Within the periphery of my first article, “An Open-Heart Letter to @twitter,” I planted a seed that encapsulates a vision of collaboration — an upgraded business ideology that allows businesses (e.g., Apple, Google, Amazon, Facebook, Twitter, Uber, Airbnb, etc.) to redefine the value creation landscape.
After almost a decade, I think it is tough to deny the impact that these large platform-based businesses brought into our daily life. They almost transformed how we interact with almost everything. It is equally hard to deny that the same impact is crawling into stagnation.
We witnessed how the platform-based business model eliminated the conventional middlemen from the value creation equation. At first, the model gave a heroic appearance of value creation’s democratization. It took us almost a decade to realize that the same model merely re-intermediated industries with new players. We must admit that the re-intermediation process was done efficiently and effectively. However, it is hard to miss that these players are gaining extra weights. Some are organically gaining pure muscles, which is healthy for the economy, but others are putting extra fat which is harming the economy. In both cases, they share one trait. Their sizes within their industries are suffocating the rest. They are controlling the value creation chain.
Unfortunately, we are ending up with new gatekeepers. Some of them are even moving away from the value creation mindset, back to the opportunistic value-capturing mindset. (i.e., repeating the incumbents’ mistake). Others are also exploiting the rights of the real producers of value.
If you want to know how platforms exploit workers, you must read Sangeet Paul Choudary’s latest article.
This post aims to germinate the planted seed by enabling its tiny roots to push deep down our brains with a quest to embrace a collaborative mindset that can responsibly liberate the value creation chain. The corporates’ Cold War must end. The economic wall must be brought down. A peace treaty must be signed. We must phase in positive collaborative thinking and phase out the cutthroat competitive behavior.
The question is, how do we collaborate?
Countless publications attributed the success of these Network Orchestrators to their network effects. Unfortunately, they tend to treat network effects as a derivative of a platform. We mistakenly understand and explain the network effects as a concept or as a phenomenon. This is a considerable limitation to its real potential.
The network effects are a living thing. It is our collective behavior. Accordingly, I am advocating toward understanding network effects as a legal formation that can thrive, create value, and protect the rights of its creators, users, and administrators. If you are interested in knowing more about the Network Effects, I suggest visiting Sangeet Paul Choudary’s library or James Currier’s Bible.
It is crucial to understand that platforms are not the creators of the network effects. We are the creators of the network effects (i.e., producers of value & consumers of value). Without us (i.e. Hosts, Guests, Tweeters, Readers, Drivers, Riders, Video creators, Viewers, etc.) there will be no value; hence, there will be no network effects. The platforms are the enablers and administrators of the network effects.
So, am I leaning toward the notion of asking these big platforms to share their profits with us? The short answer is NO. I am not a big fan of value consumption; I am a big fan of value creation. I am asking for something else.
Have you ever heard of the Special Network Vehicle (“SNV”)? “I don’t think so” is the answer that I am expecting. I had just invented this title. But, I am sure that you related it with a familiar concept, termed Special Purpose Vehicle (“SPV”).
The idea is to expand the platform’s network effects innovatively by clustering the network effect into separate parts and, then, to nurture the ones with the highest potential. Preferably, these parts should be at the edge of the network effect and not the core. It is much easier to experiment with the edge rather than the core. Always avoid a vicious and direct encounter with the core’s immune system.
The root of this thinking sparked when I noticed a divergence in my purchasing habit. I am no longer influenced by Amazon’s network effects in buying new books. In fact, Twitter’s network effects triggered my recent purchases. Does this sound strange? To fully understand this, I need to share with you the following story.
When I published my first post on Medium a few months ago, I forwarded the link with a thank you tweet to the amazing people who inspired me. Generously, John Hagel retweeted it with a kind comment. Then he followed it by another tweet, asking me if I had read one of his very early books Net Gain. I immediately logged into my Amazon account and ordered the book. John gave me a rich context to evolve within the learning pyramid. Indeed, I seized the moment with the passion of an explorer. Hence, if Amazon wants to sell more books, they must orchestrate and enable similar interactions.
On the surface, the above episode might look like a personal story. A onetime interaction. But what happened next opened my eyes and nurtured my thinking about the central message behind this post. When the book arrived, I was in the middle of a new project. I halted everything and started reading the book. What stunned me is that the book, besides being a masterpiece on its own, was highly relevant and beneficial to the project that I was working on.
This serendipitous episode made me think of how we can make such experience scalable and repeatable.
Now let’s define the Special Network Vehicle.
The SNV is a subsidiary network effect, with the purpose of leveraging the platform’s value creations, without compromising its critical mass and network effects. That said, if the SNV experienced negative network effect, the platform is not affected. If the platform experienced a period of a negative network effect, the SNV is protected.
