This post is a synthesis of two posts I originally published on my other blog "unRelated".

One of the key foundations and most attractive principle of Agile or Lean methodologies is that  "Everyone can help each other remain focused on the highest possible business value per unit of time".

I am certainly a strong supporter of that principle. However, value is often difficult to assess, I would actually argue that it is easier to identify what has less or little value, but what we think as valuable can potentially lead to many false positive, or simply be "business-as-usual" and hide the broader structure of the solution. 

"User Stories" are the corner stone of identifying and delivering value:

An argument can be made that the user story is the most important artifact in agile development, because it is the container that primarily carries the value stream to the user, and agile development is all about rapid value delivery.

In practice, very few people focus on the benefits part of a user story. All user stories I see are either what we used to call "requirements" (just phrased slightly differently but isomorphically) or "tasks" needed to advance the state of the project.

However, there is a fundamental flaw in the construction of user stories, even when they are properly written, because they somehow make an assumption about the shape of the solution, and drive the author to turn almost immediately in solution mode, leaving no room for creative and out-of-the-box thinking.

Let's compare the metamodel of a User Story and to the formal definition of a Problem. The metamodel of a User Story looks like that (using the BOLT notation):

As a <role> I want to <action> so that <benefit>

us-model

I define a problem formally as a non existing transition between two known states [1],  the metamodel of a problem looks like that:

pb-model2

 

A solution is a way to transition between these two states. Please note that both the actors and the actions are part of the solution:

sol-model

 

This is where the problem lies when using User Stories, you are specifying the requirements with the solution in mind. There is, of course, a general relationship between some of the actors and entities of the system with the "start" and "end" states of the problem. The problem states are always defined in terms of their respective states (possibly as a composite state), but it is a mistake to think that the actors and entities that perform the actions, as part of the solution, are always the same as the actors and entities related to the (problem) states.

Hence, an action is solution centric and should not be part of the problem definition. As soon as you pick one, you have put a stake in the ground towards the direction you are going to take to solve the underlying problem. The other issue is that the start and end states are never clearly identified in a user story leading to confusion in the in the solutioning and verification process, since the problem is not defined with enough precision. Benefits could sometimes align with the target/desirable state, but the definition is often too fluffy and more goal centric, not effectively representing that (problem) state.

Ultimately, the relationship between problems and solutions is a graph (states, transitions as problems, actions as solutions), and this is where the coupling between the problem space and the solution space at the User Story level becomes unfortunate. This means that User stories cannot be effectively nested and clearly cannot fit in hierarchical structures (which is common to most Agile tools I know). This problem is quite accute as teams struggle to connect business level user stories and system level or solution level user stories. The concept of having a single parent directly conflicts with the possibility of having multiple possible transitions into a single state and decomposition principles where the same problem appears in the decomposition of several higher level problems. 

I feel that distinction is profound because we can now clearly articulate:

a) the problem statements with respect to each other (as a graph of states and transitions)

b) we can articulate the solution in relation to the problem statements

c) we can articulate the verification (BDD) in relation to the problem and solution [2]

d) we can actually articulate the Business Strategy [3], the Problem Statement, the Solution and the Verification with the same conceptual framework

e) derive the Organizational IQ from the problems being solved on an every day basis

To the best of my knowledge none of these articulations have been suggested before and no one has ever provided a unified framework that spans such a broad conceptual view from the Business Strategy to the Verification. In the proposed framework the business strategy is simply a higher level and specialized view of the problem and solution domains, but using the exact same semantics (which are described here). In other words the enterprise is a solution to a problem, which is a composition of smaller problems and more fine grained solutions, etc. This has an extremely important implication for the execution of the strategy because now both the Strategy and its Execution are perfectly aligned, at the semantic level: the strategy, problem, solution and verification graph represent a map that everyone in the organization can refer to. 

To take advantage of this new conceptual framework. I suggest that we make a very simple and easy change to Agile and replace "user stories" by "problem statements". Each problem must be "solutioned", either by decomposing it into simpler problems or solutioning it directly. Value can still be used to prioritize which problems are addressed first, that part of the Agile and Lean movement is very valuable, so too speak, but the focus on problems and solutions opens a new flexibility in how we handle the long range aspects of the solution while enabling the highest level of creativity and ultimately a direct articulation with the IQ of the organization. 

