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via Idiot Souvant and Kemistry Gallery

Micro companies need mega corporations

My previous post highlighted the rise of the micro company - this post will look at the flip side of this trend - the consolidation of power in mega corporations.

For every cottage 'power seller' there has to be an Ebay, for every stall in the 'market place', an Amazon, for every millionaire bedroom software developer, an App Store

The lubricants in the micro company economy are concentrated in the hands of the internet giants. To take an example

• John sells his screen-printed T-shirts on Ebay.
• His customers, if they don't find him there, stumble across his Etsy store on Google.
• They pay by Paypal.
• The goods are shipped by Fedex.

The paradox of network effects in the modern internet architecture is that structural power is most successfully achieved by devolving power to the masses. The platform is the power.

The rise of the micro-company

I've been reading Tim Ferris' The 4-hour Work Week recently and he identifies that one of the key enablers of the new work is the increasing ability to successfully outsource functions that previously would have had to have been performed in-house.

The theory of the firm supports the existence of large organisations that reduce costs by performing tasks in-house. Thus it becomes cheaper to hire a web designer and pay a full time salary than hiring one only when needed for specific projects.

Decreasing costs of communication and collaboration have flipped this on its head. Sites like Elance mean that professionals can be hired on a project-by-project basis.

There has been tremendous growth in freelance work over the past generation, and in some industries freelance work is becoming so dominant that it is considered bad advice to get a job.

However, there will also be the emergence of 'micro-companies', that are able to serve huge markets with tiny numbers of full time staff. Think Craigslist, with just 23 staff.
37signals called this market the Fortune 5 million.

It's not just internet companies. As Tim Ferris showed in running BrainQuicken, with a virtual assistant and an loose network of support service providers and online affiliate resellers, individuals are able to operate companies that support order books far larger than traditional companies, which require staff to make sales from physical stores.

With the rise of software as a service and online human marketplaces such as Amazon's Mechanical Turk which allow individuals to scale their operations as needed, this could soon become the 'Fortune 1 billion'

The future of work

I would like to take a break from education to look at what comes after education - the world of work, and how technology is likely to disrupt the traditional (in the mass-industrial era) patterns of employment.

The industrial notion of a stable job in a large corporate, with its clear hierarchy and defined experience, is being replaced by an ever shifting landscape of nomadic individuals combining in flexible and fluid organisations.

There are a number of key forces acting on society's current economic reorganisation, including

• decreasing costs of organisation
  
• declining capital costs of tools of value creation
• rise of the creator economy
  
• expansion of education
  
• extension of working life

I will try to look at these over the next few posts, and seek to identify how technology is shaping organisations - both from the social perspective of the individual (i.e. relationship with employer) and from the managerial perspective of the organisation (relationship with employee).

A pause

There's been a brief hiatus where I've been very busy at work.

I am also now using Twitter to highlight interesting articles when I've not got the time to go into greater depth - see the box on the right or follow the updates here

Very interested to see if Twitter represents the hive mind that some view as the future of search.

Having read James Surowiecki’s The Wisdom of Crowds a couple of years ago the idea of emergent properties resulting from individual micro-actions is intriguing. But as with Google, the true impact of Twitter is likely to be some way off as users both shape and adapt the service through improved 'Twiteracy'.

A response to 'Hacking education (continued)'

I highlighted the Union Square Ventures 'Hacking Education' event in a couple of previous posts here and here.

The event happened recently generated a lot of ideas. (Ken Robinson, who's TED talk I've mentioned before was one of the many attendees)

Fred Wilson has a summary of the key themes of the day here.

My initial thoughts are that current trends in both technology and more importantly society suggest that many of these ideas will become closer to reality quicker than seems possible.

However, we must be careful not to extrapolate too far. A couple of initial thoughts spring to mind around the need to differentiate between education for older students and younger children.

I would guess that a large part of the VC interest in education surrounds the potential to expand the market beyond the traditional school/university model and encourage continual learning/skill development (with the extra revenue potential that this may bring).

People are using technology to communicate and share information in new ways. Many of these will find their way into the education system and this process will bring huge opportunities and transform the ways in which people learn (and are taught - or more importantly, teach themselves).

However I believe that students' ability to take full advantage of these opportunities will depend on them having a solid foundation, laid by caring and attentive teachers. As BF Skinner said:

"Education is what survives when what has been learned is forgotten"

iSchool

Apple have recently added iTunes U into the iTunes store.

As a longtime skeptic of Apple evangelists, I was somewhat frustrated to find myself joining their camp when I recently got an iPhone.

Without lavishing undue praise on Apple (there are enough sites doing that, and soon even a film) one thing Apple has successfully achieved repeatedly in the past is disruptive innovation.

If there is anyone who can simplify and popularise education it is Apple.

Not only do they have the right brand image to get kids to check out the new offerings, they also have a history of ensuring that ease of use is a priority. The more accessible educational material is, the more it is consumed.

Someone who starts off downloading an Oxford lecture that uses Facebook as an introduction to the theory of the strength of weak ties can easily move on to listening to a reading of Beowulf.

While Apple's move will not revolutionise education overnight (how many schoolchildren have iPhones?), where Apple focuses, others usually follow.

Unlocking passion creates outliers

Ken Robinson's new book is about how 'How Finding Your Passion Changes Everything'

Why is this?

Because it enables you to achieve success. Malcolm Gladwell recently popularised the 10,000 hour theory of success in Outliers. Gladwell's theory shatters the myth that some people are inherently more talented than others, attributing success instead to sheer hard work. His examples include the Beatles and Bill Gates, who had spent 10,000 hours programming before he'd even hit college.

That is why enabling people to find their passion changes everything. Nobody has the determination to rack up 10,000 hours doing something they don't enjoy. Yet when you are passionate about an activity, you positively want to invest as many hours as possible - because its not 'work' or 'practice' - it's just you, doing what you love.

The 10,000 hour rule and its emphasis on hard graft explains the virtuous circle that people are good at what they enjoy and enjoy what they are good at.

If education did a better job of helping people discover their passions, then maybe Gladwell's subjects wouldn't be such outliers.

Hacking education (part III)

The title of this post comes from two posts entitled 'Hacking Education' which I read recently.

I referred to the first in my post below. It is written by the venture capitalist Fred Wilson over at www.avc.com.

The second comes from Jeff Jarvis (author of What Would Google Do?)

The fact that venture capitalists are looking to invest in educational ventures is exciting because venture capital has a history of stimulating disruptions by providing the necessary finance to innovative companies.

But I also think that it his post is exciting as he sums up the opportunities that technology offers education

The tools to do this are right in front of us; peer production, collaboration, social networking, web video, voip, open source, even game play. I think we can look at what has happened to the big media institutions over the past ten years as a guide to how to do this...We all have to start participating and engaging in educating each other.

As I outlined before, money alone cannot change things. However Jeff Jarvis sees increasing pressure in both supply and demand:

I’m one among many who believe that there are huge opportunities in education, not just to change and improve it but to find new business opportunities. That’s true especially now, as the economic crisis forces people to reconsider and change paths.

Who needs a university when we have Google? All the world’s digital knowledge is available at a search. We can connect those who want to know with those who know. We can link students to the best teachers for them (who may be fellow students). We can find experts on any topic. Textbooks need no longer be petrified on pages but can link to information and discussion; they can be the products of collaboration, updated and corrected, answering questions and giving quizzes, even singing and dancing. There’s no reason my children should be limited to the courses at one school; even now, they can get coursework online from no less than MIT and Stanford.

However for a true reflection of the potential for education to be 'hacked', I think this video says it perfectly on so many levels