Bubblegeneration Strategy Lab

The Real 2.0

2008-05-22T17:16:00.000+01:00

Very good stuff, highly recommended.

Open > Closed

2008-05-22T17:14:00.001+01:00

A nice example of how to get it wrong.

Hey, look, I used an example that's not Google...!

Microsoft, Google, and the Future of Search

2008-05-22T16:05:00.002+01:00

My take on Microsoft paying for search traffic is up on the Media Lab's blog. Enjoy!

Admin

2008-05-22T15:27:00.012+01:00

"...i usually find it hard to despise. but umair is full of shit re: @scobleizer & "Valley is Blowing It" post: http://tinyurl.com/6hf2vh"

lol. Look - call me full of shit all you like. That's fine, and it helps us have good discussions.

But isn't "despise" a bit ott?

Would Dave really feel he had the license to ummm...despise me...if I wasn't a brown dude in London?

No, I'm not saying Dave is racist. But it sure feels like there's something deeper than mere disagreement happening. And it's perhaps easier to jump into "despising" people who are different from you.

I take a lot of attacks. Funnily enough, the people that make them usually come from a very specific demographic.

So I don't feel like Dave would have said this about someone, well, more like Dave. Maybe that's wrong, I'm sure many of you think I'm being too sensitive, I'm probably more than guilty of it myself.

But from my perspective - it doesn't feel like debate: it feels like hate.

This will be the last admin for a while, I've had enough of this navel-gazing.

And thanks to everyone for all the feedback on yesterday's thread - it was really, really helpful, awesome stuff.

Love > Fear, Special Bubblegen Edition

2008-05-21T15:00:00.006+01:00

So I got this tweet from Kate:

"... Am I allowed to say that I think Umair Haque is a little... offputting? He's got great things to say, but I just don't like reading him."

Now, I think that's actually on the money - so thanks, Kate. Man, I don't even like to read what I've written lately - it's ugly.

When I think about it, there are three reasons why.

The first is personal. My mom was pretty sick. She's better now, but it was a rough couple of months.

The second is that I've just been working way too hard (book, lab, etc).

The third is a bit deeper. Before, it was just kind of wonkish fun for me to write about this stuff. But the more I've thought about it, the more I've gotten a little angry about the ways in which business is failing us. I've really been feeling it - instead of just detachedly analyzing it. Maybe a bit too much - because it's bleeding through in how I've been writing lately.

So, I think I am going to try and back off a little bit - and apologies if it feels like I'm shouting at you. Do me a favour and let me know if you feel the way Kate did.

What Good Beats Evil Means

2008-05-21T01:17:00.009+01:00

"Umair is fighting the good fight, taking the capitalist investor at his own evaluation, that he creates value by doing good.

The fact is, the capitalist is just an exploiter making his profit any way he can, whether he does good or ill.

I believe Umair when he says there are opportunities to do good AND make money investing in solving big problems ... but that doesn't mean there aren't opportunities to make money fucking the world up and causing misery too ... and people will take those.

While VC and good *can* be aligned, Umair's wrong to think it's an "inevitable" law of economics. You need people with integrity and virtue to see and do the right thing. Not just those following their self interest."

Interesting comment from Phil - but it couldn't be more wrong.

If you follow bubblegen, you'll note that, in fact, I do very much think business as usual is more often than not deeply evil - capitalism is assuredly not always good.

What's different about the edge is that good beats evil.

Guys, at this point, I say this every day, and some of you still don't really get it - don't understand what this simple statement really means.

I think perhaps that's because it's such a radical reversal of the way we're used to thinking about business.

So let me make this as absolutely, totally, utterly simple as possible.

Don't complicate it. It means exactly what it says: not a moral judgment - but as razor-sharp economics.

Yes, there are opportunities to profit by evil - from misery. But there are now greater opportunities to profit by doing good than by doing evil.

That's not a belief. It's an economic fact. If you look at the numbers, they are unambiguous.

Google didn't just launch Google Arms Trading. They launched Google Health. See the point?

Selling is for Lemons

2008-05-21T01:05:00.003+01:00

Q: Can better advertising save Microsoft from strategic irrelevance?
A: aahahaha.

"...I suspect what Microsoft would most like to instill in people's minds is they are innovators and leaders."

Windows? I kiss you!!!!!@1111

The epic, epic lulz.

Admin

2008-05-19T14:52:00.003+01:00

"...But the problem with your blog is you don't write often enough. You make false promises (etsy article). Then you complain about communitied out as if there is a gatekeeper. I know you won't post this, but this is for your benefit."

Dasher, take a deep breath. Relax. I give you as much as I can. The Etsy article will be up as time permits.