As problems are decomposed, we will eventually reach a point where the subproblems will be close to or isomorphically related to the solution. But it would be a mistake to not clearly delineate the problems from solutions, simply because at the lowest level, they appear isomorphic. 

If we start drawing some BOLT diagrams, a problem lifecycle can be defined as:
problem-lc

The fact that the lifecycle is pretty much identical as the one of a user story enables most of the Agile processes and tools to work nearly unchanged.

You may want to know "How do I write a Problem Statement?". Personally, I don't like canned approaches. Oviously here, the mere definition of the two states (low value and high value) is enough to describe the problem. If a solution already exists (i.e. it is possible to transition between these two states) you may want to describe some characteristics of the new solution. I googled "How to write a Problem Statement?" and I felt there was already a good alignment betweent the results and the abstract definition provided above. For instance:

We want all of our software releases to go to production seamlessly, without defects, where everyone is aware and informed of the outcomes and status. (Vision)

Today we have too many release failures that result in too many rollback failures. If we ignore this problem; resources will need to increase to handle the cascading problems, and we may miss critical customer deadlines which could result in lost revenue, SLA penalties, lost business, and further damage to our quality reputation. (Issue Statement)

Here we see two states for the releases: initial state (low value) tested, and the high value state (in production). There is also an undesirable state (failure) that the new solution will prevent reaching. For me the most important thing is that the problem statement must avoid at all cost to refer to the solution. Even if the people specifying the problem statement have an idea about the solution, they should capture it separately.

This new focus on problem & solution provides a rich conceptual framework to effectively organize the work of a team. After all, we have been innovating, i.e. creating solutions to problems, for thousands of years, so it is no surprise that our vocabulary is quite rich. Here are a few concepts that could be used:

Goal: a goal is not a problem, but you often need to solve problems to reach goals, so it's important to keep them in mind

Fact: a fact often constrains the solution, so they need to be clearly surfaced and accounted for

Assumption: assumptions are very important because they also constrain the solution, but in a more flexible way. Assumptions can be changed, facts generally cannot.

Statement: the problem statement is what physically replaces the user story.

Hurdle: During the decomposition of a problem, hurdles might be identified, they are not a problem per say, but they impact the solution. It could be for instance that a resource is not available in time to meet the deadline.

Snag: A problem can be downgraded to a snag as the solution is obvious to the team and represent a low level of effort. It can also be a small unexpected issue, that need to be quickly resolved.

Dilemma: A problem can be upgraded to a dilemma, when several solutions are possible and it is not clear which one to chose

Setback: The team can suffer a setback when it thought it had found the solution but it didn't, or could not find a solution and need to reassess either the problem or the approach

On the solution side, we can also capture different elements and stages of the solutioning process:

Answer: Findings related to a question raised in the problem statement.

Result: A validation that the solution conforms to a Fact

Resolution: The choice made after reaching a dilemma

Fix: a temporary solution to a problem or a snag to make progress towards the solution to the greater problem

Development: An element of the solution, usually the solution to a subproblem or a snag

Breakthrough: The solution found after reaching a setback

Way out: A solution was not found, nevertheless, the project reached a satisfactory state to meet some or all of the initial goals

...

From a management perspective. The Solution or Delivery Manager can escape the bureaucracy that Agile has created. Ironically, moving stickers around is a zero value activity, with zero impact on the organizational IQ. The solution manager can and should be responsible for the IQ of the project, which rolls up and benefits from the IQ of the organization. It should keep track of the elements that are incorporated in the solution as problems are solved. It should encourage team members to be creative when necessary and to shamelessly adopt existing solutions when it makes sense. It should help resolve dilemmas and push for breakthroughs.

The PMO organization becomes the steward of the Organization's IQ.

As we define problems and solutions in terms of entities, state, transitions and actions, the BOLT methodology provides a unified conceptual framework that spans from Business Strategy to Problem and Solution Domains to Verification (BDD).

