Week 2 Learnings

            Ok, I am back to share some more thoughts from week 2.  This week focused on some very interesting topics about the effects of the Internet and more importantly social networks on business.  The short video lecture about the liquidity of information presented several different ways of doing business via the Internet.

            First it spoke about the fairly familiar strategy utilized by Amazon.  Amazon utilizes the Internet to capitalize on economies of scale never before seen.  This allows them to have such low operating costs and achieve great business success.  There is nothing you can’t buy on Amazon and they deliver it at a very low cost.

            The lecture went on to speak of various other forms of business made available by the Internet and the rapid communication that it provides.  The most interesting were the concepts of crowdsourcing and social business.

            Crowdsourcing is pretty much the idea of allowing the public to do the work collectively.  This is a great concept from a business standpoint for several reasons.  First it can be a great way to eliminate or limit costs.  People are often willing to contribute ideas or work to a project just simply for the joy of creating.  If you can tap into this desire you end up with low cost labor that produces high quality work because they care about it more than an employee might.

            The other benefit is the social aspect of crowdsourcing.  People with a common interest that work on a common goal for the joy of the work.  These types of projects often yield the highest results.  You can tap into a knowledge and skill base beyond what you can employ.  In addition, the social aspect allows many consumers to feel more a part of business.  People are interested in creating and to feel like they have a hand in creating generates value to the customer.

            These two concepts were also the main point of the article The Dawn of the Human Network.  This article gave many examples about how crowdsourcing has changed the way companies operate.  From startups like Threadless, which began with a crowdsourcing model, to the adoption of crowdsourcing by P&G, crowdsourcing has increased productivity and profitability.

            The main point that came across to me is summarized best by this quote from the article:

            “The best person to do a job is the one who most wants to do that job; and the best people to evaluate their performance are their friends and peers who, by the way, will enthusiastically pitch in to improve the final product, simply for the sheer pleasure of helping one another and creating something beautiful from which they all will benefit.”

            It is both the efficiency and the social nature of crowdsourcing that makes it so effective.  The combination of the human networks power being utilized for business gains is the future of business.  This article did and excellent job of portraying this.

            The other article assigned was interesting but short.  It was titled How to Build Your Startup Without Learning Code.  The main take away was the fact that the traditional model of creating a business plan and then seeking financing is going away.  It is much more about the visual presentation of your concept.  This can be achieved in a number of ways but mainly the idea is that the concept is more important than the business jargon of a formal plan.  Great ideas are what makes business turn.