Losing control to gain control

In a guest post at GigaOm, Robert Young reacts to this post and draws out a convincing argument for why corporate executives have to lose control to consumers — who aren’t customers but are the boss — so they can, in the end, gain control. Hard to summarize: Just go read.

  • http://www.bloodandtreasure.com Noel Guinane

    I read Mr. Young’s article and fundamentally disagreed with many of the points he puts forward.

    He opens by saying:

    The thing that I find most compelling about the Internet, as a whole, is its power to turn well-rooted, traditional business norms upside down on its head.

    Traditional business norms? Like what? Listening to your customers? Offering an honest service? Managing distribution channels? Advertising? How does the Internet turn these traditional understandings upside down? Brings them more into focus and improves them I agree, but turns them on their head? I don’t think so.

    Mr. Young proceeds to draw the following conclusion:

    As a result, there is very high value in the ability to think about strategic matters in counterintuitive fashion.

    Counter-intuitive fashion? A business won’t make money if its products or services don’t appeal to customers which is common sense and not in the least bit “counter-intuitive.” There are exceptions, like Microsoft, for example, whose products are buggy crap and people buy them anyway because conventionally, that’s what everyone else does. But the second that convention disappears, people will stop doing business with Microsoft and be glad to be rid of them. I consider Microsoft’s strategic thinking to be “counter-intuitive” since they release crap products full of bugs that frustrate the hell out of their customers yet Microsoft still makes money, and they do that because they have a large installed base and can get away with taking advantage of it, for now at least. So even their logic isn’t entirely “counter-intuitive”, just crappy, like their products, as I’ve mentioned three times in this paragraph. ; )

    When you look at the Internet the way Google does, the things they’ve done are not “counter-intuitive”. Every businessperson needs an inspiration, but it isn’t a “counter-intuitive” inspiration. If you didn’t think your idea would make money, you wouldn’t do it, so obviously there has to be a logical thread there. That Mr. Young can’t see that thread doesn’t make it “counter-intuitive.”

    Mr. Young continues:

    There’s a certain level of what … I will refer to as cognitive dissonance when you run a business based on community.

    Run a business based on community? You run a business based on customers, not communities. I’ve run and currently run businesses (online and offline operations) and none of them were or are “communities.” I love my customers, but my customers essentially have nothing to do with each other. It’s not a “community.” It’s a business. Blogs are not businesses, not yet anyway, though they can be a tool that supports a business and when more of them become businesses, i.e., generating profits, they’ll be businesses first, “communities” second. In my opinion, the “community” notion will be a marketing ploy. Open source software organizations like WordPress I’d class as communities. If the time comes when WordPress starts charging for its software, it’ll become a business first, a “community” second, as Six Apart has done.

    eBay is not a community; it’s a marketplace that combines a Better Business Bureau with lots of little trading operations. eBay skims the cream. We can imagine we’re all part of a “community” if it makes us feel more secure, but we’re really part of a large marketplace where ‘Let The Buyer Beware’ is simply the easy matter of checking feedback.

    Backing up the community theme, Mr. Young then says:

    And that’s that you quickly realize that the members of the community feel strongly that the service belongs to them, and the control that you, the corporation, think you have is actually, in large part, an illusion.

    and

    To do anything that would suggest that you, as the corporation, owns and controls the service (and in effect, the community) is, well, akin to heresy.

    We can complain about Yahoo buying Flickr and not like the changes Yahoo want to make, and even though I’m no great fan of Yahoo these days, it is their right to request Flickr users to sign up to Yahoo and it is the right of Flickr users to say “up yours!” and take their business elsewhere. A little inconvenience maybe, but nothing more.

    The point is that there is no “illusion” here or new “mindset” required, as Mr. Young is suggesting. Everybody knows that a business that buys another business (whether it’s an internet-based business or a market stall in Canada) has control over the asset they’ve purchased. They also know that if they do anything to drive enough customers away, it ceases to be an asset. Listening to what your customers want is the first priority of any business, or it should be anyway. (Microsoft, Dell, are you listening? Probably not. But they will when their profits feel the strain though I’m betting that publicly they’ll blame the economic climate or the upcoming Asian tigers … anything but themselves). The “mindset” is the same as it has always been: satisfied customers.

    Mr. Young goes on to say:

    So as time goes by, the foundation of ownership and control for content and distribution is increasingly shifting from corporate entities to people and communities.

    All businesses are founded on the same principles and the control of the content and distribution will always be with the business. The better the content and the distribution, the more customers the company will reach and the more successful it will be. We may be better informed and our standards may be rising, but we cannot control directly how a company produces their content or distributes it. Indirectly, we can influence their decisions, but they have to decide to be influenced. If a company produces crap, like Dell or Microsoft (fourth use of the word ‘crap’ with regard to Microsoft! Sorry, folks, I can’t stand shoddy work), they can no longer hide as easily or as long behind their polished public facade. The Internet has not fundamentally changed how business is done; it just makes doing business and sourcing information faster and easier.

    Finally, I’d like to quote the conclusion of Mr. Young’s article:

    In my view, if there is one company that seems to grok such dynamics better than anyone, and is in the process of executing superbly against these new set of challenges, it’s Yahoo!

    I can only speak from personal experience with Yahoo. I think Yahoo! used to be great, but are now embracing the trends of their less honest, grubbier competitors. Four years ago, I signed up to a web hosting service with them. Recently, they introduced major upgrades, offering ten times the bandwidth and storage for less money than their old plans, which I had agreed to. When I went to upgrade, I was told that this plan was not available to existing customers and that if I wanted it, I would have to pull down my website and lose all of our e-mail. Apparently, they do not have the capability to transfer my website and e-mail files because their new offer is being hosted on a different server. Yet by some miracle they are able to bring in your email account if you are doing business with a competitor. Why are they punishing loyal customers? Do they want to drive me elsewhere? I think the answer is yes and that’s exactly what I am going to do.

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