I have been following the free content debate for a while and have previously discussed the issues with it here.  I am particularly struck with the idea of new business models.  A lot of the discussion was how the internet ‘levels’ the playing field.  While I think in theory this may be true, in practice it isn’t.  A better way of saying this would be: the internet could level the playing field.  Here’s where the challenge lies:

1. People only buy ‘popular’ media online.

I think the idea of the Long Tail has promise.  In fact I have it in my lectures.  You could argue that the internet is another culture with it’s own ideas on what the mainstream is, what the 80-20 rule constitutes and what they like.  The mainstream internet, things that grow to popularity on the internet, should be considered in context as being part of internet culture.   You can’t compare what becomes popular on the internet to what is considered popular on television for one very good reason.  They are two completely different mediums.  This becomes obvious when you look at how poorly the transition to the internet fiction has had.  It’s still stagnant, backwater or very very obscure.  That is internet culture. A question for artists, business people and the like is: how do internet cultures buy and sell?  How do I tell a story on the internet and support myself as an artist without losing heart?  The long tail explains the possibilities but doesn’t give us the pragmatics.

And this is my biggest problem with the ideas of internet business models.  It’s still geared towards the mainstream, just a different one: internet culture mainstream.  We have heard the mantra connect with fans and give them a reason to buy yet how do we find fans with no money?  What if you are selling something that’s unappealing to internet culture?  Then what?  This is what we need to learn.  And I am not saying that there is no long tail effect there is, my point: How much of that is simply because the internet contains so many interlocking cultures?  Can you compare the apples (TV) with oranges (internet)?  Probably but the shape, tastes and sizes of markets are completely different.   We need to look at it differently.

2. The internet could level the playing field but you have to realise it’s another field altogether

My second and final point is that the internet creates the potential for disintermediated content to become popular because it’s the internet.  Something that’s popular on television may or may not become popular on the internet.  We really need to spend more time looking at internet trends and usage before we can make the claim that it levels out the playing field.

We need new business concepts not just models

I think a way forward for internet business ideas is good quality research.  In the days of e-commerce all we had was Michael Porter on the internet.  What we need is better thinking.   I am personally hoping for this but seeing precious little more than the free culture versus copyright debate.  New ideas not the same old crap.

*Note: I am not sure this makes sense.  I am absent of mind at the moment.  Feel free to comment (constructively).

*Image Credit: jurvetson

You don’t have to look far to find a meme these days.  One at hand example is the growing popularity of things as seemingly random as the graph jam blog.  The question that strikes me is the randomness of these ideas.  They emerge and are passed around the internet and seem to make no sense.  But as Malcolm Gladwell asked in the Tipping Point… what makes these ideas stick?

Stickiness can’t be planned… but if you don’t plan you fail?

The rate at which something becomes popular on the internet is alarming.  I have seen one (yes it’s sad) of my posts be stumbled and hit 2000 unique visitors in less than an hour.  That’s small fish compared to some people I know who do that by lunch everyday.  The thing that always gets me about these peaks and valleys is the collective consciousness that drives it.  To have this kind of short term stickiness you need something that makes enough people happy… at once… for a short period of time.  The randomness of stickiness makes you wonder what it is that people love so much about things as bizarre as this poor bastard at the University of Florida.

Shared consciousness creates stickiness

What makes these things stick is the shared consciousness around the singular element of meaning… or the thing that makes us laugh at the poor tase me bro man. What sticks relates to people and how they think about that one thing.  That doesn’t mean everybody loves it… it means that equally as many people hate it.  Then when we come to see it… it divides us into a love/hate paradox.  Very few people I have ever met I have learned to think in a way that helps to see multiple intersecting dimensions (Alan is good at this).   Most people learn to enjoy a false positive narrative when it comes to life because it’s easier than admitting that stuff happens so randomly.  Yet, in the disorganisation of things, especially consciousness there is an equilibrium.  It’s there … otherwise we wouldn’t ever be able to detect the patterns that appear to us in the everyday flow of life.  We also actively create these patterns… which makes it all the more confusing.