The SNV is a protected cell establishment that preserves a legal personality and creates to fulfill predefined objectives (i.e., creation spaces). One or more platforms may establish it, and it may be jointly owned by platforms as well as individual & institutional investors.
Let’s unpack this definition in a sequence of simple illustrations. Let’s start by visualizing how value is created within Twitter’s network effects as well as Amazon’s network effects.
The first step toward examining the possibility of establishing an SNV is to run a diagnostic experiment. For such a step to yield reliable outcomes, we need a tool that can navigate it. Accordingly, I am launching a new tool, “Network Chain,” to help us in this quest. I made sure to distance this post from introducing any technical explanation. As a result, the usability of the Network Chain will be illustrated in a white paper soon. For now, let us have a quick look at it.
Let us assume that the Network Chain yielded a positive result about the possibility of establishing an SNV. Next, we need to cluster each network effect and regroup the tweeters/products as in the below figure.
Here are two pieces of advice to be considered by Amazon and Twitter before starting the clustering and regrouping process.
1- Twitter will pass its death sentence if they merely keep labelling and viewing us as “tweeters.” We (i.e. tweeters) are very diverse in our capabilities, talents, impacts, and value that we can generate. Twitter must see us on this basis in order not to miss the massive opportunities.
2- Amazon needs to embrace professor Clayton Christensen’s theory of jobs to be done: “We Hire Products to Do Jobs for Us.” I don’t buy a book just to read it and to fill a space in my brain. I buy a specific title to help me in a job now or in the future. Hence, the current capability of the Amazon search engine is of little value to me.
As a simple illustration, I clustered Twitter into three distinct tweeters’ groups (business leaders, political leaders, and chefs); the same was done to Amazon to three distinct book groups (business-related titles, political-related titles, and cooking titles). Now, let’s only focus on the business leaders and business-related titles.
To make this dream a reality, a gentle push is needed. Let’s imagine Jack and Jeff pushing as in the below picture.
As you can see, all that we need is a gentle push. Nothing will change; the core interactions, the core value proposition, and the core identity of both Amazon, as well as Twitter, will be intact. This gentle push can be manifested in John’s theory, “How Small Moves, Smartly Made, Can Set Big Things in Motion.” The predictable consequence of such gentle push will result in a massive collision toward unlocking a new frontier for a new value-creation mechanism. I call it the Special Network Vehicle, which encapsulates, within it, a Creation Space-Based Network Effect.
Let’s see what the unique characteristics of the Special Network Vehicle are.
- This creation space-based network effect is not a standalone platform, at least, not at its infancy or during its youth. As its legal identity indicates, it is an extension of its parents. Access to this “creation space” can only be via the parents. - The ownership structure of the SNV is based on a new ideology. The boundaries will be bluer between the platform owners (i.e. enablers and administrators of network effects) and the real creators of the network effects (i.e. us, the active participant). - The SNV is seeded partially by the parent, and the remaining is raised through an Initial Network Offering (“INO”) supported by a White Paper - The duality of producers and consumers will no longer exist under the SNV structure. A new concept will dominate “Creators.” All participants join to create value and not to consume value. The consumption part will take place at the parents’ level. - The social element of Twitter’s network effects and the buying power of Amazon’s network effects will enable a new form of value creation via the Creation Spaces. -A compelling narrative will empower each creation space. -Value creation under the SNV will be subject to a new law. Not sure how this law will look like. Maybe a mathematician can help us here. For now, I can say that if you are familiar with Reed’s Law, double it, and then smash them into each other. You will get something similar to the below. Important note: This is just for fun, it is not a scientific law; even its mathematical representation hasn’t been tested. It is only a visual representation to stretch our mental elasticity.
An updated version of The Network “LAWS” from The Network Effects Bible — Just for Fun.
Hypothetical Case Study — Creation Space — Writing Professionally
Breaking news was broadcasted on all major news channels on the 10th of June 2018 about the establishment of first Special Network Vehicle (SNV). It was a joint announcement between Amazon and Twitter about their intention to collaborate by embracing the SNV’s concept.
Jeff and Jack passionately announced that an estimated budget of around USD 50 million had been projected for this unique project. Each will seed the initial capital up to 25%. The remaining 50% will be raised from potential investors through an Initial Network Offering (INO).
The offering was fully subscribed to within the first 45 minutes, starting a nondisruptive market-creation strategy with the aim of opening new value-cost frontier.
