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ABDUL MOEED KHAN ABDUL MOEED KHAN MUHAMMAD FAHAD MUHAMMAD FAHAD S M FARHAN S M FARHAN 1

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ABDUL MOEED KHANABDUL MOEED KHAN

MUHAMMAD FAHADMUHAMMAD FAHAD

S M FARHANS M FARHAN

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The Goldcorp Challenge: Took place The Goldcorp Challenge: Took place online August 2000 – March 2001.online August 2000 – March 2001.

Shared over 400 megabytes of proprietary Shared over 400 megabytes of proprietary geological datageological data

$575,000 prize money$575,000 prize moneyOver 1,000 virtual prospectorsOver 1,000 virtual prospectorsShaved 203 years off exploration timeShaved 203 years off exploration timeWent from 100 million to $9 billionWent from 100 million to $9 billion

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The significant Problems we face cannot The significant Problems we face cannot be solved at the same level of thinking be solved at the same level of thinking

we were at when we created them.we were at when we created them.

Albert EinstienAlbert Einstien

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CrowdsourcingCrowdsourcing

Outsourcing of ideas to large undefined Outsourcing of ideas to large undefined groupgroup

Open calls for helpOpen calls for helpThe hive mindThe hive mindCollective problem solvingCollective problem solvingCheap!Cheap!

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Principles of WikinomicsPrinciples of Wikinomics

1.1. Being OpenBeing Open

2.2. PeeringPeering

3.3. SharingSharing

4.4. Acting GloballyActing Globally

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Static Web vs programmable WebStatic Web vs programmable Web

Flickr beat webshotsFlickr beat webshotsWikipedia beat BritannicaWikipedia beat BritannicaBlogger beat CNNBlogger beat CNNEpinions beat Consumer-ReportEpinions beat Consumer-ReportGoogle Maps beat MapQuestGoogle Maps beat MapQuestMySpace beat friendsterMySpace beat friendsterCraigslist beat MonsterCraigslist beat MonsterMozilla Firefox gaining on IE BrowserMozilla Firefox gaining on IE Browser

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BlogosphereBlogosphere

Blog is the biggest coffeehouse on earthBlog is the biggest coffeehouse on earthBlog can capture people’s thoughtsBlog can capture people’s thoughtsBlog turning the static document into Blog turning the static document into

running conservationrunning conservationFirm use blog for “listening in ” customerFirm use blog for “listening in ” customerRicher and more engaging: audio and Richer and more engaging: audio and

video postsvideo posts

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Critique of BlogosphereCritique of Blogosphere

More noise in an oversaturated More noise in an oversaturated environment environment

Their critique is triteTheir critique is trite

Technorati (Technorati (www.technorati.org)) Ice Rocket (Ice Rocket (www.icerocket.com) )

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The demographic WatershedThe demographic WatershedGrowing up collaboratingGrowing up collaborating

The shared SpaceThe shared SpaceAdult control the home, the schoolAdult control the home, the schoolTeens do not see home as their private Teens do not see home as their private

space.space.Hanging out around the neighborhood or in Hanging out around the neighborhood or in

wood has been deemed unsafe.wood has been deemed unsafe.The new private space is on lineThe new private space is on line

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Net GenerationNet Generation They are not passive recipient They are not passive recipient

of mass consumer culture.of mass consumer culture. They spend time searching, They spend time searching,

reading, scrutinizing, authenticating,reading, scrutinizing, authenticating,

collaboratingcollaborating

and organizing everything.and organizing everything. They have a very strong sense They have a very strong sense

of common good.of common good.

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Coase’s LawCoase’s Law Why vertically integrated corporation ??Why vertically integrated corporation ??

Transaction CostTransaction CostSearch CostSearch Cost

Contracting CostContracting CostCoordinating CostCoordinating Cost

Firms should shrink until the cost of performing a Firms should shrink until the cost of performing a transaction internally no longer exceeds the cost transaction internally no longer exceeds the cost of performing externally.of performing externally.

