Hypothesis: Liminal business

Major U.S. corporations that predate the Internet are liminal businesses that exist in the space between the traditional economics of the 20th century and an emergent economy characterized by fundamentally different human behaviors and values; as a result, many are likely to experience significant business disruption by new competitors that understand how the world is changing and have the flexibility to align their products and services to the new value system.

In a nutshell, I think that many mainstream businesses are embracing social media as tools without necessarily having an understanding of how human behavior is changing as a result.  Examples are all over the place, of people getting together in unique ways with their own agenda for change.
  • Open source versus corporate built: Linux, Wikipedia, Firefox, Shareware, Freeware
  • Product-service systems versus product manufacturers: hardware and software solutions versus SaaS
  • redistribution versus hyperconsumption
  • carrot and stick versus autonomy, mastery and purpose
  • peer recommended versus brand identity
  • trusted behaviors versus credit report
  • friction versus flow
  • me versus we
  • and on and on.
Early in the class I was struck by symbolic interactionism and the implication of the idea that meaning is created through the interaction between people.  What does that mean for a society that has developed an exponential capability to interact through many-to-many communication mechanisms when interaction volumes increase astronomically?  I suspect it means a period of rapid change where new ideas take hold and are implemented by people rather than institutions (open source, arab spring, collaborative consumption, etc), simply because of rapid growth of cognitive surplus applied in altruistic ways (e.g. microfinancing) to address pervasive problems that mainstream institutions can’t seem to solve.  I think there is evidence (on web sites) that many businesses do not understand how fundamental the changes are and simply view social media as a new set of tools by which to market, advertise, and reach people, rather than applying social media strategically to address fundamental shifts in behavior and values.

Symbolic Interactionism – meaning arises out of interaction with each other a.k.a. When ideas have sex

Just watched Matt Ridley’s optimistic TED talk on the power of exchange, relating law of comparative advantage to the realm of ideas and meaning. 

 I have been musing on social interactionism since my first sociology class, because the idea of meaning created through interaction resonated in my mind.  Made me curious about the impact of many-to-many communication made possible by Internet, digital media, and peer to peer technology allowing a never-before-seen-in-human-history volume of interactions.  What does it portend for meaning?  Ridley sees it as the exchange of ideas (or as he puts it, when ideas have sex and reproduce) creating greater prosperity a.l.a. Ricardo’s law of comparative advantage.  Pretty compelling argument, makes me believe that rise of collaborative consumption and other altruistic notions made possible by crowd, network, p2p, is the result of our ideas having sex.

Mainstream business institutions woefully behind the times

Just saw Botsman’s point of view on how human behavior is being changed by technology and evolving from hyper-consumption to collaborative consumption,

 because of peer to peer technology, unresolved environmental problems, global recession and renewed focus on community.  It’s a brilliant talk and provides a new insight into the appeal of SaaS.  Also has me thinking about other products that have require high investment and large idle capacity and how mainstream businesses likely don’t understand some of the human behavior behind the trends.