Sharing a bit of Chaos

Nearly all the people with a business background (which is pretty much everyone: from professionals to craftsmen) talk about business strategy. Some define strategy from Michael Porter’s perspective and some have a hybrid theory coming from the many academics  that started writing about it after Porter wrote his famous books in the 1980s. Strategy was based in a competitive advantage a firm will get from a unique combination of resources that corresponded to the environment in which it was located. Then there was an information revolution and suddenly tons of data about our environment was available to us, this made firms evolve in strategy and structure. Then the information revolution democratized (to use the term loosely) the access to information, not only making it available to big firms, but to small ones and individuals. Information everywhere lead to people making more strategic decisions and being aware of how weak some competitive advantages were.  Some businesses competitive advantage was based solely on their advertising budget.  

Times changed and one would expect that business would change with it. Indeed business started to adopt changes slowly, first introducing an IT department and then letting the structure shift in order to be ready for the huge changes on information management that were coming. Many organizational theories emerged and the organization gained “support” groups such as IT and legal advice, outsourced many things and became leaner. All changed, later some businesses introduced departments with fancy names such as “Strategic Management of Information Department” with sole purpose of concentrating the data analysis and administration in order to keep the firm up to date and running smoothly. 

Other things didn’t change. The most important of those things was the idea that competitive advantage was going to be sustainable in the long run using the old rules of business. Some of the laws protecting competitive advantages come form the 18th century, some of these ones won’t work any more. But, lawmakers and lobbyists started to harden the security to the house instead of building a new one. As information became more open the competitive advantage based on information asymmetry started to disappear. The internet as a democratizer of access to information made many old business models die and firms had to shift to survive. The problem with this is that they sift to survive, not to win again the “business game”. New businesses still depend on old models as the change is taking place. They’re are slowly changing, but yet maintaining their generic strategies for the new “models” they find. Many of them still support their gross revenues in the old business model and are failing to apply a bit of futurology in order to be one step ahead of change.

 Information access has also changed many personal habits. It it’s less likely that employees will accept the conditions they were offered 20 years ago. Now employees want the ability to work from home, tailor their own schedules and get different kinds of benefits. Seeing this science conducted many studies and made many programs by which employees could gain more control over their work. Daniel Pink showed us a bit of that on his TED talk. 

All those things changed and we still think we can find a sustainable competitive advantage as we did in the 1980s. Many historians agree that the change in this last 30 years has been faster than any process of change made previously. That’s obvious if we believe that as humans we are accelerating constantly. Organizations can’t find a competitive advantage in access to relevant information, they now must base it on better interpretation of the data and since users are becoming capable of doing that the sustainability of that model is in question as well. 

The new businesses should be based on constant change and adding value in specific ways to the customer, even when that requires developing something that seems inconsistent with the “strategy” you are following. Instead of focusing on organizational goals it’s time to focus on the goals of our customers and start to develop our strategy to fit their needs. New businesses need to personalize themselves, that means gain a personality. It’s simple we’ve been defining competitive advantage as what we can do better than the competition. The truth is that we’re heading towards a world where we can do just the same thing the competition does. Therefore, competitive advantage will stop being based in what we do better (because we don’t know for how long it’ll last) and will be based on how we adapt to what consumers want, give them excellent service and provide them with more control. 

The 20th Century and the first decade of the 21st were ruled by companies feeling their customers where lazy people wanting everything done for them. I have a personal theory that has that as the main cause of obesity in many countries. The end of the first last decade and this decade will bring a revolution in the consumer side. And it will require businesses that no longer base their strategy on competitive advantage, but on competitive caring. Take for example Telcos, they provide the same service with the same quality and are competing in who offers one Mb/s more of internet connection or more gifts to the user. Traditional Telcos are becoming a commodity and they are not switching to think on their customers experience as the key to their sustainability. If you’ve watched enough ads you’ll see that telcos tell you: “we have more coverage”, “we give you a free backpack”….no one tells you “we don’t suck at costumer service”. The latter is where the new strategy lays on. The competitive advantage is not in the technical features of the product or the cost effectiveness, because every improvement that could be made it has already been made by everybody. Whether it’s six sigma, JIT or whatever acronym we can come out with, it’s already done and if it’s new it’ll be implemented by everybody in less than a year. 