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Coase’s LawCoase’s LawApple’s b-WebApple’s b-Web

Music b-web

Chips(Motorola)

digital music

iPod(Foxconn)

iTunes(apple)

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Peer ProductionPeer Production

Self-organizing, egalitarian communities of Self-organizing, egalitarian communities of individuals who come together voluntarily individuals who come together voluntarily to produce a share outcometo produce a share outcome

Voluntary and non-monetaryVoluntary and non-monetaryLittle costLittle costBest people to right tasksBest people to right tasksGeneral public licensesGeneral public licenses

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Peer ProductionPeer Production

Three conditions Three conditions The object of production is informationThe object of production is information

or cultureor cultureTasks can be chunked out into piecesTasks can be chunked out into piecesThe cost of integrating pieces into finished The cost of integrating pieces into finished

goods is fewgoods is few

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WIKIPEDIA in figuresWIKIPEDIA in figures

2001: 15,000 articles2001: 15,000 articles2009: 2.7 million+ articles2009: 2.7 million+ articles100,000 users posted 10+ 100,000 users posted 10+

articlesarticles75,000 regular editors75,000 regular editors5 Paid staffers5 Paid staffers

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1998: IBM join open source community1998: IBM join open source communityHarness the power of the crowd at a Harness the power of the crowd at a

fraction of the cost.fraction of the cost.Opened up their proprietary code to the Opened up their proprietary code to the

community.community. IBM spends $100 million per year on Linux IBM spends $100 million per year on Linux

development.development.

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Someone outside your organization today Someone outside your organization today knows how to answer your specific knows how to answer your specific question,question,

You need to find them, and find a way to You need to find them, and find a way to work collaboratively and productively. work collaboratively and productively.

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Solutions in search of questionSolutions in search of question

P& G now make every patent in its P& G now make every patent in its portfolio available for license to any portfolio available for license to any outsider.outsider.

AT&T, IBM, and Texas instruments have AT&T, IBM, and Texas instruments have built there IP business highly lucrative.built there IP business highly lucrative.

Online technology transfer place: Online technology transfer place: Yet2.comYet2.com

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Questions in search of solutionsQuestions in search of solutions

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TheThe ProsumersProsumers (hack this product please!)(hack this product please!)

““Our community is an opportunity to look at the rules that govern our Our community is an opportunity to look at the rules that govern our society, and to extent that we are able to rewrite them as best society, and to extent that we are able to rewrite them as best seems to fit us” – Philip Linden.seems to fit us” – Philip Linden.

The word prosumers is defined as The word prosumers is defined as product that are created by its product that are created by its customers and are then consumed by themselves.customers and are then consumed by themselves.

This chapter describes a new model of prosumption where This chapter describes a new model of prosumption where customers actually co-innovates and co-produces the product they customers actually co-innovates and co-produces the product they consume.consume.

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This chapter explains how prosumer communities introduce both This chapter explains how prosumer communities introduce both lucrative opportunities and gave new threats to companies.lucrative opportunities and gave new threats to companies.

This means that the consumers will treat the world as a stage for This means that the consumers will treat the world as a stage for their own innovations. their own innovations.

Customers as Co-innovators Customers as Co-innovators – There has been many episodes of – There has been many episodes of user–driven creativity in the history of inventions. Ex: In early user–driven creativity in the history of inventions. Ex: In early nineteenth-century England, Cornish steam engine makers nineteenth-century England, Cornish steam engine makers collaborated openly with mine owners to improve the efficiencies of collaborated openly with mine owners to improve the efficiencies of steam engines.steam engines.

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Control versus Customer hackingControl versus Customer hacking – As prosumer communities – As prosumer communities proliferate, companies face increasingly tough choices about how proliferate, companies face increasingly tough choices about how to interact with them.to interact with them.

Lead users of Apple iPod have always surmised that iPod could Lead users of Apple iPod have always surmised that iPod could be much more than a digital music player. But, the company has be much more than a digital music player. But, the company has tightened its lips about the customers input as they are riding the tightened its lips about the customers input as they are riding the success.success.

Although Apple is silent but, sooner or later will unleash his lawyer Although Apple is silent but, sooner or later will unleash his lawyer for so called “Product Hacking”. Similarly, for so called “Product Hacking”. Similarly,

Smart companies will bring their customers and give them lead Smart companies will bring their customers and give them lead roles in developing next-generation products or services.roles in developing next-generation products or services.

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Remix CultureRemix Culture – The difference today is that technology makes – The difference today is that technology makes easy for people to remix culture and share it on a much larger easy for people to remix culture and share it on a much larger scale. People can share their remixes in thousands at web. scale. People can share their remixes in thousands at web.

