Back once again with the fantastic Pam Atherton on A Closer Look Radio, Eric ties together the disparate topics of locavore restaurants, revolution in Egypt, and fake government shutdowns to what it all means for YOU and your business.

One of the most important trends in corporate governance and business strategy in the last decade has been the feverish drive toward conglomeration. Banking, telecom, heavy industry, energy, pharmaceuticals, and funeral homes have been on the path of combining into ever large corporate entities. This has a broad reaching impact for everybody – workers, other companies, governments, and the investors who provide public capital.

There’s a fascinating piece from CNBC, which features some insight from Reformed Broker’s Josh Brown. It seems that for years, the business media has accepted that giantness is always a great strategic move. Here, there is some real discussion (!) about whether it makes sense to have a single corporate culture attempting to compete intelligently in a broad variety of businesses.

Brown’s point is cogent – sometimes conglomeration a good idea (Berkshire Hathaway) and sometimes…it’s just a whole lot of people with the same letterhead.

Back in the ancient days of, say, 1996 – back when we were erecting large stone monoliths in honor of the various tree gods in exchange for their mercy during the winter months – there was this strange superstition that one should pay authors and musicians and filmmakers for individual copies of their work. You got to “own” these copies and you were able to listen or read or watch anytime you wanted. Some people even got rich from this business of selling copies of artistic work.

Bizarre, isn’t it?

Now we have a host of digital music services that offer unlimited music for fractions of a penny per listen. But even stranger, we now even have things like Grooveshark which work like the original, gangster, Wild West, lawless version of filesharing circa 2000 – only prettier and easier to use. I’m listening to it now. It is positively baffling how well it works and how free it is.

We have entered into an age like no other, in which a human being born today will essentially have unlimited entertainment from the artistic output of a number of centuries available anywhere he/she goes, and for free.

Future generations will be able to spend a year watching situation comedies from the year 1985 – in real time – commercials and all – available for free in some far off Burbank computer server. Next year, do you want to do nothing but listen to Dixieland jazz and Glenn Miller-era swing? No reason not to. When you have finished, you can read every book published in Scotland in 1820 while listening to Creedence Clearwater Revival. Don’t forget to tune in for our free streaming marathon of Greek and Albanian soap operas! Followed by 2000 straight hours of the Manga Channel, a specially curated webzone for people who love extreme tentacle-centered Japanimation.

And not a dollar will change hands.

Let the implications of that development sink in. It means a lot for how future generations will act.

Yes, that’s the headline making the rounds, and I suppose it is a signpost on the way to the future of media. Twitter just raised an additional $200 million, bringing its market cap to $3.7 billion. We are then reminded that this is twice the market capital of the “New York Times Company,” which apparently produces a small local weekly shopper tabloid in the Long Island metropolitan area, so the comparison is a Big Deal.

Question: What does Twitter do to make money?

Google: They have a clear business model: give search and YouTube and mail away for free, and stuff them full of target ads based on what the user is doing at the moment. Brilliant, profitable, and results in a $500 per share stock price.

Facebook: They have managed to get every human being on the planet to connect to each other and post pictures of their respective pets and undignified moments from high school. The humans all agree tacitly to let this data be harvested, which is bought by market researchers and advertisers. Clear, a bit more complex ethically, but likely monetizeable.

New York Times: Long form, urbane in-depth journalism with ads on every other page. Clear, 20th century , maybe-profitable-again-one-day business model.

Twitter: …sponsored tweets? Some people pay for them?

First, while I love Twitter and find it functional, until I understand what they buy low and sell high, I will reserve judgment on their business model and what it means for other companies.

Second, they shouldn’t be compared to the New York Times. Yes, newspapers are on hard times. Yes, their model was more successful in the 20th century. But the insight provided by long-form journalism is not remotely equivalent to 140 character blasts about “Dang, it’s snowy and mah car is burried!”

Just because something is no longer hip does not mean you should underestimate its importance. If I said “railroads” and “Chevy Volt,” which term would have more relevance to the “hotness” of 2010? Well, Berkshire Hathaway dropped $44 billion to acquire the Burlington Northern Sante Fe railroad. Very 19th century in terms of hipness, I’ll grant you, but Buffett is no dummy.

When you’ve been in the business of forecasting for more than a decade, it’s fascinating to see how your past scenarios become current events.

More than ten years ago, I remember discussing the conundrum of digital imaging with the executives of Kodak. It’s not that they didn’t see this coming, it’s that there was no elegant way to repurpose billions in chemical factory infrastructure for a world of integrated circuits and hard drives. Looking back at 1999, it was difficult to see a world where Kodak thrived using anything resembling their old model of competitive advantage.