FYI - Both here and at my HB blog, it's only comments with personal attacks that are modded out.

How the Valley's Blowing It

2008-05-19T14:12:00.018+01:00

Scoble:

"...I'm a noise junkie.

...I've been studying noise and news now for quite a while.

...let's do a little definition of the difference between news and noise.

NEWS: tens of thousands dead in China quake.
NOISE: BrianGreene: some pirate is playing old radio nova tapes on 92FM dublin, with old jingles and old ads. adverts for rent a 20″ TV 48p a day (48 pence!)"

Bolding's mine.

You know this would be funny - if it wasn't so sad.

Why is the Valley so lame these days? Why aren't revolutionaries solving any real problems?

Because, apparently, they're navel-gazing so hard, they can't see gigantic meteor-sized economic problems crashing and exploding around them.

For my money, the real issue isn't (for the love of sweet Jesus) news, or noise. It's the hundreds of thousands of people who just died in China and Burma.

You know - the ones Scoble just...ummm...ignored with the zombified glibness of a frat-boy at a kegger.

Those tragedies point to a whole slew of problems that need to be solved: disaster relief, income inequality, political repression, hunger, thirst, censorship/acess to information...the list is endless.

To Scoble's credit, he's discussed exactly one of these topics lately. That's better than nothing - but it's not nearly enough.

Honestly - it's no wonder the Valley's trapped in a profound state of decay: it seems to have lost the ability to, well, think.

Bubblegen, A User's Guide

2008-05-16T12:55:00.006+01:00

So, I get a lot of emails these days (thanks :) . Many of them start with (I kid you not) "I love what you write!! I don't usually agree, but..."

OK. Guys, let me try and explain the point of bubblegen very, very simply.

I think a lot. Then I build models (you can see some of these in the ppts). The models forecast future outcomes. I keep notes on these forecasts here at bubblegen.

Now, the thing is: these forecasts are usually surprisingly accurate.

I called media hyperdeflation literally years ago - in 2004. I called the death of Yahoo years ago, too - in 2005. I pointed out Facebook's errors when the kool-aid drinking was in full effect. I continually point out why Google rocks everyone. Blah, blah, this isn't a scorecard - you can trawl the archives for tons more examples.

The point. Yes, you can disagree. Or call bubblegen contrarian (really? contrary to who? Jerry Yang? Mark Zuckerberg? lol). It's irrelevant to me.

But you're perhaps doing yourself a disservice, by missing the point of bubblegen entirely.

If you're taking the time to read what I write, your fundamental questions should be - even if you disagree with their logic - why are these models so consistently accurate? How do these models really work? What does that imply for next-gen strategy, advantage, and management?

Let me sharpen that.

A few years ago, I went to talk to the C-level guys at a Giant Internet Company who's now on the ropes.

We had a nice few days of chats. But they never asked those fundamental questions - and I was a kid at the time, so I didn't press them - instead, they just said: "We love what you write! We don't usually agree, but..."

And the rest - unfortunately for them - is history.

Now, to some of you, that sounds arrogant. Sorry - but nothing could be further from the truth. I put a lot (a lot) of work into sharing this stuff with you, instead of keeping it locked down. I'm simply pointing out that - as for the guys in that boardroom - perhaps a deeper investment would allow you to get more out of it.

Communitied Out, Pt 37771

2008-04-24T08:03:00.009+01:00

So Tim O'Reilly just kicked off the Web 2.0 conference with a talk about we're not solving big problems. Wait - that sounds just like what we've been discussing repeatedly this year.

Paul Graham just wrote an essay about why good vs evil is a principle to live by for companies. Wait - that sounds like something we've been discussing for the last four years.

Lol. Nice to see you guys finally joining the discussion. An acknowledgement might be nice (if, of course, one is due).

NB - Thanks to everyone who sent me a heads-up about this.

Bubblegen: A Retrospective

2008-04-07T13:24:00.010+01:00

So I think many of you are new to bubblegen, and my HBS blog.

Some of you are understandably a little bit skeptical. Who is this guy, and what the £^%*$! is he talking about?

Here's what we've been discussing with investors, startups, and boardrooms for the last few years.

In 2004-5, we began discussing how the economics of media were undergoing profound transformation as a result of cheap interaction.

In 2006, we began discussing how new modes of coordination, like peer production, were reshaping production and consumption.

In 2007, we began discussing how markets, networks, and communities were the focal points of an edgeconomy.

In 2008, we will be discussing how the edgeconomy requires firms to fundamentally rethink DNA, strategy and advantage.

