The New Wave Company
Guide to Building Exponentially Better Businesses
Have you ever fantasized about starting a new kind of company that would operate unlike any other and create more value than most competitors combined? If you haven’t, it’s about time. The next startling startups and transformational businesses — the New Wave Companies — will make major waves as they deal with the most valuable problems in the world. They use new kinds of superpowers, such as the exponentially scalable digital platforms and the incredible network effects they generate, to rethink what a business can do, and how its products and services can be optimized to create abundant value to the world.
These are the four principles of the New Wave Companies.
PRINCIPLE 01 — Find Your Own Transformational Potential
Back in the day, both mainstream economics and management thinking insisted that companies exist primarily for creating and capturing value. This idea of relentless quest for profit has become an integral part of our contemporary culture, even to the extreme that we struggle to see an alternative.
However, the problem is not the profit, which remains to be the vital element behind the well-being of every business. The problem is the priority of profit over everything else, which inhibits businesses to realize their full potential and understand their opportunities to create abundant value around them.
Long gone are the days when neoclassical assumptions stated people were solely motivated by self-interest; markets believed in never-ending progress; economists associated human prosperity with maximum consumer satisfaction; and managers run businesses as if those were insulated from all societal and environmental matters.
Today’s world is made of rapid change, huge opportunities and epic challenges that arise from the drastic technology and culture shifts, escalating climate crisis and mounting social issues, among others. These changed realities require an updated and elevated view of value creation that aims higher than just creating consumer benefits and profit.
On the edge of this paradigm shift is the New Wave Company, which fluently combines the properties of high-growth technology business and high-impact social enterprise. It builds products, platforms and services with a purpose that allow abundant value to emerge and create a transformational capacity to change the world for the better.
IN SPACE FOR BETTERMENT OF LIFE ON EARTH — Planet Labs, a company based in San Francisco, makes small and cheap satellites — or the largest constellation of earth imaging doves as they call them — and puts them into outer space to create a daily updated high-resolution view of the earth. The average image in Google Earth, by comparison, is 36 months old. Started in 2010 by a group of NASA engineers, the company aims to democratize our access to information about how the planet works and changes, and how we live upon it.
PRINCIPLE 02 — Have a Prodigious Purpose
Building a New Wave Company starts from a prodigious purpose — the powerful reason for the company to exist. The purpose expresses the philosophy behind the business and provides the magic glue that aligns all the parts — from the brand to the product, culture, partners and beyond — for the common goal. Purpose also provides the unique message that inspires people inside and outside of the company, attracts the right investors and talent, and brings in the best customers.
Your own purpose lies at the intersection of the biggest problems in your world and your special superpowers to solve them. But simply stating that you ‘solve the climate crisis’ or ‘reduce obesity’ does not suffice. Instead, your purpose should define a progressive, systemic and empathetic take on the challenge and articulate a set of feasible breakthrough solutions to tackle it effectively.
Companies like Patagonia innovate constantly around their purpose, making sure it resonates with the world, and that the actions it enables are beneficial for individuals, communities and the environment alike. For example, they create enduring products from reusable and sustainable materials, only invest in ecological manufacturing technologies and incubate new businesses that expand their impact beyond their current category, to “inspire and implement solutions to the environmental crisis”.
The skillfully crafted purpose is a both strategic and practical tool to design a full-blooded New Wave Company. It helps you to think, make, test and deploy exponentially better ways for value creation and means to scale them up with the most daring platforms and networks.
USING BUSINESS TO INSPIRE AND IMPLEMENT SOLUTIONS TO ENVIRONMENTAL CRISIS — Patagonia is a trailblazing outdoor clothing and equipment company, started in California in 1973. Patagonia’s recent success stems from their effort to optimize the whole business — including the supply chain, investments, products, marketing and beyond — to serve their big purpose: “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.” As a result, Patagonia has doubled its operations and tripled its profits to over $600 million in the past five years.
PRINCIPLE 03 — Create Abundant Value
The New Wave Company doesn’t just solve their customers’ problems. Instead, it sees problems as complex issues and strives for value creation on many scales and for many participants at once. At the heart of its approach is an idea of abundant value that takes a holistic view to value creation.