To summarize,

1) We have provided a formal model of a problem and a solution, and how they relate to each other

2) This formal model offers the ability to compose problems and solutions at any scale, over the scope of the enterprise

3) Problems and Solutions can be composed from Business Strategy down to Verification

4) We suggest that Agile methodologies replace User Stories by Problem Statements

5) With the renewed focus on "problems", we can also integrate the work of Prof. Knott on Organizational IQ in the whole framework

Last, but not least, decoupling problem definition and solution yields a tremendous benefit in the sense that both can evolve independently during the construction process. 

_______________________________________________________________________________

[1] For instance, you build a vehicle, obviously you want to car to transition to the "in motion" state. Different "actions" will lead to the vehicle to reach that state (a horse pulling, an engine, transmission and wheels, a fan, ...).

[2] BDD Metamodel (Scenario):

bdd-model

 

[3] Living Social Business Strategy mapped using the same conceptual framework (Source: B = mc2)

lifecycle

Our latest book is available on Amazon Kindle. In B = mc2, we introduce a new, very innovative, Business Strategy Methodology: BOLT.

The iPad iBooks version will be published as soon as Apple completes the review process.

    This is cross-post from my new blog "unRelated"

In the book, we analyze the respective strategies of Groupon and Living Social. These two companies are now in a fight for their life.

Before we start understanding how they could be saved and thrive, we'd like to restate the three major strategic forces that the Platform is driving:

a) "The Platform" is opening a market of 1B+ end users often with explicit relationship between each other.

b) The Platform is also accelerating the "decoupling" of business processes. What we mean by that, is today most companies are organized around a strong coupling of a few processes, their value is actually having optimized that coupling. Take the hospitality industry and look how airBnB is using that decoupling to create a major disruption, or retail, which has optimized inventory, catalog and order/payment processes and is about to be disrupted

c) The platform is enabling an unprecedented integration between the jobs consumers are trying to accomplish and the solutions that can be made available to them, just one thumb away. Furthermore, they can provide ample feedback about the products and services they consume.

If most companies understand a) they actually do not fully realize that, paradoxically, standardization in large end user market, is the best way to never find your market. As both the cost of acquiring customer and the cost of building solutions goes down significantly, standard solutions are competing against a mosaic of optimized solutions for everything type of customers and contexts. In Blue Ocean terms, you have to conquer an ocean, one puddle at a time. We'll come back on that point below, with specific examples.

So what does this all mean to Groupon and LivingSocial?

If we look at their ecosystem, we quickly realize that very little has been done to bring the suppliers of products and services in their business model. A lot of retailers could be doing just fine, when in reality the sales of some products are depressed, sometimes at a local level. Groupon and Living Social could start selling more traditional coupon campaigns independent of a retailer. They could also explore how relationship commerce (rCommerce) could be developed.

There is also one aspect of their business that we have identified as being critically weak: they do not focus on what the customer is trying to get done, either from a Merchant perspective or from a consumer perspective, they might actually not fully understand who is there is real customer? the merchant or the consumer? We stumbled upon a report from earlier this year, from PrivCo detailing why Groupon or Living Socials should buy these three companies. Interestingly, these three companies focused on the tasks that customers wanted to get done, rather than just organizing "campaigns".

Don't stop reading just yet, because these tips are nothing, absolutely nothing, compared to what Groupon and Living Social could become if they understood the role they could play by harnessing the three strategic forces above and in particular b) by becoming the main driver behind liberating the business processes that are at the foundation of commerce today.

The plaform will force a decoupling of commerce processes in order to reintegrate them opportunistically to support the variety of tasks customers are trying to accomplish.This is what airBnB is doing to the hospitality industry and there will be major casualties in that area. What does it mean to retail? Take a combination of the Amazon's platform and the focus of Living Social on neighborhoods? What could they really accomplish together? (or what Google and Groupon could have accomplished together just as well).

