Umair 101

Hi! This is a wiki-page editable by any­one to follow-up on the “Umair 101″ propo­si­tion by Jake Kalden­baugh:

@umairh to be hon­est, took me awhile of piec­ing together your base assumps b4 i bot into your entire thought chains. mebe u need umair101?

I just col­lected the items already tweeted, but please jump in and edit this list! Reg­is­ter here then come back to this page to edit it (you can also find it from your word­press pro­file, in the edit pages menu) :)

Brands

• The shrink­ing advan­tage of brands (Feb 08)
• Research Note: The Adpoca­lypse, the Pro­sumer, and the Fal­lacy of Advertising

“From an eco­nomic point of view, the pro­sump­tion is the ad. That is, the eco­nomic roles of pro­sump­tion and adver­tis­ing — to sig­nal expected costs and ben­e­fits — are one and the same. It’s no won­der pro­sump­tion is so dif­fi­cult to adver­tise against. Most mar­keters are lend­ing cre­dence to an eco­nomic fal­lacy when they think oth­er­wise. More con­cretely: mar­keters are try­ing to “tar­get” ads — against their eco­nomic sub­sti­tutes; but they are hyper­ef­fi­cient sub­sti­tutes (less costly, far more rel­e­vant, cul­tur­ally ampli­fied, etc)”.

Inno­va­tion and Economy

• @umairh it was: colum­bia talk — “mov­ing from self-interest to we-interest”. real­ized this shifts econ/fin mod­els & explain yr con­clu­sions (link)
• Tran­script of “penny for your thoughts video” (tran­scripted by @tdavidson)
  • “Why do we see these pat­terns of destruc­tive behav­ior going on? I think the rea­son is actu­ally very sim­ple: cap­i­tal­ism in the way we built it today kind of under­counts costs and over­counts ben­e­fits. Many of the costs that we’re now becom­ing more and more famil­iar with – social costs, envi­ron­men­tal costs, human costs, the costs of unfair­ness – and it over­counts ben­e­fits, that’s kind of a struc­tural flaw, the heart of the way that we built cap­i­tal­ism itself. And what that trans­lates into is that we see this pat­tern of behav­ior of where I strive to make myself bet­ter off but I’m indif­fer­ent to whether you are bet­ter off. And if I can do that, then the result is very, very small amounts of real value that are being cre­ated, and today we’re fac­ing that fact.”
  Penny For Your Thoughts — Umair Haque from Sander Duivestein on Vimeo.
• Sept 2003:
  

  Real strate­gies are built around embed­ding — not exploit­ing — what you know in inno­va­tions that the mar­ket derives value from. Real strate­gies are not about value extrac­tion, but about value coor­di­na­tion and cre­ation. In increas­ingly tur­bu­lent mar­kets, busi­nesses can’t hope to com­pete on sim­ple infor­ma­tion asym­me­tries — for the sim­ple rea­son that real strate­gies enable com­peti­tors to pro­vide con­sumers greater value at the same or lower cost — the essence of any sus­tain­able mar­ket advantage.

• July 2006, on strat­egy and DNA: Laws of the Post-Network Econ­omy: Strat­egy is a Com­mod­ity:
  

  In a world where strat­egy is a com­mod­ity, cre­ativ­ity becomes the vital fac­tor from which value flows. When every­one can think strate­gi­cally about every­thing, the locus of value cre­ation shifts from out-thinking every­one to out-creating them. The prime mover of value cre­ation becomes putting the abil­ity to cre­ate (goods, ser­vices, processes — even strate­gies) at the heart and soul of the firm.

• Feb 2008, Edge Prin­ci­ples: Love > Fear:
  

  Let’s rewind and under­stand the rela­tion­ship between love and ads: it’s strongly neg­a­tive. When con­sumers really do love stuff, those brands have to adver­tise less.

  … On a deeper level — as Thread­less demon­strates — it’s not the “brand” con­sumers love; and when peo­ple love stuff, they stop being “consumers”.

  … Yes, there are a hand­ful of com­pa­nies peo­ple love. But from an eco­nomic pov, those are the almost always guys that invest the least in adver­tis­ing. They earn that love in more strate­gi­cally mean­ing­ful ways.

Game The­ory

• @umairh this vin­tage bit from bub­ble­gen was what got me into inves­ti­gat­ing the game the­ory parts of ur think­ing: http://bit.ly/dIzd2

Eco­nom­ics

Peer Pro­duc­tion

• This is a sem­i­nal and dense PPT pre­sen­ta­tion on Peer Pro­duc­tion Economics
• A strat­egy note from the Havas Media Lab’s blog : The New Eco­nom­ics of Con­sump­tion: User Gen­er­ated Context
• Oct 2006, Edge Pat­terns: Closed to Open :
  

  … in a post-network econ­omy where value cre­ation out­side the bound­aries of the firm is explod­ing, stay­ing closed will, more and more often, be a dom­i­nated strategy.

Snow­ball Effect

• May 2005, The Snow­ball Effect

“Note, it’s not sim­ply about viral mar­ket­ing. That’s miss­ing the for­est for the trees.

It’s about the fact that con­sump­tion is con­nected — in a net­worked world, when you con­sume some­thing, your con­sump­tion has an exter­nal­ity: I gen­er­ally know how much sat­is­fac­tion you got. As enough of this info is aggre­gated, demand within the niche increases for high-quality goods (and decreases cor­re­spond­ingly for low-quality goods)”.

