Product-Driven versus Customer-Driven

I have lost track of the number of times I’ve had conversations about product-driven versus customer-driven businesses in recent years. It’s a distinction that just keeps cropping up, and has featured in every consulting gig I’ve had in the last three years, but surprisingly I haven’t found any treatment of it that satisfies me. So this post is partly an attempt to save myself from future repetition.

The distinction is central to many questions people ask in business:

  1. Which kind of business should you build?
  2. Can you transform your business from one kind to the other?
  3. Is one kind provably better than the other?
  4. How can you tell which kind is which?
  5. Which kind suits your personality?
  6. Can you hybridize the two and get the best of both worlds?
  7. Should you listen to customers?

These questions have been discussed for decades, at least since Henry Ford didn’t make clever remarks about faster horses. So why are we having this conversation with increased frequency and urgency these days?  Two words. Steve Jobs. 

But it isn’t just the inspiring dent-in-the-universe life of Jobs that is forcing this conversation, or even the fact of Apple’s exceptional performance in the market during a decade when many businesses were thrashing about in search of a direction. The reason this debate is at the forefront today is that the life and work of Steve Jobs suggested a set of polarizing, absolutist answers to these questions, which have historically attracted hedged answers beginning with it depends. 

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Love Your Parasites

Parasitism is usually defined as a multi-party ecological organization in which one party benefits at another’s expense, and is contrasted with commensalism (the host is neither harmed nor helped) and mutualism (a type of symbiosis in which both parties benefit). Missing from this triptych are organizations in which a harm is partially offset with second-order benefits.

New research brings a little light to the subject in its analysis of the notorious brood parasites, the common cuckoo. The cuckoo lays its eggs in the nests of other birds, externalizing the costs of raising its young to other species, which bear the burden of feeding and caring for the cuckoo chicks, who compete strenuously with their own. However, it was found that the parasitized nests thrived relative to those left alone by the cuckoo; and this effect was causally related to the cuckoo chicks themselves, as moving the eggs to other nests moved the beneficient effects as well.

It turns out that cuckoo chicks defecate a kind of black, tarry substance that is incredibly toxic and serves to dissuade predators, resulting in net improved fitness for the host species despite the costs.

Ecological thinking is transforming our understanding of the natural world, and is blurring many of the firm boundaries erected under the old paradigms that fetishisized ‘identity’ and assumed in advance the nature of benefit and harm. The world of software seems perfectly poised for ecological analysis, as many of its fundamental concepts parallel those of biological systems (source code as the genotype to compiled code’s phenotype, for instance).

So what would parasitism in software look like?

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Authors and Directors

Sam is a 2014 blogging resident visiting us from his home blog at Moore’s Hand.

I grew up in Michigan, the older of two kids, but the second-oldest of all of my cousins. Every Thanksgiving we would drive to Cleveland for our family gathering, where I would hear about my older cousin Amruta’s exploits, and a couple years later, reproduce them.

She went to Penn; I went to Stanford. She spent a year living in India, I spent two. Post-graduation she started in management consulting; three years later, I followed suit.

Our paths led us both to San Francisco, but while Amruta got a J.D. and became a law associate, I quit my consulting job, taught myself to code, and became a programmer.

If you ask Amruta, she’ll say that the common thread of McKinsey and Big Law has been learning to operate in tough workplace environments. Her one-on-ones at McKinsey gave her detailed personality feedback; she was told point-blank to focus on her assertiveness.

Amruta was receiving training about how to effectively implement ideas in an organizational context — engaging with stakeholders, overcoming opposition, and so on.

My main job perk, on the other hand, is being able to sit on a couch all day and think. I give substantive status reports once or twice a week, as opposed to multiple times a day in consulting.

Amruta is a knowledge worker who primarily implements her ideas in an organizational context. I am a knowledge worker whose ideas primarily execute, and replicate, themselves in browsers and on servers.

We’ll call Amruta’s type Directors and my type Authors.

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Consent of the Surveilled

I’ve been interested in the question of governance under conditions of mass physical mobility for a while. The interest is partly selfish, since I am one of those people with a romantic longing for a nomadic lifestyle. But now, there are better reasons to ask the question.

