With the long list of comments, it just had to continue into a new blog post....but this time around...i happen to discuss the whole business point of view sans all the bio-talk. Instead deals with topics such as :
business models: collaborative, sustainable, disruptive
game theory
21st century and more...
So here goes:
This topic thats been clouding my head needed an economist's view point, so the ex-IESian my dear father was my arm's length economist at hand. And so began the series of 'healthy' debates in reasoning out the need and craze for most businesses to go BIG and keep growing......
My arguments: (nothing new...)
were that ..1. bateria...lalalaa..... why cant a single individual play the turf with dynamic teams pretty much like the Film industry which is essentially loose and dynamic bonds and collaborations made for certain projects. or like some public/private partnership civil projects (ignoring the bureaucratic hierarchies).
2. During a crisis a long train of 3 dozen coaches will fail miserably in maneuvering a huge block on the trail when compared to a ferrari or a TATA Nano... this is to compare the BIG and small business entities...
3. Why do businesses even grow with such huge liabilities when ultimately work is pushed down the order and out of the organisation to be outsourced down to the single celled business entity....why bother organising when the human resource running in a few hundreds to thousands or millions end up passing the buck to a small timer????
4. Essentially advocating this new model based on collaboration at free will in order to survive, sustain and not focus on expanding that leads to the urge to seek profits that leads to expanding and hence a vicious cycle that leads to glut......thanks to the ball that set rolling ever since the Industrial era.... why cant the model of huge corporations become obsolete giving way to so many new small entrepreneurial ventures who can effectively collaborate and serve without red-tapism. This not only frees up customer interaction, but also gives them customised service/ product at a price much lower than that charged by big corporations......
(well this seems flawed but needs further clarification, it has been simplified in vain in the above sentence...)
Father the ex-Indian Economic Service Fellow and Director of Finance, (Telecom Consultancy, State Electronics and National Textile Co.):
1. Yes why not? That is an old concept what is new... Work is often outsourced...egs from Civil projects such as cable laying, road construction etc... (My argument: outsourcing is different from collaboration....there is a sense of authority that diminishes freedom when work is outsourced often work may be inferior when compared to collaboration, when partners are at work keep a close watch on quality. Work is a job in one and Labour of love in another....or so I put it..)
2. Yes, it is true but your example of bacteria adapting in adverse conditions will also have competition and weaknesses that lead to its extinction. The same way that a sudden drop in temperature or physical conditions will have only a few survivors that go on to multiply. Big corporations are covered for huge contigencies, they can afford to sail longer while individuals will get washed away to oblivion. (To which my take was Kodak a huge company did sink into extinction...why?) Kodak failed to change or diversify. (My argument: So it doesnt matter if a business is big or small... ultimately the key to both their survival is in their level of adaptability and smartness being an important quality for adapting...)
3. Tell me one business that says I have enough and and I am happy. Everyone wants to own more, have a big outreach, lead an empire. Look at the Lions, they hunt and drag their 'lion-share' of the kill to have it all by themselves...its pure natural instinct....(My argument: This is purely capitalistic and unsustainable, if every business crazed for Big Bigger biggest what are we left with....?? Also our economic values are archaic and skewed or distorted. Is it not enough to survive and lead a modest life as an individual? Collaborate to earn a little extra but continue to do what you do as long as it makes you earn a decent living...??) That is totally relative... How can a car manufacturer think of being an individual...?? If he has a demand of 1 million, he needs to have a huge manufacturing unit with many employees... (My argument..see I didnot factor in product companies, but it doesnt have to be true with service companies.) Product/ service is all the same....when you have huge orders in a steady manner, you need a huge organisation to cater to that kind of demand. Scale of market and Profit margins govern your business model. (I disagree, the whole model is very dangerously unsustainable and cyclic).