Randomness Stickiness

Ralph Stacey used a concept called: complex adaptive systems to explain how in social networks people learn and grow through disequilibrium.  As new problems arise there is an emergent response to the crisis which we in turn find ourselves trying to manage.  We try different concepts until one sticks for no other reason that the fact that we tried it.  In affiliate marketing circles and in general most of the successful people will tell you that they make so much money because they keep on trying and until they find the random stickiness they are after.  Once the ‘hit the vien’ it’s low cost-high profit.  In between it’s trial, error and misery.

The most recent example in my life of random stickiness came when I wrote a paper for the Australasian Journal of Information Systems.  At first the editors said no but might accept it if we revised it.  We changed the title and indeed the focus of the paper and they accepted it immediately without contacting us.  Something we wrote stuck with the editors of the journal or they needed papers!

Right place at the right time is random stickiness

So is being at the wrong place at the wrong time.  The guy who started Facebook and the other one who did myspace were probably reading social trends.  I strongly doubt however they mapped out the random stickiness that happened to their sites.  That said, intuition might have had something to do with it. What about the LOLCATS people?  These are those things that for some reason large groups love and hate at the same time.  About all I can work out is four things that I have noticed that these ’sticky’ things have in common.

Four essential properties of stickiness

1. Engagement: People engaging with the core concept – interacting consciousness that engages to create a platform that people use or something that is liked as a basic concept.

2. Talkability: Something people are willing to remark on and spread the word for to whoever and whomever they please.  Reasons for this vary but I have noticed that people like sharing something that adds a certain amount of humour to the lives of others.  Most people share things because it gives them a sense of worth and creates value for the audience.

3. Passability: Something which is passable or easy to share creates the possibility of stickiness but does not absolutely guarantee it.  If it’s easy to tell people about something then it’s easy to spread.

4. Lastability: The final point about stickiness that I have noticed is the life cycle of a concept.  To me most (not all) high volume concepts, on the web at least, last a lot less longer that others.  I have seen posts on other people’s blog have an immediate hit then nothing whereas others will last a lot longer because of the inherent value of the post.   The same goes for anything.  There is a natural limit to how long something can last.  There is short term lastability (i.e. get a first life) and long term lasting(ness) which continually uses the same engagement factor to create more value from the same essential concept (i.e. problogger or digg). A short term lasting concept creates value for a shorter cycle (but might have higher initial volume) as opposed to a long term lasting concept which creates value over an extended period.  Either way the level of engagement with a concept and it’s lasting quality are important levels of stickiness.

A contrast to what I am saying here is found in the one hit wonder.  They come and then they go.  Why?  Random stickiness.  I have had no end of trying concepts that failed (especially in business) and I have to say I had never really considered the level of stickiness involved.  It’s incredibly important to do market research and find these streams… but you must remember it’s random.  If it could be continually predicted to 100% reliability (or 95% for the statisticians out there ) then we would all be rich.  We aren’t all rich.  Some of us are pretty far from rich… actually.  That aside, how something sticks and why it does is random.

Recently I read Perry Marshall and Bryan Todd’s excellent book on Google Adwords.   At the end of the book Perry begins talking about seeding micro-businesses in the third world.  I thought that’s an interesting concept isn’t it?  Then this week I hear George Soros (pictured above) talking about ‘the market’ being amoral.  George had no problem ‘breaking’ the Bank of England and seems completely unrepentant about doing so.   So looking at Perry Marshall and George Soros you begin to wonder… is business just about return on investment?

The market fallacy

One of the main arguments I have against people saying the market is ‘amoral’ is that there is no such ‘thing’ as the market.  It doesn’t exist.  The market is a concept and a set of practices carried out by human beings.  It’s not a tree, rock, house or boat.  It’s a bunch of economic precepts that are based on theories, ideals and perspectives that stem from the human being.  It is not something that can ever exist outside the perceptions and actions of human beings.  For this reason when people say ‘the market’ you have to realise they are talking about interacting perceptions, ideals and actions taken under certain assumptions.  If you think otherwise… you are sadly mistaken.

