internet for price comparison and research.

Since that bubble chart was created in 2007 Amazon has grown from a $15 Billion to a $43 Billion Business. Walmart from $344 Billion to $405 Billion.

The illusion then is Amazon is growing a lot faster than Wal-Mart but in reality Wal-Marts revenues have grown twice that of Amazon over the same period (i.e.$61 Billion vs. $28 Billion). If we do a comparative analysis of just the US revenues we find an even bigger margin.

Nor is Amazon's business model more efficient than Wal-Mart's. Wal-Mart's gross profit margin is 24.7%. Amazon's 24.6%.

As I have said before any experienced retailer will tell you, the real impact of the Internet over the past 15 to 20 years is to be found in the significant role it has played in optimising the manufacturing and distribution stages of the global retail supply chain.

As we have seen before back in 1995 it was estimated that EDI accounted for $130 Billion in B2B sales in the US. By 2007 B2B eCommerce was enabling US business to trade online in excess of $2 Trillion in manufactured goods and services.

What is interesting is the revenues as a % of GDP. Amazon's US revenues represent about 0.16% of GDP. If you include the international revenues it rises to almost 0.3% of GDP.

So theoretically, although Amazon has a fraction of the reach of the Sears' Mail Order business at its prime, it contributes more to the US economy.

The question then becomes one of: Is Amazon's apparent growth a reflection of the US economy's ability to innovate and renew itself? Or is it actually a reflection of the US economy's inability to innovate?

Or, put more succinctly, has innovation in the rest of the US economy stalled so badly that the selling (and financing) of goods and services has become more innovative than the making of goods and services.

The reality is the last 20 years have not been about inventing the information age economy. They have been about optimising the old industrial age economy. - Why this is no accident...

The problem of course is there are an increasing number of studies around patent activity, jobs growth and investment being published that suggest that contrary to popular belief the new breed of 21st Century innovation leaders are not to be found in Silicon Valley and the USA but elsewhere (i.e. Asia) . You see, once you remove debt from the equation, there has been no growth in the US economy over the past decade. Nor has there has been any new net creation of jobs in Silicon Valley over the last 15 years. While the US patent office records indicate that only two US companies (IBM and GEC) are in the top 10 innovative companies of all time. The rest are from Japan and South Korea.

Finally, if any further evidence was needed to dismiss the idea of American Entrepreneurial exceptionalism as little more than an urban myth, one only need take a look at the professional mix of America's Top 1% of Taxpayers.

The reality is these are special times for the US economy. But not because the US is more innovative than its ever been. Nor is it because the US economy is under going a period of Creative Destruction with the promise of a new economy on the horizon.

On the contrary these are special times because here is yet another generation of Americans that seems compelled to spend more time and energy telling the rest of the world how it is more innovative and more creative than ever before while failing to generate the break through innovations that really will change the world and improve the outlook of the US Economy.

This then is the flux generation. A generation much like the previous one. Big on small ideas, quick to gorge on the low hanging fruit, intoxicated by the So.Me and full of promise and self belief in a hyper-connected networked future. Ready to disrupt their world by merely optimising the economy of their forefathers.

The big question of course is in the future which box will they call home?

After all the USA can't continue to shrink to greatness. What it really needs is a Generation Focus. Not another generation in flux... or should that be generation faux?

Lovemarks, contagions and platforms

2012-01-09T21:08:00.000-08:00

[Spoiler Alert! This is the third instalment of the Story of a Brand called Marc. If you haven't read the other two posts you need to restart the story from the first instalment]

OK. Sorry about that folks... Must have been some sort of Easter Egg embedded in the app. You now what those programmer are like... always fooling around. Did I ever tell you about the story of the DOD combat training app that had a PGA Golf Tour game embedded in it. No? another time perhaps...

Back to the story.

As you will recall this is the story of Lady MeMe who wanted to become the next Brand LIKE Marc.

As you will recall this is her Tweeting, Facebooking and Blogging right now about Marc's insight into how Branding is about creating patterns, not repeating messages.

She is difficult to find amongst all the other individuals Blogging, Facebooking and Tweeting about Marc. So lets once again try adjusting volume control, the social graph, the influence score, the reputation metrics, the interest graph and of course the Signal to see if we can find here amongst all that noise created by the real time fire hose .

Here we go...

Success. I knew it was easy. Can't help but think what went wrong last time we tried this.

Anyway as you can see. Although she is busy creating patterns of behaviour and messages. The problem is compared to the total size of the network she is pretty much irrelevant in terms of influence.

