Archive for the 'Entrepreneurs' Category

Large-scale Solutions without Large-scale Organizations – #BIF6

Point: Instead of trying to change large organizations, we can create new human-scale organizations that embody the needed changes and inspire passion. Micro-volunteering site Sparked.org, citizen site SeeClickFix and Fabien Cousteau’s PlantaFish point the way.

Story: What makes you want to get out of bed in up morning? Inventure Group founder Richard Leider has been asking people this question for over 40 years. The crosscutting answer: purpose. Even better, Leider has found that people with a sense purpose live longer.
Contrast this with John Hagel‘s data that only 20% of US workers feel passionate about their jobs. And the larger the organization, the lower the passion. That lack of passion does not bode well for either these workers or their organizations.

At the Business Innovation Factory‘s BIF-6 summit, 37Signals co-founder Jason Fried posed a similarly fundamental question about organizational growth. Fried asked, “Should we grow?”  His answer: “maybe not,” because so many larger organizations struggle with inertia, bureaucracy, and passion-killing processes. Fried recommended having human-scale organizations of no more that $10 million in revenues.

So how can we keep passion and purpose yet still effect the large-scale changes we need to solve global societal problems like healthcare, climate change and ineffective education systems?

Two BIF-6 storytellers illustrated web 2.0 systems that enable small informal actions by large numbers of people to augment or supplant the activities of larger organizations.  First, Extraordinaries founder Jacob Colker described www.sparked.org , which is platform for micro-volunteering.   The system lets qualified organizations (such as a Kenyan village working to bring clean water to its citizens) post requests for simple, low-commitment, high-skill tasks (such as marketing recommendations, tech support, etc.).  Anyone can volunteer their professional services in quick 5-20 minute increments — volunteering while waiting in line, for example.

Second, Ben Berkowitz described his SeeClickFix.com site, which lets citizens report small problems in their communities to a single site. The site routes alerts of these problems to appropriate civic authorities and elected officials.

Both examples illustrate two key points about the future. First is the power of engaging informal, ad hoc participants. Rather than building a lumbering command-and-control workforce, these new systems rely on the billions of hours of idle cognitive and labor resources lying fallow in our communities. Second, these two examples illustrate the power of web 2.0 tools to create large-scale solutions without large-scale development efforts. Anyone with an idea, passion, and a modicum of technical expertise can build an online system that scales to millions or billions of users. Behemoth organizations are neither necessary nor sufficient to solve tomorrow’s problems.

Fabien Cousteau, grandson of oceanographer Jacques Cousteau and founder of Plant A Fish, provided compelling motivation for large-scale change: saving the planet takes precedence over saving any organization.  Rather than reform old large organizations, we can create new human-scale organizations that embody the needed changes and inspire passion.

Action

  • Don’t assume that large, mature, centralized organizations can or should change
  • Look for solutions that solve a problem through millions of small steps (handled by distributed crowds)
  • Use lightweight online systems rather than heavyweight organizations to inform, engage, and mobilize far-flung participants/activists
  • Invest in building the young and dynamic rather than changing the old and static.

For more information:

John Hagel’s website, Center for the Edge at Deloitte and new book, The Power of Pull

BIF-6 storyteller profiles and blogroll

No Comments »Case study, Entrepreneurs, How-to, Innovation, Software tool

How to Find Opportunities in Fragmentation

Point: If you’re looking for a new business opportunity, look for individually-fragmented but collectively large areas of economic activity, such as where individuals or small business own a large segment of the market

Story: A business model that connects small businesses and individuals to markets and automates tedious tasks was common to three of 11 new start-ups seeking  funding at Techstars Demo Day August 5, 2010. Here are their stories, followed by six action steps you can take to tap such markets.

Rentmonitor.com helps small-scale landlords. These landlords collectively own 30 million rental units in the US.  Rentmonitor offers an online service that automates many elements of the five key tasks that every landlord faces: 1) advertising available properties; 2) screening renter applications; 3) managing maintenance requests; 4) tracking rental payments; and 5) record-keeping for taxes. In exchange for a monthly fee of only $5-$50 (depending on the number of units), Rentmonitor gives the landlord a suite of online tools to manage their properties. Renters also have access to Rentmonitor to submit a maintenance request or make an online rent payments.

VacationRentalPartner.com addresses the needs of vacation homeowners who rent out their properties when they are not using them. Currently, many vacation homeowners pay a 30% to 50% cut out of their rental revenues to property managers. VacationRentalPartner.com replaces that high-cost property manager with low-cost online services to handle advertising, booking, and housekeeping and maintenance contractors. Although VacationRentalPartner seems similar to Rentmonitor, the two start-ups differ significantly because the needs of ultra-short-term vacation property owners differ significantly from the needs of long-term lease-based landlords. For example, VactionRentalPartner has tools to help fill-in unrented days, such as by promoting off-season rentals to prior guests or with special deals to already-booked renters if they extend their stay to covered the unrented days. VacationRentalPartner also emphasizes the benefits of fast automated responses to booking inquiries. Would-be vacationers expect instant replies from property holders — a less-than-30 second response time to an availability inquiry increases bookings by 200%.