4. You may disagree for you are thinking from an extremely idealistic point of view. It is not just capitalistic, look at the communists....what good are they....everyone loves to accumulate wealth and power as a sign of growth...(That is the faulty human ideal we are following....look at so many modest people who lead quiet lives while surviving with their modest businesses) The kind that you mention are handful...economics is for the masses, and majority would never say they are content with modest lives...Besides it is like nature, just as bacteria survives besides other large animals....so do many business models co-exist in the market. You cannot say one is better than the other. You may use different models for different purposes. It is not a homogenous world. Also it is BIG companies that can spend lavishly in serving their customers, and take the market's lion share even during economic slumps at the cost of endangering or even killing small-time competition. Clients/customers will need a lot of convincing in buying into small-time businesses purely due to lack of trust when compared to Big brands/ businesses. (We all know the truth of brands they are differently packaged but essentially the same, customers might want to buy the cheaper one from a small-timer especially in economic slumps...) But with such low margins the small business will be forced to leave the market. (That is exactly what can be avoided with collaborating with more small businesses)
You think collaboration is easy? Call it outsourcing or collaboration you end up losing the earnings to the other person in that name. Ultimately its not profitable, you cannot be always good at everything. You will end up hiring a team to do work that you yourself might not want to or like to do....(yes, that is exactly why we collaborate, but not to delegate but share the work, there is a chance of free-loading or trust-building or keeping egos out of the scene to avoid conflicts.) Ego or selfishness is what makes you, that individuality is important and it is difficult to work. Someone is always answerable to another. There may be an informal air about it but there is always a boss or middle man before the service/product reaches the customer. Its a supply chain. (Ya but if all that can be skipped with direct business-to-consumer model isnt it best for both the provider and consumer...?) Ofcourse consumers only want to get profitable deals (I also mean the experience of transacting with a provider not just the money part...) ya ya that too...but look at what Amazon/ Flipkart did...none of them produce the real stuff...but they directly connect the consumers to the product by obviating the middlemen. E-commerce works that way...(but they are huge organisations...) So how do you think it can work without a huge team they get many orders.
You really cant say one model is better than the other. (My argument: I think that needs to be tested and that is why I am in the process of hypothetically stating a phenomenon to be proved as a theory.).
Phew....with all that argument-counter argument, it really made me do some more digging up of evidence...and VOILA to my utter stupidity and ignorance this is a topical theme ever-so furiously discussed and debated in the world. Ever since design thinking and business administration had been married off in B-schools, ever since the internet and web2.0 and social media companies took to limelight...theres a whole lot of players and experts who are on a mission to work out or help entrepreneurs work out business models for the new digital age. Some of what I came across was a tool call Business model Generator with a handbook:http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
that almost lectures and prescribes a way ahead for arriving at a clear business model. It prescribes routines of sketching, drawing, thinking, sticking notes, wall posting etc. to arrive at many decisions on the 9 key factors that are important to start with: Customer segments, Value propositions, Key resources, customer relationship, Channels of communication/service, Key activities and Key Partners, Cost structures and revenue streams. Boy was i stumped...here I am sitting in vaccuum thinking that this is the first time something so grand collided with my brain waves and there the whole world has not just realised the change or the need to relook but also presented awesome tools to navigate and get a deeper understanding of the whole concept of a new business model for the 21st century. The creators of the tool understand the importance of a new model, but the oh-so fashionable terminology called Disruptive innovation or disruptive business is something they think needs more rethinking. Apparently any new business player, entering the market comes in with some new idea that renders an older one obsolete. So Twitter did that to blogs, Facebook did that to google....and so on....but none of these ideas entered with clear thought on how to function as a business entity only until years into the business....
Not just that, there are also researchers who are into fnding a collaborative and sustainable business model that renders the capitalistic model of last centuries obsolete. This new trend of a neo-socialistic economy looks at collective innovation and co-creation such that it positively benefits the whole ecosystem of consumers, prosumers and their own existence...minimising competition the source of conflict and aggression.