We will be doing that through my new organization - the Havas Media Lab. Which, if you think about it for a second, is one of a very, very small handful of organizations in the world dedicated absolutely to next-generation strategy.

The point is: bubblegen has been shaping thinking in this space for years now.

I wrote this article about why copyright was economically broken and strategically irrelevant, for example, in 2004.

That was when Larry Lessig was focused on IP. He was thinking about the legal aspects - I was thinking about the economic aspects. The point of the paper was to try and discover new paths to advantage in a world where old ones were breaking down.

Now, I can't give you all the answers.

But if you've been reading bubblegen through the years, I suspect you have gotten a tiny bit closer to at least some of the answers.

The edgeconomy has a funny effect on people: it's so counterintuitive, often people refuse to believe it exists at all.

That's because yesterday's assumptions are incredibly difficult to truly let go. How can Google profit by not being evil? How can Wikipedia exist? Isn't Twitter just a fad? Etc.

Let me offer a very different example.

Look at Hillary. How could Obama - using near-perfect edge strategy - close and then reverse the gap? It seems impossible to Hillary's team - still playing by yesterday's rules.

What Obama's team has realized is that a world of cheap interaction is a very different world economically - and so they are focused on very different kinds of advantage.

Bubblegen has been at the forefront of exploring that world for years. You're welcome to join the discussion. You will get a lot (lot) more out of it if you recognize that I do have the expertise to guide you through these issues - and if you can see the world with fresh eyes, not jaded ones.

Communitied Out

2008-04-07T12:47:00.001+01:00

Why is blogging a pain? Here's an example.

Fred recently wrote a post responding to the latest post at my HBS blog.

Today, the highest ranked comment on Fred's discussion is by a guy who clearly hasn't read bubblegen much (ie, I didn't start writing about peer production yesterday, but before most of the guys he's talking about were doing it).

Which requires me to then have a not very productive session of pointing exactly that out.

That's a pure transaction cost, which makes building communities much harder than it should be.

That's fine - I can do it every once in a while. But amplify that by like ten billion and you get a tiny taste of what guys like Om have to deal with.

The point is: we need better DNA to make communities cohere.

Twitter, for example, is a very nice start.

So here's my Twitter, if you want to add it.

The Crisis in Strategy

2008-04-04T16:50:00.004+01:00

Hi guys, this week at my HBS Digital blog, we're zooming out to discuss how the banking crisis is really a crisis in orthodox approaches to strategy.

Sound like fun? It is - a really fun post to write, and hopefully to read too. Check it out if you're interested.

Thanks for all the comments and feedback over the last few days - it was very, very helpful. I have been reflecting on what you guys said, and am going to try and incorporate quite a few of your suggestions.

Here's how.

I will be writing quite a bit more frequently at HBS Digital - which is also where I am going to start adding things like frameworks, industry-specific posts, and suggestion threads - so please add it to your feeds/bookmarks/etc if you're so inclined, and hungry for this stuff.

And, of course, please let me know if this sounds good...!

2008-04-02T13:14:00.002+01:00

Hey guys, thanks for all the comments below. There is clearly a lot of interest in more hands-on advice.

I need two things from you guys to do that most productively.

First, more concrete needs - what exactly would help the most?

Second, to open source it somehow. How can we all help each other more effectively? Would open threads here help?

Why 2.0 Sucks

2008-04-01T14:53:00.003+01:00

Do you sense a growing frustration across the 2.0scape?

Good - it should very much be there.

Why? Because we're not solving real problems anymore. The economy has massive structural flaws. 2.0 can fix them.

But focusing on ad nets and minigames sure won't - and we'll just spiral into more and more navel-gazing, name-calling, and frustration.

Would it help if I did a post about industries that need to be revolutionized?

The Acceleration of the Edgeconomy

2008-03-29T16:45:00.010Z

"...in the ten days since this post, we can see business-as-usual continues merrily on its way

except as a "amrketing concept", i think "edge economy" as espoused by umai haque is a paper tiger, with zero practical value

am i wrong?"

Ummm....how can I put this.

In the ten days since this post, apart from a major investment bank, well, collapsing, the entire global financial system has begun the process of systemic deconstruction - something not seen for the better part of half a century.

Needless to say, the edgeconomy is very, very real.

You can slam bubblegen all you like, disagree with the edge - that's fine. But you're living on another planet if you think the economic landscape these days is anything resembling business as usual.

We will be talking about more macropocalypse in great detail shortly.

NB - Gregory, it would do you good to stop trolling and start listening to the discussions a bit more.

The Fourth Horseman of the Macropocalypse, Redux

2008-03-17T10:10:00.003Z

Guys, I'm going to write the Bear/macro situation in detail later. It's really too depressing to dwell on at the moment.