With everybody else busy creating patterns. The patterns she, and everybody else are busy creating, are just adding to the noise.

As I have observed elsewhere your ability to dominate, never mind manage or control, the network is inversely proportional to the size of the network. So as the network grows it become more and more complex and difficult to monitor, manage and maintain.

In this context trying build a brand by creating patterns is in practise just as difficult as trying to herd butterflies.

Clearly if social media is to help her build her Lady MeMe Brand she needs to Think Differently.

Perhaps even ask herself what would Steve Jobs do?

So let's ask the question: Realistically, apart from investing more time and energy creating more patterns, what are her options here?

Well she could do a Rebecca Black and inflect the network with a "Love Me or Hate Me" contagion.

As you can see viral infections are far more effective than patterns.

And this in itself tells us something about the nature of what we are dealing with. These so called social networks are in reality complex adaptive systems. Cellular in nature and subject to changes brought about by external forces.

But more on that later... Suffice to say if you take the time to explore what a meme is (i.e. a unit of culture (e.g. ideas, symbols and practises) that can be easily replicated and transmitted - A virus of the mind) you'll begin to ask yourself what is the difference between a successful meme and a successful Brand.

Alternatively if she's a bit of Tech Head she could take it to a whole new level and build a parallel network. A whole new Lady MeMe platform were the whole world can come and be involved in what ever Lady MeMe's do.

This is a great strategy because it leaves everybody else with the problem of wasting their time and energy on creating the patterns.

After all why be a mere freemium slave when you can be the platform landlord?

Finally there is the Lovemark gambit where, rather than trying to affect change within the confines of the system, you become simply irresistible and reshape the landscape by sharing the love.

You see in the end great Brands are like magnets. They draw people to them. While simultaneously distorting our expectations and desires. (Think Apple)

Great Brands don't waste their time trying to participate in the conversation (Again Think Apple). They understand implicitly they are in the business of framing the conversation (Now Think Coca Cola).

That's why Branding was, and always will be, about owning a word, a phrase or concept in the audience’s mind that is exclusive to you and your product. Or, what we describe today as a meme.

They are what you might describe as point attractors. They bring the system to rest. They monopolise the conversation simply because they monopolise the imagination (Think No Logo).

New entrants disrupt the market not by creating patterns or going viral but by becoming strange attractors that take people towards a new way of thinking and more importantly acting.

Understand this and you'll not only realise why Facebook has become the new Kodak moment but also why the only Great Brands being built by your participation in social media are the platforms themselves.

The Ghost in the Patterns

2012-01-08T20:22:00.001-08:00

This is part two of yesterday's story about a brand called Marc. (please don't read this unless you have read the first instalment)

We begin the rest of the story with the aspirations of a young woman. One self styled Lady MeMe. Better know to her friends as Little Miss Me2.

She, like many of her generation, no longer just aspires to be LIKE Marc. She wants to be the NEXT Marc.

Here is her DIY Brand campaign. Is there nothing this PhotoShop generation can't do?

As you can see she is more of a Tom Wesselmann than an Andy Warhol girl.

After all why settle for being a Me2 when you can be a MKDO?

Along with everybody else of her generation she seeks out the Social Media gurus and invests heavily in the Social Media thing.

She Blogs before breakfast, Foursquares her commute, Facebooks between meetings, Instagrams her Lunch, Tweets as she talks, Tumblrs before Tea and updates her day on Google+ before she goes to sleep.

She is unique and she makes sure everyone knows it.

Here she is Tweeting, Facebooking and Blogging right now about Marc's insight into how Branding is about creating patterns, not repeating messages.

What's that you can't see her? Why is that?

What's that you say? They all look the same?

But they're all talking about Marc and she's so unique. Surely she can't that hard to find?

Tell you what. Let's zoom in.

Just hang on while I adjust the volume control, the social graph, the influence score, the reputation metrics, the interest graph and of course the Signal to Noise ratio.

Just a tweek of the real time fire hose and here we go...

Hummm? Sorry about that. I must have hit the wrong button or something... It's zoomed out to the max and it now seems to be stuck. This is what the whole the So.Me world looks like at this moment in time.

It also appears we've have moved on from Warhol to Lichtenstein. Both screen print artists of course. It's just Lichtenstein is better known for his dots.

I don't know if you can you see that? But there appears to be a bit of a shadow appearing in the patterns.

Just let me see if I can adjust the signal to noise ratio over here to see if we can get a better picture for you.

