Friday, December 31, 2004

New Business Models I

This is New Business Models I because there are so many new ones springing up and surpassing the old world business models with many more to come. Perhaps the most notable new business model du jour is Open Source, even espoused by IBM CEO Polisano in a recent suggestion list to the US government on the imperative of increasing American competitiveness.

The new business model addressed here is the customer creating not only the content but also the applications. Customers have long been creating content in Internet business models like eBay, hotmail, craigslist, and now in blogging sites, flickr and other photo sites, and online gaming worlds like Sims Online and Second Life. The next wave is the customers, really a new class of entrepreneurs or other innovators, creating the applications as well, using web services APIs provided by Amazon and increasing numbers of others.

There are many amazing things about this including:

1) the exponentiation - exponentially more content is and will be created than the company/initiator could possibly create. From the vast sea of content will arise attendant phenomenon such as the coalescing of new special interest groups / shared interest communities, and patterns, linkage and ultimately new means of value creation from the content / information,

2) the necessary accompanying innovation of new tools (especially automated) to manage, search and create content,

3) the rise new skills to exploit this medium, the application and tool creators, to create derivatives of derivative of derivative applications, the need for people to be proficient in these new skill areas or at least decide whether they would like to or not, and services like the early easy website development sites allowing one not to know html,

4) the way humans are getting to be more meta with computers, adding layers of intelligence in how machines talk amongst themselves to make human live more productive and easier. This is great in lots of ways but also represents humans getting another step farther removed from the operating, and really, control, of computers,

5) the additional democratizing of the trend - allowing more people the freedom to dream and create the applications that are fun interesting and worthwhile to them, not having to wait until their needs are a large and valuable enough corporate marketing opportunity. This StarBucks of software development facilitates the proliferation of individuality, self-expression, and fulfills self-actualization levels in Maslow's hierarchy,

6) and the stronger form of democratizing of the trend, economically, individual application development and launch as a flexible income generator nicely complementing a traditional job and other life activities that can grow, turn into multiple businesses and deliver economic freedom. This is an important emotional empowerment, to not work for someone else but to be an autonomous unit coming together for collective collaboration, training, feedback and other activities but remaining fundamentally self-directed not answering to another or another's machinations within a slow-to-evolve corporate hierarchy.