Today, Kodak has now been delisted from the S&P 500, along with the New York Times and Office Depot. Added onto the list of bellweather stocks is Netflix, a company whose shared are trading near $200, a company whose business model seemed like a long-shot at the time.

The whole point of analyzing future is to understand upcoming competitive dynamics. There will be new winners and new losers.

Competitive…Futures…yeah, I like the ring of that.

Pam Atherton is one of our favorite human beings here at Competitive Futures. She talks for a living. She knows Weird Al Yankovic. She lives in New Mexico, an inherently cool place to be. And she knows a ton about the past and future of radio. Pam is the host of a wonderful, eclectic radio program entitled A Closer Look Radio. She has had me on as a guest regularly since the release of Future Inc, and as punishment, I have insisted on interviewing HER about where the media is going in the next twenty years.

Her insights on future trends in media are, as expected, fantastic, not to mention useful for business people, intelligence analysts, and everybody else:

• We’re exiting the era of absolutely everybody producing media and thinking it’s of equal quality. Whether it sounds elitist or not, Andrew Keen is right.
• Why podcasts and long-form journalism will return intellectual depth to the media ecosystem.
• Market research is usually wrong, and sends the media professionals in the wrong direction when creating content.
• As counterintuitive as it sounds, the era of the big audience is over – business people should cultivate small, committed audiences with which they have actual engagement.

Six billion dollars seems like a lot to pay for a website that gives out coupons and whose assets may not be much more than a brand presence, some code, and a few databases. Yet that seems exactly what Google plans to do.

Add to this the emergence of Facebook Marketplace, which may or may not be a genius application, but it will have at least 500 million potential customers.

According to Doug Stephens, our favorite retail futurist, if you are smaller than Google, Facebook, or Walmart your choices are pretty limited at this point. Not that all hope is lost.

Here is Doug’s very simple advice on how to deal with this megatrend:

Any specialty retail business that stands on selection, price or convenience as its point of competitive differentiation will be toast… if not today then very soon.

Between Amazon, Facebook Marketplace, EBay ,Google Boutiques, Wal Mart and a host of others, the price, convenience and selection markets are cornered.  And they’re already scaled beyond the point where you could ever dream of catching up so throw away any notions you have about trying.  It’s a fight you can’t win.  And frankly if you think you’re winning at it, you’re losing.

Here’s what’s left for you to compete on – service, shopping experience and product quality.  Choose at least one of these and dominate in it.

But by dominate, I don’t just mean be good at it.

I mean be extraordinary.  Be remarkable to the point where you become famous for it. Hire it.  Train it.  Instil it in your people and reward them when they do it.  Communicate it at every marketing touch point.  Get so good at it other businesses come to you to learn how to do it.  Treat it like a religion.  Write a book on it.  Be so ridiculously excellent at it that no competitor would bother trying to beat you at it.  Put it on a T-shirt.  Be it! Own it! Tweet it! Crush it! Live it!

A positive reaction to a megatrend – words to live by.

Facebook will be worse than an abandoned shopping mall, and Twitter is doomed – or so sayeth my favorite comic, Patton Oswalt. (While it may seem to strange to cite standup comics for business insight, I submit that there’s nothing more comical than most of mainstream business television right now.) As such, I thought that his announcement that he is joining Twitter contained some cutting analysis on the future of social networks and the stability of their business models in an era of ultra-easy product substitution:

So, I’m joining Twitter this Saturday.

And, eventually, whatever replaces it.

I was on Friendster. It collapsed. I jumped on MySpace, and now it’s pretty much an abandoned shopping mall. I still get about 30 Friend Requests and 15 messages in my Inbox every day, but they’re all mailing list bullshit for bands I’ll never listen to, or porno-bots promoting some young Eurasian hottie. Even the comments are clearly all bot-generated. An abandoned mall still had trash, heating and cleaning services drop by, I guess.

I’ll still update my calendar and galleries here, but that’ll be about it.

Don’t feel bad, MySpace. Facebook is also, clearly, on the way out. Constant spam ads, weird privacy wormholes — yuck. Any social networking site, like a great punk band or TV show, has entropy and collapse built into its biography.

Remember how fun Friendster was for those three or four months?

His scenarios, however, are my favorite:

And Twitter will collapse, too. What will replace it? Here are my 3 predictions:

BlipBlap: Basically Twitter, but only 17 characters allowed, and no vowels. Xclnt!