So the competitive advantage will be in the ability to change quickly and adapt to consumer needs. Consumer expectations drive markets today, everything else is plain vanilla in the business environment. Given that, organizational structure gets a special place in making firms able to compete. Many CEO and boards of directors are lazy as we see organizational charts stay static when the environment requires a more flexible organization that is able to mold to what customers expect from them. I haven’t seen many models out there that incorporate the new social technologies and environmental concerns to the competitive advantage definition and organizational structure creation. 

In a fast changing world, we need to re-define all of that. Many companies have already done this, some are flexible from their inception, while others are slow movers. How do you see the competitive advantage form in the next decade?

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When we are at school we feel bad when we’re wrong. The academic system and almost every other system in life (even the Business environment until not so long ago) punishes people being wrong. If you’re wrong you’re gonna get yelled at, a bad great, grounded for three months and with no Internet. 

As humans we’re wired to be wrong and learn from that. It’s a path of self discovery where you learn from your mistakes and never make them again. In high school I was not the brightest student and I made many mistakes, later I found that all the mistakes I made I became really good at not making them again. So being wrong is probably one of the best teachers out there. Sorry reputed academics, but being wrong seems to teach us in a very different way, one that almost every time sticks with us.

Academia sees knowledge as the main goal, therefore being wrong in applying is not acceptable. The academic system has the goal of teaching us and to test what we know they came up with a grading system. That grading system considers mistakes as a negative and punish them with no points or even negative points in exams. All the years we spend in schools (specially they years where our brain is developing) wire us to think that being wrong is bad. Academia is very good for learning they’ve done amazing developments, the problem is the grading system in use. 

The good news is that even if we’re wired to avoid being wrong we end up being wrong. When we’re wrong we can have two possible choices:

• Be mad at ourselves for being wrong and think the worst of us. 
• Learn from the mistake and take it as part of our growing process knowing that we can correct course.

Of course, we are wired to do the first thing. Many times when we screw something up we feel ashamed of telling we made a mistake and fear that the worse can happen. So if we do this we may need to be medicated with some serious brain rewiring.

I try to rewire my brain every day so I’ll share some steps that have worked for me. Maybe this will work for you too.

1. Look forward to failing: Start doing something that you don’t know anything about. Like for example learning HTML. I started learning HTML when Liza Sperling gathered a group of people willing to learn playing Neo Pets. I started there and did some bad looking HTML mockups. I looked to fail, because I had no idea how to do it and then as I failed I started correcting myself  by reading books about it and just iterating a lot. The point here is that we often don’t do things because we are afraid to fail. If we look to fail we’ll learn things that could make the difference.
2. When you fail audit your thoughts: Usually when we fail our mind tends to run in lot’s of thoughts. What I do is I write them down and see what I usually think when I fail. It ends up being that when we fail we tend to be to harsh with ourselves. If we audit our thoughts and come up with counter arguments to what we think, next time we will know that all those things that we tell to ourselves are not true and we will rewire our the way we think when we are wrong.
3. When you’re wrong go through your mistakes and study them: When you’re wrong you usually get something right, make sure you acknowledge that and see that your mistake could’ve been one small part. Sometimes we let mistakes become huge. The truth is that most of our mistakes are small and we can correct them by studying what we did wrong and learning to improve that small part. Usually we will quit the whole thing when in reality we are closer to getting it that to failing.

This three steps have helped me rewire my brain to some extent and stop being down when I make a bad decision. This may not work for you, but no matter how you do it try to rewire yourself from feeling bad when being wrong to turning it into a full learning opportunity. In school someone obliged us to learn after our mistakes. In the “real world” no one is there to do that and we naturally tend to quit doing that.

 

Let’s don’t let the academic system scare us from being wrong. Let’s embrace that 8 out of 10 times we’re going to be wrong in something and let’s make a learning experience out of it, to make us better at whatever we may want to be. 

So how are we correct when being wrong? That’s simple. 

Understand that mistakes are a part of life and that we can learn a lot from them and better. Finally the world will divide between the ones who quit and the ones who keep learning.