Now, if the market is controlled by people how can it be amoral?  Anything you do as a human should reflect your ethical standpoint and views.   Say tomorrow that a disease broke out and killed 98% of the world population and seriously deformed 1.99% on top of that?  What would the remaining survivors do?  Trade in the ‘market’?  I think not.  The market would not be a pressing concern would it?

Business and ethics should be embodied

Yes I am an idealist.  I made a similar point at work the other day and a colleague laughed at me and told me I was dreaming!  I know I am.  However, it’s a dream worth having.  See, you don’t conduct business ethically … you bring your ethics to work.  If I am faced with a choice between my values and my work I should (but don’t always…) choose what I think is right.  The two are not diametrically opposed are they?  The two are the same.   What I am saying can be broken down into a thought train: IF people run the market and people have ethics then we should have an ethical market?  Like I said it’s a dream.  A pipe dream at that.

The shareholder view of business, “I am in business to make money”

And fair enough too… who isn’t?  I am in business to make money… I enjoy making it.  All I am saying here is that you can’t take your heart and place it in a little box and play with it when you think it suits you.  If you are in business to make money then ask yourself this question… am I in business to sell my soul?  The market is not evil.  People are evil .  What’s your goal?  Well it’s business, not personal.  So you are in business to turn off your conscience, so you can make money?  What other areas do you turn your conscience off?  What if a stay at home mother thought this way?  I am here to raise children not make friends!  What if a firefighter thought this way?  I am here to put out fires, its not personal. A police officer? Why do you think they have ethical standards branches? Come on!

Why I think business is more than return on investment

Business is about trade.  Selling, building, creating and moving things people have a need for.  Trade has existed since the very beginning.  I have noticed an increasing level of selfishness, greed and various other things manifesting themselves in business circles in the last few years.  I believe you can still have a heart and be in business.   As Perry Marshall and Bryan Todd say at the end of their adwords book business can be part of making a difference.

The smartest people in the world today are in business.  One particular hero of mine is Ricardo Semler.  He has taken some of his money and is improving the school system.  Bill Gates has a foundation that has seeded over 5 Billion dollars to some of the poorest nations in the world.  These people are helping and using what they know to improve things.  But that’s not really what I am talking about here is it?  I am talking about having a heart while you do business.  I am talking about the business that sells vacuums, real estate, ice cream, telephones or whatever and has the basic principles of what is right built into that business process.  Frankly, people who can turn off their ethics when they go to work scare me.

So what can we do about it?  We can find better ways of doing business.  We can trade ethically, compete fairly and build meaningful businesses that help improve society.  Yes, I am dreaming and yes I am idealistic but so what?  If we don’t take our heart to work then work becomes part of what’s wrong with the world.

There is this opinion that to be in business you to be a first class jerk.  I don’t know about you but why would you want to think this way?  I really don’t think you need to be a jerk to survive in business.  I can tell you from personal experience that it can be a cut throat world out there… but remember if you live by the sword you will die by the sword.  There are many examples of how in the modern world people are not jerks and are doing well in business.  I will leave it up to you to find them.

We have to move forward from the greed inspired motives and bring back the heart to business.  What happened to businesses supporting local communities?  I know some do and I realise that what I am saying may be (unfortunately) generalised.  But it’s getting worse in my opinion.  We have this stupid image of business as harsh, tough and cutthroat.  Why?

It’s time for a change.  I hear read story after story of people who are willing to be a jerk in business and they say things like, ‘It’s business’.  I am arguing here for an embodiment of ethics not just a consideration of them.  It’s quite one thing to say you are business person with heart but another to be living and breathing it.  Why don’t you give it a go?

A few weeks ago my wife and I acquired a couple of watches from my father that he had been given for free. Our first thought was let’s take them to the local pawn shop to see if we can get some money back for them. I know… what can I say it’s the entrepreneur in me. When we got there we saw what I think is a blight on pawn shops. A lady who was white, shaking and clearly in need of a fix was standing at the counter with a pile of DVD’s. I looked around and it occurred to me… what kind of business profits off the failure of society more so than the pawn shop? That aside, I noticed something else. And yes, considering I am on dreams, the heart and so on at the moment (for some reason) I noticed that I was standing in the house of broken dreams.

