Market Segmentation? Product vs Job-to-be-done

"Marketers should think less about market segments and more about the jobs customers want to do..."
This is what Harvard Professor Clayton Christensen affirms! Does it ring any bell to you? Do you have to go back to college and check all the marketing material again? No, you don't.
This idea of understanding the job-to-be-done by the customer rather than the customer himself comes from results of research conducted by Clayton.

"The idea that we should focus on understanding the customer and give the customer what she needs actually contributes to the failure of new innovations. The unit of analysis in coming up with great ideas are the jobs that are sitting out there needing to get done for which our products or services might get hired"

Listen to Clayton Christensen Milkshake example:

 "I wonder what job people hire a milkshake to do for them..."
"...it turns out that the competitor is not Burger King milkshakes but bananas, donuts, bagels, and snickers bars"

The new age of MOLO has come!

What are the different ways that companies are thinking about linking those two things: the ad or the offer, and the payment, and how does mobile change that?

 

Google has "a lot" of experiments in this area (Google has recently hired two senior managers from PayPal, who were working on mobile commerce services.). On May 27th PayPal filed a lawsuit against Google and two of its executives for stealing trade secrets! to be continued...

Google considers NFC (Near Field Communication) technology as an important opportunity for Android, and is making a big bet on it as a company. There is a lot of potential here.

What is Google belief on mobile commerce?
"we're going to see a real transformation in the mobile local space and how consumers interact with merchants, with service providers. We call it the age of MOLO - mobile local. And, we envision that consumers will be able to walk around and get offers nearby, and so we have several different offers products", said Google's VP of commerce Stephanie Tilenius at Techrunch Disrupt 2011.

She also announced a "mobile open and local" (MOLO) system for near-field communications (NFC) payments via smartphone, to be rolled out in New York and San Francisco for field testing.
Google is partnering with Citi Mastercard, Sprint and First Data to create a "Google Wallet" designed to integrate online payments and mobile shopping. The virtual wallet app will be available in the coming months through major retail partners which include Macy's, Walgreens, Subway, and Toys R Us.
The company stated that it is in negotiations via its partners with thousands of retailers around the globe to create an ecosystem for the Google Wallet.

There is a ton of activity around NFC in international markets, as an example, a successful trial of the technology that Starbucks ran in London. 

Not to mention that Mobile payments have been used for many years now in Japan.

Will it take off in europe and the US? I believe it will, it's just a matter of time to find the right model.

goRaiseFund.com, a brillant Internet Service idea, for individual fundraising

goRaiseFund.com

iInnov, a Sweden-based Internet Innovations company has launched recently - a brillant idea - with goRaiseFund.com, a new free internet service that allows individuals (and organizations) to raise funds; simply, conveniently and affordably. The service provides a social network platform for fundraisers worldwide as well.


Why is it a brillant idea? there are several reasons...

1. The service expands the community of fundraisers: Effective fundraising will no longer be the exclusive activity of NGO's, big organizations/institutions like UNICEF, the Red Cross, and other organizations.
   The service of goraiseFund.com allows any individual to login and to create his/her own fundraising project to support his/her cause.
   
   
2. The service expands the objectives of the fundraising act: Fundraising is mainly known as a tool for humanitarians. The service of goraiseFund.com provides the possibility to any individual to raise funds. The cause does not matter.
   As shown on goraiseFund.com website, you can raise fund to buy a $500 birthday gift to your grandma who will turn 80 soon.Similarly, You can raise fund to support your best friend's parents with the expenses of the coming expensive surgery operation of your best friend.
   
   
3. The service creates a worldwide community of fundraisers: The service will create ties between all the fundraisers worldwide, as it offers a complete social network platform with all the needed functionality like email, chat, sharing of photos, videos, articles, etc...

The sky is the limit!

• Every fundraising project created still needs the approval of goraiseFund webmaster before it is activated.
• The service is open to all population between 13-100 years.
  In fact the service is targeting the 13-30 years old segments.

No fundraising action is too small, every action matters, either by being fundraiser or donor you will make the world a little bit better!


