The New Economics of Social Business is about Enabling Unrealized Value.
I’ve always been fascinated with business models but lately I’ve been on an Economics kick lately. (Scary, I know.) It’s kind of hard these days to be thinking about new types of business models without addressing the larger macro-economic models that are evolving. Some of my light reading:
- Collaborative Entrepreneurship: How Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth by Miles, Miles and Snow 2005
- Content by Cory Doctorow
- Remix: Making Art and Commerce Thrive in the Hybrid Economy by Lawrence Lessig 2008
- Open Business Models: How to Thrive in the New Innovation Landscape
by Henry Chesbrough 2006 - Blown to Bits: How the New Economics of Information Transforms Strategy by Evans and Wurster 1999
- Blown to Bits: Your Life, Liberty, and Happiness After the Digital Explosion by Abelson, Ledeen and Lewis 2008
Yes I discovered the second Blown to Bits when I was buying another copy of the first Blown to Bits. I’ve also been reading a lot of blogs, articles, the recent edition of Wired as well as some of the readings from business school.
Economics has always been one area I’ve been a little behind on. That’s part of the reason why I went back and got my MBA. There’s so much great thinking happening in the field of Economics right now. Between the continued disruption of the Web and the recession everyone’s rethinking all their models (that’s when things get fun).
I’m really looking forward to Chris Anderson‘s new book Free: The Future of a Radical Price
which apperently will be distributed for free via the Web. If you can’t wait you can read Wired’s cover story on the subject.
I’m still trying to wrap my head around all these thoughts (and I’m still wading through most of these books). I wanted to share with you one of the thoughts that came to mind:
The new economic model that all of these previously mentioned authors are talking about in some variation (whatever it ultimately looks like) isn’t about giving away value.
The ‘New Economics’ of Social Business is about enabling unrealized value.
If your company can make money on something you had better do that. Don’t give it away. But every company, every individual, has assets they will never be able to realize (or fully realize) the value of. And in some cases your assets would realize more value if you gave it away and recovered profits elsewhere (advertising, Open Source Software, etc).
From DRM to open co-opetition to the near unlimited capacity of the Internet, if it hasn’t already, your business model will adjust. Even if your business model has already changed it will undoubtedly change again.
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