Monday, September 08, 2014

On Co-Creation ...

Co-creation is an extremely useful technique but it should be remembered that it's not suitable across the board. When I examine a map of the landscape then I tend to advocate its use in particular circumstances.

However when creating the novel and new (i.e. the genesis of an activity), it's actually better to get everyone else to create it for you and to exploit their creations to identify success. This is more You CREATE and I EXPLOIT and there is little collaboration to it.

An example of this is the ILC (innovate-leverage-commoditise) model which I've talked about extensively in the past. The model starts with a company first creating the industrialised services that you build upon (what is often called a platform) and then growing an ecosystem of companies consuming those services. 

The technique is incredibly powerful (it's a force multiplier in competition). If correctly used then my apparent :-

1) rate of innovation i.e. how much YOU are creating for me to EXPLOIT
2) rate of customer focus i.e. how much I'm EXPLOITING creations YOU made to give to others
3) rate of efficiency i.e. how much I take advantage of economies of scale by all YOUR use.
4) stability of revenue i.e. volume of predictable industrialised services I'm providing to all of YOU.
5) ability to maximise opportunity i.e. how much I am able to spot future success from YOUR experiments.

... all increase, simultaneously with the size of the ecosystem.

Spotting a company using an ILC like model is fairly easy. Whilst the company might grow in terms of physical numbers of employees, it's apparent rate of innovation, customer focus and efficiency all seem to accelerate at a faster rate (because it's growing with the size of the ecosystem). Worse, this seems to happen all at the same time (counter to the old ideas of you can focus on one).

A telltale signal is when people & other companies start grumbling that this company has just trampled all over their business models. Words like 'eaten the ecosystem', 'bully' tend to get mentioned a lot. At the same time, customers (i.e. those not being trampled on which can include other companies) benefit from the net effect of an increasing number of useful services. This tends to act as a magnet and the model is therefore reinforcing with plenty of network effects.

Anyway, more information on ILC can be found from reading the above post (linked here also).

So, why do I mention this? Well, first of all the ILC technique has been in operation for almost a decade. Hence, to anyone who is recently discovering the force multiplier effects of ecosystems - can I suggest that something is going terribly wrong with your horizon scanning. 

The second reason is someone just asked me whether I thought Amazon was a good example of co-creation. Oh, you're kidding right? Seriously?
Post a Comment