Here's the quick version. You will read a lot of complicated analyses today.
Some are very, very good. The real story is, I fear, pretty simple, and very scary.

As simply as I can put it: the Fed has just signalled with absolute certainty that it has absolutely no interest in helping disinfect the financial system.

The Fed just signalled, with absolutely certainty, that it will do anything and everything in it's power to help stave off the accounting that's long past due. And without that accounting, there is no incentive for new DNA.

Bailing out Bear comes, ultimately, at the expense of every security holder across the larger economy. Because the Fed just vaporized (again) the incentive for a true process of settlement and valuation of the infected assets to really begin.

Do you think JPM has different incentives than Bear? Of course not. The machine's just as broken as it was last week - there's just more grease in the gears.

That's the Japanese story: spending almost 20 years trying to avoid a recession by devaluing the economy into oblivion - because the truth of broken balance sheets and infected DNA was too painful to face.

Or, a little more darkly - because the cronyism between banks and central banks was intense enough to let both parties abdicate their fundamental responsibilities.

It's funny, isn't it - how the Fed's bailout makes no mention of Bear management. What a coincidence.

We are now entering dangerous waters - the kind where economies get blown up for decades.

I suggest you all spend a few hours thinking first about how to make sure Bernanke's shock and awe approach to policy doesn't end up...ummm...destroying you personally - and then we can chat about strategy, finance, etc, later tonight.

Edge Principles, FriendFeed Edition

2008-03-14T18:08:00.005Z

Here's a textbook example of how not to think strategically.

Duncan looks at the numbers and concludes Friendfeed and Twitter are subsitutes. It should be pretty obvious - if you think about the dynamics - that they're complements.

Strategy isn't spreadsheets - and it sure ain't disconnected usage numbers.

The real point is: Friendfeed is a next-gen, open version of Facebook's social feed.

Funny - what was that we were discussing a few months ago? About competition for openness would ultimately begin to eviscerate Facebook's pseudo-platform; how the evil at the heart of Facebook would stop it from moving past last-gen games of domination?

Exactly.

That's an edge principle: good beats evil. It's not wishful thinking, it's not utopianism, it's not idealism - it's razor sharp strategy for a new economics.

Companies Are Not Pimps

2008-03-14T13:13:00.009Z

Perhaps the biggest problem across the economy is that our thinking is permeated by yesterday's stale assumptions.

There's a conference at LBS today - called "Monetizing Social Networks".

Uggh.

These poor kids. Most MBAs come to B-school wanting to do cool things - and they get crushed into thinking business is about "product" and "monetization".

It was, at least a little bit - in the industrial era.

But that was yesterday.

If there's one single lesson you apply at the edge, let it be this: business models happen.

What that really means is: we don't "monetize" resources. We co-create and co-produce value.

And to do that, we have to experiment, deeply and intensely.

Monetize is an ugly word.

When you try and "monetize your users", you accept the almost obscene assumption that people are meant to be pimped out, sold to the highest bidder, resources to be slashed, burned, and exploited.

But that's not how the edgeconomy works. Businesses need what connected consumers have to give more than connected consumers need what businesses have to sell.

Let's put that a little more formally. Monetization is ugly because it blinds us to the truth that value must flow in many directions. That's the essence of edge strategy, in fact.

That's why businesses that aren't deeply, durably connected to people are already falling apart (hi, Facebook, Gap, and Microsoft).

Just ask yourself: how many ~~firms~~ industries has "monetization" already killed?

AOL + Bebo

2008-03-14T13:10:00.003Z

I wish I could say this was important, but it's not. AOL is a company coming apart at the seams. Bebo is a company that long ago stopped itself from realizing it's full potential.

In that sense, it's a match made in heaven. Unfortunately, it's also a perfect example of orthodox strategy - growth/share thinking - at it's worst.

The Poseur

2008-03-14T13:05:00.003Z

Mark Cuban bans blogs. Lulz. So did China, Iran, and the army. And we know how well that went.

So is this just noise?

Actually, it's like an unwritten Kafka novel about authoritarianism: when Wal-Mart is more 2.0 than a self-proclaimed revolutionary who keeps investing in industrial value chains (hi, HDnet), no less, it's (troublingly) ironic - and a sign of all that's going wrong in the Valley and in the mediascape.

Goople vs The World

2008-03-13T17:15:00.002Z

Hi folks, this week at my HBS blog we're doing something a bit different. I haven't discussed next-gen strategy in depth for quite a while.

So that's what we're doing this week - with a focus on why it seems that, no matter how hard everyone else fights them, the next-gen media pie will seemingly be split between Apple and Google.

