Chicago-area startups piggybacking on social media for new product concepts — chicagotribune.com

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As the country waits for the economic downturn to pass, some describe the economy as an engine with gears, slowed down for now, waiting for lubrication (in the form of credit).  When the machinery gets what it’s been missing for the last few years, some say it will get back to spinning at its previous speed.  They see a recovery.

But that metaphor doesn’t capture what’s really going on.  Some things aren’t ever recovered from, and this economic slowdown is one.  Because  what’s really happening isn’t happening to one system, its happening to the ground under our feet.  What’s happening is more like an earthquake, shaking all institutions and markets, forever changing the landscape.

Architecture and engineering can protect new buildings against earthquakes, as long as the forethought and planning is put in at build time.  If this care isn’t taken, the next fifty or hundred-year quake will tear down the tallest structure.

Steve Yastrow of Yastrow & Company talks about how to react to today’s business environments in terms of “recalibration” – and that’s an idea that’s perfect for what’s going on.

The time for incremental changes and hunkering down are long gone – and that’s the lesson of today’s downturn.

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We’ve discussed the e-children, those 75 million people who never (or almost never) knew an unwired world.  Once called Generation X, Generation Y or the Millenials, e-children are the people your business model needs to understand and engage, in short because they are better equipped than your organization is to communicate and collaborate, to generate and recognize value from intellectual property.

The origin of the e-children as a force in technology – and therefore business – begins with a single message from a man named Linus Benedict Torvalds sent August 25, 1991.  It reads:

” Hello everybody out there using minix -

I’m doing a (free) operating system (just a hobby, won’t be big and professional like gnu) for 386(486) AT clones. This has been brewing since april, and is starting to get ready. I’d like any feedback on things people like/dislike in minix, as my OS resembles it somewhat (same physical layout of the file-system (due to practical reasons) among other things).

I’ve currently ported bash(1.08) and gcc(1.40), and things seem to work. This implies that I’ll get something practical within a few months, and I’d like to know what features most people would want. Any suggestions are welcome, but I won’t promise I’ll implement them

Linus (torvalds@kruuna.helsinki.fi)

When Torvalds, a Finnish programmer and user of the UNIX variant called Minix, sent the above to a group of Minix users, he started a reversal of the classic relationship of customer to vendor that your business is now dealing with every day.

Torvalds and his group began to build Linux, and in doing so, changed forever the enterprise computing landscape in a fundamental way.  He did this by racing ahead of every UNIX vendor to a vision of a free operating system technologically worthy of running everything from banking to nuclear safety to airline reservations.   Then, he organized the team to build it.

This is what e-children do: they see a need, and they build what it takes to fill that need, self-organizing along the way.

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Building sophisticated educational tools out of cheap parts, Johnny Lee demos his cool Wii Remote hacks, which turns a $40 video game controller into a digital whiteboard, a touchscreen and a head-mounted 3-D viewer.

His “business plan”?

1) Hack a $40 Wii remote
2) Write controller software
3) Give it away
4) Ruin the year of a product manager at 3M, whose comparable hardware product runs between $1 and $2K retail.

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As I mentioned in the last post, the future of your industry — all the new ways it will develop, communicate, decide — isn’t something you farm on your plot of land, under your control.  Instead, it’s hidden in the forests outside your fence, growing wild.  The print industry ignored that forest, and was ambushed by the “enemy” hidden therein.  You don’t have to make the same mistake.

You’d better not make that same mistake.

The new talent is not lined up outside your HR department, waiting or hoping for your attention or offer. Instead, they are on the move en masse for their own reasons, pursuing their own interests.  Creating their own paths and communities.  Since they’re not coming to you, you’ll need to approach them.

Who are they?  Some call them the E-Children.  I’m one of them, and I’ll tell you what I know.

Our earliest birthdays were in the late 1960s, which makes a fair lot of us categorizable as “Generation X“, or born between 1965 ad 1976 – numbering approximately 51 million.  But the larger group is the Millenias, once referred to as “Generation Y”.  Born between 1977 and 1998, there are 75 million of us.