When you travel into a store like the one I went to you notice the guitars, the drum kits, the stereo systems and the like on display. How did they get there? Drug users, failed musicians, trades people who can’t get work and so on put them there. Where do the desperate, the failures and the like go when there is nowhere else to go?

The pawn shop is a business that makes it’s profit on broken dreams

The world is a harsh place. For every success there are a hundred failures. If you don’t believe me take a trip to any major city and have a look at a pawn shop. It’s the place where the end of line has been reached for a lot of people. People who had dreams of their own, desires but somehow missed out. These are the ones that didn’t make it. When I went to the store it really struck me how heart wrenching it is when you have had a dream in your grasp and it was ripped out of your hands. You do get desperate. You do begin to think… what did I do to deserve this? The answer to that is beyond this post… sure I could reason it out… blame people, God, whoever. But at the end of the day the broken dream is still there isn’t it?

Should we blame the pawn shops for cashing in on broken dreams?

The question perhaps should be framed this way: Why do pawn shops exist? They exist because there is a demand for them. This stems from the need for people to sell something or offload something in exchange for something else. Eventually as a meditated on the situation I came to the point in my thinking where I reached a paradox. Here we have a business that takes away things in exchange for money because people have a need. The businesses like Cash Converters exist because someone is there to feed them. The need is the problem not the shop. Take away the need and you take away the shop. This raises another question:

Why are there so many broken dreams?

What happens to a life when it falls short of it’s potential? I don’t really know. I can say that I was reminded of it at Cash Converters the other day when I saw all of the lost hope in the eyes of the people there. The reality is why does a business decide to profit of broken dreams. I am not one of those people who believe that businesses can sell whatever they like. Greed is not good.

Businesses need to bring the heart back

Making money can be done in a way that society is improved and not devalued. I think establishments like Cash Converters elevate the status of the dollar above human worth. As Gordon Gecko says: ‘Greed is good’. A business that profits off broken dreams and people who do the same have lost their heart. Business can be conducted in a way that it profits both the owners and the customers without destroying lives. So, I hear you say: What about some examples?

Examples of businesses with heart

The first place that comes to mind for me, is Gloria Jeans coffee. On this page you can read about the things they are doing to build a better future in various communities. W.I.S.E is another example of what I am talking about and you can watch this video below to explain it better than I can:

This is social entrepreneurship. A more recent famous example can be found in Richard Branson’s decision to invest future profits in reducing global warming:

What about another example? Imagine taking over a company at a young age and running yourself into the ground with stress? That’s exactly what Ricardo Semler did. To combat that he set out to build a democratic workplace where people got to vote for their managers, negotiate their pay scales, choose their work hours and so on. If you are ever in the mood I would recommend reading the book called Maverick or the Seven Day Weekend. Recently the 7:30 report ran this story on him:

I could go on for hours citing examples of people who have changed their businesses by putting the heart first. For me, a business should be about building dreams not destroying them. It should be about letting those who make it help build something for those who can’t. It’s a two way street that goes beyond personal wealth into the area of social wealth where we build this world as well as success. I don’t think there can be anything wrong with that?

This post is the first in a number of posts on bringing the heart back to business. It’s the theme of the month at the moment!

Once I had great ambitions to be a successful businessman like Richard Branson, Ricardo Semler, Bill Gates or Steve Jobs… maybe. Yet, my two failed attempts so far have taught me that perhaps this path is not for me. I can say that I learned a lot from failing. In particular I learned how not to succeed. *Coughs* More specifically, I learned five things that if I knew at the time I would have changed the path I was on. It wasn’t until afterwards that I knew I was up the creek. By then it was too late.