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So, I got this idea for a business last week and I have no idea how to code or do technical stuff whatsoever. That means I don’t have the technical knowledge to do it as I studied business. I’ve liked the internet and it’s potential for a long time, but never took interest (or had the time) to start learning how to do the coding part. I learned basic HTML (XHTML) and CSS, but never even managed to play with the API of a service. I’m a huge marketing and strategy geek and I love those points on a business, but as of lately I’ve discovered I love maths and algorithms too. Not to late to discover what I love and how that can be applied to make people’s life easier or at least more enjoyable. 

I now NEED to turn this project from an idea to a reality.So, my problem today is how to turn an idea into an asset. No big deal, really. As of lately I’ve realized that there are lot’s of people around the world willing to start a business, some have the ideas, others have the technical knowledge and others the people skills. The only problem is to find ones that share the same passion as you do. In this case is sharing a passion of making peoples life a bit easier and more enjoyable.

So I’ve been thinking on how to gather a group of people passionate enough to start a business dedicated to one subject. The first few ideas that I had are the most important.

• Bring in people that love your idea and that will work for it hard and smart. They don’t have to be the best at what they do or even have all the technical skills. These people are the ones that are going to learn if they needed, because they’re passionate enough to stay up all night getting ready for the next challenge.
• Also, bring people that know marketing and have an idea of what’s the most important thing in the world. The most important thing in the world is caring about your customers/users —thanks Gary Vay.ner.chuk for pointing out on his book —. If you bring people that have the user first and all the rest second as priorities, you’ve already won a huge battle.
• Bring people that want to grow. You’ll probably won’t get the best in each field for your startup. You don’t need them. What is needed is a team of people that wan’t to be better everyday. People that wake up with the sole goal of outperforming themselves every single day.

Those 3 main characteristics may be the sole reason of your success. The team is all. A good team will notice a bad market, will fix the strategy and tactics, will measure and set big goals to attain. A good team can fail too. If a good team fails, they fail fighting and that’s how you notice if they’re good.

So I hope 2010 brings lot’s of your projects to reality. What do you think you need to make  your projects real this year?

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I’ve been looking at many social apps that don’t let users control their privacy or don’t encourage it. As users we produce information on-line all the time and that information is pushed to our friends, followers or connections in a way we can’t control. In this past year I’ve became all pro user control. The users need to be in charge of the experience they are having and we need to let them take control in order to make it the best. Many services provide some sort of control, but this control is far from what users really want or could use.

In Facebook you either decide (or decided, haven’t checked if they already changed this) if your profile is public for all to see or only to your friends. Of course, you can choose what parts of your profile to share in Public and what parts not to. What about your friends? You often friend people that you have to friend (like your in-laws or your boss) and you don’t like them to be able to watch all of your updates. A user controlled privacy setting will allow us to choose who will see what updates and who will not. This also works so we don’t spam some friends with information that they don’t want to or need to know. For example if I’m organizing a Party I’ll create an event and choose to share it with the friends that are in Lima,Peru. The ones that aren’t don’t need to see that,because they can’t come (Facebook has this feature). Another example will be if I’m sharing links about Social Media on Facebook I’ll like my contacts who like Social Media or have an interest in it to be able to watch them (and don’t send them to my mom). Of course, we can do this with groups but going to the group page and sharing there and then following it adds a bit friction to the process. 

Wordpress CMS provides this control by letting us lock a post with a password so only certain people can see it. The problem is many other services think that the default  should be public data and that’s not what we like. Of course, it benefits us to make some data public because then we can connect with friends, get advice or meet new people. But we are not comfortable putting all our data for the whole world to find ( or Google to index).

Share more, not less

Having control over those settings in a much more flexible way will help us share more. How?

It’s simple. If we can control with who we share information, rather than just deciding to make it public or private, we will share some of the information that it’s private now (or not even posted) with some people we trust and therefore be sharing more of our data with people that may like it or find it useful. The problem here is that the common believe is that public means more sharing and that’s not always true. Some Public and some Private allows us to share more information and make our relationships evolve naturally. Human relationships grow as trust is created and we are inclined to share more, but if the social apps or services won’t let us then we’ll limit what we share.

