Why the ecosystem is more important than market share


The caterpillar hidden in a tomato from my garden is great news for me as the gardener. While it’s one less tomato to eat, the presence of this little creature is enhancing the ecosystem I’m trying to build. I’ll put that tomato back into the ground. There’ll be more bugs, and butterflies which will make my soil more fertile. In turn they’ll help pollenate the flowers for next season, and they’ll be more tomatoes and resulting nutrition than their was last season.

While it is true that the bugs and competitors reduce my yield now, they increase it later by helping me create more of what I’m trying to grow. The systems approach takes longer, but usually creates more for all participants. This is why market share is never as important as growth. Market share is a me versus you, reductionist measure – it’s very yesteryear. The thing I’m trying to grow is the system. In a world of increasing abundance I want to participate in creating something which means more for everyone. I have little desire to dominate what is already here.

Sammartron snap

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Innovating too early is the same as being wrong

The EV2 Electric car

I’ve had a few startups where I was a bit early. I’d put my former startup rentoid in this category – not to mention the amazing potential pivots I missed. When someone is early to an emerging market we often say these simple words.

“He had the right idea, he was just a bit early.”

Here’s the truth. Early is the same as wrong. I know it sounds mean, but we have to be honest with ourselves. If the idea is not at the right time, then put simply it is the wrong idea. But I will admit there are complexities with being early, and it leads me to these thoughts.

  1. I’d rather be wrong by being early, than wrong with a dumb idea.
  2. There’s always a good chance of being early with something new.

Number 2 points to the importance of keeping costs low. A low cost operation has more time to learn and iterate. They have a better chance of getting closer to todays needs, and or the market catching up to their initial vision.

You should totally read my book – The Great Fragmentation.

Ignore what the teacher told you, and just make things up

old school

Watch a 5 year old kid play for half a day and you’ll see levels of creativity that’ll blow your mind. You’ll wonder in awe where their natural ability to ‘make things up’ comes from. You’ll be inspired by how they see the world and what it makes them think and do.

We used to see the world that way too.  But what happened was for the first 18 years of our lives we got told how to see the world. In fact, the concept of making things up brings back some very strong and personal memories for me. I can remember when I reached High School (Grade 7-12 in Australia) and that it was no longer Ok to make things up. We had to reference where we got our ideas from. All of a sudden my opinion didn’t matter. What started to matter was researching someone else’s opinion, someone who had been ordained by industrialised society and had been published. It felt so weird. Why couldn’t I just write what I think? Why did it have to be a quotation from someone else? Why did what they think matter more than what I think? We all got taught  got taught stop thinking and start rehearsing. Rehearsing for what you may ask?

Rehearsing the lines for some kind of monetary industrial pantomime.

We were getting taught how to play inside the the modern economy.  An elongated economic play in which we would become ‘extras’ in someone else’s dreamscape. Someone else had the starring role, but they needed all sorts of support so they could be the stars of the show. And we went along with it. But now the exact opposite of what we got told, is where all the value is being created.

The trick they pulled on us to not have any original ideas, to not create anything new, to keep our opinion to ourselves is rapidly becoming redundant. And this gets me excited. We all still have the ability to just ‘make things up’. Now that we have access to the tools to create anything, now that the economy is being totally redesigned, we just need to forget what we got told, and start to write some of our own lines.

New Book – The Great Fragmentation – out now.

Future Lab – Q & A

Future Lab

I was recently asked by the super clever Future Lab team of LS:N Global to do an interview on a few topics including: The New Australian Consumer, Crowd Finishing or Pre- Hacking (a theme in my book) The Sharing Economy (A former startup I had rentoid.com was early in this space), Reverse Retail, and Innovation via Skunk Works.

While writing up some thoughts in my note pad, I thought it would make a good blog entry. And then I wrote ‘blog this’ on the first page of my notes. And that is exactly what I have done – literally. It will take some interpretation (hand writing, typos, order) as it is just a mind stream of half sentences, but often the unfinished nature of things is what makes them valuable.

Screen Shot 2015-02-13 at 8.29.36 pmq2Screen Shot 2015-02-13 at 8.29.49 pmScreen Shot 2015-02-13 at 8.30.28 pm

Screen Shot 2015-02-13 at 8.30.10 pmq1

 New Book – The Great Fragmentation – out now!

When innovation is not really innovation

Innovation is an interesting word which gets thrown around lot in organisations. No one seems to disagree that it is the life blood of long term organisational survival, but I think it’s clear that the definition of what it actually is happens to be wrong. The definition tends to be most wrong in large stable industrial companies. I should know, once upon a time I was the ‘head of innovation’ in one such large organisation. I was recently pointed to this article which goes a fair way to demystifying innovation, versus novelty and invention. But for me it doesn’t go far enough. I think the problem with innovation in many large companies is this:

They confuse Asset Utilisation with Innovation.

A colleague of mine works in a large industrial concern heading up the product innovation area. Here’s a bunch of constraints they’ve placed upon him:

– All innovations must be able to manufactured in their existing factory.

– All innovations must use the existing machines in the existing factories.

– All innovations must focus on the existing core users of the brand.

– All innovations need to be able sold in the existing sales channels and retailers.

– All innovations should have a price point in and around the existing price points their range of products are already sold for.

– All innovations have exactly 13 weeks to prove themselves in market, because that’s what the reseller demands.