Why not try it? Let your friends, family, sons and daughters support their cause! 
goraiseFund.com, your way to a better world... is also a very appealing slogan.

I will follow it...

Impact of Cloud Computing on the Telecom Sector

Cloud computing will most probably affect the telcos in three ways according to the available Business & technology litterature:

3way impact



Value chains

Today, a number of telecom companies are differentiating themselves from their rivals through their unique product offerings and bundling of services.

The Cloud providers can provide efficient services using telcos infrastructure, technology and procurement at a relatively reduced cost. The telcos can utilise the services of Cloud providers and, combined with telcos capabilities, offer advanced value proposition to their clients. The telcos have the potential to develop incremental revenue streams from the application providers and the application consumers. Through technological innovation, telcos will provide telecom services, application services and other data services.

Today, the telecom market is dictated by the consumers, due to increased competition and customer’s changing requirements. Besides having their primary focus on customer intimacy and relationships, telcos are looking to leverage on the operational excellence; and the adoption of cloud computing technology as a strategic move could be beneficial. This facilitates telcos to restructure their internal capabilities and infrastructure, to provide a cost-efficient solution to their customers.

Through innovation in technology, telcos have the opportunity to create new market boundaries and create new value curve with new portfolio. Telcos can become core ICT providers, a network-centric business through data centres, or service-oriented developments. Hence, the innovation in Cloud Computing can substantially affect the value chain of the telecom operations.

For e.g. AT&T, BT, Orange 

Operating Model

Cloud computing creates the need for new organizational structures and processes, and new strategies. Telcos are excellent in tightly managing their procurement process and negotiating longer term contracts with vendors and suppliers.The challenge for telcos will be to internally and externally decentralize purchasing and decision power because the essence of Cloud is agile service re-configuration and sourcing. Telcos will also have to take a fresh look at the level of ICT innovation. Telcos will have to align and adapt their organization by creating strong cross-functional interfaces and organization flexibility.

These changes have an imperative effect on the telecom operating model in the OSS (operating support systems) like Customer service operations and Network operations. The operational support services like order fulfilment, service configuration, resources provisioning and Invoice Billing are becoming increasingly complex with millions of subscribers involved with variety of products. Hence the operational cost to handle them is high. Further to that, the infrastructure needed to cater to the increasing customer base, can lead to increased financial overhead.

The implementation of Cloud computing incurs minimal capex as this infrastructure is owned by the cloud providers. This will lead to decreased capex, as these are converted into opex, thereby saving costs in the balance sheets, resulting in lower operating profit taxes.

The shift from a capex to an opex organization is leading to development of new business models. The telcos operating model has to be restructured in order to incorporate cloud computing.

The adoption of cloud computing can have a significant effect in the Strategy, Infrastructure and Operation by improving the cost structure through operational excellence and economies of scale.

Strategic Alliances

Implementing cloud computing technology paves way to strategic alliances between

Telecom and IT firms. Telcos have been considering in leveraging the economies of scale by sharing the infrastructure, particularly the network resources. Network sharing is gaining popularity as the drive towards cost-control intensifies and will continue to gain momentum as mobile operators seek to reduce their capex and opex burden, but the network itself will remain a key point of differentiation for operators.

The growth of the cloud is providing fertile ground for new forms of collaboration between vendors. Vodafone and Decho decided to offer both businesses and consumers cloud based backup services of allowing users to securely store their documents externally and be able to access them from a web browser from any device.

The IBM and Juniper relationship is another evidence of growing importance of the high performance network in the progression of data centres towards cloud infrastructure. Both companies agree that high-performance, secure network is vital to the operations of both the data centre (enabling service production) and the global network.

Forming strategic alliances with the cloud providers can help telcos to collaborate, and create a win-win working model through a portfolio of managed services. This will enable telcos to meet the new demands of their customers and will help them focus on their core competencies, and leave the backroom operations, and other non-critical services, to the cloud service providers.

More to come on this topic soon...


Founder & CEO goRaiseFund.com

Techcrunsh bound to be crunshed by AOL?