Wh1ff: The first-ever “scent site” — you update your status from an “odor board” of 170 different scents. “(Snnnnnnfff) Patton had chili for lunch and he’s somewhere humid.”

DanzaQuip: Every single status update on this site is first sent to Tony Danza’s personal e-mail. He then decides which ones to post, and is the only one who can respond or comment. (*This site will replace the U.S. Post Office in 2027)

Really, is it any stranger than a prediction that 400 million people would voluntarily post embarrassing photos online in an ultra-complex social web of their coworkers and former elementary school classmates?

I answered that question in the negative out of pure instinct, but when you hear that Lulu is already signed on for a publishing distribution deal for iPad, you think – oh yeah, once again Apple doesn’t make devices, they make new business models. And exceedingly few companies are comfortable in that game.

Andy Ihnatko at the Chicago Sun-Times is just flat -out ebullient, in way that transcends fanboy excitement:

In fact, after a week with the iPad, I’m suddenly wondering if any other company is as committed to invention as Apple. Has any other company ever demonstrated a restlessness to stray from the safe and proven, and actually invent things?

Good question: Is your company restlessly invented new things?

I have no idea how I managed to miss this incredible video for so long:

Are You Ready for the 21st Century ? from Michel Cartier on Vimeo.

Between the Greeks staying in the European monetary union, or Detroiters keeping their dry cleaners and doggie-daycares afloat, there is a considerable amount of talk about the role of currency. The crux of the European issue is that the Portuguese and Greek economies are so different from the French and German ones, it is difficult to keep one currency with the same rules and assumptions in play. The fringe actors are no longer able to keep up the facade required for membership in the club.

We are seeing a microcosm of this in local towns in America, and the issue comes down to the ability to maintain a central currency. We note with interest an uptick in stories about local currencies not seen since the banking meltdown of 2008 and 2009.

Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.

But why would people go to such trouble? Money is money, right?

When the Treasury prints billions to bail out banks and automakers, people look for alternatives. These folks may look nutty now, goes the quip, but wait till the dollar goes the way of the Argentine peso. Then you’ll be exchanging a wheelbarrow of cash for a bay buck, local currency boosters say.

What could this mean in terms of business strategies? One of the most likely implications would be a return to local distributors, those able to deal best with the local market and even local currencies. Compare this to the recent trend of market consolidation in a variety of industries. It just doesn’t match.

First Greece and Portugal, but they are on the outskirts of civilization. First Detroit and Western North Carolina, but those places aren’t prime time.

Next…California? Spain? Iceland? New York State?

For those of you who know Gregor MacDonald, you know you’re in for a treat with this podcast- a full hour of some of Gregor’s latest forecasts on energy, economics and society, insights you simply won’t get anywhere else.

For those of you who haven’t discovered Gregor yet, he is one of the top energy analysts in the world, and in our minds, one of the top analysts of anything, period.

This podcast covers sweeping ground:

• Why we’re at peak automobiles
• The end of cheap oil
• Coal’s role in the development of the world economy
• The return to human capital and small towns
• Why waterways are the future
• Our current period of “late phase economic decadence
• Why PAKISTAN holds the key to the Copenhagen Protocol

Crazier still, we could have spend ANOTHER hour talking to him and still not exhausted him of insight.

Enjoy.

This presentation from Alexander Osterwalder is a terrific, brief analysis of what is broken in the business model of music, and more importantly, how it can be fixed.

Note the systemic tear down of the different parts of the industry, looking at the value chain in great detail.

This analysis can and should be used by any company in any industry.

Courtesy of Forrester Research, a great graphic describing the innovation of the music industry, from 25 billion euros in 2000 down to 10 billion euros today.

Competitive Futures has been using the music industry as the poster child for strategic disruption since the beginning of the decade. I remember discussions with music executives around the turn of the millennium. Mostly, they were caught in the “moral” indignation of “kids” “stealing” music when they should be paying $18 (closer to $30 in Europe!) for static music media.

My favorite discussion was with an industry exec who attempted to sell me on the notion that “Compared with going to the movies, which is $8, a CD is a great investment because you can play it again and again. It probably should be $100 or something.” Nice. Try.

The conclusion: just because you don’t want to face reality doesn’t make it have less impact.

Psychologically, many are glad to have 2009 behind us. It is difficult for people to work in conditions where so much seems out of control, ready to collapse at any moment. The moment seems to have passed. The one facet of 2009 that was clear was the willingness, often at great long-term cost, for government policymakers to keep the status quo with our major institutions. For 2010 – 2020, we can use this political reality, and make more solid plans.

This is not to say that we think that everything is back to “normal.” Have a look at our strategic outlook last year on the major drivers of disruption; none of them are fundamentally different.