Clearly constraints like this prove that the core task is not at all about innovation and much more about business management within a set set of structured parameters. In simple terms it’s an asset utilisation program. There’s nothing wrong with asset utilisation. It’s a valid, profit centric, strategic imperative. It’s what companies must and should do to reach their financial potential. What’s foolish though, is confusing it with innovation. Such confusion can only lead to a long term displacement of brand relevance.


Short media memory & piracy

Digital Piracy

Kim Dotcom sent out a tweet a couple of days ago on how to stop digital piracy. It was the most succinct realistic view of the digital market place I’ve read. While the stop part might be an overstatement, it would certainly minimise it. I’ve taken his points and listed them below:

How to stop piracy:

  1. Create great stuff
  2. Make it easy to buy
  3. Works on any device
  4. Same day global release
  5. Fair price

The last four on this list really speak volumes. But the thing which is really standing out to me on this list, is that most media companies seem to have forgotten the reasons why they did things a certain way prior to the digital era. Most of their decisions were based on what was possible. The limitations on selling their goods were physical realities. Although these physical realities no longer exist, they seem to have forgotten why they did things a certain way. That way was the only way. The stability of the media system pre-web seems to have distorted their minds to the point that they forget the ‘why’. I’m going to reference the recorded music business to show how their rigidity has failed them. In fact the digital world is actually what they always wanted, and that piracy is not the problem, but the industry’s poor memory.

Make it easy to buy: In a digital age, the best advice anyone can give, is to sell it in as many places as possible. This is always the case for any mass market product. Rewind back to the pre digital music industry and you’ll remember that record companies would sell their records in any store that would stock it. Kmart, Target, Walmart, the local independent record shop. So long as it was out there they were happy. Sales representatives were judged on the number of distribution points they got their stock into. But for some reason they seem to have forgotten this fact. They now decide to hold back on potential distribution points for no apparent reason. The early iTunes revolt being the easiest example we can all remember. Totally counter to what they did before the format changed. So why the music industry don’t embrace this and make it ‘easy to buy’ is beyond me.

Works on any device: It used to be really hard for the music industry to do this before digital. They had to invest in manufacturing for vinyl records, then cassette tapes, then beta, then VHS, then CD…. but they did it and moved quickly to have their content available in all formats. So why the change of heart now? Why don’t they move as quickly as they used to? This is especially strange given that they no longer have to make physical stuff to make their content available on any device. Or even worse, when it’s already loaded up onto a content platform and they restrict usage depending on the device you a re retrieving it from. Vevo on youtube is the classic example. If a song won’t play on my mobile via Vevo, I’ll just listen to a another song. No revenue for you! It’s much easier to do now than it was then.

Same day global release: If you can, then you should. Simple. Here’s the thing the recording industry has forgotten about their pre digital staggered global release programs. Every new market (country) they entered had extra associated costs with it. They used to have to make more stock (records, CDs) to sell. Pay to get their content promoted on TV and radio. (Now we’e all immediately aware of of any big music launch once it happens) They had to change the formats to suit particular markets. They had to ship records on boats for 4+ weeks across oceans. They wanted to be sure the record would be a hit before they invested all the money into wider market expansion. They had reasons to delay global release plans. Reasons largely around stock, promotions, production and mitigating financial risk. None of these reasons exist today.

Fair price: When people get a raw deal, they find an alternative. They even cheat. People know the costs of content distribution are minuscule compared to the pre-digital era. This ought be recognised more than it has been in many digital channels. I truly believe most people will pay a fair price. And in the words ‘fair price’ I would like to add the idea of purchase without friction. Simple ways for us to give you our money so we can get on with enjoying the content. Not a million hoops to jump through. I’d go as far as saying that most people want to pay those who bring them joy with their output. In a world of zero cost digital duplication, then fair pricing  would mean taking out 100% of the now removed physical production costs.

Once we get over the fact that anything which is both digital and good will be pirated by some people, then we can get on with business and just know it’s a fact of life. A cost of doing business. We shouldn’t let it paralyse us into avoiding new methods.

The laws of nature tell us much about piracy or lost revenue. If we don’t distribute the output it goes bad. Stored water which isn’t sent out via distribution channels evaporates, natures form of piracy. The longer we wait, the more we lose.  We can add to this the frustration distributors have with non global release plans.  So much so that distributors are becoming makers (Netflix) because they can’t get what they need.  The end result is a great demarcation with all things digital. If we can’t get it, we’ll make it ourselves or source it elsewhere. The best approach would be to embrace the reality omnipresence and immediacy. 

A mist of innovation

Today is a hot day in Melbourne 34 degrees celsius or 93.2 degrees fahrenheit. It seems though it is never too hot to retail coffee in our fair city of Melbourne. Looking for a java fix I quickstepped down to the nearest caffeine haunt in docklands. I happened upon a new outfit called Cafenatics. Their coffee and food were both good. Their outdoor air conditioning was the total bomb. I freaking loved it.

They had set up a nice water misting system in both their outdoor dining area and even inside. It was just perfectly soft so that you didn’t feel wet, just cooled down. So amazing, I tweeted about it, posted in on Foursquare and even made the effort to write this and share some pictures of it (below). A simple idea I’ve never seen before.

The thing I like just as much is that this is clearly not a new technology…. the Romans probably invented it. Proving again that innovation is an attitude and there are probably a thousand low cost ways any of us could employ tomorrow to wow people. This certainly got me talking.


cafenatics 2

cafenatics 3– – –

The curious thing is that, their coffee is what I came for, and their mist cooling system is the story I left with.