This remix culture originated through the endeavor to reshape the This remix culture originated through the endeavor to reshape the existing creations with more attractive features.existing creations with more attractive features.

Therefore, as the software to manipulate and remix proliferates, Therefore, as the software to manipulate and remix proliferates, fresh new careers emerged. But on the same note copyright law fresh new careers emerged. But on the same note copyright law also came into effect.also came into effect.

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Prosumption is different from Mass Customization. Presumption Prosumption is different from Mass Customization. Presumption entails deeper and earlier engagement in design processes. entails deeper and earlier engagement in design processes. Whereas, mass customization entails mixing and matching pre-Whereas, mass customization entails mixing and matching pre-specified components.specified components.

Future of ProsumptionFuture of Prosumption – Listen to your customers and run design – Listen to your customers and run design contests or other such promotional schemes or anything that will get contests or other such promotional schemes or anything that will get your loyal customers to share their intellectual capital.your loyal customers to share their intellectual capital.

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The New Alexandrians The New Alexandrians (Sharing for Science and the (Sharing for Science and the Science of Sharing)Science of Sharing)

Take the sum of mankind’s knowledge and share it for the Take the sum of mankind’s knowledge and share it for the betterment of science, the arts, wealth and the economy. The new betterment of science, the arts, wealth and the economy. The new age of collaborative science is emerging that will accelerate age of collaborative science is emerging that will accelerate scientific discovery.scientific discovery.

The Science of SharingThe Science of Sharing – Collaboration, publication, of – Collaboration, publication, of precompetitive information are now becoming keys to success in precompetitive information are now becoming keys to success in the knowledge –based economy. In the same way digitization of the knowledge –based economy. In the same way digitization of information is also putting in the sharing of information.information is also putting in the sharing of information.

Today in networked economy, companies that don’t share are Today in networked economy, companies that don’t share are finding themselves isolated, by passed by networks that share, finding themselves isolated, by passed by networks that share, adapt and update knowledge to create value.adapt and update knowledge to create value.

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The Age of Collaborative ScienceThe Age of Collaborative Science – Just as the new – Just as the new organizational model of knowledge is being created, the new Web is organizational model of knowledge is being created, the new Web is helping to transform the realm of science endeavored by:helping to transform the realm of science endeavored by:

Rapid diffusion of best techniques.Rapid diffusion of best techniques. Availability of just in time expertise.Availability of just in time expertise. Increasingly horizontal and distributed models of research.Increasingly horizontal and distributed models of research.

Above all, the new scientific paradigm will be truly global, swelled by Above all, the new scientific paradigm will be truly global, swelled by the participation of millions of scientists from across Asia, South the participation of millions of scientists from across Asia, South America and Eastern Europe. America and Eastern Europe.

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Similarly, as the pace of the science quickens stashing new ideas Similarly, as the pace of the science quickens stashing new ideas will be of less worth as compare wide open collaborative will be of less worth as compare wide open collaborative knowledge platforms that are refreshed with each new discovery.knowledge platforms that are refreshed with each new discovery.

Rethinking Industry-University PartnershipsRethinking Industry-University Partnerships – Advancing the – Advancing the basic sciences is really the only way to guarantee innovation in basic sciences is really the only way to guarantee innovation in industries for long time.industries for long time.

If the well of knowledge dries up, so too does innovations. Today If the well of knowledge dries up, so too does innovations. Today it is more important than ever that R&D activities are fast and it is more important than ever that R&D activities are fast and efficient and earn a clear ROI.efficient and earn a clear ROI.

Indeed, smart firm looks university partnerships as a nimble and Indeed, smart firm looks university partnerships as a nimble and cost effective means for detecting and launching disruptive cost effective means for detecting and launching disruptive innovations.innovations.

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An example of industry-university partnership is Intel’s Open An example of industry-university partnership is Intel’s Open University Network. In 2001, Intel established exploratory research University Network. In 2001, Intel established exploratory research labs adjacent to University of California at Berkley and University of labs adjacent to University of California at Berkley and University of Washington in Seattle.Washington in Seattle.

