Category: Innovation

Business model innovation, open innovation and co-creation practices and case studies

Co-creationCollaborative business modelsCollaborative culture

Essential reads about collaboration

Collaboration has been on the spotlight of business literature throughout the last years, and so it is difficult to make a good selection when searching for good literature on business collaboration. This article proposes 3 outstanding books that will help you get further insights on this issue.

The Silo Effect

From award-winning columnist, journalist and senior editor for the Financial Times Gillian Tett, The Silo Effect shows the importance of cross-disciplinary and cross-cultural collaboration for organizations to succeed. It also shows how the lack of this collaboration sends organizations into deep trouble. Probably this is the book on collaboration with the most interesting case studies.  Readers will find cases of organizations getting collaboration right but also of those felled by the lack of it. Specifically, the book includes eight different tales of the silo syndrome: Bloomberg’s City Hall in New York, the Bank of England in London, Cleveland Clinic hospital in Ohio, UBS bank in Switzerland, Facebook in San Francisco, Sony in Tokyo, the BlueMountain hedge fund, and the Chicago police.

Beside the cases, the book also includes some specific suggestions on how some people and organizations can break those silos down to unleash innovation. Author Gillian Tett’s background in anthropology is present when she examines our tendency to create functional departments (silos) or when she answers questions as why do humans working in modern institutions collectively act in ways that sometimes seem stupid, or why are we so often “blind to our own blindness”.

An interesting twist to highlight. Tett does not consider silos as the “evil” player to eliminate. She recognizes silos can also be beneficial, especially in a world as complex as it is today. Silos in the business world can indeed be uniquely valuable containers in terms of organizational efficiency and productivity. But they can also be, of course, major barriers to communication, cooperation and, especially, collaboration. So essentially everything comes to know how to get their benefits but also avoid or prevent their downsides. And Gillian Tett explains how.

Collaborative intelligence

Collaborative Intelligence is the culmination of more than fifty years of original research that draws on Dawna Markova’s background in cognitive neuroscience. Markova and her “Professional Thinking Partner” Angie McArthur are experts at getting brilliant yet difficult people to think together. They share a consulting practice in which they serve as “thinking partners” to clients who need insight in how better to achieve synergistic collaboration within their firm, a group of “patients” that includes some of the world’s top CEOs and creative professionals.

Rooted in the latest neuroscience on the nature of collaboration, Collaborative Intelligence offers tangible tools for those serious about becoming ‘system leaders’ who can close the gap and make collaboration real. This book is full of practical guidance to help the reader to discover his or her own “CQ” or Collaborative Intelligence Quotient. As explained in the book, each individual has a characteristic way of processing cognitive challenges (Mind Pattern), depending on the kind of attention that their brain utilizes: Focused attention, Sorting attention and Open Attention. There are also three languages of thought (Auditory, Kinesthetic and Visual).

Markova includes many worksheets and questions that readers can use to determine not only their own patterns, but those they work with as well. There are also plenty of tips on how to maximize that pattern for effectiveness in personal work and in collaboration with others. Subsequent chapters demonstrate how the knowledge of these languages and triggers can be used in building teams and in optimizing team interactions.

Collaboration begins with you

Collaboration Begins with You focuses on helping leaders at all levels to create and develop a culture of collaboration. Bestselling author Ken Blanchard and his co-authors show that busting silos and bringing people together is an inside-out process that involves the heart (your character and intentions), the head (your beliefs and attitudes), and the hands (your actions and behaviors). From authors’ point of view, clearly none of these “parts” can function without the other. You need your heart, head, and hands to bring about change and build collaboration with others.

An important fact for those who prefer novels to essays. Authors use the business fable as a format to explain a story about creating a collaborative atmosphere in a company, with a main character who is the leader of a cross-department project that fails because the units involved are too competitive with one another. The solution, he learns, is to shift his and other’s heart, head and hands toward collaboration.

This article is from  www.co-society.com/summer-time-reading-collaboration/

Business model innovationCollaborative business modelsCollaborative cultureStrategy

Basque SMEs collaborate to get larger and more global customers

Effective cooperation between local stakeholders is one of the key success factors for Tourism 3.0 to thrive, but this cooperation needs to be well focused on strategic goals, in a way that many different types of cooperation may be developed. This article explains how SMEs in the same region create an alliance developing four types of cooperation to gain and advantageous position in the international market.

Smart Factory Alliance is a partnership of several SMEs created in order to gain the kind of visibility that just bigger companies can achieve. The collaborative initiative has internationalization and global customers as one of its main goals. The partnership takes place in the growing market of the so called Industry 4.0, one of those emergent contexts of new technologies and disruption in which we think collaboration supposes a core element for its development.

Five companies in the IT sector from the Basque Country (Spain) have set up the Smart Factory alliance aiming to boost their internationalization and being able to obtain contracts with large companies. The alliance will allow partners to offer integral Industry 4.0 solutions to manufacturing companies.

Four types of collaboration. Each of the five companies is specialist in several areas, so the alliance adds on the competence and solutions of each of them, promoting a more integrated, specialized and competitive offer. According to Tomás Iriondo, CEO of Gaia, an industry cluster promoting the initiative, “by working together, these companies can now address more distant, larger and more complex clients thanks to a collective solutions map and a portfolio that becomes one of the widest for Industry 4.0 demands”.

