Posts Tagged ‘Start-up’

The Death of Commoditization. The Birth of the Small Business

October 20, 2009

by joseph.young.2009

Image Source: Wired.com

Image Source: Wired.com

In today’s society, there is the belief that “free is good.” I have this belief as well, but I do think there are times when the saying isn’t always true. A situation that stands out for me is new products in the marketplace. When you see or hear about a product from a friend, in the news, or by any other means, what you’re hearing a someone’s invention. It is something they (the company) created by trying to understand their customer (often themselves) and making a product that serves their customer. That is the essence of new product development. You find a need in the market, and then you try to fill it with a product that you think the consumer would enjoy and purchase. And you, as the creator would be rewarded. In today’s society, that reward is financial, social, or some other high value asset.

Source: stock.xchang

Source: stock.xchng

So back to the inventor. This inventor has created something that they think you will like. And by buying their product, you say, “I like your product and I will support you.” What makes you decide to buy it? Maybe you tried it. Maybe a trusted friend recommended it to you. By some marketing initiative, you became aware of the product and decided that you wanted it enough to be willing to pay for it.

Source: Stock.xchng

Source: Stock.xchng

The problem with commoditization is that it drives down the quality of the product as the price drives towards zero. One example of this direct relationship between quality and price can be seen in toilet paper. Toilet paper is, in essence, free. If you wanted to, you could get toilet paper free for the rest of your life and never have to pay for it. Now I don’t know where to get reliably source of free toilet paper from, but a quick search would answer that question. The bigger point is that even in a market with free products, people pay. And people will pay a fair amount for high quality toilet paper. The point is that a commoditized product is often of poor quality, so the majority of consumers will pay for a higher quality product. You can pay with money, as in toilet paper, or with information, as in Google.

Source: stock.xchng

Source: stock.xchng

My proposal to you, the consumer, is to consider, “Why would somebody create something in a commoditized market?” Are they trying to make a quick buck? Or are they making something they believe in and think will improve your life. If you believe the reason they made the product is to make your life better, then I ask you to buy it. By buying that product, you are supporting the inventor’s dream. You are an early adopter. You buy into their dream product. The current iteration of the product may not be your dream product, but by supporting them, you give them another chance to make something better. You keep their company in the race. By selecting a commoditized version of the product, you don’t give them the chance to even try again. Aren’t we supposed to support smart risk taking? Without such, society wouldn’t grown and flourish.

Advertisements

Stumbled Upon Sites

December 16, 2008

by joseph.young.2009

I ran into a bunch of new and exciting website links. I thought I’d share them with everyone who doesn’t already have their day filled with next generation business news. Here goes…

startup.partnerup.com

Source: startup.partnerup.com

http://startup.partnerup.com/

All about startups, entrepreneurs, and small business. All the time.

truemors.com

Source: truemors.com

http://truemors.nowpublic.com/

A rumor spreading website.

http://www.tilzy.tv/rex-sorgatzs-im-just-sayin-aims-to-be-diggnation-for-girls.htm

Online webisodes blog. I never knew there was so much dang web content. And of good quality!

vimeo.com

Source: vimeo.com

http://vimeo.com/imjustsayin

Conversations amongst friends. Unscripted. On tape.

I don’t have nearly the amount of time to read all this content. Anyone want to follow it and share their google reader shared items with me? Otherwise, I’m going to miss stuff on it.

Play Conference and New Business

November 15, 2008

by joseph.young.2009

playconference.org

Source: playconference.org

Attending the Play Conference at UC Berkeley brought about a key insight about business school that ties in to the new way of thinking. Intelligence is moving away from knowledge and moving towards algorithms.

Growing up in a Google world, people learn about information via tools rather than concrete facts. A growing population thinks about intelligence as how quickly you can access data. If we can pull it from memory, retrieval time is in milliseconds. If we can’t think of an answer in memory, the growing Google thought process is to use an algorithm (proper question) to get the information we want. This pushes out our knowledge beyond what’s stored in our brain to what we can find very quickly on the internet.

The same is true for business. Instead of pure skill set that you can bring to a company, it is also about surrounding yourself and the ability to find people to complete your team. Sites such as LinkedIn allow people to have a Rolodex in their head, or computer, or phone, or on the Internet. What makes it great is that it allows you to find people beyond your knowledge base via networks. Again, we use algorithms to find the right person for the job.

Business school (especially a full time program) allows people to build their network and learn tools for enrichment. Rady has afforded me the ability to meet a top class of talent who I will tap in my future business endeavors. Beyond that, they provide me with their network so that I can hire trusted employees who will help my businesses succeed.