There Are Numbers Less Than 1%

from the reasons-to-buy... dept

I've pointed out in the past, that any time you hear a company talk about their business model in terms of "if we only get 1% of that market... we'll still be huge," you should run away (and, it's even more ridiculous when you hear some talk about 10% or 15% of a market). This is top down thinking, but it's not how businesses work. There's no guarantee of any percent. Instead, any business needs to focus on bottom up reasoning -- explaining why the very first person will buy. Then the second. Then the third, and so on. Taking the top down approach is wishful thinking. It's making a huge assumption that people will just buy. Taking the bottom up approach is actually building a business. It's recognizing who the customer is, what they want and how to best get it to them. It's tempting to do the top down approach, because it looks so tantalizing and easy. But business isn't easy. It's hard work.

I'm reminded of this, with a submission from JohnForDummies about a Derek Sivers blog post, discussing a musician friend who took out an ad in a magazine with 1 million subscribers, repeatedly saying:

"If only one percent of the people reading this magazine buy my CD... that'll be 10,000 copies! And that's only one percent!"

But, as the musician learned there are numbers much smaller than 1%, as he ended up selling just 4 copies of the CD.

This is, in some ways, similar to the give it away and pray business models that we sometimes see people trying. Giving stuff away for free is a good part of a business model, but it's not an entire business model by a longshot. Anyone looking to use free as a part of a business model also needs to go further and do the hard part, the bottom up part, where they figure out how they're going to get anyone (not a percentage, but specific people) to actually find something worth paying for on its own. Because $0 from a million people is still $0. But, reaching 1,000 people with something of value that they want and can't get any other way... that's the start of a business model.

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OLPC Finally Decides to Open Source Its Hardware

from the it's-about-time dept

The many travails of the One Laptop Per Child program have been widely chronicled - after developing a robust, innovative laptop for the developing world, Nicholas Negroponte's educational project failed to garner the reception he expected. One of the main reasons for this was OLPC's belief that the market could not do better than their small project: instead of seeking the best products for the children of the developing world, competition was anathema to the OLPC group.

But news that the hardware from OLPC's second version, XO-2, will be open sourced, gives hope that things are starting to change. Speaking to the Guardian, Negroponte says, "The XO-1 was really designed as if we were Apple. The XO-2 will be designed as if we were Google - we'll want people to copy it. We'll make the constituent parts available. We'll try and get it out there using the exact opposite approach that we did with the XO-1." Open hardware is an exciting new arena for innovative designs and, by embracing it, OLPC will create a new opportunity for entrepreneurs to create the best laptop for the developing world (or even the developed world). Also, instead of picking an established manufacturer from East Asia, open sourced hardware specifications will allow the developing world's emergent technology industries to compete, strengthening the communities OLPC seeks to assist.

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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OLPC Is A Cathedral But OLPC Tech Is Fleeing Into The Bazaar

from the top-down-or-bottom-up dept

From the outset, one of the oddities of the One Laptop Per Child project has been the tension between its organizational philosophy and its software platform. In his famous essay, "The Cathedral and the Bazaar," Eric Raymond contrasted two organizational philosophies for developing software. In the Cathedral, software projects are organized in a top-down fashion, with the development process following a plan carefully developed by the project's leaders. In contrast, the philosophy of the Bazaar is to "release early and often, delegate everything you can, be open to the point of promiscuity." The OLPC project was a strange beast because it was clearly organized on the "Cathedral" model, yet it was developed around Linux, the open source project that Raymond used as the poster child for the "Bazaar" style of development. And its broader vision of empowering third-world kids to use the laptops without a lot of central support, is clearly more Bazaar than Cathedral.

I think many of the problems we've noted with the project stemmed from this fundamental conflict of visions. Nicholas Negroponte's vision for the OLPC organization has always been the model of the Cathedral: produce a perfect laptop on the first try and sell it in batches of a hundred thousand to the world's governments. Negroponte's plan left little room for the kind of development growth, bottom-up participation, and trial-and error that characterizes the Bazaar. Indeed, even when customers were beating down the door to try out Negroponte's product, he resisted selling it to them because it conflicted with his vision. And of course, he absolutely hated the idea of his customers having other options to choose from.

