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by
Bharat Anand
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December 1 - December 10, 2017
The management of Yellowstone’s 1988 fires had several notable features. First was the sheer bad luck of the cigarette butt and horseshoe spark—we can call them benign triggers. Second was passive management response—the apparent indifference of park supervisors, in part traceable to the distressingly inaccurate predictions of fire experts.
Third was the intense managerial disagreement and conflict over the appropriate course of action.
we tend to search for a universally right solution rather than recognizing that what the right decision is should reflect the context.
These are seemingly rational and sensible behaviors that turn out to be flawed. This is what I call the Content Trap.
It has three main expressions,
Just as there are three expressions of the Content Trap, there are three types of connections central to our story: connections between users, connections between products, and connections across an organization’s activities.
Figure 1: The Connections Triad
They have come to be built around certain premises: change as threatening, listening to your customer, and the value of forecasting. This book diverges from the usual view on these matters, as follows.
The link isn’t the superior quality of products or the ability to innovate and bring new offerings to market first. The link is the ability to recognize and manage connections across users.
Content has been a curse. It causes you to think you can make what’s going to delight customers. It causes you to ignore user contributions. It causes you to focus on your own content rather than on how to get the best content in the world—content anyone can make.
Superior products are great, but strategies that exploit connections are better.
The problem is not uncommon: confusing the benefits of scale with those of networks. Scale benefits come from fixed costs, network benefits from communication.
“Forget and borrow” is how they termed it. It was an approach that would define its digital businesses for many years.
The main reason was our technical team. It had the nerve, the attention, within minutes, to take everything else off our news site, except four lines of news in the beginning. So our servers didn’t crash.
Their key insight was that the real value of bundling came not from combining products that were similar but from combining customers with different preferences.
The normal reflex of management upon seeing a decline is to ask: How can I get out of my physical infrastructure? How can I variablize costs? How can I manage this problem down? And we have done exactly the opposite. We call it our zigzag: Everybody went zig, we went zag.
If you can’t reduce costs, increase your revenue. It’s a simple formula, but it’s hard to make it work.
That’s what prompted SD to shift its approach to news production, moving toward what it called “planned journalism.”
A firm might signal its quality through advertising—not because advertising was necessarily lucrative, but because a low-quality firm could not afford it.
Second, the tendency is to treat as the unit of analysis the individual user, rather than connections between them.
Two products are complements if a user’s value from consuming both is greater than the sum of her values from consuming each alone.
Specifically, the demand for a product goes up when the price of its complement goes down.
Make one product (iTunes) easy to use, widely available, and cheap, and thus create dramatic demand for its complement (the iPod).
It’s good not to define product or business boundaries too narrowly. To do this, ask what complements your customers find useful when they buy from you, not just what features they care about in your product alone (see Figure 11).
Price according to where you have a competitive advantage, not just based on rules that make sense for others.
Popular assets command dollar payouts that often far exceed their direct popularity, yet simultaneously result in massive benefits for the paying firm as well. They do this because of spillover effects.
Brown’s success after The Da Vinci Code did not come from new content, but from “backward spillovers,” in which today’s hit draws attention to yesterday’s content.
Center your magazine on individual writers, on breaking news, or on the diversity of voices you offer, and the Internet—as well as the hundreds of competitors it brings—is poised to destroy you.
But writers are often the best marketers
Operational effectiveness was about doing things better, activity by activity. Business strategy was about being different, and combining connected activities. Recognizing the difference was central to success.
Copy any single choice and, because it’s connected to so many others, you’ll actually be worse off. Try to copy, say, ten of them at once and it will be exponentially harder to do so.
But regardless of where you look, there are two questions any strategist must answer: Where will you play, and how will you win?
Figure out which customers to go after and what they really want. Then deliver on it in a unique way.
“If you’re in media,” he noted, “don’t start by understanding what you offer to readers. Start with a view of how people are finding out about news, how they’re using news, and how they’re buying news.”
Once you’ve formed a worldview about customer behavior, you’re ready to tackle the second part of the strategy process: figuring out what to offer customers in a way that matches their behavior with your unique capabilities.
Bathroom breaks, refrigerator visits, and side conversations were as problematic as any ad-skipping technology could ever be.
How many times can you go to the bathroom
Did the results generalize beyond eBay? For large companies with well-known brands, the endogeneity logic ought to raise similar concerns about paid-search effectiveness, the authors noted.
Product-centered advertising is designed to convince you to purchase a product even when you might not want it. Consumer-centered advertising makes it easier for you to find a product that you want.
They are all there. It’s what I refer to as an eco-tone. It’s a place where two ecosystems come together, a transition zone.
Although it didn’t save the brand from its structural and operational troubles, it was the most successful non-TV campaign of the Super Bowl.
So what
This logic eventually gave rise to the name we’d ascribe to our online program—HBX CORe, or Credential of Readiness.
Create to connect. Expand to preserve. Dare to not mimic. These are simple ideas. Yet so often we fall into the trap of doing exactly the opposite.