What's happening at Techcrunsh?


Techcrunsh blog became too big, too influential, particularly in the start-up business. 
Financial interests and conflicts between editorial management, who is accused of starting up venture capitals and promoting their own business via Techcrunsh editorial line, and Techcrunsh owners  are about 


to bring an end to a successful blog that became too big to be just a blog.

read moreTechcrunsh, the end?

Are you an Executive with an "Innovator's" DNA?

A great research topic from three prominent professors, who spent a rich professional academic life in analyzing innovation from business and human perspective; Jeffrey H. Dyer, Hal B. Gregersen, and Clayton M. Christensen

In December 2009 they have published the results of their research in a famous HBR article "HBR article "The innovator's DNA". 

Now they publish a book to master The innovator's DNA

It took them a six year study to uncover the origins of creative—and often disruptive—business strategies in particularly innovative companies. They studied the habits of 25 innovative entrepreneurs and surveyed more than 3,000 executives and 500 individuals who had started innovative companies or invented new products.

What does their research show? There are five discovery skills that distinguish the most innovative entrepreneurs from other executives:

Skill 1: Associating - the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields

Skill 2: Questioning - Innovators constantly ask questions that challenge common wisdom. Ask “Why?” and “Why not?” and “What if?”

Skill 3: Observing - Discovery-driven executives produce uncommon business ideas by scrutinizing common phenomena, particularly the behavior of potential customers.

Skill 4: Experimenting - Like scientists, innovative entrepreneurs actively try out new ideas by creating prototypes and launching pilots.

Skill 5: Networking - Unlike most executives—who network to access resources, to sell themselves or their companies, or to boost their careers—innovative entrepreneurs go out of their way to meet people with different kinds of ideas and perspectives to extend their own knowledge domains.

"...We were intrigued to learn that at most companies, top executives do not feel personally responsible for coming up with strategic innovations. Rather, they feel responsible for facilitating the innovation process. In stark contrast, senior executives of the most innovative companies—a mere 15% in our study—don’t delegate creative work. They do it themselves."

"...innovative entrepreneurs (who are also CEOs) spend 50% more time on these discovery activities than do CEOs with no track record for innovation..."

Listen to the recent HBR interview of Jeffrey H. Dyer, elaborating on the innovator's DNA.

Spotify, a threat to Apple ITunes coming from Sweden, not Silicon Valley

The Swedish online music Spotify announced its launch Thursday July 14th in the United States. 


A first foray outside Europe, after an agreement with U.S. music industry. "Spotify, the digital music service cherished by millions of Europeans will be available Thursday morning in the U.S. by invitation or subscription," said the Enteprise in a statement.

Combining free (Open) and paid (Premium, Unlimited) offers, Spotify counted in March more than 7 million users with 1 million paying customers in seven European countries: Sweden, Norway, France, Finland, United Kingdom, Spain and the Netherlands.

Founded in 2006, the Swedish service is a leading music services online in the world. Spotify is becoming one of the major threat for Apple ITunes music.

And most importantly it is proving that Silicon Valley-born services and business models are not a holy grail...

The amazing FALL of MySpace! Who's next?

MySpace, do you remember it yet? MySpace has invented Social networking when it was launched.
So many artists, entertainers, businesses have used it and even made a starting career thanks to MySpace.
In 2005, MySpace had almost 100 millions subscribers, FaceBook was nothing then.
Sold for more than 500 MUSD only 6 years ago. This week it did not exceed the 50 (fifty) MUSD!!

What a fall! What happened? Business analysts can argue with several strategy mistakes,
but I personally think that in this business nothing is taken for granted. Nothing can last for ever...
If a company does not disrupt itself, it will be definitely disrupted by someone else.
That is the rule of fast Internet business. And it should be written in stone!

So my question, who do you think will be the next one to fall? FaceBook, Google, others?

see also my post on Facebook vs. Google

What are the personality traits of Top Sales people?

