Wikinomics is it a Sustainable Business Model?

The world where we used to read series of Britannica encyclopedias, to learn new things no longer exists. With the rapid evolution in technology, access to knowledge is now just one click of a way. The best example is Wikipedia (http://en.wikipedia.org) which is yet another magnum opus in the evolution of technology which operates based on the simple principle of collaboration. As of 27^th September 2011, 90 000 regular contributors, contribute on this free, web based, collaborative, multilingual encyclopedia project which has over 19.7 million articles and viewed by over 365 million users. People collaborate in sharing their knowledge with both philanthropic reasons and with the intention of enhancing their own reputation.

With the immense success of Wikipedia, Wiki has become synonymous to collaboration and Wikinomics is an area which contemplates on creating economies through collaboration. Don Tapscott in his book Wikinomics (http://www.amazon.com/Wikinomics-Collaboration-Changes-Everything-ebook/dp/B000QBYEH8) gives a classic example of how one of the gold mining companies which effectively used the concept of Wikinomics. The company’s geologists were not successful in finding the locations to mine for gold. Thus the CEO of the company used an online based model where he announced that he will reward $5 million to anyone who accurately located gold. 72 participants took part in this competition and the gold mining company was able to generate revenue of $ 3.4 billion.

Another classic example of collaboration is Free and Open Source Softwares (FOSS) like LINUX OS which operates on the same principle as Wikipedia where people across the glob collaborate in developing the software platform.

Wikinomics operates on four main principles of, being open, peering, sharing and acting globally. Don Trapscott identifies the wiki contributor as a “person who is willing to contribute to the system which made him”. Thus this model harnesses on talent across the globe, with significant economies in production and leveraging on social capital.

Models	Description
Ideagoras	This where people with solutions and people with problems collaborate. Example collaboration of scientists in solving problems
Prosumers	This is where consumer becomes co-innovators in building the product. Trapscott presents the classic example of 2nd life where the consumers are part an parcel of the product development and product innovation as it is the consumers whom design the 2nd life.
Open Science	This is where companies collaborating to arrive at the best solution. Classic example in the Sri Lankan context would be mobile operating companies collaboratively lobbying the regulators to stop the severe price cutting by the foreign telecommunications company.

Although this concept is evolving rapidly without monetary benefits it could be argued that the principles of being open, peering, sharing and acting globally could be challenged. Thus for this model to evolve the a proper platform a proper methodology should be developed to distribute rewards across contributors.

The Concept of Value Based Marketing

Value Based Marketing

This concept evolved with the extensive focus on market orientation as a culture. Market orientation as per Felton (1959, 55p) is a “corporate state of mind that insists on integration and coordination of all marketing functions in which, in turn are melded with all other corporate functions, for the basic purpose of producing maximum long range profit”. Thus with the evolution of this concept the overall organization was customer centric.

Most of the decisions were based on the fundamental principle of adding value to the customer. Multinational companies have invested heavily in incorporating this culture across departments, from the point of purchasing a Computer for office user to delivering the product to the customer, organizations started to baseline customer.

Customers were delighted of this new change in organizations as the customer became the focal point of organizations with excessive research on means of delighting customers, creating a high bargaining power at customers end.

The master mind Peter Doyle (http://www.amazon.co.uk/Value-Based-Marketing-Strategies-Corporate-Shareholder/dp/0471877271) observed that although customer delight is increasing it did not reflect on the share price movement. Thus Peter Doyle brought out the concept of value based marketing. Value based marketing appreciates the core goal of the existence of any organization which is to maximize the share holders. Thus Peter Doyle brings out the importance of an equilibrium of customer value and share holder value. It is important that organizations should contemplate on adding value to the customer but also each decision made should eventually result in maximizing the share holder value.

I would focus on a ratio of customer profit per share ( Profit per customer/Number of shares). This ratio would give a clear indicator to monitor the implementation of the concept of value based marketing.

Misinterpretation of Customer Life Cycle

Customer Life Cycle Management

It is pathetic that most of the Sri Lankan Companies does not appreciate the concept of customer life cycle. From the definition of the customer there is significant misinterpretation in how organizations target their customers.

Most of the companies are only focused on customer who generates the average income. However this misconception should be changed as the person below age 25 with limited cash reserves as per the concept of customer life cycle increases the cash reserves as he evolve and transforms into the average income customers.

The worst experience I have is with my investment advisor, the little amount of effort, the little amount of time he spends on helping me with my investments. The investment advisor does not see the potential value of the youth will be his next generation of valuable customers in the future. With the evolution of social media things have even got worst for a company who does not appreciate the concept of customer life cycle as the youth goes on social media spreading the bad experiences and thus creating negative publicity.

Companies like Dialog Telecom have mastered this concept and has product catering to a kid who starts schooling to the ultimate executive with a blackberry. Thus if Dialog Telecom can satisfy the kid who is of 6 years age, the kid would be loyal customer of Dialog Telecom through his life cycle.

Personal Branding in 3 Steps

In developing a personal brand, as any brand manager would do the starting point should be understanding your core competence and and create a differentiating factor from the rest. Thus as the starting point a SWOT analysis of yourself would highlight which strengths you can master to beat others.

For some the main strength would be Networking skills for some it would be Writing skills, for some it would be Public Speaking skills. Thus the first step to developing the personal brand should come from understanding your core competency.

For instance a person with amazing writing skills could start by creating a blog, and have an incremental plan on taking yourself from a writing skills brand to a brand that people would pay money to read.

There should be clearly laid out objectives in developing the personal brand to a valuable brand. After identifying the core competency, laying out objectives, effective system to measure effectiveness should be set in place. In case of a blogger, the number of visitors viewing the page would give a clear measure as to the development of the personal brand.

Steve Jobs Such an Amazing Character

After Steve Jobs resigned from his CEO position, there have been a huge interest on praising the product master who grew a company from zero to the most innovative company in the world. The new buzz made me do more research on his life, the principles he believed in, and his philosophy of management.

Steve jobs is a master in everything he does. He proudly claims that "At 23 i was worth $ one Million, At 24 I was worth 10 million at 25 I was worth $200 Million" Lot to learn from the master. I think the most important thing that we need to learn he is way of being a product perfectionist...