Not listening to my guts

I can’t count the amount of times my intuition told me that I was doing something wrong. One event I can remember committing to a 12 month plus work cycle thinking in my head… oh yes this is great idea. Then as I sat down to start it my heart sank. Have you ever had that feeling? I just knew on the inside that it was a bad choice. But alas, I soldiered on to fail miserably in defeat.

Not taking feedback seriously

When you have a product that isn’t selling the first, no the VERY first thing you ask yourself is why. The next thing you ask what are people saying about my product. I read watched on shoemoney.com this week that to be a successful blogger you need an edge. But that edge needs to be understood by your customers and how will you know you have them talking about it unless you get feedback to check. Feedback is really from cybernetics… it means when the system takes an output, learns from it and acts accordingly. In my case (both times) I ignored what people were saying… more commonly known as THE BUZZ. Hence, my input never changed and so the cycle of debt increase kept going. Pay attention to feedback!

Not questioning my own ideas

Hitler, Stalin, Napoleon, Alexander the Great, Cleopatra all have something in common. What? They were megalomaniacs of course. They never really thought through some of their ideas and I would say didn’t have a good critique process in place. Sure, it’s nice to be smart, wonderful and dashing… however do your ideas suck? If they don’t who told you they don’t? Mum? Ask someone you know who will tell you the truth and then listen to them. It’s not personal it’s about a product. Sure, you put your heart into it… but constructive criticism and even mindless sledging can improve you. If it leads to cash… who’s going to complain?

Not listening to my family

I don’t know how many times I told my wife she was wrong. Well, she was right. So was my Dad and of course a few others. Even though your family can be very discouraging at times and painful … listen to them. They may just be right about something.

Trusting in a product that wasn’t market researched

Finally… don’t ever go to market to buy a fat pig without first knowing if you can sell that pig and make a profit. Business is not all about profit but to keep it going it sure helps. If you are thinking of launching a product make sure in advance that you are confident about the market for it. Don’t be like me and hope to God it will work because it has to. Things in society, become popular through social networking, word of mouth and trust. Research these things… find out what people will say, how your idea will spread (if it will) and so on. If your product is not going to at least make it’s money back and then some… forget it. As a Doctor market research friend of mine used to say, ‘research, research, research.’

I hope this helps you to avoid the 20k plus disaster I had in business. Have I learned… yes. Some would say I have become overcautious and now take a long time to make business decisions. Me, I will get back on my feet again but let me tell you… I won’t do the above five again. Not anytime soon anyway.

Imagine this: my two daughters were playing shops the other day when my eldest talked my youngest into buying a plastic vegetable from her imaginary mart for 20 cents.  I walked in as my daughter decided to hand over the real money for something she already owned and I wondered is this an early sign of a entrepreneurship?  In Richard Branson’s autobiography he notes that a schoolteacher said he would end up either in jail or in business.

Recognising Entrepreneurial Skills

In my daughters case you might say she is showing evil skills.  I beg to differ.  She is looking for a creative way to make money.  Albeit, an unethical one.  Sure with a little training and maybe some time in the school or hard knocks she will get there.  Actually, I think she wants to be a vet now.  Either way those entrepreneurial skills she has can be developed to help her be the best paid vet in Queensland.

How to nurture those entrepreneurial skills

One of the things you need to realise is that entrepreneurial skills is to find some activity that supplements their core personality.  Now at the risk of sounding corny I like what I saw on the girl scouts cookie page:

Many successful business women today say they got their start selling Girl Scout Cookies. Girls practice useful life skills like planning, decision-making, and customer service. During cookie activities, girls are members of a team working towards a common goal, with each girl striving to do her best. Every local troop/group is encouraged to set realistic goals, such as planning field trips and community service projects, to accomplish during the year. The money earned from cookie activities helps the troop/group achieve its goals.   So when your local Girl Scouts come calling with this year’s best-selling cookies, remember you’re saying hello to tomorrow’s business leaders.”

Of course selling girl scouts cookies is one way to train up your kid in the way the should go.  I am looking at such things and wondering now what can I do to facilitate those skills to give my children the best possible future.