This is my fifth post in a series about mastering the six new assets in the Networked Society. I started with a review of the assets that played a central role when the industrialization started a few hundred years ago, such as capital, factories, and raw material – investment intense, concreate and very physical assets with high barriers access. For most industries at that time, capabilities required heavy investment and took a long time to build and scale. That was the era of mass production.
Looking forward, the focus will shift to flexibility and responsiveness to a constantly changing market.
Last year we did an interview with Bobby Beaver, Co-founder of Zazzle for our Digital Disruptor report, and he explained how the on-demand model is the natural successor to mass production:
For example, every year half of all shoes end up on the sales rack at the end of the season because it’s impossible to predict the style, size, color, etc. That amount of inefficiency has implications. It has implications for the cost of goods; you’re paying far too much for shoes on the whole if half of them are going on sale at the end of the season, because you’re obviously paying for that inefficiency.
It has a big taxing effect on the environment, because of all the excess it creates. And ultimately consumers aren’t getting what they want. They’re only getting what’s available and what’s close to what they want.
Today, for an increasing number of entrepreneurs, starting a global business requires no more than an idea. Funding can be crowdsourced, and ideas and prototypes evaluated and improved directly by a network of collaborators. Factories can be rented. Specialized skills, workspaces and digital infrastructures can be acquired or downsized on demand and according to the need. The digital side of business can access at a very low cost all the tools and knowledge for prototyping, developing, producing, marketing and interacting with customer. As a result many previous barriers to entering a market at global scale have been lowered or eliminated.
An example of a new type of company that makes use of the six new assets is Local Motors, a US-based motor vehicle manufacturing company focused on low-volume manufacturing of open-source motor vehicles. They even use 3D printing to manufacture them. Damien DeClercq at Local Motors says in our Digital Disruptor report:
The great thing about leveraging the community is that you get more ideas and better ideas faster, and therefore you are able to avoid mistakes and speed up your development process.
As an example, the Rally Fighter, which was our first-ever vehicle produced, took us 18 months to go from initial sketch to the car on the road, when a typical car development process will take five to seven years from scratch. When we did the XC2V, we went from an existing base chassis to a vehicle, fully developed, tested, operational, and on the road in five months, when a typical DOD new vehicle development would take five if not ten years.
Another US-based company, Type a Machine, develops and produces 3D printing machines with a focus on providing 3D printing machines that replace the need for investment in, for example, a small production line. Now 3D printing machines can do a job that required a major investment 10 years ago, all at a fragment of the price.
Funding is another resource that can be raised on-demand. Crowdfunding platforms like Indiegogo and Kickstarter have funded more than 100,000 successful projects, many of which would have never been financed by traditional venture capitalists.
Skills and knowledge that you don’t have but need are also available on-demand. If your idea is interesting enough, you can crowdsource tasks online, and, most likely, find people who are willing to help. Otherwise you can find the expertise you need at online staffing platforms like Elance that list several hundred thousands of programmers, mobile developers, designers, writers and marketers. Fiverr is another platform for on-demand services basically for everything from graphic design and web analytics to sound effects and filmmaking.
The list of services offered on-demand can be very long, and almost every single startup and creative individual is aware of this and taking advantage of it. The real challenge will be for traditional businesses to adapt to the new reality and organize their business for a digitally transformed market.
You can find all the posts in this series here: http://www.ericsson.com/thinkingahead/the-networked-society-blog/author/mikael-eriksson-bjorling/
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