Disruption will continue to be the theme of 2010 -2020; those megatrends still hold. Still, the likely stability of 2010 is something you can use.

We have one lesson for clients about studying the future: Just because there is a crisis doesn’t make it a crisis for everyone. When you make solid strategies, disruption can become massive opportunity. In the past decade, the music industry has melted down. It is not a catastrophe for Apple, who launched billion-dollar devices that changed the landscape of media, and then followed up by becoming the world’s largest music retailer. The oil crisis of the 1970s took Shell to the top of the petrochemical industry. Look ahead, think differently, make bold decisions and catastrophe for some can mean success for you.

Perhaps last year many were attempting to avoid the collective catastrophe that comes when all of our institutions catch on fire at the same time. This year, choose your own success.

The most important implications of any strategic trend is usually not that your organization must do something drastic, it is that your organization is obsolete and can’t respond effectively at all.

Case in point: newspapers and the Internet. It’s not so much that newspapers could have done something to maintain their business model of classified advertising, it’s that they need a brand new business model and structure to survive. If that is the major implication of the trends we track as strategic analysts, then we almost must develop skills to help organizations change quickly and painlessly.

On that note, check out this talk from Aurora WDC’s Arik Johnson on the future of organizations, recorded at last month’s Intelligence Collaborative meeting in Washington.

I was just surfing SlideShare for some competitive intelligence – always a great source of left-of-center information, unusual sources, and stuff that never gets published. I cam across a provocatively titled slideshow about how digital imaging killed the corner camera shop. Even though the market exploded, the model shifted to one where there was no margin for customer service of any sort.

Food for thought for this Monday.

So Google is coming out with its own operating system, which shouldn’t really surprise anyone. It will likely be lightweight, simple, cool and functional like pretty much everything they do. And also evident is the fact that Microsoft should now be hyperventilating, as this development takes direct aim at its aging business model while also pointing at the future of computing.

Google is now threatening to bust the trust owned by the world’s richest man. You may remember a fantatastic, precient essay by Neal Stephenson entitled “In the Beginning Was the Command Line,” in which the author of Cryptonomicon and Snow Crash pointed out the near absurdity that the world’s wealthiest businessman made his money selling operating systems, as opposed to chemicals or railroads or minerals or something real and industrial. The untold riches in the production of user interfaces really did seem surreal at the time.

If you think about it, though, their business model was strikingly industrial in the Henry Ford, mass market vein. In the Golden Age of Microsoft, computers all hungered for standardization and interoperability if they were to function as something other than an electric paper weight. Whoever could forge that infrastructure could make stupid amounts of money – not unlike the railroad or the telephone. Not only did the infrastructure model pay off for Microsoft, they also harnessed Henry Ford’s mass production model, shipping out millions of individual boxes of “software” to individual users about the globe. It “scaled up” but at massive profit to the manufacturer.

And now you can officially say the 20th century is over. Even Microsoft, a digital age company, has succumbed to the new business models of the future. Google’s new operating system is harnessing all the aspects of the next generation business model. Google OS will be free, perfect for a variety of small, light devices intended to access the internet and cloud-based services. It’s not that you won’t be able to run Microsoft’s operating system and software tools – it’s just that they will no longer be the only game in town. Their competition will need to come from innovation, customization, and service rather than size, exclusivity, and scarcity that stems from limited technologies.

Record companies have learned this the hard way.

Newspapers are learning this the hard way.

Telecom is learning this the hard way.

No doubt, large and unwieldy, Microsoft will learn it the hard way as well.

Now…what about your industry? What will it need to learn? And will you be proactive, or will you be happier learning it the hard way?

As promised these are the slides from this afternoon’s talk about telling negative stories with a positive, business development spin.

I am glad to see Douglas Ruskoff weigh in on our current situation. He’s a fantastic thinker, humanistic and often contrarian, the author of many books including the recent Get Back in the Box: Innovation from the Inside Out, which is about the foolishness of senseless innovation. If I read Rushkoff correctly, he sees economics as a distinctly human, connected enterprise, and the absolute opposite of where our commercial leadership has taken us.

He presents some major, major ideas:

• The recent goal of business has been to make every company a holding company, one whose purpose is the acquisition and/or management of debt as opposed to a group of competent people who do things for other people
• People at all levels have become more interested in the perceived value of assets (homes, shares of companies, CDOs) than the actual value that they might ever produce
• Most of these ideas are supporting people who may not even be in the system – long-gone investors, maybe even dead guys
• The monetary system is not about encouraging trade, but often preventing trade
• The American Revolution came about because England forbid people from providing each other with services
• LOCAL CURRENCIES used to be very popular and could be again
• We were probably better off economically in the Late Middle Ages (the Black Death notwithstanding)

We need to revisit our total concept of value creation. It’s great that Rushkoff is lending a hand.