Sharing more has benefits in many ways. For example, being able to share medical data can help us get feedback from other patients or doctors we trust. In the case of Doctors we need someone we trust and has a valid opinion, because we can come across some doctors that perform doubtful methods or even be spammed (as happens on twitter a lot) by doubtful sites that sell medicines. In the case of shopping information there’s stuff we shop (you know what you shop that you can’t share) that we just can’t share with others  or that we will just want to share with some friends. 

Ask for it! 

Rather than asking for a privacy or hide option we should have the ability to choose to share something publicly, selectively or not share at all. As users we are entitled to ask for this options in order to control the information we share and be able to improve our experience. And as good service providers all this sites should be willing to let control our privacy settings when this would help UX rather than make it worse. (Twitter does this already, you have Public, Private updates and DM — a group feature will add some complexity). This can also come to reality through a project like Mine! which intends to create a place from where we can control our information. 

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While reading some posts and magazine articles on entrepreneurship it came to me that many people see entrepreneurship as something sexy to do. I may be using the word sexy to mean lot’s of things in this post and I hope to explain myself better in the following lines. A few weeks ago I was chatting with a friend at a local Starbucks and he commented  that he believed that entrepreneurship was seen as a ‘WOW’ thing to do specially by all the media we consume. Most of that media  is originated in the US. Don’t get me wrong the US produces lot’s of revolutionary content and has amazing approaches to numerous things. One of those things is Project VRM which I think will revolutionize the world soon enough.

On the ground of sources for entrepreneurs, the ones coming from  the US, Canada & the rest of developed nations offer a great insight on what to do, how to do it and the main problems we may find. Some other sources even give us a little bit of coaching telling us that we need to resilient in order to start a business. What I see commonly in this sources is that entrepreneurship is described as ‘sexy’. What I mean by sexy is something that you want to do because it’s how we make big fortunes and because it’s cool not to be dependent on a job. There’s a assumption there that entrepreneurs have the choice of a normal job. I think that the recovering economy in the US and the realities of developing countries tell us that a job is not the un-sexy thing to do, because sometimes the possibility of getting one doesn’t even exist.

Entrepreneurship in my country, Peru, is all about survival. It’s not the sexy thing to  do or done with the intention of pursuing your passion (but most of the time you end up pursuing it either way), it’s done with the intention of putting some Choco Krispies and Milk on our plates every morning. The survival approach makes some of the entrepreneurship advice invalid for some realities. For example, one may argue that spending money is good if you do it in the correct things. What if there was no money to spend even in the correct things? How can you design a startup process where you start building a cash base to then grow your company? The answer doesn’t fall in any advice I’ve read before. The starting process that comes from necessity is really complex to study and it rarely follows the established path of startup. 

Not following the established and recommended path for a startup it’s  difficult, because many of the believed-to-be “solved” problems appear when you start for survival reasons. There are many books on that and my favorite one is “The Art of the Start” buy Guy Kawasaki, which is useful even if you start out of passion or need. Solved problems as having someone to pitch too or having the ability or knowledge to make a  market research. And lacking all this things startups in Peru, India and the US that are started out of need succeed.

What makes them succeed?

• Love for your family: Many don’t consider this, but wanting eagerly to be able to provide for your family increases your power to keep fighting and doing more than  you could humanly can. This is the main reason this startups keep coming back with multiple iterations of their product as they have to adapt to survive.
• Loneliness: I’m not  using this word properly (maybe?), but being alone (i.e no government, insurance, contacts or friends) makes you aware that if you’re not fighting for you no one would do it. And you get to fight a huge fight.
• Transcend:  Many entrepreneurs want to transcend in the way of creating new jobs for their communities and putting their country on the map so their company can grow bigger and better and to give the chance to many more to come.

In conclusion, entrepreneurship is not a sexy thing it’s done for survival (in many cases) and sometimes the startup conversation doesn’t help people in this condition. Many of the books in the US and talks about bootstrapping are showing that the number of startups done out of the need for survival and to transcend are growing more and more. It will be wise to study the process in developing countries to offer a bit more of advice to those that not fall in the recurring stereotypes of the entrepreneur. 

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