Thursday, November 3, 2011

OccupyWallStreet OWS Utopia and Scarce Resources

OccupyWallStreet OWS Utopia and Scarce Resources sets the stage in thier article Two's Company: The Basics of Property

"Let us hear David Hume describe such a condition, in which
"...nature has bestowed on the human race such profuse ABUNDANCE of all EXTERNAL conveniences, that, without any uncertainty in the event, without any care or industry on our part, every individual finds himself fully provided with whatever his most voracious appetites can want, or luxurious imagination wish or desire.
"Hume went on to suppose that in this situation every person's natural beauty is such that he has no desire for adornment, that the weather is so mild that he has no need for clothing, that all around him wild plants bear in abundance the most delectable food and natural springs spill out in profusion the most delicious beverages."
"Hume argued that in such a paradise, the human conventions of property and justice would be entirely useless:
"For what purpose make a partition of goods, where every one has already more than enough? Why give rise to property, where there cannot possibly be any injury? Why call this object MINE, when upon the seizing of it by another, I need but stretch out my hand to possess myself to what is equally valuable? Justice, in that case, being totally useless, would be an idle ceremonial."

Do we have Global Surplus?

If the world has a growing population of ~7 billion, no sane person would answer "yes". So how does this example apply?

Imagine growing up in a time of great surplus, like the 1980s and 1990s in America. Food, shelter, recreation, all provided by Mom and Dad in the greatest utopia imaginable, the middle class american home. Everything "free", everything easy, everything provided by somebody else. Student loans just happen to be the first real expense in their life - a harsh yoke to the government ox cart. 

By contrast, the Arab Spring is about the oppressed class (slaves by many measures) rising up against their masters.

OccupyWallStreet (OWS) Does Have a Message: 

Property rights are bad, give us your stuff.  

It is the same message that OWS rebuffs when the homeless (those evil homeless moochers) announce, "we are hungry and we want OWS food". The OWS menu provides a clue to the surplus: "organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad" (cite: FoxNews Article). 

While OWS strains under the restrictions of sanitation, fire safety and public decency, I am sure that no other OWS protesters in the world enjoy such luxurious meals.

Error of the 53%

The 53% seem to think that logic and reason will convert the OWS mob. Nothing is further from the truth. If the 53% want to work three jobs while going to school and raising their kids, the OWS mob is willing to harvest the fruits of the 53% labor. Will the 53% wake up to the challenge?

Bottom Line: 

Ignore the cacophony of unfocused leadership and unfocused messages. When the conductor arrives and taps his baton, the OWS orchestra will come together in a form that we will all recognize.


Wednesday, November 2, 2011

Diffusion of Innovations - Social Media Impact

Diffusion of Innovations - Social Media Impact

New comments about Rogers' Diffusion of innovations (Wikipedia)
"Within the rate of adoption there is a point at which an innovation reaches critical mass. This is a point in time within the adoption curve that enough individuals have adopted an innovation in order that the continued adoption of the innovation is self-sustaining. In describing how an innovation reaches critical mass, Rogers outlines several strategies in order to help an innovation reach this stage. These strategies are: have an innovation adopted by a highly respected individual within a social network, creating an instinctive desire for a specific innovation. Inject an innovation into a group of individuals who would readily use an innovation, and provide positive reactions and benefits for early adopters of an innovation."
"The rate of adoption of interactive media such as email, telephones, fax, and teleconferenceing often displays a distinctive quality that we here call critical mass... The interactive quality of new communication technologies create interdependence among the adopters in a system." Diffusion of Innovations, 5th Edition By Everett M. Rogers (p.343)


Two Ideas Deserving Emphasis

  • Can innovation occur without the profit motive?
  • Can Social Media make and break the adoption cycle?

Communication is Key

First, rural sociology from 50 years ago is not a likely place to discover cutting edge discussions of change driven by technological innovation. But, with minor substitutions of SMS (texting), Blogging, and Social Networking (ie.  Facebook, Twitter, et. al.) the relevance of Rogers' observations is still true. Adoption is driven by communication from innovators to early adopters to the average user until critical mass is achieved.

Modern social media is touted as the fast lane to business success as product and service differentiation for the individual consumer takes focus. In fact, social media itself is migrating along its' own adoption curve with innovators and early adopters looking for the proper influence to push Social Media into critical mass. Advertising and marketing represent the displaced innovations - Social media proponents claiming that neither are able to effectively engage the customer.

But, what if...

But, what if the innovator is not profit motivated? 

Does the Rogers' Curve accurately represent adoption of free or very low cost (subsidized) goods and services? An example is the adoption of free internet based email services and free News via the internet. If there is no cost to adopt, does the curve apply?

Worse, what if profit is the only motivation? 

Does the Kim Kardashian narcissistic model of influence - driven solely by the need for profit and providing nothing of substance to society (beyond comic relief) break the Rogers' curve? Is there a nuance to the Kutcher model or the Oprah model?

Even worse, what if the modern consumer thinks everything should be free, that the producers of whatever product or service do not deserve compensation?

Do the recent examples of Netflix attempting to change their product offering and fees and the example of Bank of America changing the fee structure of debit card processing lend good examples for this discussion? Neither company provided an improvement in their offerings, only a change in pricing. Airlines charged for bags before (it was buried in the ticket price), but now catch scorn for being (more) transparent on their prices. Newspapers charged for their content, then gave it away for free, and are now faced with creating a pay model that will keep them from extinction.

How does business react when that same communication channel, that key group of influential early-adopters  turn against your product or service? Rogers' model is driven by farmers' economic choice to become more efficient and more profitable. Without that catalyst, the profit motive, why would anyone be concerned about crop-yields or delivering the news, or handling baggage? How do you take intellectual property and distribute it free without regard to the content creator?

How do companies avoid the social media firestorm when prices change from free to anything else? And, what happens when a company loses the ability to manage their margins and profits (like Netflix) due to consumer backlash, or government mandates? Is a hyper-efficient social media an ally? See Austin Business Journal for an example.

Bottom Line: More Questions Than Answers

  • If personal networks are powerful enough to drive adoption to critical mass, are they just as efficient at imploding the critical mass? 
  • Does the Government have a role in Innovation and driving adoption, or is it exempt from the curve? Does exemption create other problems?
  • Finally, does the Occupy Wall Street (OWS) movement as a leaderless and agenda-less entity create a new dynamic, or is it simply awaiting the evolution from the innovator category to early-adopter category? 

Rogers' Diffusion of Innovation creates a framework for discussion that is as relevant today  as it was 50 years ago. Now to find people with the motivation for exploration.