This article from USA TODAY should be on its front page in all red letters.

A small but growing number of cash-strapped communities are printing their own money.

Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.

The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.

Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.

It is not possible to overestimate this disruptive nature of this trend.

This has nothing to do with a drycleaner exchanging his services for some computer repair. This is about the nation-state shifting in importance back to the city-state, or at most the regional economy. The economic vitality that normally comes from nations is being choked by the decadence of bankrupt financiers and the inaction of feckless bureaucrats. In response, the people who actually provide the wealth of nations are walking away.

This is a statement to Messieurs Obama, Sarkozy, Brown, Hu et al. that if you can’t make a functioning international currency system, we will not take part. The printing of local currency is the sign of a revolution brewing – a bloodless revolution that is far more radical.

Watch this trend very closely. If it continues, it will change the logic of globalization for the next decade or more.

Great column from Andrew Keen regarding the different business models represented by Twitter and by the rest of Media 2.0.

He points out, correctly, that Twitter values attention, while advertising only values the likeliness of people to purchase something. You can do whatever you would like with attention: start a political movement, encourage sales, provoke conversation. Advertising is measured solely by the likelihood that the target market will open their wallet.

It will be interesting to see what business model Twitter ultimately chooses. At some point, they will need to ask people for money.

This is perhaps the top entry in the Guinness Record Book of Complete Philosophical Reversals.

Jack Welch, “Neutron Jack,” the great father of steroid-pumped management, “Flourish Elsewhere” human resources, cutting the bottom 10%, and evangelist of shareholder value as a singular strategy, has now declared the whole “money for Wall Street” thing is the “dumbest idea in the world.”

For those of you who have heard the term “shareholder value” abused in every possible context, a phrase used as a placeholder for an actual strategic thought, this reversal is akin to hearing the Surgeon General come out and say, “You know Marlboros and tequila get a bad rep – I think they are part of a healthy breakfast.”

This too is an overcorrection. People who bet their money on the performance of a for-profit enterprise will expect a certain level of return compared to stockpiling gold or letting money sit in a savings bank (assuming you can find a solvent bank these days.) Jack is right, shareholder value is a result and not a strategy – but it’s still a fine goal.

The difference in the next economy will be that half the world won’t be investing through Wall Street for the basic societal functions of assuring a dignified retirement for aging citizens. Once the pensions set to grow at 8% fail (coming soon to an economy near you!) people will get even more hesitant to invest in nameless, shapeless glass and steel buildings. Investing in for-profit companies will return to where it ought to – a risk undertaken by the very professional and very observant.

Will corporations really see employees as their number one constituency, as Jack suggests? He obviously saw value in firing over 110,000 employees in his tenure at General Electric – but it sounds like a nice idea.

The future may look like more of a balance between durable human relationships and the need to keep the doors open by making money.

At a luncheon meeting for the International Association of Corporate and Professional Recruiters, we had a stimulating dialogue about future trends and their implications on the next generation of leaders. We discussed the bursting of the current bubble in some depth, leading to one participant asking, “Will we ever see growth again?”

It’s not whether we’ll see growth – it’s whether you’ll recognize it as growth. For more, tune in to today’s episode of the Competitive Futures Podcast:

Longtime reader JM remarks the following:

Think about how much influence this current situation may have on the future definition for anti-trust suits brought on by mergers and acquisitions. What will be the maximum threshold for total market share that will be allowed? We keep hearing how these companies are “too big to fail.”

Will the government put in measures and procedures to keep this growth from occurring? Which industries will be affected? Will this make smaller companies more or less competitive knowing they will not or can not be absorbed by larger players?

Insofar as government will not want to keep pumping trillions into bad business decisions, a likely future is that anti-trust departments will be put on steroids.

Then again, Merck and Schering-Plough think that mergers are the way of the future. Their reasoning? Efficiencies and combined product pipelines.

Hasn’t that always been the rationale behind mergers in pharmaceuticals? And is it working?

Is it working in banks? Healthcare? Automobiles?

That’s what Andrew Keen, author of Cult of the Amateur seems to think:

Rather than learning to quote Shakespeare or W.E.B. Du Bois, I would advise aspiring humanities scholars to learn how to build their own intellectual brands and distribute their ideas more broadly and relevantly. Just as the death of newspapers is forcing smart young journalists to become self-employed entrepreneurs, so the imminent crisis of academic humanity departments, which will eventually do away with the archaic tenure system, offers a great opportunity to rethink what it means to be a professional educator in the 21st century.

