In this fascinating interview on Charlie Rose, Lawrence Lessig provides some interesting comments about “hybrid economies” where companies co-create value with their customers. As he says some companies, mostly new and small, are already adopting this hybrid economic model, but bigger companies in the future will be transformed by this.
Most companies look at what consumers create, co-create, and share with the world as some kind of free resource to be exploited in what ever way they can, but the winners in the future will be the companies that can create ecosystems in which all the participants are valued, rewarded, promoted, and empowered. Companies are going to increasingly have to treat their customers as contributers and stakeholders in their business, and the concept of where a company begins and ends will blur.
Social Media is the engine behind this massive and slow moving change and for most companies change is not something that can be avoided. Anyone who thinks that social media is about influence, popularity, or an audience is sorely mistaken and business models built on that will be shaky at best. Social media provides the tools to empower and lead a legion of people who believe in your vision, be they customers, employees, partners or competitors, the opportunity right now for all companies is to be a change agent for your industry, are you up for the challenge.
BTW this was the topic of a recent talk/presentation I gave at Inverge and the Social Media Marketing summit, it was titled “Employing Your Customers For Fun and Profit”, I hope to have video of that soon. I’ve had some companies express an interest in having me come in and do the presentation for them and I’m happy to share it, time permitting.
Anyway, don’t just take mine and Lawrence Lessig’s word for it, check out these books if you are interested in this transformation of business.
The Future of Competition: Co-Creating Unique Value with Customers by Prahalad & Ramaswamy
“web-empowered consumers will usher in “a new industrial system” characterized by “co-creating value through personalized experiences unique to the individual consumer.” Under the new regime, headstrong consumers will “seek to exercise their influence in every part of the business system,” and companies will accommodate them by, for example, allowing them to design their own individualized cosmetics and houseboats (an innovation whose benefits include “emotional bonding with… the company” and “a greater degree of self-esteem”).”
Remix: Making Art and Commerce Thrive in the Hybrid Economy by Lawrence Lessig and it’s associated blog page here
Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky
Also watch this video of Clay at the web 2.0 expo where he puts into describes the massive cognitive surplus that enables huge projects like Wikipedia to be created, and how much of it is available
Related: Kaplak Blog has an excellent write up of the Rose/Lessig interview as well, worth reading.
Also follow Lawrence on twitter.com/lessig Clay Shirky at twitter.com/cshirky and me if you like at twitter.com/karllong.
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I’m all questions, no answers. Where do you think those ecosystems are going to exist? They could be part of a corporate “destination” or be distributed across large social media sites like facebook, linkedin, myspace, etc. or something we haven’t even heard of yet.
As a separate question, in the movement toward crowdsourcing, do you think things are going to get further and further personalized ad infinitum? I’m thinking about Malcolm Gladwell’s book, The Paradox of Choice. Obviously, we have a finite amount of time and resource to put into selecting and customizing the products we consume, but consumers are demanding more and more choices. Perhaps in addition to the 53 varieties of tomato sauce on the supermarket shelf, we’ll be able to log into the vendor’s site and make up our own recipe. Is this going to continue or will the pendulum swing back towards a artisan/specialist model?
I think these ecosystems are going to span a wide array of tools and networks, including tools the company uses, tools that customers use, etc. In the end the ecosystems will create an environment where creativity and the creation of value (how ever a company wants to define value) is rewarded. Essentially it is the extension of a company culture beyond the traditional boundaries of the company, where customers become part of the culture, which helps drive increasingly meaningful and valuable activities. These reward systems are going to be complex and unique to the value that the company is trying to create, and there must be numerous ways for customers, users, partners etc. to participate in the creation of value.
Correction: The Paradox of Choice was written Barry Schwartz. Check out his great talk about the book at:
http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html
Malcolm Gladwell is the author of the excellent books, The Tipping Point and Blink. All worthy of your time!
Thanks for the book & other references! I’ll check them out.
We’re putting together a small business based on social media PR and some IT offerings (essentially building mashups of different services for customers to engage them with customers).
An interesting idea would be to allow our customers to build their own service plan from us, using a tool that we build for the purpose. This will require (I think) that we have a clear service offering and also that we design and publish a pricing structure that lends itself to such a use.
Any thoughts on this?
Not to sound overly zealous about the ideas compiled here, but this is monumental in its scope.
In a somewhat similar fashion, I am currently working on development of the notion that the social media darling Twitter, for a variety of reasons including: its timing (now in steep ramp and going into an explosive growth phase); Twitter’s ease of use; its safety; its instantaneous nature, and what I find to be an overwhelmingly powerful intellect of its early adopters (plus how it recently proved its usefulness and impact in helping elect Obama President) may be identified by future historians as the essential fulcrum that helped bring about the tipping point that moved the global economy from the current retraction (great recession) back into expansion.
Cheers to Karl Long for what he is doing as a post grad project.
Tom Nocera (B.S./M.A.)
Developer of Ancestral Marketing (2003)
Identifier of Synergistic Evangelizing (2008)
Creator of Nocera’s Law (Everything communicates!)
and caretaker of http://www.TheWholeDamnNet.com
Hi Karl,
We’re pleased to inform you that the WisconsInnovation blog created a link to “Experience Curve”.
WisconsInnovation is a group of graduate business students that enjoy exchanging ideas about innovation. One of our most popular topics is co-creation. We always welcome thought leaders like yourself to join our conversation and would love to hear your thoughts on innovation.
Keep up the great work with you blog!
Best regards,
WisconsInnovation
Keep up the great work with you blog!