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Collaboration vs Competition

[ photo courtesy ]

There is no limit to what can be accomplished if it doesn’t matter who gets the credit.

Normally attributed to either Ralph Waldo Emerson or Harry Truman, this quote is one of my favourites as it’s a pithy reminder of how much more we can achieve through collaboration than through competition. And a reminder of how much we often fail to achieve because we’re so focused on trying to make sure we get the credit.

It’s true in so many walks of life, but sadly particularly true when it comes to agencies’ work. We all talk the talk about integration with agency partners – but when push comes to shove, everyone’s constantly fighting to get the credit. Because in the main, we work within a model that doesn’t really reward collaboration, and in practice rewards singular ownership of ideas. Sure, awards entries may get jointly submitted, but the winner will always claim it as ‘theirs’. And of course the same examples appear in multiple agencies’ creds – and rightly so because good ideas have many fathers (or mothers) – but in each case you’ll generally have each agency claiming each idea as ‘theirs’, relegating agency partners’ contributions to the sidelines.

At Naked a lot of our IMC processes revolve around co-creation with multiple stakeholders, including people from around the client organisation and different agency partners. But when we share examples of work resulting from various IMC programmes with new prospects, we’re frequently met with a response along the lines of ‘yes, but whose idea was it‘.

Ideas are our currency. So it’s totally understandable that we want to protect them, lest they be stolen by a competitor and they claim the credit – with damaging consequences both to our reputations and our bottom lines. But in doing so, we lock great ideas down, stifling the potential of what they could be if we could collaborate instead of competing. And maybe it’s a utopian view that’s incompatible with the stark business realities of our industry, and how much appointments and remuneration are tied with being able to claim ideas as ours.

But just think what we could achieve if we were truly, genuinely able to be more open and collaborative in our day-to-day working practices, instead of worrying about who got the credit?

January 20, 2010 in Business | Permalink | 5 Comments

How David beats Goliath

Nice piece by Malcolm Gladwell in the New Yorker about how underdogs come out on top – by breaking the rules:

Insurgents work harder than Goliath. But their other advantage is that they will do what is “socially horrifying”—they will challenge the conventions about how battles are supposed to be fought.

The first point is pretty straightforward, and very much along the lines of the ’10,000 hours’ theme in Outliers – that the underdog simply tries harder. Goliath gets lazy and David sneaks up behind him – the hare is beaten by the tortoise.

The second point’s no massive surprise either – Davids often win through guile rather than force – by changing the rules of the game. The status quo works well for the Goliaths – less so for the underdog. So Davids don’t follow the herd. To be a challenger, you have to upset the applecart – it’s all very well trying harder, but you’ll only ever be running uphill unless you start trying to beat the big boys at their own game by playing a different game:

The political scientist Ivan Arreguín-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact. Arreguín-Toft was analysing conflicts in which one side was at least ten times as powerful — in terms of armed might and population — as its opponent, and even in those lopsided contests the underdog won almost a third of the time. . . .

What happened, Arreguín-Toft wondered, when the underdogs likewise acknowledged their weakness and chose an unconventional strategy? He went back and re-analysed his data. In those cases, David’s winning percentage went from 28.5 to 63.6. When underdogs choose not to play by Goliath’s rules, they win… even when everything we think we know about power says they shouldn’t.

It’s not exactly earth shattering news that the underdog has to behave with more wile and cunning than his opponent. But it’s not just simply a case of thinking outside the box. Changing the game takes guts. It’s risky. And having the courage to take risks, and the tenacity to give it your all, still isn’t a guarantee of success. But when doing nothing leads to almost certain defeat, isn’t it better to have tried and failed, than never to have tried?

It’s all very well talking about wanting to be a challenger brand. But to be a successful challenger, rather than one that just talks about it, you have to make some scary choices.

Davids do try harder. Davids are smarter, more nimble, more agile and more sneaky. But most importantly of all, they have a whacking great set of balls.

May 22, 2009 in Business | Permalink | Leave a Comment

Something for nothing?

[ photo courtesy ]

It’s an absolute inevitability that we’ll see more and more businesses looking to adopt different business models in 2009, as the old advertising-based model becomes less and less tenable, as the economy slows and the ad revenue dries up.

Chris Anderson’s original exploration of the the different models for free started to outline some of the different business models for free-to-consumer provision of content and services, of which advertiser funding is just one.

He’s followed this up with an article in the WSJ, The Economics of Giving it Away, in which he examines how models for free stand up in the current economy. Working through the list of usual suspects that arguably haven’t yet worked out how to turn huge numbers of users / traffic into huge money (Twitter, Facebook, Digg, et al), Anderson notes:

A year ago, that hardly mattered: The business model was ‘build to a lucrative exit, preferably in cash.’ But now the exit doors are closed and cash flow is king. Does this mean that Free will retreat in a down economy? Probably not. The psychological and economic case for it remains as good as ever—the marginal cost of anything digital falls by 50% every year, making pricing a race to the bottom, and ‘Free’ has as much power over the consumer psyche as ever. But it does mean that Free is not enough. It also has to be matched with Paid.

Freemium is one of the most flexible web business models, and it’s surely inevitable that 2009 will see a flood of organisations looking to adopt varying forms of the freemium model.

Anderson observed in his original article that although freemium is based on the age-old practice of product sampling, the significant twist is that ratio of free to paid is flipped. The traditional sample is distributed in very limited quantities, with the aim of persuading as many recipients as possible to go on and purchase the product or service for themselves. Yet in the digital world, instead of giving away 1% of your product to sell 99%, you give away 99% of your product to sell 1% (because, where the marginal cost is close to zero, the 99% cost you little and allow you to reach a huge market, so your 1% conversion may be 1% of a very large pool).

Free is changing. When you think about it, there are two economies, one of atoms and one of bits. In the atoms economy, which is to say most of the stuff around us, things tend to get more expensive over time. But in the bits economy, which is the online world, things get cheaper. The atoms economy is inflationary, while the bits economy is deflationary.

The 20th Century was primarily an atoms economy. The 21st Century will be equally a bits economy…the differences between 20th Century free and 21st Century free [ will be ] free moving from a marketing trick to a new economic model.

There’s some really interesting analysis of the different structures for successful freemium businesses on the Long Tail blog . Estimates for the number of free Flickr users that convert to paid Flickr Pro range from 5-10%. Ning says 3% of its 500,000 social network creators pay for the premium version. And shareware software programs often see less than 0.5% of users paying up. But other companies do much much better. But others companies are able to do much better. Intuit offer basic TurboTax Online free for federal taxes, but charge for the state version – with a reported 70% of users opting to pay. Although Anderson admits it’s a special case in that most people need to pay both federal and state taxes, it nevertheless still shows that high conversion rates are possible in the freemium model.

The classic subscription model for content isn’t anything new, and there’s no doubt that where advertising has been the preferred model for providing free content, persuading some users to pay won’t be easy. But the answer is, as it’s always been, that you need to make something valuable to the user, that’s worth paying for. Jason Fried at 37signals has written an excellent post outlining the benefits of a monthly recurring revenue model – but the key for the consumer is that they make great software that people are willing to pay for.

I reckon it’s a pretty safe bet that we’ll see more and more businesses moving towards the freemium model in 2009, but that whilst some will flourish, others will fall by the wayside. It’s not enough to rely on advertising bucks to fund shitty content, products or services – make something valuable, you’ll pull through. Make something crappy, and you’ll fail.

[see also Dave Rosenberg at CNET for some further thoughts on the rise of freemium in the down economy ]

February 16, 2009 in Business | Permalink | 2 Comments