People always make a purchase decision in context. Yet, hardly anyone knows about your context.Forrester released recently some numbers that show that today, Amazon commands 30% of all the product searches (with the goal of purchasing) and Google a mere 23%. Search is also increasingly being fulfilled by a mosaic of specialized solutions that better understand your context and provide actionable results (Yelp, OpenTable, TripAdvisor,...) while enhancing the search with reputation data. With the emergence of voice search, we can expect that most purchase decisions will soon start with a search, from your mobile device. Is there a better place to understand the context of your purchase than when you search for it?

Can Living Social drive the integration with local stores into the Amazon's platform, you bet, they are right there and can even use their existing business model to cover some of that cost. Could you imagine a day where, during the day, you collect the list of things you want to buy and by the time you get home, Amazon's platform would have optimized what you need to pick up, what it could deliver directly? I can, it is right there. It could even monitor the amount of calorie your family eats and recommend more appropriate choices. Could it be more integrated and perform more complex tasks? Could it answer the question: I want to spend $200 in groceries for the coming week, could you please tell me what to buy and show me the recipes to prepare the meals? It could even collect the kids favs ... though that's not hard to guess, or make sure purchases comply with some medical condition. You think we are that far off? think again, we are right there. This is true for almost anything within a family life. Living Social could help manage the entertainment budget, the travel budget and make 100% personalized suggestions. If I can afford it and reward myself or the family in the process, why would I not go for it? You see, neither Groupon nor Living Social understand what you are trying to accomplish, holistically, nor can they do it without the Platform behind.

From a merchant perspective, this should simplify inventory and order/payment processes, enabling retail to transform itself into a showroom where products are experienced and supported (repair, training,...). Don't you think merchants would love to spend their time in higher value activities? Do you think that Starbucks is using the time of their cashiers effectively when you  could have just ordered and paid from your phone? Don't you think cashiers could be instead talking about the latest products while you wait for your drink? trying to understand what you like? Yes, you get the picture, what Starbucks will do at some point for its stores, Groupon and Living Social have the potential to do it for retail altogether.

It is almost a crime to see these two companies dying with such an enormous potential and nobody to develop it. That is a win-win-win solution, the merchant wins by getting rid of ancillary low value processes, the end user wins by having a 21st century experience, Groupon and Living Social win by embracing the vision to transform commerce as we know it and harnessing the three strategic forces of the Platform.

 

    The book is progressing well and we have reached the review stage. I wanted to start giving some hints about BOLT because I feel this is something important. BOLT is a completely new form of Business Strategy methodology. The methodology is not fluff, not a set of patterns, or yet another 4 quadrant,  5 bubble or 7 letter diagram. After applying it directly in different projects, I can report that it looks very, very, promising, especially when it comes to innovating on the Platform. You can download a sample chapter here. Here is a quick summary of the conclusion:

It is a cliché to claim that the world’s complexity has reached unsustainable levels. Globalization made it even more complex by exposing further cultural and linguistic barriers. Solutions always appear to be poor compromises and often create new problems of their own. We can all witness that conflict is winning over cooperation,  status quo is often seen as more valuable than innovation and eventually, people feel they can only survive by focusing on their immediate, most visible, interest.

In a “A Rhetoric of Motives” Kenneth Burke defines Rhetoric as “a function that is wholly realistic and continually born anew: the use of  language as a symbolic means of inducing cooperation in beings that by nature respond to symbols.”

The tools humans invented thousands or even tens of thousands of years ago to communicate and cooperate are incomplete. Anyone participating in a corporate meeting, a town hall or a political debate where people wrestle with questions, issues and decisions, is faced with a constant communication breakdown which hampers progress, creates frustration, and ultimately causes entire communities, corporations or countries to fail before they can find solutions.

BOLT defines a new language, a language based on a foundational model of our world, which enhances communication and above all fosters cooperation in a multidimensional and dynamic world.

Our initial findings show that this new approach to communication is very effective to formulate and execute strategies. In a world of constrained resources, driven by dashboards and rigid structures, BOLT has the potential to restore cooperation and innovation as the core values of organizations by enabling them to:

  1. harness collective intelligence
  2. execute at unprecedented speed
  3. offer a diverse and adaptable set of products and services which can best align with their customer needs, just-in-time and just-in-place.