Aint this some heartening news for a fiercely idealist such as me...Well, what is also gladdening to learn is that my search for the entrepreneurial mission which now seems to have become a research topic/project in itself has new lease of life in joining the other band of researchers as I use this research in planning the collaborative model that Mographies is dreamed upon....whether it lands up as something of a trend or a trend setter will be seen over time.
Until the next one...signing-off with many dreams and ideas
Chitra
business models: collaborative, sustainable, disruptive
game theory
21st century and more...
So here goes:
This topic thats been clouding my head needed an economist's view point, so the ex-IESian my dear father was my arm's length economist at hand. And so began the series of 'healthy' debates in reasoning out the need and craze for most businesses to go BIG and keep growing......
My arguments: (nothing new...)
were that ..1. bateria...lalalaa..... why cant a single individual play the turf with dynamic teams pretty much like the Film industry which is essentially loose and dynamic bonds and collaborations made for certain projects. or like some public/private partnership civil projects (ignoring the bureaucratic hierarchies).
2. During a crisis a long train of 3 dozen coaches will fail miserably in maneuvering a huge block on the trail when compared to a ferrari or a TATA Nano... this is to compare the BIG and small business entities...
3. Why do businesses even grow with such huge liabilities when ultimately work is pushed down the order and out of the organisation to be outsourced down to the single celled business entity....why bother organising when the human resource running in a few hundreds to thousands or millions end up passing the buck to a small timer????
4. Essentially advocating this new model based on collaboration at free will in order to survive, sustain and not focus on expanding that leads to the urge to seek profits that leads to expanding and hence a vicious cycle that leads to glut......thanks to the ball that set rolling ever since the Industrial era.... why cant the model of huge corporations become obsolete giving way to so many new small entrepreneurial ventures who can effectively collaborate and serve without red-tapism. This not only frees up customer interaction, but also gives them customised service/ product at a price much lower than that charged by big corporations......
(well this seems flawed but needs further clarification, it has been simplified in vain in the above sentence...)
Father the ex-Indian Economic Service Fellow and Director of Finance, (Telecom Consultancy, State Electronics and National Textile Co.):
1. Yes why not? That is an old concept what is new... Work is often outsourced...egs from Civil projects such as cable laying, road construction etc... (My argument: outsourcing is different from collaboration....there is a sense of authority that diminishes freedom when work is outsourced often work may be inferior when compared to collaboration, when partners are at work keep a close watch on quality. Work is a job in one and Labour of love in another....or so I put it..)
2. Yes, it is true but your example of bacteria adapting in adverse conditions will also have competition and weaknesses that lead to its extinction. The same way that a sudden drop in temperature or physical conditions will have only a few survivors that go on to multiply. Big corporations are covered for huge contigencies, they can afford to sail longer while individuals will get washed away to oblivion. (To which my take was Kodak a huge company did sink into extinction...why?) Kodak failed to change or diversify. (My argument: So it doesnt matter if a business is big or small... ultimately the key to both their survival is in their level of adaptability and smartness being an important quality for adapting...)
3. Tell me one business that says I have enough and and I am happy. Everyone wants to own more, have a big outreach, lead an empire. Look at the Lions, they hunt and drag their 'lion-share' of the kill to have it all by themselves...its pure natural instinct....(My argument: This is purely capitalistic and unsustainable, if every business crazed for Big Bigger biggest what are we left with....?? Also our economic values are archaic and skewed or distorted. Is it not enough to survive and lead a modest life as an individual? Collaborate to earn a little extra but continue to do what you do as long as it makes you earn a decent living...??) That is totally relative... How can a car manufacturer think of being an individual...?? If he has a demand of 1 million, he needs to have a huge manufacturing unit with many employees... (My argument..see I didnot factor in product companies, but it doesnt have to be true with service companies.) Product/ service is all the same....when you have huge orders in a steady manner, you need a huge organisation to cater to that kind of demand. Scale of market and Profit margins govern your business model. (I disagree, the whole model is very dangerously unsustainable and cyclic).