This might drive the disruption of the educational business model a little faster. Which is fine – because the model of $50,000 per year private schools might go the way of the million-dollar fixer-upper one-bedroom condo.

The national pastime is now watching financial indicators reach the lows of the decade. It’s getting boring.

FAR BETTER is to see what IS going to create the next economy – entrepreneurialism. The next economy won’t be stimulated into existence, it will be built by entrepreneurs. Yes, that intrepid spirit of putting your money and time into businesses that do little but eat money and time, in the hopes that one day you will change the world – or at least turn a profit.

My colleague, the intelligence thoughtleader and Enterprise 2.0 guru August Jackson dragged me out to a mixer for group I didn’t know – Tech Cocktail. You might think that an event dedicated to technology startups would be morose in this supposedly capital-scarce, depressed economy. Surprisingly, the mood was gleeful, far more reminiscent of Monica-Lewinsky-era Washington, when cell phones were novel, Napster brought you the world’s music guilt-and-compensation free, and people were just SURE that www.e-spatulas.com was going to set the world on fire.

Wait, haven’t we learned ANYTHING since 1998? Shouldn’t we have figured out to not trust the flowing drinks, the meeting of new people, the launching of strange sounding, internet-based services, since this irrational exuberance brought us Enron and Global Crossing? Isn’t getting excited about tech companies better suited to an era of high profits, financial trickery, cheap illusions?

No, this is still where the future’s at. Sure, nobody was trying to deal with clean water, climate change or healthcare, the likely shapers of our destiny, but it’s the attitude here that is so important. Check out a few of the players:

• The Social Collective, a group the builds online communities to improve the value of conferences
• Localist, a one-stop shop to advertise local cultural events
• DeGeeked, a website dedicated to answering the simplest, most inane questions for tech n00bs
• GeniusRocket, a service to link brand builders and artists

What struck me was that this time around, all of the entrepreneurs were prepared to discuss viable business models. They knew where the money would come from, and were even realistic about their projections. Today, it’s OK to base a business off traffic and revenue from ads, even if it means you won’t be ultimately buying a Gulfstream 5 from your income. The rest generally knew who their target markets would be. These details seem to be all the difference between this round of innovation and 1999, when sites like www.goatclick.com went for $127.50 a share, and the CEO said “We’re still looking for a business model.”

I don’t care whether any of these specific businesses rescues the economy. What strikes me as important is that America is still hosting these types of events, where people come together excited to talk about building new services, manufacturing new goods, solving real problems and hopefully creating jobs. This is the only spirit that EVER builds economies.

We’re spending so much time examining the collapse, it’s time we get excited about the recovery. I know I am.

Many people on the Interwebs are becoming exercised about the new terms of service of Facebook:

You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof.

On one hand, this does sound a bit like King Henry VIII on The Tudors, granting himself powers over all matters royal, legal, theological and temporal and starting a new church all at once. This blog, for example, gets posted to my personal Facebook account: can Facebook now make derivative products of ALL futurists on Facebook, print a compendium of foresight blogs? (Who knows, maybe it would be cool?) But it sounds like a lot of power.

On the other hand, I saw one young person comment, “You probably should expect anything you put on the Internet to be available for free, forever.” This is probably the more rational approach.

As Gerd Leonhard is fond of saying, “Compensation, not control.”

Jeff Jarvis is talking about the bankruptcy of Young Broadcasting, but his observation  applies to many industries:

It’s a failure of distribution as a business model. Distribution is a scarcity business: ‘I control the tower/press/wire and you don’t and that’s what makes my business.’ Not long ago, they said that owning these channels was tantamount to owning a mint. No more. The same was said of content. But it’s relationships (read: links) that create value today.

Actually, I’m not so sure it’s links per se. If there’s anything Twitter is teaching us, it’s that you want an actual dialogue with people who follow you and your products, not just search engine optimization.

Gerd Leonhard is one of the hardest working guys in the world right now, criss-crossing the globe and trying to figure out the future of making money off music, books, movies, and other content. (Guys like me really appreciate that!)

He has noticed that the “sue the customer” trick didn’t work (ahem) and that a new business model for content is badly needed.

Here, his mantra is “compensation, not control.” Watch the whole thing:

I thoroughly enjoyed the NPR segment yesterday entitled “Obama tests Keynes” in which a couple of young guys dig into the often-bewildering rhetoric of the economic stimulus package. Funny, relevant, and worth a listen.