Steve W. Martin presents in his recent HBR blog interesting findings from the results of personality tests he presented to high technology and business services salespeople as part of sales strategy workshops he has conducted. Below, I have summarized and copied the main key personality attributes of top salespeople and the impact of the trait on their selling style.

 .

1. Modesty. 91% of top salespeople had medium to high scores of modesty and humility.
Selling Style Impact: Team Orientation. top salespeople position the team. You dont have to be arrogant and selfish to be a top sales person

2. Conscientiousness. 85% percent of top salespeople had high levels of conscientiousness. Have a strong sense of duty.
Selling Style Impact: Account Control. Top salespeople take command of the sales cycle process.

3. Achievement Orientation. 84% of the top performers are fixated on achieving goals.
Selling Style Impact: Political Orientation.They strategize about the people they are selling to and how the products they're selling fit into the organization instead of focusing on the functionality of the products themselves.

4. Curiosity. 82% of top salespeople scored extremely high curiosity levels.
Selling Style Impact: Inquisitiveness. An active presence drives the salesperson to ask customers difficult questions.

5. Lack of Gregariousness. Top performers averaged 30% lower gregariousness than below average performers.

Selling Style Impact: Dominance. Dominance is the ability to gain the willing obedience of customers such that the salesperson's recommendations and advice are followed.

6. Lack of Discouragement. Less than 10% of top salespeople were classified as having high levels of discouragement.

Selling Style Impact: Competitiveness. Top performers are able to handle emotional disappointments, bounce back from losses.

7. Lack of Self-Consciousness. Less than 5% of top performers had high levels of self-consciousness.

Selling Style Impact: Aggressiveness. Top salespeople are comfortable fighting for their cause, action-oriented and unafraid.

Reference: Steve W. Martin teaches sales strategy at the USC Marshall School of Business. His latest book on sales linguistics is Heavy Hitter Sales Psychology: How to Penetrate the C-level Executive Suite and Convince Company Leaders to Buy.

How To Make your message Stick and How to create a buzz?

Here are some tips to use in order to make your message stick.
You may be a corporate executive manager or an individual.
Make your message Simple. Make it Unexpected. Make it Concrete. Provide Credentials. Make it Emotional. Use Stories.
Make it S.U.C.C.E.S.S !!!

Below are seven principle to make a buzz in your organization or around you.

Simple - The first princile is simplicity. One of the most basic principles of cognitive psychology is that the channel capacity of human attention is somewhere around 7 +/- 2 bits of information.
Keep your ideas fairly simple!

Unexpected - The second principle is unexpected. Announcing that the end of the world is on May 13th. That’s unexpected.

Concrete - The third principle is concrete. “We only use ten percent of our brain”. That's concrete.

Credentialed - The forth principle is credentialed. All ideas, all stories, all legends, come with informational credentials. It may be in the form of specific details.

Emotional - Next principle is emotional.What makes legends successful? they have an emotional component.

Story - Next principle is story. We all remember every story that we have been told.
That's why storytelling is one of the most efficient tool component in marketing & Communication strategy.

That Sticks - The final principle is to use what sticks. Make your message simple. Make it unexpected. Make it concrete. Provide credentials. Make it emotional. Use stories.


Founder & CEO goRaiseFund.com

Who will win the battle: Google or Facebook?

The battle between the two giants of the Web has accelerated and is about to reveal a bloody fight.

Battle: Facebook vs. Google

At first glance, Facebook and Google look very similar: both created by students from a prestigious American university,  keeping a start-up spirit, leading the same battles for transparency and free internet, generating revenues by selling advertising.

Their model is however very different: To know the behavior of people, 

Google claims to help people in their professional, academic or private search, phone calls, web navigation, etc...

Facebook wants to help everyone to engage with others and for that, trying to become the standard system login, sharing links, comments from other sites as well.

Today, Google seems to prevail: The firm is valued $190 billion, that is 5 times more than Facebook.
But the dynamic is rather on the side of Facebook, peoples spend more time on Facebook than Google (average of 41 million minutes per month as against 40).