Making the most of University PartnershipMaking the most of University Partnership – – Use industry-university partnerships to shake up product road maps.Use industry-university partnerships to shake up product road maps. Make sure the collaboration is a win-win.Make sure the collaboration is a win-win. Deepen and broaden collaboration across research communities.Deepen and broaden collaboration across research communities. Keep the science open and the applications proprietary.Keep the science open and the applications proprietary.

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Pharmaceutical firms like Mercks with an annual R&D budget of $3 Pharmaceutical firms like Mercks with an annual R&D budget of $3 billions conduct less than 1%of biomedical research in the world and billions conduct less than 1%of biomedical research in the world and remaining 99% conducted in universities and public research remaining 99% conducted in universities and public research organizations. organizations.

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Platforms for Participation Platforms for Participation (All the World is a stage, and (All the World is a stage, and you’re the star)you’re the star)

We are entering a world where vast open platforms for We are entering a world where vast open platforms for participation provide a foundation on which large communities of participation provide a foundation on which large communities of partners can innovate and create value.partners can innovate and create value.

A platform might be a Web service such as Google maps or A platform might be a Web service such as Google maps or Amazon that might include an e-commerce system.Amazon that might include an e-commerce system.

So, the main idea is to Open up the platforms to increase the So, the main idea is to Open up the platforms to increase the speed, scope, and success of innovation.speed, scope, and success of innovation.

By tapping open platforms one can leverage world class By tapping open platforms one can leverage world class infrastructures for a fraction of the cost of developing them infrastructures for a fraction of the cost of developing them yourself. The Web-indeed the world-is your stage, so deliver the yourself. The Web-indeed the world-is your stage, so deliver the star performance.star performance.

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Platforms for Web Services and communitiesPlatforms for Web Services and communities – The notion that – The notion that innovation proceeds through the recombination of existing ideas innovation proceeds through the recombination of existing ideas to form something new is not unique to the Web.to form something new is not unique to the Web.

Platforms for CommercePlatforms for Commerce – Amazon, eBay are the examples how – Amazon, eBay are the examples how platforms of commerce can give rise to activities like shopping. platforms of commerce can give rise to activities like shopping. Amazon’s platform for participation spurs two things: innovations Amazon’s platform for participation spurs two things: innovations and viral growth.and viral growth.

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Platforms for Grassroots ActionsPlatforms for Grassroots Actions – Government agencies are – Government agencies are one of the largest sources of public date that often remain one of the largest sources of public date that often remain unutilized although, it can provide platform for countless new unutilized although, it can provide platform for countless new public services.public services.

The best use of public data can be made by nonprofit The best use of public data can be made by nonprofit organizations that are free of political considerations.organizations that are free of political considerations.

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As new Web evolves, platforms for participation are becoming the As new Web evolves, platforms for participation are becoming the competitive standard for top online properties. Companies that competitive standard for top online properties. Companies that attract and reward the best participants have the opportunity to attract and reward the best participants have the opportunity to create new sources of competitive advantage.create new sources of competitive advantage.

Winning with an Open PlatformWinning with an Open Platform – Following are the three points – Following are the three points that stand out for the discussion of open platform business.that stand out for the discussion of open platform business. Applications of a new technology go through an evolutionary process i.e. Applications of a new technology go through an evolutionary process i.e.

reshaping the existing creations.reshaping the existing creations. Radical decentralization and openness create tricky environments in which to Radical decentralization and openness create tricky environments in which to

build genuinely viable business models.build genuinely viable business models. Platforms for participation will only remain viable for as long as all the Platforms for participation will only remain viable for as long as all the

stakeholders are adequately compensated. stakeholders are adequately compensated.

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The Global Plant Floor The Global Plant Floor (Planetary Ecosystem for (Planetary Ecosystem for Designing and making things)Designing and making things)

Rise of the Global Plant Floor – The key message in this book is Rise of the Global Plant Floor – The key message in this book is that the old monolithic multinational that creates value in a closed that the old monolithic multinational that creates value in a closed hierarchical fashion is dead. Wining companies today have open hierarchical fashion is dead. Wining companies today have open and porous boundaries and compete by reaching outside their walls and porous boundaries and compete by reaching outside their walls to harness external knowledge, resources and capabilities.to harness external knowledge, resources and capabilities.

Although, local production had still has its advantages. Producing Although, local production had still has its advantages. Producing locally provided an opportunity to tailor products to local taste. But, locally provided an opportunity to tailor products to local taste. But, this market-by-market approach no longer make sense in a global this market-by-market approach no longer make sense in a global age.age.