It’s important that in this case it’s young journalists taking a fresh approach to the economic arguments of Baby Boomers. I don’t think the Boomers at the head of our institutions often recognize that the political ideologies discussed were born long before we arrived on the scene, and often have no connection to reality for Gen X & Y. The snarkiness between taxcutters and economic stimulators often generates as much deep-seated passion as comments about “Hanoi Jane” Fonda – it’s a reference to a fight that started well before our births, and may need minutes of explanation to even make sense.

Case in point: the radio program deals primarily with the multi-decade conflict between Keynesians, who believe that well-timed government spending can save flagging economies, and market fundamentalists who belief that the entire economy can be managed through tax cuts and manipulation of the interest rate. The Keynesians protest, “government spending led to winning World War II and got us out of the Depression!” Market fundamentalists tend to argue that the slump of the 1970s proved that it’s not a cure-all – and that only deregulation, tax cuts, and Greenspan’s masterful operation of the interest rates saved us from big government stagnation.

The radio program concludes by saying that after all the discussion about this once-in-a-lifetime event, the Obama plan is basically pure Keynesian economics. After this, we’ll be able to see once and for all if it works or if we were imagining it the 1940s. The exciting bit is, this may be the first verifiable test of classical economics!

This kind of thing makes me insane.

Here we are, heading straight into the meaty part of the 21st century, experiencing an economic emergency that could only be created by a combination of today’s special mix of globalization, Internet, post-hegemonic power vacuum, unchecked assumptions, and 6.8 billion people at an unprecedented moment in history. And the only topics our elites can discuss is:

“So should we spend a lot of money on credit or fool around with the interest rate?”

Every day, people wake up and turn on the television or radio or Web site of their choice and begin worrying about a select group of numbers that are forced at them daily. We hear these measures so often, people are mistaking them for important or relevant.

• The Dow Jones Industrial Average – a collective of large-cap equities, and the prices that Wall Street gamblers are willing to pay that day to take part in their eventual earnings
• Housing starts – the number of new suburban homes under construction, with the assumption that all human housing should eventually stretch to the planet Mars
• Consumer spending – The amount people spend on Guitar Hero and couches and other goods for their new suburban homes
• Interest rates – The rate at which money can be borrowed from banks to the Federal Reserve, to other banks, to people, through credit, through…oh cripes I have a master’s degree and still don’t really get it. Suffice it to say that the interest rate policy appears as logical as Aztec shamanism, and about as transparent as the election of the Pope
• Stimulus packages – The amount of fake money spent on real things, supposedly to be paid – with interest! – by future generations, who will repay this through all the fantastic, super-paying jobs that are right around the corner…so…uh…just let us retire in peace, um, and keep paying your taxes…

We follow these things excessively, and to the untrained eye, they don’t seem to be leading to better management of the world economy. In fact, the world has been managed exclusively through these kinds of measures, and our policymakers are stuck arguing on the radio about whether KEYNES got us out of the GREAT DEPRESSION using these numbers.

GUYS – CAN WE TALK ABOUT THE NEW STUFF HAPPENING?

U.S. manufacturing now resides in China. Our kids are in debt. The Internet is making new companies possible and other companies obsolete. Science and technology is rolling onward. This is probably just another phase of Kondratieff cycles or Schumpeterian creative destruction. We’re looking at a huge change of management between the Boomers and Gen X. The Boomers are going to start going to the doctor a LOT and will crush the private healthcare system. Mass media is about to go extinct. Europe is out of kids, while the average age of Iran in 24.

Now, how is it that the argument can still be down to deficit spending versus interest rate policy?

Here’s some new measure to try out on the TeeVee, just to inject a bit of new debate into the public sphere:

• The Gig Rate: Measure the percentage of people who just graduated with expensive student loans and got a job that pays for rent, food, and debt repayment
• The Grandma/Doctor Ratio: Percentage of grandmothers able to get to their doctors appointments as scheduled, not left at home, letting their prescriptions go out of date, because they can’t get transportation
• The Ebay Entrepreneur Stat: Number of cash flow-positive home-based jobs created through Internet technologies, allowing people to make money and still raise their kids
• The Youth Diabetes Drop: Number of young people diagnosed with Type II diabetes mellitus able to reverse their disease through diet and exercise, thus saving society billions in the long-run
• The Volunteer Volume: Number of people financially secure enough in their lives to donate time to a local charity, improving their communities at no cost to taxpayers
• The Revitalization Rate: Dollars generated through the repair of our natural and built environments, from wetland and waterways to city centers and school districts, creating economic prosperity while giving future generations even more opportunity

I don’t care if you use these – invent your own. Find a way of discussing economic prosperity in a way that doesn’t use these same, tired, busted statistics.