This tension was never sustainable, and indeed there are increasing signs that OLPC's innovative technologies are being steadily liberated from the Cathedral. In January, we noted that one OLPC alum was starting a new firm to commercialize the OLPC's display technology. Now CNet notes that another OLPC alum, Walter Bender, is starting a new software spinoff to license OLPC technology to a variety of laptop manufacturers. Bender's decision to start a new company was presumably sparked by Negroponte's decision to run OLPC more like Microsoft, which one engineer claims involved demoting Bender in favor of someone with less technical expertise.

It seems that the folks who have left OLPC have a more Bazaar-like vision for their companies, licensing their technologies to a variety of companies. In contrast, Negroponte seems to be doubling down on the "Cathedral" model. He's reportedly considering a switch from Linux to Windows. That would be oddly appropriate given the apparent similarities between Negroponte's management philosophy and Steve Ballmer's.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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CIOs Need To Learn To Enable, Not Lock Down, Technology

from the just-different dept

Information Week is running an article about the difficulty some CIOs are having with the fact that just about everyone is at least somewhat tech savvy these days -- often just enough to be dangerous. Combine that with the rise of online software in the "Enterprise 2.0" realm and the ability for technology to bubble up rather than come from the top down, and CIOs are finding that their job is changing in ways that they didn't fully expect. Some certainly don't see it as a problem, just a different kind of challenge, but it definitely seems like the very role of the CIO needs to change in some significant ways. Rather than managing all of the technology infrastructure of a company, they're going to have to figure out a way to focus more on enabling other parts of the organization to use technology effectively and efficiently. Obviously, letting individuals or even individual groups in the company set their own tech policy can lead to some problems, but it also opens up the ability for more creativity and new types of communication and apps to bubble up in a more useful manner. This reminds me of a post by Chris Anderson over a year ago. When he was asked to speak to a group of CIOs, he was amazed at how scared they appeared to be by modern technology, rather than energized. There was fear, he noted, that the position of the CIO could soon be extinct. If they're not willing to recognize how the world is changing, then perhaps that's appropriate, but there's no reason why a modern CIO can't focus on the enabling side, rather than the "lock everything down" view of the world.

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Technology Will Change Politics From Top Down To Bottom Up

from the but-it-won't-be-pleasant-in-the-meantime dept

Sometimes people wonder why so many people in the tech industry tend to fall into more of a "libertarian" viewpoint on things. Perhaps it's because they realize the empowering nature of technology to do away with the need for many more centralized top down structures. The reason that we often have big top down structures is because there was no efficient way to spread the control outwards, so you consolidate power at the top allowing someone else to make decisions for a large group of people as their "representative." However, technology erodes some of that, by creating more efficient means of communication, breaking down the need for such top down control. We see it many different aspects. Companies today are more fluid, with a much more bottom up approach. Products and services that involve a bottom up approach are becoming more popular (and more useful) every day. So it's only a matter of time until the same thing happens to the government.

It's almost surprising to find out that there's a high ranking politician who recognizes this. Apparently the UK's Tory leader David Cameron made exactly that point, noting that politicians need to let go, and let the technology distribute tasks out to citizens, rather than trying to control everything centrally. Of course, it's one thing to say it and another thing altogether to do it. Those who came up through the "old" way, which grants more power and control at the top freak out at the idea of giving up that control. You see it today with the way Microsoft reacts to open source, the way the RIAA reacts to Napster, to the way newspapers react to citizen journalism. They close up, circle the wagons and talk about how important that control is -- though, not in those terms exactly. Instead, they trash the quality of the more chaotic bottom up system, missing the point that it's not about the average quality, but the the abundance of options that make quality more personalized. The same thing will happen in politics as well. Many people get into politics (or get hooked on politics) because of the power that comes with it. Getting them to give up that power won't be easy by any means. But it will happen. It'll just mean a period of rather painful adjustment.

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