To strengthen the partnership, Smart Factory Alliance has established four types of collaboration. Shared knowledge is considered the most important one. And the most critical, as this sharing will only be possible if first a climate of trust among partners is created. Another two kinds of collaboration will involve common communication strategies to reinforce visibility, and detection of customers and projects. Finally, setting up the Alliance comprised also the technical integration of products and software developed separately by each of the companies partnering.

The Basque culture has collaboration as one of the key values that make it more competitive than its neighboring regions’. It has proved to succeed in many other cooperative ventures. For instance, three years ago, ten Basque companies in the designer furniture and equipment sector joined forces to grow in the retail market. This is a subsector in the world of specialized furniture and equipment for all types of shops in which customers include from a single store to chains, franchises and brands, and large commercial areas or the design of showroom. It’s a huge market but competing for global customers requires a wide range of services.

Creating a common brand, Basque Retail, they can now meet this challenge because each of the firms has a specialized portfolio (furniture, security lights, wood cladding, design lamps …). The alliance makes possible for them to offer complete projects, that is to say, to ‘dress’ from top to bottom a single commercial site or hundreds of stores from the same chain or franchise.

Each one of the companies partnering at Basque Retail keep its own activity coexisting with the one generated by the common brand. The alliance is been possible despite being very different businesses. Some of them are small companies and never worked internationally, some others have been exporting for years. Turnover, sales and products are quite different, but their goal is the same one: to be able to offer a comprehensive solution to both a customer with a single store and one that has a thousand.

Collaboration leading to more collaboration. Internationalization has been also a main driver. Just recently, Basque Retail and its solutions were presented in Düsseldorf during the main global trade show for this sector. For most of partners in Basque Retail, with their sales limited to Spanish market until recently, been able to have a stand in Düsseldorf would have been unthinkable just few years ago.

Currently, close collaboration between companies is working so positively and leading to so many new ideas that they are even considering to create a new collaborative sub-brand focused on “sensorial marketing”, an increasing demand from brick and mortar commercial sites competing with online e-commerce.

This post is from www.co-society.com/basque-smes-collaborate-get-larger-global-customers/

Business trendsCo-creationCollaborative cultureInnovationInnovative culture

Teaming up with customers & fans to co-innovate

As explained many times in this blog, engaging customers and turning them into fans, contributors and brand ambassadors is one of the key success factors of destinations 3.0. One recent case within the entertainment sector showcases how co-innovation with fans can lead to fruitful results.

Even if the concept of costumer centric business is still often more of a marketing trick or organizational aspiration than a reality, increasing competition is making brands truly getting closer to customers. Some others are even going further: they are putting them at the heart of business decision-making.

When it comes to innovation they’re even asking them for help with the process, not just simply using them to provide insight. Consumer-led creativity does exist. Consumers are a huge and largely untapped source of creativity and innovation. Customers are already creating value and solving problems without any encouragement from commercial organizations. Why not trying to tap into it?

Co-creation workshops can help businesses pool ideas from participants and turn these insights into tangible prototypes that can be evaluated in real time. We could recently prove it once more when asked by F.C. Barcelona to lead its first co-creation workshop with members of the football club in order to work together in a process of proposals and ideas. Using the context of the recent Mobile World Congress, fifty F.C. Barcelona supporters between 18 and 40 years gathered in a workshop named ‘Smart & Mobile Connection Future’ to propose ideas linked to technological applications that could facilitate the living and sensing of everything the sport club is offering to its members, supporters and fans in the stadium and sports events.

After a few speeches introducing the vision, mission and methodology of the workshop by some innovation experts, the supporters were divided into small groups to encourage their participation, which resulted in a great deal of ideas related to the use of new technologies in the Stadium and the sporting events. Contributions and needs identified were numerous. For instance, it was proposed to make possible to watch game replays on the phone or tablet at the Camp Nou stadium itself in real time; and apps to order sandwiches and drinks from seats during the game or to access to information about public transport and traffic around the stadium. Some other proposals pointed to be able to carry a digital version club’s member card in smartphones that could also be used for mobile payments at shops and restaurants linked with F.C. Barcelona.

Co-creation workshop ‘Smart & Mobile Connection Future’ is part of a transversal innovation program started late last year with the aim to identify problems and opportunities for the organization and resolve them through new projects or ways of working. Some other workshops like this are coming soon and will be related to other areas of the club.

This article is from www.co-society.com/teaming-customers-co-innovate-even-better-fans-youre-lucky

Co-creationCollaborative business modelsCollaborative cultureCulture changeInnovation

Presidential Innovation Fellows: Co-innovating with (We) the People

As it has been explained in the posts about destination models 3.0, these intend to leverage the intelligence, creativity, initiative and influential power of all its stakeholders from the outset, not only in product and content co-creation, but also up to the business model innovation. In this regard, considering the Destination Management Organisation (DMO) as the destination’s government from the planning and management perspective, some governments are developing innovative practices in this direction, which should inspire also the destinations’ governance organisations.