The collaborative approach allows companies to tap best-in-class The collaborative approach allows companies to tap best-in-class capabilities without the headaches accompanying the need to capabilities without the headaches accompanying the need to manage a full-blown merger or acquisition. manage a full-blown merger or acquisition.

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Boeing is establishing a new competency in managing a globally Boeing is establishing a new competency in managing a globally extended partner base. Boeing is using state of the art collaboration extended partner base. Boeing is using state of the art collaboration technologies to transform a traditional collection of suppliers into a technologies to transform a traditional collection of suppliers into a seamless global collaborative.seamless global collaborative.

Harnessing the Global Plant Company – Following are the lessons Harnessing the Global Plant Company – Following are the lessons after reviewing the collaborative processes for designing and after reviewing the collaborative processes for designing and building physical things as in the case of Boeing.building physical things as in the case of Boeing. Focus on the critical value drivers.Focus on the critical value drivers. Add value through orchestration.Add value through orchestration. Install rapid, iterative design processes.Install rapid, iterative design processes. Harness modular architectures.Harness modular architectures. Create a transparent and egalitarian ecosystem.Create a transparent and egalitarian ecosystem. Share the costs and risks.Share the costs and risks. Finally, keep a keen futures watch.Finally, keep a keen futures watch.

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Wiki WorkplaceWiki WorkplaceUnleashing the Power of UsUnleashing the Power of Us

More employees are using blogs, wikis, video games to collaborate More employees are using blogs, wikis, video games to collaborate and form ad hoc communities across departmental and and form ad hoc communities across departmental and organizational boundaries.organizational boundaries.

Rise of openness, peering, sharing and acting globally in future Rise of openness, peering, sharing and acting globally in future workplaces.workplaces.

Shift from closed, hierarchical workplaces, rigid employment Shift from closed, hierarchical workplaces, rigid employment relationship to self organized, distributed, collaborative human relationship to self organized, distributed, collaborative human capital that draw knowledge and resources from inside and outside.capital that draw knowledge and resources from inside and outside.

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Geek Squad –An ExampleGeek Squad –An Example

Employees use wikis, video games to brainstorm new ideas, Employees use wikis, video games to brainstorm new ideas, manage project, swap service tips and socialize with peers.manage project, swap service tips and socialize with peers.

Up to 384 colleagues simultaneously use online multiplayer games.Up to 384 colleagues simultaneously use online multiplayer games. Bottom up communication and product development.Bottom up communication and product development. Designed folding flash drive with thin loop for key chains.Designed folding flash drive with thin loop for key chains.

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Rise of Wiki WorkplaceRise of Wiki Workplace

Work is more cognitively complex, team based, collaborative, Work is more cognitively complex, team based, collaborative, require social skills, time pressured, technology dependent, mobile require social skills, time pressured, technology dependent, mobile and less geographical dependent.and less geographical dependent.

Organizations are dispersed, leaner, agile, customer focused, Organizations are dispersed, leaner, agile, customer focused, dynamically competitive and offer less job security and lifelong dynamically competitive and offer less job security and lifelong careers.careers.

Net working technologies offer companies to run cohesive yet Net working technologies offer companies to run cohesive yet decentralized operations by linking employees in virtual teams and decentralized operations by linking employees in virtual teams and communities of practice.communities of practice.

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Bringing high technology adoption, creativity, social connectivity, fun Bringing high technology adoption, creativity, social connectivity, fun and diversity in workplace.and diversity in workplace.

Networked business with webs of partners on a platform of Networked business with webs of partners on a platform of information technology.information technology.

Tools such as blogs, wikis, chat rooms, peer-to-peer networks, Tools such as blogs, wikis, chat rooms, peer-to-peer networks, personal broadcasting,instant messaging, online multiplayer games personal broadcasting,instant messaging, online multiplayer games are weapons of mass collaborations.are weapons of mass collaborations.

Net Gen has experience of these mass weapons as part of birthright Net Gen has experience of these mass weapons as part of birthright unlike earlier generations who have to adapt. unlike earlier generations who have to adapt.