4. You may disagree for you are thinking from an extremely idealistic point of view. It is not just capitalistic, look at the communists....what good are they....everyone loves to accumulate wealth and power as a sign of growth...(That is the faulty human ideal we are following....look at so many modest people who lead quiet lives while surviving with their modest businesses) The kind that you mention are handful...economics is for the masses, and majority would never say they are content with modest lives...Besides it is like nature, just as bacteria survives besides other large animals....so do many business models co-exist in the market. You cannot say one is better than the other. You may use different models for different purposes. It is not a homogenous world. Also it is BIG companies that can spend lavishly in serving their customers, and take the market's lion share even during economic slumps at the cost of endangering or even killing small-time competition. Clients/customers will need a lot of convincing in buying into small-time businesses purely due to lack of trust when compared to Big brands/ businesses. (We all know the truth of brands they are differently packaged but essentially the same, customers might want to buy the cheaper one from a small-timer especially in economic slumps...) But with such low margins the small business will be forced to leave the market. (That is exactly what can be avoided with collaborating with more small businesses)
You think collaboration is easy? Call it outsourcing or collaboration you end up losing the earnings to the other person in that name. Ultimately its not profitable, you cannot be always good at everything. You will end up hiring a team to do work that you yourself might not want to or like to do....(yes, that is exactly why we collaborate, but not to delegate but share the work, there is a chance of free-loading or trust-building or keeping egos out of the scene to avoid conflicts.) Ego or selfishness is what makes you, that individuality is important and it is difficult to work. Someone is always answerable to another. There may be an informal air about it but there is always a boss or middle man before the service/product reaches the customer. Its a supply chain. (Ya but if all that can be skipped with direct business-to-consumer model isnt it best for both the provider and consumer...?) Ofcourse consumers only want to get profitable deals (I also mean the experience of transacting with a provider not just the money part...) ya ya that too...but look at what Amazon/ Flipkart did...none of them produce the real stuff...but they directly connect the consumers to the product by obviating the middlemen. E-commerce works that way...(but they are huge organisations...) So how do you think it can work without a huge team they get many orders.
You really cant say one model is better than the other. (My argument: I think that needs to be tested and that is why I am in the process of hypothetically stating a phenomenon to be proved as a theory.).
Phew....with all that argument-counter argument, it really made me do some more digging up of evidence...and VOILA to my utter stupidity and ignorance this is a topical theme ever-so furiously discussed and debated in the world. Ever since design thinking and business administration had been married off in B-schools, ever since the internet and web2.0 and social media companies took to limelight...theres a whole lot of players and experts who are on a mission to work out or help entrepreneurs work out business models for the new digital age. Some of what I came across was a tool call Business model Generator with a handbook:http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
that almost lectures and prescribes a way ahead for arriving at a clear business model. It prescribes routines of sketching, drawing, thinking, sticking notes, wall posting etc. to arrive at many decisions on the 9 key factors that are important to start with: Customer segments, Value propositions, Key resources, customer relationship, Channels of communication/service, Key activities and Key Partners, Cost structures and revenue streams. Boy was i stumped...here I am sitting in vaccuum thinking that this is the first time something so grand collided with my brain waves and there the whole world has not just realised the change or the need to relook but also presented awesome tools to navigate and get a deeper understanding of the whole concept of a new business model for the 21st century. The creators of the tool understand the importance of a new model, but the oh-so fashionable terminology called Disruptive innovation or disruptive business is something they think needs more rethinking. Apparently any new business player, entering the market comes in with some new idea that renders an older one obsolete. So Twitter did that to blogs, Facebook did that to google....and so on....but none of these ideas entered with clear thought on how to function as a business entity only until years into the business....
Not just that, there are also researchers who are into fnding a collaborative and sustainable business model that renders the capitalistic model of last centuries obsolete. This new trend of a neo-socialistic economy looks at collective innovation and co-creation such that it positively benefits the whole ecosystem of consumers, prosumers and their own existence...minimising competition the source of conflict and aggression.