We expect BOLT to alter the structure of organizations significantly and foster the emergence of a continuous strategy function alongside innovation and marketing.

    This is cross-post from my new blog "unRelated"

There were a couple of articles about Amazon in the Wall Street Journal this week that caught my attention. And then, there was Venkat Rao's latest post on the Economies of Scale, Economies of Scope. Incidentally, his blog, RibbonFarm, is rapidly becoming my favorite blog.

It looks like the book industry has decided to go thermonuclear while the box stores have declared war on Amazon. This could end up being one of the most challenging holiday season for Jeff Bezos. Let's try to understand why and then let's connect Venkat's question to Amazon's recent strategic path. (Venkat also wrote last year a great piece on Amazon's strategy).

First you might ask, how could Amazon really win the Platform game against Google and Apple? Yes, I get it, Jeff pioneered the Platform, yes they can build stuff, really innovative stuff, and I wish they could win, Hollywood Style, but what are the odds? How much resources is Jeff Bezos wasting by building more tablets, and possibly a phone? why not a chrome "book" too?

So, there is a very legitimate question pointing on Amazon's horizon: where is it today? at Waterloo or Austerlitz? Amazon is facing  the mother of all coalitions that spans from Apple to B&N, and there is no fog here to hide its intentions. You might argue that the retailer flanc is weak and they are playing their last card, somewhat desperate if you ask me. When was boycotting or price matching a business strategy?

It seems though, that neither Amazon nor the retailers have a clue as to the world has become and how the architecture of retail is changing. Whether he likes it or not, Amazon is a commerce company, an amazing one: they sell, sell, sell. They are also a catalog, a big catalog, the best catalog, and a logistics engine, a big one too.

And yet, it has to be Apple, the Platform leader, who tells us that retail is not dead. There is light beyond boycotts and price wars. Retail is a major competitive weapon in the Platform era, so big, that Microsoft had to follow. The Apple Store in Bellevue that just opened is at least 10 times bigger as it was. Anyone can guess why?

If Jeff Bezos had a map of that retail battleground it probably would look like this (this diagram doesn't even start to do any kind of justice to the amount of technology Amazon innovated):

The story is the same across the entire landscape: shoppers need to see the product before they buy it, be it a book, a dishwasher or a toy, even an iPhone or a Surface.

Amazon does own a couple of key activities in the overall process: it informs the customer with the best and largest catalog on the planet, it sells at the best price point, but it can't show anything other than pictures and it can't deliver products as fast as they can be picked up from a physical location (or serviced for that matter). Shoppers quickly "optimized" the process, a modern veni, vidi, vici: find, see, purchase.

Everyone knows that, and clearly price matching and boycotting are indeed a reasonable response to Amazon's business model. So will Amazon lose on all fronts during the 2012 holiday season and will it be some kind of a Mayan event, a Waterloo of some sort? With a 1999 style P/E hovering at 300, Wall Street certainly doesn't think so.

I would certainly edge my bets. Everyone knows all too well that content is key, if Amazon's catalog doesn't have what shoppers want to buy, they'll come less often and if the same shoppers can get their hands on their toys at the right price point before they can even be shipped, yes, you guessed it, Amazon will soon be the leader of diaper and dog food replenishment. After all, maybe that's why Amazon is adopting a "fuite en avant" strategy by competing head to head with Apple and Google. Unless they think they already have won the retail battle. I actually agree, if Amazon successfully delivers a Platform, it could become its Pratzen Heights and from it, it could defeat the retailers once and for all and dominate commerce, if it fails it could lose it all and, Wall Street will send Jeff Bezos to Saint-Helena Island.

