One man’s meat is another man’s poison
Or so the saying goes. The old shall always give way to the new – indisputable fact of nature.
Long established conglomerates – AIG, Lehman Brothers, General Motors, and many others who didn’t make it into the papers – are seeing ghosts they never expected, while a number of next-generation businesses are shaking up the establishment.
These tech-savvy companies have constantly stood at the forefront of creating, innovating, and using technologies for better efficiencies and the greater good. Not that the big guns of old were not buying the latest and greatest in technology, the problem is that their think-tanks were not able to keep up with the weapons at hand; and some weapons have backfired.
The whole world over, genuinely smart workforces with years of conventional wisdom under their belts are learning the hard way that conventional wisdom doesn’t always mirror reality; and that it doesn’t always forecast predictable results.
Industrial type companies are going belly-up by the hundreds. Not because they did something wrong, but because they hung onto the old ways too long when the world was busy evolving around them. It’s too easy to ride the wave of success when the economy is booming. It feels like it will go on forever and it’s too easy to ignore the eagles flying dangerously close to your private jets’ engines.
No-one’s to blame for the current economic crisis, markets go up, markets crash. This is not the first or the last time. For those who lost fortunes and seek revenge, there are plenty of “guilty people” to round-up and use as bait against Somali pirates .
Of course this change doesn’t spell doom and gloom for the industrials. Just as agricultural markets didn’t die at the dawn of the industrial age (or prostitution, which existed long before shovels); industrialism will still be around and prospering for a long-long time. Production of coke and brandy will have to be stepped up to meet the growing demand from freshly minted hobos (proudly bankrolled by the thoughtful folks at the Social Security Agency). Debt-ridden petrol attendants - who were granted loans worth ten times more than they could afford – will need a steady supply of tranquilisers and headache tablets – they double-up as suicide ingredients in emergencies.
On a serious note, industrialism as a powerhouse will decline in dominance as conventional wisdom shifts from cash-flush inefficient operations to doing more with less. Less people, less time, less money, and less technology. Conventional wisdom – that crafty moving target – changes every now and then. In the 18th century it was widely known and accepted that humans cannot fly and many well-meaning inventors met gruesome deaths for thinking outside the box. Thank goodness some of were let-off with only stern warnings, broken limbs, black-eyes, and castration ( Theodore Kaczynski‘s activities in the 80′s and 90′s led to the suspicion that many are still nursing grudges against innovators).
Look at the internet; it’s nothing like it was during the pre-dot-com bubble. Back then conventional wisdom leaned on transplanting an industrial-type business to the web and getting filthy rich from it.
Easy. Just put up a website for your corner pet-store and watch the orders fly in. You’ll be amazed at the number of black mambas you will be selling online. No need to change the way that grandpa ran the shop in 1803. Uh… value-add? What’s that?
It was just too easy, many thought gold was starting to grow from trees and promptly got their fingers burnt. Those who did more than bask in the false glow of the “new economy” kept innovating and growing from strength. These are companies like Amazon.com and their kindle book reader; companies who always thought of providing real value for their customers instead of plonking industrial-age business-models on the web (“let’s name it plonk-n-play”).
To sidetrack a bit: strangely enough, no one seems to factor in the fact that the Y2k craze also had a hand in the 2000 crash. Demand for Y2K compliant hardware and software – or any new IT products – fell to near-zero. The traditional “box-droppers” lost ground on the NASDAQ before the first dot-bomb.
No siree. This ain’t yer daddy’s internet fer shure! It’s no longer a “place” you go to. It can be with you anywhere, anytime, and in many ways. It’s a manifestation of desires brought on by science fiction (thank you Arthur C Clarke & Co. Who said watching Star-Trek and the Jetsons was a waste of time?). There’s no end as to where it leads.
Running most aspects of your business is now possible online, without having to purchase expensive equipment and employing jobless scientists from the Nagasaki bomb project to run them. The barriers to entry have been lowered and the pyramid corporate structures are feeling the heat. Small and nimble, highly innovative companies are in vogue. It won’t be science-fiction for long that one day you’ll be able to design and build your unique car with a few mouse clicks and drive it within a couple of hours (and today’s motor insurance products will be irrelevent in that world).
We are at a stage when we know for certain that old ways of doing business have serious flaws. We know something’s broken but the replacement solution has yet to come. Call it HIV for business if you will and just as the era following the 1930′s great depression, human ingenuity and innovation will dazzle us.