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Point of DiscussionPoint of Discussion

Some business thinkers claim thatSome business thinkers claim that

““Letting a thousand flowers bloom” ends up giving companies a lot Letting a thousand flowers bloom” ends up giving companies a lot of weeds, diluting their focus on few big ideas that “move the of weeds, diluting their focus on few big ideas that “move the needle” in multibillion-dollar companies.needle” in multibillion-dollar companies.

But,But,

““Getting other points of view and knowledge into our learning Getting other points of view and knowledge into our learning system that might escape is key to success as an organization” system that might escape is key to success as an organization” says Anderson, CEO, Best Buysays Anderson, CEO, Best Buy

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Social Computing in EnterpriseSocial Computing in Enterprise

““A lot of organizations are using wikis without top management even A lot of organizations are using wikis without top management even knowing it . It’s a bottom-up phenomenon. The CIO may not get it, knowing it . It’s a bottom-up phenomenon. The CIO may not get it, but the people actually doing the work see the need for them”but the people actually doing the work see the need for them”

John Seely Brown, Chief Scientist XeroxJohn Seely Brown, Chief Scientist Xerox

Real innovation can occur when companies take time to observe Real innovation can occur when companies take time to observe how the existing workplace culture operates in a “state of nature” how the existing workplace culture operates in a “state of nature” and then learn how to serve that culture effectively.and then learn how to serve that culture effectively.

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Wikis conform naturally to the way people think and work, and Wikis conform naturally to the way people think and work, and flexible to evolve in a self organizing fashion because wikis are flexible to evolve in a self organizing fashion because wikis are completely unstructured.completely unstructured.

““The structure is created by demanding active involvement from The structure is created by demanding active involvement from users in ways of organizing and creating their own information users in ways of organizing and creating their own information architecture.”architecture.”

Ross Mayfield, CEO, Social TextRoss Mayfield, CEO, Social Text

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What to Expect in Future?What to Expect in Future?

Workplaces will become smaller with distributed teams from all over Workplaces will become smaller with distributed teams from all over the globe.the globe.

Consultancy to be dominant contractual model for work.Consultancy to be dominant contractual model for work. Share of profits derived from intellectual contributions.Share of profits derived from intellectual contributions. Freelancers, entrepreneurs, SMEs taking a larger share of Freelancers, entrepreneurs, SMEs taking a larger share of

economic productioneconomic production New peer-to-peer rating services to play a greater role in identifying New peer-to-peer rating services to play a greater role in identifying

high quality reliable collaborators.high quality reliable collaborators. Talent agencies, auctions and markets will have a larger role Talent agencies, auctions and markets will have a larger role

between employer and employee.between employer and employee.

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Collaborative MindsCollaborative MindsThe Power of Thinking DifferentlyThe Power of Thinking Differently

Just as good investment strategies diversify across low-high risk Just as good investment strategies diversify across low-high risk opportunities, good innovation strategies diversify intellectual opportunities, good innovation strategies diversify intellectual property holding across open and closed offerings.property holding across open and closed offerings.

Opening up IP in one area of business could boost demand for Opening up IP in one area of business could boost demand for complementary products and services.complementary products and services.

Pooling competencies and reducing R&D costs exceeds the benefit Pooling competencies and reducing R&D costs exceeds the benefit of exclusive rights in knowledge produced.of exclusive rights in knowledge produced.

Openness removes unnecessary friction in collaborative projects.Openness removes unnecessary friction in collaborative projects.

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Wikinomics Design PrinciplesWikinomics Design Principles

1.1. Taking cues from your lead usersTaking cues from your lead users

2.2. Building critical massBuilding critical mass

3.3. Supplying an infrastructure for collaborationSupplying an infrastructure for collaboration

4.4. Take your time to get the structure and governance rightTake your time to get the structure and governance right

5.5. Make sure all participants can harvest some valueMake sure all participants can harvest some value

6.6. Abide by community normsAbide by community norms

7.7. Let the process evolveLet the process evolve

8.8. Hone your collaborative mindsHone your collaborative minds

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““The technologies that come along and change the world are the The technologies that come along and change the world are the simple, unplanned ones that emerge from the grass roots rather simple, unplanned ones that emerge from the grass roots rather than those out of corner offices of the corporate strategists”than those out of corner offices of the corporate strategists”

Tim Bray, Sun MicrosystemsTim Bray, Sun Microsystems

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THANK YOU!THANK YOU!

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