In 2012, for the first time in history, there were over a billion international tourist arrivals worldwide. Chinese tourists led the way, spending $100B of a market of over a trillion dollars. The data isn’t in yet, but it seems like 2013 might turn out to have been another record-breaking year. And that’s just the beginning. What has started as a tourism boom is likely to end as a secular lifestyle shift enabled by mobile digital technologies. In a few decades, we might be living in a world where at any given time, only half the nominal population of a country is actually living and working in that country. A world with far fewer “vacations” but a lot more (and more extended) travel. At least, I hope that’s the direction we’re headed.

Mobility, especially across jurisdictional boundaries, both domestic and international, is a problem for governments because it interrupts or complicates their ability to govern. This is why the forced settlement of illegible nomadic peoples is an essential part of any serious history of governance.

As Julius Caesar once said, “hold still dammit, so I can see and rule you!”

But thanks to surveillance technologies —  and this is the silver lining to the Snowden affair — soon we might not need to hold still. Those of us who want to might be able to become nomads without dropping out of society.

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Algorithmic Governance and the Ghost in the Machine

This is a guest post by Sam Bhagwat from Moore’s Hand.

 Moore’s Law has granted to 21st-century organizations two new methods for governing complexity:  locally powerful god-algorithms we’ll call Athenas and omniscient but bureaucratic god-algorithms we’ll call Adjustment Bureaus

As an example of an Athena, consider this case:

Eighteen months ago a Buddhist convert in Los Angeles named Rick Ruzzamenti donated his kidney. It was flown on ice on a Continental red-eye, to a retiree in Newark in need of a transplant. The retiree’s niece then sent her kidney to a woman in Madison. The woman’s ex-boyfriend sent his kidney to a secretary in Pittsburgh. The secretary’s boyfriend sent his to a young father in San Diego.

When the chain halted six months later, in December 2012, with a final transplant in Chicago, sixty operations had taken place, enabled by an algorithm that crunched through billions of match possibilities.

And for an example of an Adjustment Bureau, consider this case:

For several months in 2011, including the holiday sale season, JC Penney was at the top of a curious number of Google search results. “Dresses.” “Bedding.” “Area rugs.” “Skinny jeans.” “Home decor.” “Furniture.” Even “grommet top curtains.”

The placement generated huge traffic – 3.8 million monthly visitors just for ‘dresses’ – and  revenue in the tens to hundreds of millions of dollars.  Then an enterprising reporter noticed thousands of paid links in link directories, and brought the matter to the attention of Google’s webspam team, which flagged the site:

At 7 p.m. Eastern time on Wednesday, J. C. Penney was still the No. 1 result for “Samsonite carry on luggage.”

Two hours later, it was at No. 71.

At 7 p.m. on Wednesday, Penney was No. 1 in searches for “living room furniture.”

By 9 p.m., it had sunk to No. 68.

In other words, one moment Penney was the most visible online destination for living room furniture in the country. The next it was essentially buried.

Wide-eyed advocates of ‘algorithmic governance’ (Tim O’Reilly) beware: each god may grant you your local optimization, but their intervention is far from free.

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Deep Play: An Impressionistic Theory of Innovation

I have my second essay up at Aeon Magazine, Deep Play. It’s an attempt at an impressionistic picture of how the world of innovation works.  Here’s an extract:

The EMP Museum, the Gates Foundation, and the MOHAI form what I’ve dubbed the Titan Triangle of Seattle, a zone of violent urban terraforming. Sometimes, on my walks, an absurd image pops up into my head: Bezos, Gates and Allen standing like thousand-foot colossi at the three vertices, hammering away at the earth, with the ghost of Boeing looking on. Violence is the key word here. To scurry about within Titan Triangle is to be struck by the relentless violence — physical, financial, social, and psychological — of a process dubbed ‘creative destruction’. As popularised by the economist Joseph Schumpeter in the 1940s, this is the technology-driven unravelling and cohering of social orders in the human world.

But standing between the EMP Museum and the Gates Foundation, and taking in their opposing visions of innovation, I am equally struck by the fact that the transformative violence of creative destruction still appears to be governed by that apparently intractable question: how can you talk of colonies on Mars when there are starving children in Africa?