There you go. It doesn't look too bad from a distance and you know I can't help but feel I know that guy from somewhere. I just don't understand why he is in the picture. After all, weren't we talking about how you build a global brand using social media?

The Story of Brand called Marc

2012-01-08T15:17:00.000-08:00

This is a short story illustrating just how much our ideas about Brands has evolved over the past 50 years. I hope it leaves you with a smile on your face, a question in your head and the urge to go and read Marc Shillum's Branding is about creating patterns, not repeating messages to discover more.

We'll begin our story by going back 50 years to the Golden Age of Advertising. The world of the MadMen.

Imagine a young unknown Brand called Marc sitting across the table from Don Draper. He pops the question. "If I was to ask you launch Marc tomorrow what would you do?"

Don replies: "We have a young, promising Art Director. Andy is his name. He's full of ideas. Let me invite him into the conversation."

He makes the call: "Megan. Can you get Andy Warhol up here. Now?!"

Cut to the next scene and we see Andy doing his pitch. It's a screen print of Marc that captures the Zeitgeist of of the Pop Art movement.

Marc's blown away by the chance to put a bit of colour back in his life.

Now for the media plan.

Of course things where a bit black and white in those days. But at least people could tune into the Marc vibe and before long everyone aspired to be Marc.

Time stops for no man (except perhaps for an enlightened few survivors of the 60's).

But at least the Brand lives on.

Fast forward 20 years and the young, promising art director has drifted off into obscurity of the New York Art Scene and Don Draper is now writing TV screenplays.

The agency handling the Marc account continues to build the brand. Everyone now has colour TV and the advent of database marketing means that everyone now receives their own targeted Marc promotion in the mail.

Fast forward another 20 years and we see that the Internet is now a small part of the media mix. The direct marketing industry has evolved from you've got paper in the mail to you've got email.

We also discover that traditional advertising campaigns have become increasingly layered and textured.

For example Nike isn't just endorsed by one elite athlete but by many athletes.

Could it be the Brand is evolving from a single message into a pattern of messages?

Marc's agency responds to the challenge by launching the Many Colour of Marc. Complete with an online do-it-yourself colouring in game.

Fast forward another 10 years and we are talking about the here and now.

Google has revolutionised the Direct Marketing industry and the hype surrounding the potential of social media has reach fever pitch.

The creative team working on Marc can see the trends. The world of media is fragmenting before their eyes. They know they need to be doing something. But What?

Enter the Big Data guru. The answers is in the data. You just need to look for the patterns

Think PINK! and WOW! It looks like nearly the whole world thinks PINK!

Thinking small? Let's get intimate and discover those who like to live with a green wall.

Hit the real time button and suddenly the world becomes alive with the Global Conversation about Marc.

Today Marc has never looked so exciting. So energetic and so in tune with the zeitgeist.

And its all thanks to a new slogan.

Branding is about creating patterns, not repeating messages.

"Brands today exist in multiple mediums, defined by multiple voices. The media brands inhabit is iterative, with no beginning, no end, and little permanency. In that context, adherence to a big idea and endless repetition of centralized, fixed rules can make a brand seem unresponsive and out of step with its audience. " - Marc Shillum

Of chicken philosphers and intelligent agents

2012-01-07T14:34:00.000-08:00

While leafing through the Rolling Stone I spied an illustration style that I though I'd spend an hour or so experimenting with. All that what missing was a couple of subjects to provide a bit of inspiration for the perspiration.

The question was simply about who should get the "Rolling Stone" treatment?

The man on the left is Bradd Libby (). A man who, despite walking away from the advertising industry to weave his magic with Det Norske Veritas, continues to deliver to the world rare and challenging insights while either "dirty dancing" with the numbers or via his dry wit and tweets.

His latest post "Ask the Chicken Philosopher", an insight into the mathematics of mixing, segregation and toleration, begins the New Year in stunning style.

... and upon reflection he may look better as a "b" than an "A". Although it looks a little puffy in the cheeks.

The other face on the right is Antoine RJ Wright (@arjwright). A man with a seemingly insatiable appetite (or should that be faith?) for all things mobile. He has helped me to understand that, far from being yet another esoteric micro blogging platform, Twitter is the place where "the real time" conversation and free flow exchange of ideas now happens.

The only question now is, having never met them in person and only held conversations via email or Twitter, did I manage to capture their likeness from their avatars and their personalities from their writings?

I guess only they can tell us that.

Till next time...