I like this quote from William Dunk, courtesy of MBA Depot. Visit the site, because I'm quoting in full:
This works pretty well when thinking about consumer product challenges. I'd add a corollary that sustaining extensions to standard answers to well entrenched problems are also likely to be wrong.
[UPDATE: Don't bother with the link. I like the quote but the originating article is...meh]
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This WSJ article on Franchising wins for "most relevant" today.
At first glance, I'd be tempted to dismiss this as a "market bubble" story along the lines of the teenage investment whiz kid stories that have me piling me money under a mattress, but a closer assessment of this phenomenon makes me think that we are seeing a real shift in the business world that stared in the 1980's and 1990's when cutting edge inventory management systems allowed retailers like Giordano to adopt a disruptive, low margin high volume-with-upscale-services approach to the value clothing industry.
Over time inventory management systems have emerged and have engaged in what I think of as downward innovation: innovative processes that simplify previously complex systems, removing cost and complexity barriers to widespread consumption along the way.
Imagine a franchise owner in the early 1990's trying to set up a remote management service for his franchise. At best he would be forced to get by with regular calls. It just would not work.
However, in the past 10 years, inventory management systems have been simplified and data capture/ communications have improved, all while a new class of outsourced billing and HR management services (such as Administaff) have emerged. All of these factors have converged to simplify management of small businesses and franchises, which are often defined by straightforward process, have been the first to really benefit.
And this sort of thing should be exciting for executives interested in rapid iterations. Soon, I imagine, we will have franchise service builders: companies that will set up a franchise backbone for you at minimal cost, using off the shelf components (and maybe the occasional Web 2.0 widget). These franchises might allow a comapny to experiment with new product offerings, opening a franchise, testing, it altering it, growing it and finally pulling it inside the company. In this world, professional franchise managers, like professional startup managers, will be actively sought by larger firms.
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Treehugger links to an inflatable roof rack. This product certainly fosters the consumer gives (does not support heavy loads, not as secure) and gets (ease of setup, ease of storage) that we like to see in a product. I expect that this sort of thing will be popular among consumers who have never owned a roof rack.
Pic from Treehugger
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Lifehacker looks at Chime.tv:
A number of video aggregators such as Chime, and ZapZap have gotten some attention in the last few months. Some, such as VideoJug, have received venture funding. I suspect that simple aggregators attempting to become, for example, a video version of an RSS feed, will fail, because users search for video by content and popularity rather than looking for specific directors. Instead, I suspect that the video aggregation space will be divided by affinity group (crunchyroll for anime, videojug for "how to" videos). If this is the case, then it is just a matter of time before some enterprising person (let's say someone over at Innosight in the US) develops a Weblogs, Inc-style service focused on video aggregation around specific affinity groups. Get all medical videos here! Get all automotive videos here! Get all DIY videos here!
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Strategy+Business looks at non-core business divestitures, commenting on a whitepaper paper by Booze Allen Hamilton. The paper is interesting because many of the "seven points to consider when divesting" are also worth consideration when setting up an experimental satellite business that will either be shut down, spun off, or brought in house.
I am most interested in the first three points in the paper:
-IT integration makes divestitures difficult
-Support services and facilities are hard to unravel
-Outsourcing adds third party issues to divestitures
Why these three? They point to an underrated problem facing firms running arm's length experiments, namely:
The more "arms length" an experimental mini-business, the less likely that a company will be able to learn anything from the success or failure of that experiment
and...
The more "arms length" an experimental mini-business, the more difficult it will be to bring that business in house or make rational long term management decisions about that business.
This is a real problem, especially for arms length companies that are running new business models which will generate process that may conflict with parent company processes. I don't have a ready answer to this but it is worth some thought.
Quote: Theory of Embedded Wrongs: If a problem has been around a long, long while, and there's a dominant prevailing notion as to what will cure it, the answer is almost inevitably wrong.