With such a majestic theater, on the eve of one of the best economic battles, you would think that all the protagonists would have given us some hint on how they will leapfrog their enemy with an overwhelming force of innovation. Unless I missed something, the strategies deployed by both Amazon and its competitors are surreal and anachronic. Nobody, other than Apple itself, seems to be able see the three major forces at play that are transforming retail:

  • the rapid emergence of rCommerce (Relationship Commerce) between people and between people and products
  • the decoupling of processes (retails couples catalog management, aka shelves, stock and order/payment)
  • the integration of commerce activities with the context of the "Jobs customers are trying to accomplish"

In effect, Amazon needs to:

  • Launch an army of rCommerce (including affiliated) apps that will allow its customers to order whatever they need in the most convenient way, just-in-time and just-in-place. The Catalog as we know it is dead. That will weaken its competitors to a point of no return.
  • Invest in showrooms children museums for the products that must be seen before they are bought (including books), a space where customers experience the products, not just see it. The shelves are gone. That will kill Amazon's competitors.
  • Build a continuous logistics engine with multiple SLAs, from Pizza delivery (and pickup) to two men an a truck to support that new commerce vision.

Interestingly Amazon seems to be investing in neither. It wants to compete with Apple, yet it seems to have no clue as to how central retail is to Apple's business model. I don't want to sound dramatic, but we all know how that will end.

So, if we go back to Venkat's post, yes, I see a 3rd function emerging in the enterprise, beyond innovation and marketing. That 3rd function is (continuous) Strategy. For way too long Strategy has been considered a static, discrete process, formulated in a retreat, planned by senior management and executed with a precision that would scare the Supreme Soviet. Yes Amazon had an incredible strategic run over the last ten years, backed by a perfect execution, and delivered the Cloud and the Kindle in the process, but today it seems stuck in Jeff's ego who wants to be on the same pedestal as Google or Apple. There is certainly a bit more glamour to compete against the iPhone compared to a Walmart shelf, but in the midst of the tectonic shift introduced by the Platform, that kind of approach to business strategy will kill Amazon in an instant.

In our book, we formulate six principles on which to build the 3rd function:

  • Strategy is not sequential
  • Strategy is not static
  • Strategy is not “value” or “cost”
  • Strategy is not “product”
  • Strategy is not “big picture”
  • Strategy is not commoditization

To continue responding to Venkat's post, he explains: “Whatever this third function, it will be heavily dependent on technology: machine learning and data technology in particular. “, I would actually beg to disagree. He is on the right track when he talks about machine learning or big data, because both of these technologies give you some kind of visibility, but what you need, above all, is human visibility, you need to do like Apple did with Cards and pick, across hundreds of features and processes, across dozens of dimensions, the one solution that will give you a decisive advantage. This is why our book is about improving human visibility, there is no amount of big data or machine learning that could have given Apple a hint about building Cards.

The economies of variety speaks to the very notion of "just-in-time,  just-in-place" or the circumstances as Clay Christensen would say. While the economies of Scale speak to affordability in the market, and the economies of scope speak to addressing the whole set of needs of the market, the economies of variety speak to being there, which is essential in a world where you can be (and must be) just a thumb away from your customers.

Continuous strategy also transcends Value Innovation, as defined by Kim and Mauborgne:

Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proposition to buyers.  

You can no longer just talk about cost and value, and you can no longer rely on Marketing to own the visibility of your products. In the platform era, it has become critical to see and be seen. Only a global and continuous strategic function would allow you compete effectively across the three dimensions: scale (cost), scope (value) and variety(visibility).

This is cross-post from my new blog "unRelated"

Amazon is a great case study for our methodology. Amazon is a formidable innovator and strategic player. Not only did Amazon single-handedly pioneered the Platform, but it remains a fierce competitor to Apple and especially Google.

Amazon's achievements are epic, Jeff Bezos took the most boring and probably oldest ecosystem on the planet, an ecosystem that had barely changed from 1440 to 1999 and turned it into the most advanced commerce platform in the world, delivered the first successful commercial Cloud, the Kindle and competes head to head with Apple and Google which have far more resources.

How did the book ecosystem looked like before Amazon (from a retailer's perspective)?