The SNV encapsulates a vibrant creation space that is reinforced by a profound narrative, “Write Professionally,” with the aim of redefining the chain of professional writing and authoring. Creators (i.e., writers and authors) will be given unprecedented opportunities to tap into the power of social connectivity through Twitter’s network effects and the richness of stored value within Amazon’s network effects. This space is a vibrant domain for creation (i.e., books productions) where all participants interact proactively. Creators can start by posting descriptive information about a proposed project. Immediately, Amazon’s assistant will provide them with predictive services (e.g., a list of all relevant titles). Combining the wealth of Amazon’s library with the richness of Twitter’s curated social conversation, creators will be enjoying prescriptive services. Would you like to get a sneak peek at this creation space? Scroll down.
Hypothetical — Creation Space — Writing Professionally
In the above imaginary minimum viable creation space, I sent an invitation to John to see if it’s possible for him to be the lead mentor and coach for this project. He accepted, and we immediately started video conferencing. As an act of generosity, he even proposed to co-author the book with me.
I’d appreciate it if you can lean back for a moment and try to direct your full attention to the above picture. For once, try to surrender yourself to your imagination. Can you envision how this creation space is bringing life into writing? With the creation space, you will be in the middle of vibrant and curated social conversation and support with a wealth of interactive resources.
The creation space will bring life into the whole process, even simple acts such as cross referencing. How? The moment you cross reference a paragraph to a relevant title, a notification will be sent immediately to the author of the book. If he wishes, he can communicate with you by providing feedback and comments which can enhance the quality and impact of your idea. Your book will be full of life even before being published. The curated social conversation will nurture the content of your book.
Can you imagine the impact and quality of future publications under such creation spaces? I can. And I’m happy to say it will be a mind-blowing experience.
You might skeptically ask why business leaders and well-known authors would participate in such creation spaces. Allow me to explain. Creation spaces accelerate learning in addition to facilitating the exchange of knowledge and expertise among all participants. Also, I would like to remind you gently that such creation spaces are designed to create value. As a rule of thumb, when value is created, it can be captured financially. Hence, the creation space could be viewed as a new business model. This means that creators within a creation space would be compensated incommensurate to their efforts and input.
Also, you can look at the creation space as a new form of investment. How? All participants in this creation space would be investing in you (i.e., the writer of the book), anticipating that their investments will yield fruitful returns. Unlike a monetary investment, a creation space would allow international-level authors to invest intellectually. Based on their vast expertise in this filed, they can use their intuition to predict the success rate of new projects. Once the stakes are high, they can invest their knowledge in helping the beginners like us. Imagine if the book became an international bestseller. Who do you think will be part of the success story?
A non-exhaustive list of why each might participate in the creation space End of Case Study…
Now that we have a clear understanding of how the SNVs works, let’s think about how to promote it with an impact that goes beyond the creation spaces domain.
Let us explore another creation space’s use case, “Global Book.”
This new creation space will create an unprecedented opportunity to publish a global book, co-authored by hundreds of thousands of people (i.e. you, me, Bill Gates, Stan Lee, Oprah Winfrey, Shah Rukh Khan, Emmanuel Macron, etc.). The book will address an emerging issue by extracting the wisdom of such influential leaders, thinkers, scientists, artists, superstars, officials, Presidents, etc.
This global book is a thread of tweets from all of us. Twitter will promote a universal hashtag (e.g. #FightingPoverty, #EndingWars etc.) and will invite everyone to participate. Every tweeter will have an equal chance to win a spot to participate in the creation of this global book. Tweets will be qualified based on their impacts and the social interaction that they can generate (likes, retweets, responses, etc.) and will be transferred immediately to the creation space and will be edited by selected professionals (i.e., the creation space’s judges). Upon completion, the book will be electronically published and sold on Amazon. The proceeds of sales will be directed to the underlying #hashtag. The book can cost as little as USD 1.
Yes, if your tweet qualified, you will be co-authoring the first Global Book along with presidents, business leaders, thinkers, etc. Such a creation space will participate in raising the global awareness along with raising global funds for one cause. Can you feel the impact? I certainly do. I promise, if my tweet got qualified, I will buy One thousand electronic copy and will make sure to share them will whom I know and don’t know. Didn’t you notice that Amazon just turned me to their marketing agent? Don’t be surprised; this is the power of creation spaces.
I feel that my imagination has dried up, but before going, I would like to leave you with one more sneak peek at another creation space’s use case “Cooking with Chefs”.
I am done, my lungs are not capable of pushing new words, just look at the picture below. I trust your imagination to speak on my behalf.
See you soon with a new Idea and new Tool.
You are most welcome to connect via https://twitter.com/KhalidiAlmadani or https://medium.com/@KhalidiAlmadani
This post was updated on Wednesday, July 17, 2019 to replace the Network Effects Canvas with the Network Chain