Author: William Dunk
Source: Global Province
This works pretty well when thinking about consumer product challenges. I'd add a corollary that sustaining extensions to standard answers to well entrenched problems are also likely to be wrong.
[UPDATE: Don't bother with the link. I like the quote but the originating article is...meh]
=========================================================================
This WSJ article on Franchising wins for "most relevant" today.
At first glance, I'd be tempted to dismiss this as a "market bubble" story along the lines of the teenage investment whiz kid stories that have me piling me money under a mattress, but a closer assessment of this phenomenon makes me think that we are seeing a real shift in the business world that stared in the 1980's and 1990's when cutting edge inventory management systems allowed retailers like Giordano to adopt a disruptive, low margin high volume-with-upscale-services approach to the value clothing industry.
Over time inventory management systems have emerged and have engaged in what I think of as downward innovation: innovative processes that simplify previously complex systems, removing cost and complexity barriers to widespread consumption along the way.
Imagine a franchise owner in the early 1990's trying to set up a remote management service for his franchise. At best he would be forced to get by with regular calls. It just would not work.
However, in the past 10 years, inventory management systems have been simplified and data capture/ communications have improved, all while a new class of outsourced billing and HR management services (such as Administaff) have emerged. All of these factors have converged to simplify management of small businesses and franchises, which are often defined by straightforward process, have been the first to really benefit.
And this sort of thing should be exciting for executives interested in rapid iterations. Soon, I imagine, we will have franchise service builders: companies that will set up a franchise backbone for you at minimal cost, using off the shelf components (and maybe the occasional Web 2.0 widget). These franchises might allow a comapny to experiment with new product offerings, opening a franchise, testing, it altering it, growing it and finally pulling it inside the company. In this world, professional franchise managers, like professional startup managers, will be actively sought by larger firms.
=========================================================================
Treehugger links to an inflatable roof rack. This product certainly fosters the consumer gives (does not support heavy loads, not as secure) and gets (ease of setup, ease of storage) that we like to see in a product. I expect that this sort of thing will be popular among consumers who have never owned a roof rack.
Pic from Treehugger
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Lifehacker looks at Chime.tv:
New video aggregator Chime.tv offers internet video from all the big providers in a slick, television-like interface...Browse video channels (like music videos, politics, tech, and OMG cute!) and see videos pulled from YouTube, Veoh, Google Video, Metacafe, Daily Motion and Blip.tv all in one place with optional full-screen viewing.
A number of video aggregators such as Chime, and ZapZap have gotten some attention in the last few months. Some, such as VideoJug, have received venture funding. I suspect that simple aggregators attempting to become, for example, a video version of an RSS feed, will fail, because users search for video by content and popularity rather than looking for specific directors. Instead, I suspect that the video aggregation space will be divided by affinity group (crunchyroll for anime, videojug for "how to" videos). If this is the case, then it is just a matter of time before some enterprising person (let's say someone over at Innosight in the US) develops a Weblogs, Inc-style service focused on video aggregation around specific affinity groups. Get all medical videos here! Get all automotive videos here! Get all DIY videos here!
==========================================================================
Strategy+Business looks at non-core business divestitures, commenting on a whitepaper paper by Booze Allen Hamilton. The paper is interesting because many of the "seven points to consider when divesting" are also worth consideration when setting up an experimental satellite business that will either be shut down, spun off, or brought in house.
I am most interested in the first three points in the paper:
-IT integration makes divestitures difficult
-Support services and facilities are hard to unravel
-Outsourcing adds third party issues to divestitures
Why these three? They point to an underrated problem facing firms running arm's length experiments, namely:
The more "arms length" an experimental mini-business, the less likely that a company will be able to learn anything from the success or failure of that experiment
and...
The more "arms length" an experimental mini-business, the more difficult it will be to bring that business in house or make rational long term management decisions about that business.
This is a real problem, especially for arms length companies that are running new business models which will generate process that may conflict with parent company processes. I don't have a ready answer to this but it is worth some thought.