It’s time to leave John Maynard Keynes where he was: a Cambridge elitist who bounced around the London dinner party circuit, hating the working class and delivering all kinds of new, interesting ideas just for shock value. I think he’d be sorely disappointed in us if he thought that in 2009 we hadn’t moved past him, despite having gone to the moon, defeating communism, and inventing about 1000 new world changing technologies.

KEEP THINKING.

MUST READ, from intelligence thought leader August Jackson:

Social Networking More Popular than Porn: What it Means for Competitive Advantage « augustjackson dot net:

Policies in information security, public relations, human relations, marketing, sales… the list goes on all have to take this reality into consideration. Old “sledgehammer” strategies are not going to work going forward. The best and the brightest are going to go where they can maintain and grow their self actualization through social tools both inside the company, with partners/customers and their social lives. Many boundaries are going to collapse as a consequence. It’s not going to be all flowers and happiness because everybody involved is going to have to be a lot smarter.

August is on to something big. The drive for social connection is incredibly powerful, more powerful than all other forces including the sex drive. As he points out, the companies may change in social media, but the social trend is here to stay for the rest of our lives.

This will change all organizations, all strategies.

There’s too much awesome stuff in this video to only highlight a few points. Wine Library’s Gary Vaynerchuk passionately dishes about entrepreneurialism, passion, and brandbuilding in the new economy.

Most important point – content used to be dictated by major media companies who simply won’t exist in a few years. So make your own connections to real human beings and create your own business model.

Like much these days, chaos is leading to totally new opportunities – but we must be ready to take advantage. The entrepreneurial spirit has never been more important.

Can’t believe I missed this last November, but Global Entrepreneur Week must have been a blast.

The word ENTREPRENEUR will be very important in 2009 as we build small ideas into new institutions.

Again, stop whatever elese you were doing, like reading things I wrote about 2009, and read Jim Kunstler’s forecasts about 2009. The author of The Long Emergency is experiencing the unenviable task of seeing dire structural change ahead, change that won’t be mollified by new gadgets, and being right about its consequences.

Some highlights:

He’s not a fan of techno-solutions. (not unlike yours truly)

The various tech industries are full of MIT-certified, high-achiever Status Quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia, the three thousand mile Caesar salad, and the theme park vacation. The environmental movement, especially at the elite levels found in places like Aspen, is full of Harvard graduates who believe that all the drive-in espresso stations in America can be run on a combination of solar and wind power. I quarrel with these people incessantly. It seems especially tragic to me that some of the brightest people I meet are bent on mounting the tragic campaign to sustain the unsustainable in one way or another.

He sees Dow 4000:

A consensus in the blogoshpere says that the stock markets will rebound strongly during the first Obama months. This is possible just on the basis of pure “animal spirits,” but the Obama Bounce will occur against a background of continued dismal business and financial news. It will appear to defy that news. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year.

He believes that you’ll actually need positive cash flow to make a business run (old-fashioned, but radical!):

We’ll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable…Giant enterprises requiring giant loans to get from quarter to quarter will tend to not make it. Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off.

Real change. Not new technologies for old philosophies. Nobody will save the day. We’ll need to make workable solutions for many different types of people.

And still – people will need things. Goods and services will be required, perhaps just different types.

Business development will need to be on its toes! Are you ready?

Stop everything you are doing, click here, and read this fantastically thought-out article from Paul Graham on why the future of economies will no longer depend on giant, hulking organizations, but small, nimble startups – and why this is socially disruptive.

Large organizations will start to do worse now, though, because for the first time in history they’re no longer getting the best people. An ambitious kid graduating from college now doesn’t want to work for a big company. They want to work for the hot startup that’s rapidly growing into one. If they’re really ambitious, they want to start it.

This doesn’t mean big companies will disappear. To say that startups will succeed implies that big companies will exist, because startups that succeed either become big companies or are acquired by them. But large organizations will probably never again play the leading role they did up till the last quarter of the twentieth century.

Another extraordinary riff on why the education system might be up for a major shake up:

The new Tom Friedman article is essential for its analysis of the coming shift in business models. Like every other human with a functioning brain stem, the Detroit Bailout stinks to Friedman:

…America’s bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.

And I did not know this about gas mileage 100 years ago:

Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage – 25 miles per gallon – than many Ford, GM and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done.

And it will happen to more than just this industry.