Check it out, leave a comment, discuss away there, etc.

A Wake Up Call For The Venturescape

2008-03-11T10:22:00.003Z

Let me ask a question. Is SXSW fiddling while Rome burns?

We've been discussing Zuck, Sarah Lacy, Facebook's privacy controls, etc. But perhaps we don't have the luxury of that self-indulgence.

Why not? Because the global economy is about to get hammered. The signals the economy is sending are, to put it bluntly, very, very scary. As Lex notes:

"...Now, after a very nasty week in markets, the whispers are that it might even be the big one: the worst crisis since the 1930s. Signals of distress abound: Friday’s non-farm payroll data were awful, the US auction rate market is closed, banks’ shares are collapsing, interbank rates are back in the danger zone and debt spreads are ballooning."

From this perspective, Yahoo + Microsoft, Google + Digg, Zuck + Lacy - who cares? We're lost in the trivial. It's like happily painting your toenail - while Freddy Krueger closes in on slashing your jugular.

Let me put this to you another way. Most of us in the venturescape and mediascape think orthodox business - ie, working at a corpocracy - sucks.

Yes, big business sucks. We all know it. But the question is: what does our feeling really mean? Why do we feel that?

Because the DNA of the industrial era firm is sucking the life out of the economy. Once upon a time, industrial era firms were engines of value creation. Today, they're prisons, where trauma is institutionalized into everyone who comes into contact with them.

That feeling - like a dull toothache - is a massively powerful heuristic that something is deeply wrong; wrong with McJobs; wrong with $100m bonuses for value destruction; wrong with the evisceration of variety, choice, and happiness; wrong with the long slow death of culture and community; wrong with the sinking intuition that like you've signed away your life when you walk into that cube, all for a few bucks and free lattes.

So who reinvents the firm? We do.

The power of 2.0 isn't minigames and ad nets: it's the new DNA it brings to the table.

There are two paths ahead of us. First, a global crisis explodes, and the economy is reinvention via the new genetics of 2.0 is forced upon it slowly, over 5-6 years. Second, we take the initiative, and reinvent it fast, over 2-3 years.

As a naive and trivial example: no one loves Wal-Mart - but no one is helping Wal-Mart think about love.

Here's a better example. Big pharma's manipulation is lame and cheesy - but we're all complicit in it - except Google and a handful of startups, who are busy redesigning the pharma value chain.

That's the point. If the venturescape wants to remain relevant, it has to solve the problems that are causing the macropocalypse to accelerate.

That's always been it's job: to power renewal. Today's crop of VCs are nice guys - but fast being corporatized: comfortable in their myopia, highly risk-averse, cronied into each other, and, unfortunately, totally out of tune with the problems they should be solving.

Ad nets, social nets, and minigames won't change the DNA of the economic system. Radical new approaches to consumption and production across the industries that are broken will.

Let me put it more sharply. I think we have two choices. Help fix things, and get rich, or just get blown up along with everyone else.

Let me make that concrete.

-For venture guys, that means: most of you are going to have to develop new investment theses, centred on redefining industrial era DNA. What do next-gen value chains really look like? What do the economics of production and consumption look like tomorrow?

-For entrepreneurs, that means: forget about hot products/services (ads, games, etc) and tech. Think about DNA, and how it can reshape the markets and industries that are crying out for help. Where does business suck today, and how can you make it radically better?

-For corporates, that means: stop making acquisitions driven by growth/share thinking. That's easily dominated. Make acquisitions driven by DNA, and use it to suck the lameness out of your strategy - fast.

Lameness Is In the DNA

2008-03-10T13:04:00.005Z

Sarah Lacy blows an interview with Zuck, bloggerati/twitterati go crazy.

There are lots of interesting perspectives about this, like Jarvis's.

I think the heart of the problem is different.

At a conference about radically democratizing media, is it any surprise that, well, a journalist questioning a CEO ended up being a waste of time?

Of course not.

See the irony yet? What happened on stage was a rigid, controlled, 1:1 interaction that's reminiscent of the industrial era.

It's exactly the wrong kind of DNA. Why are we organizing things industrially when we're building things that aren't industrial?

Now, sure. Sarah's interview was (really) lame. Other interviewers might have done a better job. But that's the point of DNA: it makes some outcomes much more likely than others.

I took a lot of heat for slamming TED's DNA. Take this as another example of the same. Orthodox conferences are nice, but they're not very productive.

Why not? Because their DNA makes productive outcomes are very (very) hard to achieve - because the DNA itself prevents the kind of interactions that lead to cool stuff.