We have mantras.  Sure, not all of us, but enough of us can agree on some universal basics of the digital landscape.  We must repeat:

The Power Of We
I Have A Voice
I Can Build It Myself
Information Is Open

All of these things need exploration!

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In his 1982 book Critical Path, futurist and inventor R. Buckminster Fuller talks about the “Knowledge Doubling Curve”. Fuller’s curve, which extends to the past as well as the future, plots the points where overall human knowledge doubles in volume.

Professionals will recognize a similarity with Moore’s Law, which has become a kind of barometer for measuring the power of humanity’s computing machines at any given moment, based on the historic periodic doubling of speed and memory of computers. Likewise Fuller’s “Knowledge Doubling Curve” can be summarized as follows;

The more we know, the faster we know more. Knowledge volume undergoes exponential growth, doubling and redoubling over time.

This is not such a big deal to live through if you happen to be alive during a  much earlier period in history. Long ago, the curve indicates a knowledge doubling only once every 100,000 years.  But exponential growth of the rate of knowledge means that the interval between times when we “double down” on what we collectively know has radically shrunk and continues to shrink.  Further, we are living in the time of the steepest climb in the rate of knowledge growth.

According to most researchers we are today in an era where knowledge volume doubles every 1 1/2 to 2 years.  Comparing our time to the preceding 10,000 years, where the curve is mostly flat, we are right to strap ourselves in — because that curve is approaching a trajectory leading straight up.  (Or “straight out” as Fuller might say, but his personal knowledge curve was always pointed toward the ceiling.)

While it is difficult to get your head around the rate at which the sheer volume of stuff we know is increasing, it is true that there are no signs of this pace slowing down even as other indicators of our society surely are.

This sets the table for the idea that the current economic recession is irrelevant to innovation in knowledge management — which is an idea you’ll hear a lot about at Project 22.  Make no mistake: innovation comes from the fringes of business and institutions.  It is no longer the sole domain of the large companies with massive research and development budgets.  The state of technology, the number and quality of available tools, put together with the general knowledge of today’s high school student is more than enough to upset any business model.  This uncontrolled power has been chipping away at Microsoft’s market share for many years.

Historically, protecting a business from disruption meant keeping close tabs on known competitors or on sector jumpers making acquisitions. Once, there was significant warning and time to observe and adjust to newcomers. No longer.  Today’s landscape more resembles a guerrilla war, which, as history shows, isn’t exactly new to the US.

When the thirteen original US colonies declared a revolution and went to war with the British in the eighteenth century, they were able to get a foothold against a much larger, much more organized army because they fought an nontraditional war. They did not fight in the way the British expected, in the way it had always been done.  The colonial army did not head out into the open in classically organized lines of battle. Instead, they fought from behind the trees, utilizing an ambush philosophy. The colonists changed the dynamic of war and put it on their terms – and birthed a superpower doing it.

Full-Court (Printing) Press

To watch this guerrilla fight right now, just look to the news media industry.  Like the British in our story, newspapers did not know they where being ambushed by online media until they had already lost half the battle. They were a legacy industry doing business the same way they had for over a century. Unfortunately, it was in the forests around them that their hidden opponents became armed with ever-doubling knowledge and tools to build applications to better meet evolving costumer need. And exactly like the British, the entrenched news media was unwilling or unsure of how to adapt to these tactics.

Not Like Us

Unlike in traditional channel protection, this new “enemy” ambushing traditional business is, for the most part, not deliberate or malicious. Instead, they are living in what amounts to a parallel universe. Their universe contains a new set of expectations of the possible, where the concepts of privacy and community have different meanings. The tools at their disposal are enormously powerful. If they cant find a tool or a knowledge base they want, they self-organize, collaborate and build it by the tens of thousands.

The experience of the newspapers is not unique. Many industries are unwittingly engaged in a similar battle. Success can be achieved first and foremost through developing an intimate understanding of the underlying motivations and the driving forces of the communities which are reshaping markets.

The good news is the communities are hungry to be engaged. A fantastic opportunity lies out there for those willing to figure out how engage them and evolve. In the next few blog posts I will explore the culture of these communities; what motivates them, what drives them and how to begin to engage them.

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