Data mining and qualitative superior data
A major difference appears to be though, in the quality of the data available to Facebook and Google
Facebook’s data allows it to do more than just guess what its customers might be interested in; the company’s data can help it know with greater certainty what its customers are really interested in.
If Google’s business has been built on choosing which Web pages are most likely to appeal to any given anonymous query, Facebook already knows, for the most part, which pages appeal to whom.
And this key difference could potentially give Facebook a tremendous advantage in search function.

So guess what could be the Facebook "killer app"...

Will Facebook go in this direction?
Will the developers community provide this to Facebook?

India, an emerging economy who hates girls!

7 millions of new born girls are left out, all alone, in the bushes of rural India.
Yes read well! 7 millions! and maybe even more?!!

Why on earth a country (and people) that is, desperately, positioning itself as one of the new economic power, - and, purportedly, member of the so-called BRICS countries- still does not tacle this serious, segregationist, gender-hatred, medieval tradition?

Why is having a boy is still considered a gold mine? Why kill a future Indira Gandhi?

The Times of India:
"Even as the world celebrated the Women's Day on Tuesday, a newborn girl child died after being abandoned by her parents. The girl was mercilessly thrown into bushes soon after the birth. She was found by a couple who got her admitted to hospital where she died after battling with life for almost 12 hours.
Kumar heard a child crying while he was on his routine morning walk at Shubham Vihar colony near Munshipulia. He found an innocent baby with umbilical cord lying amid thorny bushes without even a piece of cloth. Her body was full of insect bites. Kumar and his wife rushed the baby to Ram Manohar Lohiya Hospital where she was diagnosed with `hypothermia' (low temperature) and breathing problem. She was put in the intensive care unit (ICU) but despite best efforts of doctors, the baby did not survive for long."

The end was tragic.

Abandoning newborn girl child is becoming usual in India; if they are not abandoned in the bushes, they are -if lucky- abandoned in orphan houses.

Why Indians, Government and people, this "emerging" economic power does not act upon this horrible, segregationist plague?

Is Groupon Business Model profitable for Merchants? for Consumers?

Best known among voucher vendors is Chicago-based Groupon, a 2,5-year-old startup already touting a ten-digit valuation and, purportedly, recently rejecting a $6 billion acquisition offer from Google (should have they really?).

Groupon business model is illustrated below using Osterwalder’s canvas.

Groupon Business Model

Hundreds of websites offer discount schemes similar to that of Groupon.
Many studies, from both academics and business activists, have been conducted on the Groupon business model profitability for merchants and consumers. See references at the end of this post.
The results of the studies were not totally rosy to a certain category of merchants, and consumers.


Here is a summary of some of the concerns:

Consumers:

The discount vouchers service presents many intriguing questions: 

1. merchant goes bankrupt after issuing vouchers but before performing its service?
2. What happens if a merchant simply refuses to provide the promised service? 
3. Since vouchers entail prepayment of funds by consumers, do buyers enjoy the consumer protections many states provide for gift?
4. Must consumers using vouchers remit tax on merchants' ordinary menu prices, or is tax due only on the voucher-adjusted prices consumers actually pay?
5. What prevents consumers from printing multiple copies of a discount voucher and redeeming those copies repeatedly?

Merchants:

merchants considering whether to offer discount vouchers, the most important question is the basic economics of the offer: Can providing large voucher discounts actually be profitable?

Voucher discounts are worthwhile if they predominantly attract new customers who regularly return, paying full price on future visits. But if vouchers prompt many long-time customers to use discounts, offering vouchers could reduce profits.
For most merchants, the effects of offering vouchers lie between these extremes: vouchers bring in some new customers, but also provide discounts to some regular customers

The findings of an academic study of Rice University from 2010, 
from 150 Groupon businesses in 19 cities 66% profitable; 32% unprofitable.

• Restaurants were the most unprofitable category, describing Groupon customers as "entitled," poor tippers, and definitely not repeat customers.
• Spas, on the other hand, were the most profitable
• 42% said they would not use Groupon again

The recommendations include: selective, partial offers, designed to link to repeat behaviour.