A closer look to value reveals how value has multiple meanings and many characteristics. On a personal level, we tend to separate the functional and emotional dimensions, while on a shared level we often talk about the social and cultural dimensions of value. Then there’s money, which we use to put a number on the experienced value, often during a process of exchange.
In practice, value is always an intangible experience we have of the things, ideas and actions around us. From a human perspective, nothing is valuable before we define that value. But all our experiences — even largely our personal interests — obtain their value only in relation to the current social situation and the surrounding cultural fabric.
We are an entirely social species, and as tribal it may sound, we ultimately value most the things that are seen important in our communities and society. For example, a recent Swedish study found that organic coffee actually tastes better than conventional one, when people evaluated the taste of coffee from two cups with different labels but exactly the same content. That’s largely the case, because our cultural values imbue wholly our personal experiences.
In the context of business, this means no company, brand, platform or product posses any inherent value — but they all can become invaluable when their actions and meanings are resonating well with the world. Abundant value emerges when companies champion important cultural movements and enable collective action for a big purpose — and manage to connect these shared aspects of value with the good old functional and emotional personal benefits.
EYEWEAR WITH A PURPOSE HELPS TO SEE THE CHANGE — Warby Parker, founded in 2010, offers designer eyewear at a revolutionary price, while leading the way for socially conscious business. Their recipe for value creation combines a portfolio of good-looking and affordable eyewear, a supreme digital-first shopping experience, and a big purpose: for every pair glasses sold they provide a pair for free for those in need. So far, they’ve sold over a million pair of glasses and secured over $116 millions in funding with a $500 million valuation.
PRINCIPLE 04 — Build a Growing Platform
We are venturing into a platform era where network effects dominate, algorithms do things on our behalf, objects are connected and data is everywhere. The New Wave Company uses these and other clever building blocks to create superior value systems where products, services and brands are only the visible tip of the iceberg of the transformational whole. This systemic approach allows them to create value on various scales and capture it potently with multi-sided platforms and diverse revenue streams.
For example, the collaborative platforms à la Airbnb, Uber and Etsy manifest well the power of networked value creation. They create whole new experiences and better means for facilitating the social actions and exchange between people — and not just design another set of products or services that they would sell to consumers.
The resulting network effects mean that when more people use their platforms the more valuable these become for everyone involved. This also leads to exponentially increasing potential for impact on the real world — which largely explains their multi-billion-dollar valuations, disruptive effects on traditional competitors, and the increasing public outcry when these companies fail to get their mojo right or act uberly against their communities.
The New Wave Company takes its impact seriously. It builds benevolent open platforms, personalized service systems and intelligent environments that allow it to tackle the big problems we collectively hold dear. These value systems are never optimized just for efficiency and profit, but always also for bigger values such as joy, comfort, well-being, access and equality.
OPEN SYSTEMS OF CONNECTED THINGS — OR HOW TO OPTIMIZE VIRTUALLY EVERYTHING FOR ANYTHING IMAGINABLE — Spark builds an open source platform and operating system to power the emerging ecology of connected things. The company’s Spark Core development kit helps engineers, designers, and makers to develop connected hardware products, while the Spark Cloud provides an infinitely scalable platform to operate the things. The Spark Core raised $567K on Kickstarter in 2013, and now has thousands of developers creating connected products on the platform.
Originally published at newwavecompany.co
The New Wave Company is a research project by Wevolve. It maps the vital elements for creating better businesses that are designed to prosper in the complex and constantly changing environment of the early 21st century.
The future has its precedents and we see how these ideas and principles have been a long time in the making. The late 1960’s saw consequential technological, ideological and social upheaval, when the emerging digital network culture, the new systemic ecological paradigm and the forceful socio-cultural movements for betterment and equality were brought together for the first time.
Nearly 50 years later, the revolution is about to happen again, at the same intersection of technological systems, natural systems and cultural systems. Yet, this time the challenges, tools, means and momentum are all on a very different scale. We are witnessing an emergence of a new wave counterculture that builds on the power of global digital networks and accelerates businesses to unleash exponential solutions to challenge the social, environmental and technological problems of our times.
