Posts Tagged ‘business model’
Close your eyes, and cast your mind back to the first dotcom boom in the late 90s/early 00s. What’s your overriding memory of that whole crazy period? Or if you’re too young to really remember, what do you immediately think of when you hear dotcom bubble or dotcom boom mentioned in relation to Silicon Valley at the turn of the millennium?
I’m going to take a stab and guess that it has something to do with over-inflated valuations of ill-conceived, kooky ideas. Okay, that may be wide of the mark for some of the companies that are still plying their trade today, such as Amazon, eBay and Google. And of the many ideas that didn’t work out, not all of them were inherently bad, they were simply ahead of their time.
We’ve discussed this subject before, looking at why the original dotcom boom of a decade ago isn’t the same as today, and why we won’t see the same widespread collapse of the digital industry. In the intermittent years between the two dotcom booms, technologies, attitudes, skill levels…everything, has caught up. So even if companies such as Groupon were to fall flat on their faces tomorrow, the bubble would probably still remain intact, simply because the Internet ecosystem is far more robust – companies rise and fall as they have always done, but e-commerce is here to stay.
One of the reasons why so many companies failed before was that there was a broad lack of understanding about monetizing the Web.
As media companies try desperately to solve their revenue problems by launching paywalls and subscription iPad apps, too few are looking at how connecting with their community (or communities) can help. That’s the view of Public Radio International’s vice-president of interactive, Michael Skoler, in a piece written for Harvard University’s Nieman Foundation for Journalism. And I think he is right: engaging a community can be one of the most powerful tools that companies have in an era of real-time, distributed and hyper-social media.
As an example of what this kind of engagement can produce, Skoler describes the incredible response that PRI had when it took radio host Ira Glass on the road several years ago, with a live version of his popular show “This American Life.” But would anyone come to see what amounted to a radio show in person? Apparently yes — huge numbers of them.
They came in droves. More than 30,000 watched the first digital show at hundreds of theaters across the U.S. and Canada in the spring of 2008. The next year, 47,000 turned out. They came to be with other fans, experiencing something they all loved together. The success wasn’t so much the power of Ira, but the power of his community.
Skoler also offers several other non-media related examples of communities that have produced profitable businesses, including Angie’s List — which has grown from a site run by a single mom into a company with more than 1.5 million members in over 150 cities who pay annual fees that total about $50 million. Although Skoler doesn’t mention it, Craigslist is perhaps the most powerful example of this phenomenon: a site that started as Craig Newmark’s personal passion and is now one of the largest sites on the Internet, with revenues estimated in the $100-million-plus range.
Same Exterior, Different Innovation Engines
by Nicolas Bry
As I was completing my thesis on “rapid innovation“, one of the frequent comment was: “and you’re lucky to work in the digital industry because you can include in your case studies Google and Apple”. As if they were two innovation champions of the same kind…
Google and Apple may seem to share similar innovation patterns from afar, but under the hood, they play totally different ball games. This way, they demonstrate their ability to build their own identity based on a genuinely personal innovation model. Let’s get more in-depth into the comparative analysis.
Leadership and Culture
Google was founded in 1998 by two brilliant engineers and strong leaders, Larry Page and Sergey Brin. To take their growth to the next stage, and in response to the well-meaning but strong pressure exerted by their shareholders, they strengthened the team in 2001 by recruiting Eric Schmidt, a manager with an international reputation, as Executive Chairman. On joining the business, Eric Schmidt discovered that 60% of searches were run from areas outside of the USA and set up sales teams to develop operations in Europe. The management style is characterized by the care dedicated to recruitment: Larry Page has always carefully considered each and every application from potential candidates and it is not uncommon for up to 10 recruitment interviews to be held. However, this does not mean that there is no scope for thoughtful open-mindedness: to boost the performance of its network of servers, Google’s 18th employee was a neurosurgeon who had qualified at Harvard and the Yale School of Medicine. Finally, one should note the sense of fun “which is taken very seriously” at Google; the Googleplex site is playfully decorated, with toys, benefits and services available on the premises, while the delicious, cosmopolitan and healthy cuisine symbolizes the sense of enjoyment that presides at Google.
Harry van Vliet and I are currently working on a state-of-the-art of business modeling. One, maybe not very scientific, source is Google Alerts. Here is the result of this day:
- PAX East: Studios Defend Activision’s Business Model
- FDIC too slow to sue officers and directors at failed banks, critics say
- BofA cuts jobs in consumer banking
- BioFocus leads compound library market with innovative business model
- Telehealth in Today’s Healthcare Business Model
- TCS launches cloud-computing solution for SMBs
- Facebook Enters Deal-of-the-Day Arena with Facebook Deals
- NM Senate panel caps film subsidies at $50 million
This is actually the result of two days. Check them out.