References:

http://www.blogs.ubc.ca/paulcubbon/

http://mashable.com/2010/08/19/gap-groupon/
Harvard Business School: http://www.hbs.edu/research/pdf/11-063.pdf
http://primitus.com/blog/whats-the-secret-success-of-groupon/
http://www.ruf.rice.edu/~dholakia/

Why Most Product Launches Fail?

An interesting HBR article from Joan Schneider and Julie Hall and interview.

40 ways to crash a new product launch:

Pre-Launch Phase

1. No market research on the product or the market has been done.

2. Most of the budget was used to create the product; little is left for launching, marketing, and selling it.

3. The product is interesting but lacks a precise market.

4. The product’s key differentiators and advantages are not easily articulated.

5. The product defines a new category, so consumers or customers will need considerable education before it can be sold.

6. The sales force doesn’t believe in the product and isn’t committed to selling it.

7. Because the target audience is unclear, the marketing campaign is unfocused.

8. Distribution takes longer than expected and lags behind the launch.

9. Sales channels are not educated about the product and thus slow to put it on shelves.

10. The product lacks formal independent testing to support claims.

11. The marketing campaign is developed in-house by the manufacturer and lacks objectivity.

12. The product is untested by consumers; only the company can assert its benefits.

13. The website is the primary place to order, but the product description is unclear and the site isn’t fully functional.

Launch Phase

14. The product is launched too hastily and doesn’t work reliably.

15. The launch is aimed at the wrong target audience.

16. Supplies of the product are insufficient to satisfy orders.

17. The product is launched too late for its key selling season.

18. The product doesn’t fit into any key selling season.

19. The manufacturer’s claims can’t be backed up.

20. A governing body (the FTC, the FDA) pulls the product, citing false claims.

21. The product is given a limited “trial at retail” but without public relations, marketing, or promotion to “turn” it.

22. The product is launched without influencers to promote its efficacy.

23. The launch budget is insufficient to “pull” the product off the shelf.

24. The product has no trained spokesperson to educate the media.

25. Management launches the marketing campaign before distribution is complete.

26. Management has promised the board and stockholders an instant hit without considering how much time is needed to educate consumers about the product.

27. The ad campaign is untested and ineffective.

28. The launch campaign depends solely on PR to sell the product.

29. The company spends the entire marketing/advertising budget at launch, so no funds are left to sustain the campaign.

30. Company executives underestimate the value of Twitter and Facebook.

31. Retailers are given no incentives to feature the product.

32. All marketing dollars go to advertising and public relations, none to social media.

33. Line extensions aren’t test-marketed as thoroughly as the original product, so they fail.

34. The product is launched to capitalize on a fad that soon fizzles.

35. The product design is unique but confuses consumers, who don’t understand how the product works.

36. The spokesperson is a bad fit with the product, creating a discordant message.

37. The product is priced too high for mass adoption.

38. Consumers are unclear about what demographic the product is geared toward.

39. The product is manufactured offshore; quality control issues result in negative consumer feedback and product returns.

40. The ad campaign is launched before the sales force is fully briefed, so customers know more than salespeople about the product.

JOIN The Stockholm Business Model Design and Innovation Circle!

You are welcome to join and become an active member of the newly created 
Stockholm Business Model Design and Innovation Circle.

Group description:


"The Stockholm Business Model Design and Innovation Circle is a group of academics and professionals from different industries driven by the passion to learn, to share and to debate on Business Model Innovation topics and how to create a better business.

Business Model Innovation is increasingly becoming a hot topic on every manager, leader and strategist table. Business models trumps technology, enables growth and create economic value.

Our ambition is to bring in together successful entrepreneurs and academics in order to create a space for game changers, visionaries and forward thinkers.

We will look at all aspects of ideas that create value for companies, customers and society.

How an idea can become a sustainable business? How an idea can create economic value for firms and society? How an idea can evolve to build up the 21st century capitalism?

Our guest speakers include entrepreneurs, academic and professionals.

We are convinced that being connected and sharing experiences and knowledge will benefit individuals, customers, companies and society."