Billions of dollars are apportioned according to the logic of that question every year. And one has to wonder, do the financiers of creative destruction operate by better answers than the ones you and I trade at parties?

Without giving too much away, the essay tries to get at the fundamental structure of industrial-age innovation models using a happy/broken families metaphor, with some inspiration from Clifford Geertz’ notion of deep play.

And in case you missed it, here’s my first Aeon essay, American Cloudwhich appeared earlier this year.

These pieces at Aeon have been an interesting challenge: trying to treat themes as complex as the ones I attempt here at ribbonfarm, but in a more accessible way for a mainstream audience. Tough game, since it means doing without random engineering metaphors or too much obscure conceptual scaffolding (the first draft of this essay was a cheerful mess of yin-yang references, genies in lamps etc. which I would likely have let through untouched if I’d posted here).

Am learning as I go along, thanks to my editor there, Ross Andersen.

No time for a full post this week, but this one should keep you busy.

On Lifestyle Rigidity

I’ve been wondering about why lifestyle design, outside of a few special cases like young, single Western men moving to Thailand, is proving to be so hard for everybody trying to adapt to the Internet era. I think the key is what I call lifestyle rigidity, which can be understood in terms of the (informal and speculative) heavy-tail distribution below. 


The central feature of lifestyle rigidity (my informal sociological generalization of the idea of wage rigidity) is what we might call dark energy: the lifestyle energy absorbed by parts of your lifestyle that are illegible to you. My claim is that this energy has increased radically in the last century, making  the leap from Industrial Age to Internet Age much harder than the leap from Agrarian Age to Industrial Age. As a species, we’re carrying a lot more baggage this time around.

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The Mother of All Disruptions

I like thinking about technological disruptions that take place over really long periods of time. This is because the older a technology being disrupted, the more profound the social impact. In my disruption of bronze post, I speculated about one that probably took a few thousand years (iron disrupting bronze) and made spaghetti of the prevailing world order.

I just thought of a potential example that spans 10,000+ years: as a technology, computing disrupts natural language in the thinking and communications market.  That would make computing the mother of all disruptions in terms of time scales involved.  Well, maybe electricity disrupting fire in the heat and light markets is a contender too. Here is the disruption, speculatively mapped out in the form of the familiar intersecting-S-curves visualization used in disruption analysis.



Here’s my reasoning. I am convinced it hangs together.

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The Quality of Life

The idea of quality of life is very twentieth-century. It sparks associations with ideas like statistical quality control and total quality managementIt is the idea that entire human lives can be objectively modeled, measured and compared in meaningful ways. That lives can be idealized and normalized in ways that allow us to go beyond comparisons to absolute measures. That lives can be provisioned from cradle-to-grave. That an insistence on a unique, subjective evaluation of one’s own life is something of a individualist-literary conceit.

I suspect the phrase itself is a generalization of the older notion of modern conveniences, a phrase you frequently find in early twentieth-century writing. It referred to the diffusion of various technologies into everyday pre-industrial life, from running hot and cold water in bathrooms and garbage collection to anesthetics and vaccines.

That conception of the quality of life, as the sum total of material conveniences acquired and brutalities of nature thwarted through technology, seems naive today. But with hindsight, it was much better than what it evolved into: baroque United Nations statistics that reflect institutionally enabled and enforced scripts, which dictate what people ought to want.


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You Are Not an Artisan

A couple of weeks ago, after reading yet another piece of high-minded marketing copy, full of words like hand-crafted and artisan, a silly verse popped unbidden into my head:

This is not the renaissance.
You are not an artisan.
Go around to the back door,
you’re a smelly tradesman. 

So long as we’re pretending that we’re rediscovering an early-modern work ethic, I think I can call myself a bard and allow myself a bit of anachronistic doggerel.

Thinking through the implications of the whole artisan-crafts-guilds meme in the future-of-work debates led me to an odd conclusion: the future is significantly brighter (or less bleak) than people realize. So long as you stop thinking in terms of crafts and aim to practice a trade instead, there is more work for humans than people realize.

What’s the difference? It’s the difference between bards and chimney-sweeps.

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