How did Amazon changed it? Venkat Rao published a thorough analysis of Amazon's Strategy from 2000 to present. We will publish our complete analysis of Amazon's strategy in the book. Here, we will simply look at how they transformed their ecosystem and how they could transform it further? Here is what we saw:

Based on the moves that Venkat identified (again, just looking at the ones that have a direct impact on the ecosystem):

  1. Being first to market with a meaningful and usable, but predatory, offering for self-publishers (Amazon Advantage) at a time (late 90s) when getting traditional distribution as a small or self-publisher was nearly impossible
  2. Creating a used-book marketplace that made used books go from 4% of the market to something like 30% in just a few years
  3. Undercutting Lulu, the pioneering self-publishing operation catering to authors, with its Createspace offering, which offers authors better margins
  4. Booting up the Amazon Affiliate program (which, from unverified sources, accounts for about 40% of sales)
  5. Making it brain-dead simple to publish on the Kindle
  6. Creating a royalty option structure for Kindle publishers (70% between $2.99 and $9.99, 35% above $9.99) that leaves you with an offer you cannot refuse for the under-$9.99 price range
  7. Once the traditional supply chain had been sufficiently weakened that traditional publishers were no longer very useful, ramping up direct relationships with authors

How will Amazon innovate in a relationship-Commerce (rCommerce) world? Here is how we see their ecosystem evolve.

Amazon could mine many different relationships:

Author-Reader: obviously with a print format, a book is static and cannot evolve until the following edition. In the Platform era, readers can ask for clarifications and authors can add footnotes and references, transforming the book into something a lot more dynamic.

Reader-Reader: Amazon is already sharing with their readers the sentences of a book that a majority of readers highlighted. Social eReaders also enables readers to exchange ideas about the book, in real-time or not. Who knows, why not even offer readers the ability to collaboratively rewrite sections of the book?

Book-Book: Amazon could create a new business model where readers can access the references of the book (for a fee), or maybe the entire referred book, for a short period of time, as you explore the reference.  How many more books do you think Amazon could sell if they let readers explore references?

Book-Products/Location: the book could also be easily be connected with products or even locations. Why wouldn't Amazon set trips based on particular stories for readers who want to follow the steps of their heros? Conversely, if you are in a given place or heading on a trip, why not be able to query your library in such a way that sections of books that talk about that particular location can be made available easily? Similarly, why not be able to purchase products based on the content of the book or search for product references in your library?

Author-Author: again, a book is inherently a static document, with a begin and an end. Why not allow authors to collaborate and let different authors create different paths that inter-relate and let readers chose the path of the story they prefer, or different levels of details. Amazon could then charge based on the path and create a revenue share model.

... and we could go on and on, talking about the relationship between books and games, books and friends, and so on.

rCommerce is here, there is a massive land grab that is about to happen since pretty much every commerce activity is unRelated today.

But that's not it, our analysis shows something else. Amazon could be fighting the wrong battle altogether  They would be extremely lucky if they could remain a platform operator and take a dent at Apple or Google's market in the long term. They lack a key component: the relationship engine (as described in our chapter, "the world in motion"). Apple has the potential to acquire its own, and Google will find ways to grow Google+, but Amazon has no means to acquire or built that capability. If it continues on its path to build a full platform, up to smartphone, it will waste precious resources that could be used to win a much more important battle.

Amazon is inherently an "App" company. The Kindle is an app, not a device. As we have seen above it can even be made a greater app, that could dominate the digital content industry, even ahead of iTunes. But Amazon could extend the reach of its commerce platform much further in the app world in a couple of dimensions:

a) the micro-commerce dimension: catering to the SoniCares of the world (see "the world in motion" chapter). It could look back at it's entire catalog of products and decide which item should be micro-commerce enabled.

b) the just-in-time commerce dimension: the Platform is about to prove further (if it was needed), Clay Christensen's theory that:

what’s really important is understanding the job that customers are trying to accomplish

The platform is putting a magic wand in every customers' pocket. Whatever job they are trying to accomplish, they can order whatever product or service they need, get support from the vendor, or other consumers, ...

Amazon has the opportunity to reinvent commerce, and bring commerce as you need it, just-in-time, with a collection of apps assisting jobs that Amazon customers do with Amazon's product.

Amazon is an app company but it doesn't know it. The Kindle is an app, micro-commerce and just-in-time commerce are a lot of apps that Amazon could bake like cookies. If they don't? Walmart or somebody else will...

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