Aint this some heartening news for a fiercely idealist such as me...Well, what is also gladdening to learn is that my search for the entrepreneurial mission which now seems to have become a research topic/project in itself has new lease of life in joining the other band of researchers as I use this research in planning the collaborative model that Mographies is dreamed upon....whether it lands up as something of a trend or a trend setter will be seen over time.
Until the next one...signing-off with many dreams and ideas
Chitra
Ahaa...so it is true that big corporations have their trade-offs....one that plagues them...systemic flaws. Seth Godin the marketting Guru writes in his blog:
ReplyDeleteWhen smart people work for big companies
http://sethgodin.typepad.com/seths_blog/2012/04/when-smart-people-work-for-big-companies.html
Also his idea of a new business culture, which he calls: On making a ruckus in your industry
http://sethgodin.typepad.com/seths_blog/2012/04/on-making-a-ruckus-in-your-industry.html
All of these reinforce and confirm the advent of the New Disruptive Opportunist Culture
Seth Godin's manifesto: Stop stealing dreams makes reference to this very relevant theme:
ReplyDeleteThe smartest person in the room
David Weinberger writes,
As knowledge becomes networked, the smartest person in the
room isn’t the person standing at the front lecturing us, and
isn’t the collective wisdom of those in the room. The
smartest person in the room is the room itself: the network
that joins the people and ideas in the room, and connects to
those outside of it. It’s not that the network is becoming a
conscious super-brain. Rather, knowledge is becoming inextricable from—literally unthinkable without—the network
that enables it. Our task is to learn how to build smart rooms—that is, how to build networks that make us smarter,
especially since, when done badly, networks can make us
distressingly stupider.
This is revolutionary, of course. The notion that each of us can assemble a
network (of people, of data sources, of experiences) that will make us either smart
or stupid—that’s brand new and important.
http://en.wikipedia.org/wiki/Swarm_Intelligence
ReplyDeleteGives a fresh perspective from an already well researched area of robotics and AI.
Also parallelly this research is also being aggregated as posts under various titles in the Mographies facebook page stringshttps://www.facebook.com/Mographies
All about lean start-ups:
ReplyDeletehttp://en.wikipedia.org/wiki/Lean_Startup
http://en.wikipedia.org/wiki/Eric_Ries
http://en.wikipedia.org/wiki/The_Lean_Startup:_How_Today%27s_Entrepreneurs_Use_Continuous_Innovation_to_Create_Radically_Successful_Businesses
Eric Ries defines a startup as an organization dedicated to creating something new under conditions of extreme uncertainty. This is just as true for one person in a garage or a group of seasoned professionals in a Fortune 500 boardroom. What they have in common is a mission to penetrate that fog of uncertainty to discover a successful path to a sustainable business.
Rather than wasting time creating elaborate business plans, The Lean Startup offers entrepreneurs - in companies of all sizes - a way to test their vision continuously, to adapt and adjust before it’s too late. Ries provides a scientific approach to creating and managing successful startups in a age when companies need to innovate more than ever."[12]
http://www.startuplessonslearned.com/2008/09/lean-startup.html
http://www.youtube.com/watch?v=ljRr2J1wQfc&feature=relmfu
The Lean Startup isn't just about how to create a more successful entrepreneurial business...
it's about what we can learn from those businesses to improve virtually everything we do. I imagine Lean Startup principles applied to government programs, to healthcare, and to solving the world's great problems. It's ultimately an answer to the question 'How can we learn more quickly what works, and discard what doesn't?
TIM O'REILLY
CEO O'REILLY MEDIA
http://theleanstartup.com/principles
http://www.youtube.com/watch?v=wFzkYUt_cNg&feature=relmfu
http://www.startuplessonslearned.com/2010/07/some-ipo-speculation.html
The sum total of all we know about entrepreneurship is just the tip of the iceberg. We need to be disciplined, to study what works scientifically, and – above all - to introduce scientific methods into the practice of entrepreneurship itself.