AdStruc.com targets outdoor advertisers with an auction and listing-based marketplace for the buyers and sellers of billboard space. Adstruc address the fragmentation of national, regional, and local billboard site owners that make it hard for advertisers, especially national advertisers, to find and buy the best billboard sites for a large campaign. AdStruc aggregates billboard sites and provides searchable data on available inventory.  AdStruc gives buyers virtual visits to billboard sites through Google Streetview. AdStruc also partnered with Circle Graphics on the printing and shipping of the extremely large format. AdStruc supports the sellers, too, in managing their inventory. “This-space-available” and obsolete signs represent $750 million a year in lost revenue. With AdStruc, sellers can upload their available spaces, automate sales to approve buyers, and auction off space. AdStruc makes money on a share of the transaction fees as well as monthly service fees for managing billboard inventories.

Action

  1. Look for individually-fragmented but collectively large areas of economic activity, such as where individuals or small business own a large segment of the market
  2. Find the “pain points” in the lifecycle activities of these market participants (e.g., advertising vacant space, vetting renters, researching an opportunity, handling tax records)
  3. Automate these processes and offer an online, software-as-a-service tool suite
  4. Monetize the service with a low monthly fee, nominal share of transaction price, or through ad sales
  5. Connect these small businesses or individuals to large markets (or create them) with automated advertising, inquiry support, booking, vetting, etc.
  6. Help people on the other side of the transaction, too, such as with online booking, online payment, and online management of requests.

2 Comments »Case study, Entrepreneurs, How-to, Opportunity

Ted Turner on Visionary Leadership

Point: Ted Turner’s tips for seeing over the horizon

Story: Many leaders are described as “visionary” — I’m always curious as to how they got that way. Is it something they’re born with, or something we can we all learn?  I had a chance to participate in a Silicon Flatirons Q&A with media mogul Ted Turner as we probed this question with Ted.

Before CNN, people didn’t think that a 24-hour-a-day news channel was viable.  How did Ted prove them wrong? “It helps to see over the horizon,” Ted said.  ‘Most people can’t do it, but I think your brain is like a muscle. And just like any other muscle, you can use it and your brain will improve.”

Ted elaborated: “I have a 128 IQ, but 140 is genius.  I was in the 97th percentile, so that means 3 percent of people were smarter than me. I knew I was going to have to work hard if I wanted to accomplish something in life. So I read a lot — classics, warfare, Alexander the Great — I used my brain all the time. Everything I did was education.  Others just shot the breeze, wasted time — nothing wrong with that, but you can’t get to the top doing that.”

Ted’s answer points to a combination of aptitude and hard work. (I think it’s interesting that Ted thought being in the 97th percentile meant he’d have to work hard if he wanted to accomplish something — it reminded me of Andy Grove’s “only the paranoid survive” philosophy.)

What did Ted see over the horizon? As Ted described it, the idea for CNN was born of his own desire to stay on top of the news but, as a busy executive, not having time to watch the news during the two times a day it was on during the 1970s. “I knew I was gambling with CNN, but I knew it would work,” Ted said. “At the time, the news came on at 6:30 and again at 11pm. I never saw the news — it was inconvenient. I knew that having news on 24 hours a day so you could check in anytime was something that people would want.”

Beyond CNN, Ted was also working to build a multichannel universe. CNN fit into this universe perfectly.  In the 1970s, three broadcast networks — ABC, NBC and CBS — controlled the programming people could see.  For example, sports games across the country were televized, but they couldn’t be seen outside the local area because the broadcasters had a monopoly.  “The broadcasters had carved up the games,” Ted said, dividing the NFL, AFL and Monday Night Football between them. “Everyone paid the same prices and made the same profit. All three networks were happy, but I wasn’t happy” — customers weren’t being served, and incumbents had no incentive to change.

This is where Ted’s reading and habit of learning came into play again. “It was in early 1975 that I saw an article about communications satellites in Broadcasting magazine,” Ted recalled. Reading the article, Ted realized that he could use one satellite “antenna” in space to cover all of North America.  He’d found a way to compete with the established networks.

There’d be more hard work along the way — “We sweated payroll for ten years,” Ted said — but Ted relished the challenges. “The way to lead is with infectious enthusiasm, get everyone enthusiastic about what we’re doing.”

Action:
* Fit your current strategy into the larger picture: Ted’s vision for CNN was part of his overall goal to build a multi-channel universe
* Lead with infectious enthusiasm

Sources:
Silicon Flatirons Q&A November 13, 2009

Call Me Ted, by Ted Turner

3 Comments »Entrepreneurs, How-to, Innovation, interview

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