• March 2006, The Snow­ball is the New Blockbuster

“The Snow­ball Effect is about value mul­ti­ply­ing because coor­di­na­tion is cheap — peo­ple can stand on the shoul­ders of oth­ers. It’s about the cre­ation of value out­side the bound­aries of the firm.

This is far more pow­er­ful than the rel­a­tively weak lever­age that results from the viral trans­mis­sion of messages”.

Mar­kets, Net­works, Communities

• Good intro­duc­tion to Umair’s three key con­cepts : Mar­kets, Net­works and Com­mu­ni­ties Brief­ing (with Innovaro)

• Sept 2006, Research Note: Show me the Money Mar­kets, Net­works, and Com­mu­ni­ties
  

  “The moral of the story is sim­ple. You should see Heavy and YouTube as oppo­sites in strate­gic error. Heavy doesn’t cre­ate enough value con­sis­tently enough to be able to exert enough pres­sure to cap­ture a sig­nif­i­cant share. YouTube, on the other hand, is cre­at­ing a great deal of value — but also can’t exert enough pres­sure to cap­ture a sig­nif­i­cant share” .…

  “If that sounds obscure, think about in Google terms: Google cap­tured value by mak­ing return on atten­tion for adver­tis­ers and con­sumers hyper­ef­fi­cient. Myspace promises to do the same. YouTube only does it for con­sumers. Heavy only does it for adver­tis­ers. The gap is still yet to be bridged — in large part, because it will require the deep, fun­da­men­tal rede­f­i­n­i­tion of inert brands into liv­ing microcultures”.

• Dec 2006, Edge Pat­terns 7: Messy Beats Clean (Or, Why LinkedIn Will Never Be Myspace):
  

  Today, stream­lin­ing is cheap, fast, and easy. … Which means today’s rad­i­cal inno­va­tors are going in a very dif­fer­ent direc­tion. Fun­da­men­tally, deeply, in their very essence: they’re messy, not clean.

  In other words, in the post-network econ­omy, (re)learning how to cre­ate value is going to be, in large part, about get­ting messy.

  For­get about economies and cost-cutting and trim­ming the fat — because that stuff’s a com­mod­ity. … What is a basis for advan­tage is explod­ing what was clean and stream­lined yes­ter­day: unlock­ing new pos­si­bil­i­ties for value cre­ation which are messy because inter­ac­tions at the edge are richer, deeper, riskier, and, ulti­mately, human.

• Intro­duces cor­po­rate con­sti­tu­tion (DNA), ideals, strate­gic decay, A The­ory Of Strate­gic Jus­tice: Google, Evil, and Com­pet­i­tive Advan­tage:
  

  Every cor­po­ra­tion – indeed, every orga­ni­za­tion – has a con­sti­tu­tion, whether it’s explicit or implicit. … The point is that every orga­ni­za­tion you or I have belonged has had a fun­da­men­tal orga­niz­ing prin­ci­ple that defines the rights of the organization’s stake­hold­ers – a constitution.

  Con­sti­tu­tions are value cre­ation mech­a­nisms. Because con­sti­tu­tions can allow the firm to define and rede­fine rights in a way that cre­ates more value than oth­er­wise, they are a strate­gic tool firms can use to guide them­selves in tur­bu­lent environments.

  … They do what few strate­gic heuris­tics and frame­works are capa­ble of in a world of grow­ing hyper­com­pe­ti­tion, hyper­im­i­ta­tion, and dis­con­ti­nu­ity: they unerr­ingly guide deci­sion mak­ers towards defen­si­ble sources of value from which to craft rev­o­lu­tion­ary strate­gies. But more impor­tantly, they define and shape pur­pose – which is, and always has been, the only mech­a­nism for going beyond mar­ket advantage.

• Jan 2008, Rethink­ing the Eco­nomic Insti­tu­tions of Hyper­cap­i­tal­ism:
  

  The eco­nomic insti­tu­tions of cap­i­tal­ism — firms and (finan­cial) mar­kets — alone can’t solve these problems.

  No mat­ter how much money we throw into them, at them, through them — they are solu­tions for very dif­fer­ent prob­lems; eco­nomic prob­lems dom­i­nated by equi­lib­rium solu­tions and a lim­ited num­ber of homo­ge­neous players.

  … The chal­lenge, I think, for peo­ple who wanna really build the next econ­omy, is mak­ing mar­kets, net­works, and com­mu­ni­ties become the glue hold­ing the hyper­cap­i­tal­ist econ­omy together.

Media

• Sem­i­nal and dense PPT pre­sen­ta­tion on the new eco­nom­ics of media — test

• Oct 2006, Deal Note : Google + YouTube, why did Google buy YouTube?

“Rev­o­lu­tion­iz­ing brand­ing is the real play at the heart of all this. Google thinks they are closer now, with YouTube in their back pocket — because they have a plat­form for exper­i­ment­ing with branded ads.

I think the reverse is likely true: Google has no idea what nor­mal peo­ple want (or even are like, if you like), and so a YouTube acq might be just a nice way to geek out, pos­si­bly earn a nice mar­ginal rev­enue stream (a la AdSense/Blogger), but never really rede­fine the value chain in the way it wants”.

***************************

Great piece on Face­book Bea­con, lame ideas of what “next gen ads” look like, and how to design social systems:

http://www.bubblegeneration.com/2007/11/research-note-lord-of-flies-or-shape-of.cfm