Those who hang on tightly to glorious yesterday and hoping that it’ll come back are in for a shock. No doubt there’ll still be a place for managers who’s primary skill is to stifle subordinates for the sake of pleasing the bosses (or for no reason at all – just for kicks). The available slots just won’t be as mainstream and abundant anymore (job openings for whip-cracking guards during the construction of Egyptian pyramids have nearly vanished, for example. I suspect they might still be popular among prison workforces and North-Korean authorities).
On that note, it’s human nature to want to be king of the hill and I see some initiatives are under way on the internet to cater for that human desire. There’s nothing wrong with that, but to aim for awards as your highest business priority is missing the point completely. Companies like Google and Amazon did not set out to be king of the hill. They ended up there because they provided what people needed and not to win beauty pageants. The awards were a consequence of their innovations and the value they brought to consumers.
People have become smarter as yesterday’s science-fiction finds its way into our daily lives. Caveman tactics and shaky value-propositions will no longer cut it in the long run and that’s a fact.
[People like Adii, his teammates at Woothemes , Colis Ta' eed, have got the right mentality. Many "old-schoolers" would do well to learn from their example.]
Could this be more than a credit bubble? A mentality bubble perhaps?
I think we will never in our lifetimes see as great an opportunity to revolutionalise the economy as we have right now. What do you think?
With all the free and open-source products circling the web, why should you pay for a product that has a free equivalent for download?
If you put in a little more effort you can even get retail goods without paying a single red cent!
So what’s all this buzz about businesses continuing to sell goods (software, graphics, photos, etc.) online when there is so much free stuff floating around; when their own retail products can be pirated through the thousands of warez sites and p2p file-sharing applications? Why don’t these online businesses just give up already!??
I’ll tell you why. For starters, business people are a strange bunch. They will pursue opportunities that justify profits, and it turns out that a healthy business can result from selling digital goods online.
But how? When I can download an open-source software equivalent or download royalty-free photographs and graphics? Not to mention pirate commercial versions of all of the above?
Let me answer this by using a parallel, real-world example: Premium art. Better still, let’s look at The 500 year-old Mona Lisa. Unless you’ve been living under a rock, you know what it is.
There are thousands of Mona-Lisa replicas floating around (in digital and in printed form). Someone, somewhere even has a full-sized replica with a gold-plated frame hanging on his / her living-room wall.
You can have your own copy too, by simply googling “Mona Lisa” and saving one of the many painting graphics that pop-up in your google search results.
So why won’t you feel content by doing just that?
For starters, it’s because you know that – although it looks exactly like the real thing – it can never give you as much joy as owning the genuine article. Why not break into the Musée du Louvre in Paris and steal it? Are you kidding me?!! ( I fear some numskull somewhere will probably entertain the idea… what would the world be without them, anyway?)
Granted; electronic goods are not as highly valued or as closely guarded as The Mona Lisa but the point I want to make is that human nature will always stay more-or-less the same. It will always measure value in a way that will drive lab technicians to the insane asylum.
Human-nature is the reason we make the choices we do make and it is no different online. It is the reason some people prefer to buy from pharmacies instead of eying government-issue condoms from public toilets; the reason some don’t line-up at food shelters simply because the food is free; the reason some prefer a 5-star chef to cooking dinner themselves.
Self-perception, quality, service
These are some of the same real-world reasons that make selling digital goods online still viable. Some people will chase after anything as long as they can get it for free. Some would rather spend money on a good product and save on bargain-hunting time and effort. Some value the service that comes with commercial purchases.
Online and off-line: the buyer of your products is a human-being with their own peculiar reasons for prowling the market for their item of desire.
And since aliens and dogs are not yet sufficiently trained to operate a web-browser, you can rest assured that human nature has more than enough need for premium online electronic goods. That strange bunch of business people certainly thinks so, and they haven’t been proven wrong yet.
The hard facts from Paul Boag.
A must read for prospective web clients and web designers:
Getting the design of your website right is important. However it is no use if nobody sees it. Your number one priority has to be driving traffic to your site.
Web designers like to claim they need to spend hours testing on every browser combination. However, in reality this is just another way to extract more money from you.
At first I wanted to grab Paul by the ears and shove a keyboard down his throat. How could he expose designer secrets this way? Web people, just make sure you read his post to the very end before you think of creative ways to hurt the author. The comments are particularly informative. Read the post here
Update: Oh, and if you still don’t get it, see the next post here