Join here

Let's plan a first meeting soon!

Why established firms lose their ability to innovate?

There is a recurring question (and observation) regarding the ability of established companies to innovate within their established organization; albeit within their core business or far from their market boundaries.

Harvard Professor Clayton Christensen has tried to explain this phenomenon. His explanations seem sometimes somewhat radical though. Some of the most astonishing ones are the following:

• “The way we teach ‘Marketing’ at school causes innovation to fail.” Amazing, isn’t it? Coming from the mouth of one of the most prestigious Harvard Business School Professor.
• The idea of understanding the customer and give the customer what he/she needs contributes to the failure of new innovation.”
• “The unit of analysis of coming with innovative ideas is “the jobs sitting out there and waiting to be done”, for which our products and services might get hired.”

Innovations in established firms

Every innovative idea pops out of the innovator head in a half built condition, not in the form of a complete business plan.  So the idea has to go into the established process. By the time the idea gets to the market, it has been twisted and shaped to confirm the firm's business model.  Very often companies lose their ability to innovate, not only because there are no good ideas, but because the innovative ideas have to go through the established processes with which the companies are familiar, companies are good at doing; as opposed to confirming and developing a business plan that fits to the market needs.

From Innovative idea to normalized idea 

What type of Market Segmentation?

According to Clayton Christensen, 75% of the products introduced into the market fail. After they have done market research, built business cases, tested the products, etc... Even one of the best among the best companies in Marketing like Procter & Gamble’s, has a success rate in product introduction of around 15%, only 15%!

Why is that? What causes this high failure rate? According to Christensen, it is due to the way companies segment their market into products and customers, instead of to be structured in terms of jobs customers need to get done.

This is how Christensen explains it “When companies look at the market, it appears to be that the market is structured by product category and customer category.  If you’re in the car industry, your market is segmented into SUV, compact, mid-sized, mini vans, etc… they can tell you exactly how big each of those segment is and who’s got what share. They also segment their market by demographic segment 18-34 year old female with or without children or male 18-25; but if you are in the market
 ‘a customer’, that’s not how the market is segmented for you.

That’s not what the market looks like at all.  If you’re a customer, stuffs just happen to you.  Jobs are raising your lives and you hire them to get the job done!”.

Book Review - The New Capitalist Manifesto: Building a Disruptively Better Business

Book Title: The New Capitalist Manifesto: Building a disruptively better business  

ISBN: 978-1-4221-5858-6
Author: Umair Haque

Review: The book is a call for re-inventing the 21^st century capitalism; capitalism with a human face; capitalism that reinvents societal ties; capitalism that no longer divides, exploits and sheds societal disasters wherever it surges. The open-ended consumption model we have today is not sustainable. The book is a call for a capitalism that cares about others; economic, social, environment.

The foreword written by Gary Hamel is a strong support to the call for the 21^st century capitalism. Hagel questions why “…consumers doubt that large corporations are good for society. Why are executives regarded as ethically more inferior than lawyers, journalists or doctors?”

Umair Haque makes strong argument for what 21^st capitalism should look like, in a very passionate style and with strong arguments from different industries. In order to make his case, Umair Haque describes several examples, sometimes with astonishing and sharp analogies; companies like Wal-Mart, Google, Apple, Nike, Microsoft, Threadless, Gap, among others help illustrate different points. In this book, Umair haque uses, as a support to his case, the results of a study performed under his guidance on 250 companies.

Umair Haque introduces a blueprint for building a “disruptively better business”. How?

By throwing away the old cornerstones of capitalism (value chains, value propositions, strategies, protection, and goods) for the cornerstones of a 21st century constructive capitalism (value cycles, value conversations, philosophies, completion, and betters).

Umair Haque demonstrates how current capitalistic practices create what he calls “thin value”; that artificial, unsustainable value that depletes resources and never gets to re-use them or replace them with something better; value that is often created for shareholders at the expense of the people, communities, or society. In contrast, Umair Haque encourages companies to create “thick value”, which is described as generating profits by activities that create sustainable value in the benefit of both shareholders and society.

