Big companies are no longer the best form of organization to solve the world’s problems. Good ideas can come from anywhere and all you need is a skilled team to bring them to life. How do you find each other?
“The Internet is nothing less than an extinction-level event for the traditional firm” says Esko Kilpi
In his recent articles on his blog, Esko Kilpi plays out the economic models of Joseph Stalin, Adam Smith and Ronald Coase. Stalin put in place a centralized hierarchical factory where every decision ultimately lead to him. In the 18th Century, Smith explained how in a free market prices and information are set and exchanged out of self-interest, letting the necessary coordination emerge without the need for central planning or governance. A century later Coase highlighted how successful companies are the ones that beat the costs of transacting in the market precisely by being hierarchically structured and more efficient. But this is where Kilpi makes his point “The Internet is nothing less than an extinction-level event for the traditional firm”, flipping Coase’s argument on its head. Mobile apps and cloud computing coordinate, match and scale product offerings to market demand instantly, with no intermediaries and at a fraction of the cost, disrupting obsolete corporations.
But how do large companies decide what to make, for what market and how do they define product success? My guess is that half the time products get killed or removed from store shelves because of a distribution problem — not enough customers are buying the product, often due to an underlying lack of market fit.
Our current companies need big markets to operate, they can only sustain themselves by addressing mass market needs. Companies must grow, their culture and belief system are founded on the costs of mass production and the profit returns promised to their shareholders. Projects that don’t move the needle will never see the light of day. Therefore they must go after big markets, and to that end they end up taking huge leaps of faith based on too little data and feedback from target groups. Such product launches are doomed from the start since they fail to build empathy at a scale that makes sense for what they’re trying to accomplish.
My point is not that companies don’t start with the customer in mind — successful product teams do — but rather that very few companies can actually get to the kind of scale of proof required to move forward on those mass markets. The amount of feedback and customer validation companies are able to get before launch rarely justifies the investment.
They’re gambling big while they should be making small bets.
A better way to make products is to make them with people, not for people. Products need to be built on empathy, backwards and emergent from the community. Feedback is not just key for the inception of an idea, it needs to feed every step of the product development cycle. That is why creatives and entrepreneurs work better when they are — or find ways to get — embedded in communities: so they can have better data, sooner and more frequently.
A better way to make products is to make them with people, not for people.
In Makers Chris Anderson — who wrote The Long Tail and FREE, now CEO of 3D Robotics and DIYDrones — believes affordable desktop 3D printers, open source software and hardware, 3D model libraries, free online classrooms and crowdfunding unleash the collective creative potential of millions. A new industrial revolution where the long tail of niche demand for products will be created by a new generation of makers.
This context means that the mass-produced, mass-market commodity is losing its competitive advantage. Small-batch products with just a local market, or a sparse global one, can compete because demand is online.
Anderson shows how KickStarter and Indiegogo don’t just solve the funding problem but are also powerful levers for market validation and distribution. That alone entirely changes the offer-and-demand game because it shortens the feedback loop and, in a way, reverses its direction.
We’re all neighbors in the global village, it’s not just hype.
You have no idea how valuable your skills are, seriously. Sure they’re valuable to you and your team, but they’re even more so to others, outside your direct network of peers. It is a massive waste to lend your knowledge and skills to just one company, working on one product at a time — and on to the next job. We need to rally behind the “open” movement and help more kickstarters and projects succeed. It sure is an ethical question, with somewhat utopian aspirations, but it is also backed by business logic: open collaboration helps maximize the reach and impact of our work, and removes inefficiencies by meeting demand where it is already detected — however sparse it might be.
Imagine if people and communities with context-specific problems could collaborate with people who have the skills to help them turn their ideas into products. These solutions will be better because their community is also (partly) their designer.
“Work will become a journey, money a medium, satisfaction the reward and ultimately success will become the ability to do what you want to do.”
says Thomas Lommé on intrastructures.net
“Open” completely changes the way we work and what we choose to work on. Online communities are built on common interests. “The Internet is producing trait-based communities that share intent, belief, resources, preferences, needs, risks and other characteristics” write Salim Ismail et al. When you share your knowledge and capabilities, you choose to contribute your time to projects you believe in, with communities you understand. Open collaboration is pull-based: it thrives on intrinsic motivators.
Warhol said you’d be famous for 15 minutes, for Momus and David Weinberger you’ll be famous for 15 people. How about being famous 15 times?
The point is that you do your best work when you’re driven by passion and purpose, and that you’ll also be more successful at it, more often.
Instead of trying to hire talent, relocating it under one roof and assigning roles so they can be effective teams, Anderson says that
“the alternative is building a team in public: If you build communities first and open source them, you don't have to find the right people. They find you.”
Making in public
Radical openness makes something truly magic happens: learning and humility become inseparable. Others are learning by observing not just the work you do but also how you do it. And in turn you are making yourself open to feedback and correction; open to learn from others.
Every open project has core contributors at its start. It is the few core contributors that made Wikipedia possible, and the gazillion one-off edits that make it so powerful. Linus almost single-handedly wrote the core of Linux, but he opened it for others developers. Clay Shirky calls it cognitive surplus, he estimated that the world has over a trillion hours a year of it.
“What’s the future of business when technology-enabled networks and marketplaces are better at deploying talent than traditional companies?”
says Tim O'Reilly
This is the work we do at night.
Perhaps in the beginning you’re spending your off-hours on a project or two that need your particular skill. Perhaps at some point one of those projects starts generating more positive feedback as you get more dedicated and become a core contributor. Perhaps the product gets a Creative Commons license with royalties built in and you start making some money, and at some point — perhaps as the community grows with more backers and customers — you can stop working in large, slow corporations.
In the meantime, all your contributions have improved projects, accelerated their validation process, and leveled up individual skills and our collective ones.
It is not the world of mass-market unicorns but one of direct, real impact, working with small communities of people, solving problems together and with context. This call is to start making in a better, more informed and open way.
Open collaboration makes us better makers.
- If you are a maker — engineer, entrepreneur, designer —start working in the open, make in public. Use public repos, write blog posts, share often and invite others along for the ride. The return on sharing is huge, we know that now.
- If you know people who have put such open collaboration to practice already, help them in any way you can — and share their story.