The book presents a visionary, idealist, realist and human look at how we should create economic value in the future; how we could build up “constructive capitalism”.

The book Chapters:

Chapter 1: The Blueprint for a Better Kind of Business sets the scene and makes the argument that the current type of capitalism is not sustainable. Haque introduces the concept of thin/thick value and lays the groundwork for how capitalism can go through a revolution to meet the challenges. Thin value is Artificial, Unsustainable, and Meaningless with respectively examples like McMansion, Hummers and McDonald; “Who benefits when we all eat Big Macs?”

The Blueprint for a Constructive Capitalism

Chapter 2: Step 1: Loss Advantage, from value chains to value cycles, this chapter

describes in detail the elements of the first step to become a constructive capitalist and the value cycle– with which Umair suggests to replace the current (Porter’s) value chain - using StarKist and Wal-Mart strategies as an example. “…Loss advantage happens by re-conceptualizing, re-organizing, and re-building production and consumption as a value cycle instead of value chain.” The goal of value cycle is simple: waste nothing, replenish everything.
“Cycles yield a new kind of economy for the 21^st century: economies of cycle.”

The Value Cycle - Umair Haque 2010

Chapter 3: Step 2: Responsiveness, from Value Propositions to Value Conversations is all about gaining agility and ability to engage customers, suppliers and the Market; mastering responsiveness. Don’t dictate Value propositions, hold Value Conversations instead! Threadless business model is used as the main example to support this topic. 20^th century businesses were built on value propositions, but 21^st century businesses are built on a new institution: the value conversation. Participation, Deliberation, association and Dissent are the main pillars for value Conversation.

Chapter 4: Step 3: Resilience, from Strategy to Philosophy, this chapter is about mastering resilience. The ability to evolve by constantly challenging its own business model, products and markets. Google is used as an example of a resilient organization that has the capacity to evolve itself faster than rivals; interesting analogy between Microsoft MSOffice and Google’s data liberation front. “Disrupt yourself instead of protecting yourself.”

Chapter 5: Step 4: Creativity, from Protecting a Marketplace to Completing a Marketplace is about mastering creativity. The chapter discusses the different levels of creativity and how they apply to new ways of looking at market opportunities. TATA, Hindustan Unilever, Microsoft Zune vs. IPod, Sony PS3 vs. Nintendo Wii, this chapter provides good examples on how different the approach is between “protecting a marketplace” and “completing a new one”.

Chapter 6: Step 5: Difference, from Goods to Betters, this chapter is about mastering difference. This chapter is a focus on creating products that support positive outcomes rather than just delivering features and functions. Nike Plus, Nintendo Wii are cited as examples of producing betters. Instead of just producing goods, a constructive capitalist makes betters – bundles of products and services that make a difference to people, communities, and society by having a tangible, meaningful, enduring positive impact on them.

Chapter 7: Step 6: Constructive Strategy, from Dumb Growth to Smart Growth covers how to create constructive strategy and business models based on ideas such as Generosity, Creativity, Resilience, etc. This chapter offers a broader strategic model, starting with the game board tool.

Chapter 8: Constructive Capitalism provides a summary of how the steps and concepts fit together. Specialized definitions are described for an accurate understanding.

Six steps to Constructive capitalism

The Constructive Capitalist Game board, Umair Haque 2010

Conclusion:

The book is complex, profound and academic, but accessible to profanes. The book invites us to think about how the future should look like, what we should stop doing, what we must do more and recommends a blueprint how to do it.

The New Capitalist Manifesto is a “Food for thoughts” book, for strategists and those who are looking to understand; for those who share the noble idea that capitalism should create “economic value” and “thick value” at the same time. 

The book is a must read for anyone wondering what will come next.

The New Capitalist Manifesto is recommended for executives, who want to understand how to compete in the future, and how to help build up the “Constructive Capitalism”.

Question to Umair: What is (or should be) the relation of your “manifesto” and Michael Porter’s “shared value” concept? Shouldn’t you work together to create the best framework ahead?