Some governments are trying to lessen political apathy by engaging citizens in crowdsourcing initiatives for a variety of areas of innovation and decision taking on public affairs. But besides the attempt to prevent further public institutions disaffection, those governments tapping into the knowledge and abilities of citizens are also discovering the benefits to reach beyond the usual experts to expand and diversify the talent pool tackling a problem.

U.S Government and more specifically Obama administration has been especially active in government-driven crowdsourcing competitions and collaborations. Across government, all sorts of agencies are implementing hundreds of crowdsourcing approaches, citizen science programs, and other efforts that have brought the best ideas and talent together to solve mission-centric problems. Last year alone, Federal agencies ran over 85 prize competitions, from small-dollar prizes to winnings of $100,000 or more.

The Presidential Innovation Fellows (PIF) program brings the innovation economy into government, by pairing talented, diverse technologists and innovators with top civil-servants and change-makers within the federal government to tackle some our nation’s biggest challenges.
This program brings the principles, values, and practices of the innovation economy into government through the most effective agents of change we know: our people. This highly-competitive program pairs talented, diverse technologists and innovators with top civil-servants and change-makers working at the highest levels of the federal government to tackle some our nation’s biggest challenges. These teams of government experts and private-sector doers take a user-centric approach to issues at the intersection of people, processes, products, and policy to achieve lasting impact.

Fellows selected for this unique, and highly-competitive opportunity serve for 12 months, during which they will collaborate with each other and federal agency partners on high-profile initiatives aimed at saving lives, saving taxpayer money, fueling job creation, and building the culture of entrepreneurship and innovation within government. As stated in its website, PIF offers to talented individuals from diverse backgrounds “the unique opportunity to work on truly awesome projects with the potential to make a positive impact, with a user base of more than 300 million Americans.”

About the Fellowship

The Presidential Innovation Fellows (PIF) program was established by the White House in 2012 to attract top innovators into government, capable of tackling issues at the convergence of technology, policy, and process.

The PIF program is administered as a partnership between the White House Office of Science and Technology Policy (OSTP), the White House Office of Management and Budget (OMB), and the General Services Administration (GSA). In 2013, the PIF program established a permanent home and program office within GSA.

Program Details

The Fellowship is a 12-month program, during which Fellows are embedded within a federal agency to collaborate on challenges with innovators inside government. Fellows are based in Washington D.C. for the duration of their Fellowship, and are considered full-time employees of the federal government.

Fellows operate with wide latitude for individual initiative in planning and executing solutions to problem, and spend a significant portion of their time co-working and collaborating with other Fellows. Throughout the program, Fellows receive support from partners in the White House and change-agents across various federal agencies.

Created in 2012, opportunities for Fellows participating in the program have already include creating new crowdsourcing tools to empower survivors and first responders during natural disasters, significantly improving the quality of US patent system, or even addressing asteroid threats to human populations. Fellows have also unleashed the power of open government data to spur the creation of new products and jobs; designed pilot projects that make it easier for new economy companies to do business with the Federal Government; and much more. These are some of many other resultant projects:

This article is from  www.co-society.com/presidential-innovation-fellows-co-innovating-people/

www.whitehouse.gov/innovationfellows

Business trendsCollaborative business modelsCollaborative cultureInnovationInnovative culture

Co-Innovation will be a new growth path for companies, Singapore considered

Collaborative innovation is one of the key concepts that set Destinations 3.0 apart from others, and one of the main sources of competitive advantage. Singapore –the second most competitive economy worldwide according to the World Competitiveness Index- is an example of best practices in collaborative innovation between the public and private sector.

The Singapore Government launched about five years ago a Public Private Co-Innovation Partnership (CI Partnership) programme to encourage the co-development of innovative solutions with the private sector to meet the government’s longer term needs. The initiative was inspired by part of the recommendations of the Singapore Ministry of Finance Economic Strategies Committee (ESC) in which it was included the idea that Co-Innovation would be a new growth path for companies.

The programme involves the Government committing $450m over 5 years to fund such collaborations. For each of these projects, companies interested in co-developing solutions with the Government can apply for funding to do so.

The CI Partnership works on a public-private problem-based approach to innovation. Public agencies first define Government’s needs where there are no identified “off-the-shelf” solutions. Interested companies can then submit their proposals and ideas for projects to the agencies. Depending on the project, promising proposals can be funded to test the feasibility of the concept, develop prototypes or to test-bed the solution.

Interested companies can log on to the co-innovation website at http://www.coinnovation.gov.sg in which is possible to read Government explanation for the programme:

“Today, in an increasingly complex environment, Government faces many challenges and needs that do not have existing solutions. Singapore companies have the innovation potential to meet those needs. The central idea behind the CI Partnership is that Government can better serve the public through innovations borne out of public-private partnership”.

www.coinnovation.gov.sg

This article is from www.co-society.com/co-innovation-will-new-growth-path-companies-singapore-considered

 

InnovationOpen innovationThird sector and social sustainability

UNICEF looks “out there” for co-innovation to solve its challenges

Tourism Destinations 3.0 base one of their main competitive advantages in the power of leveraging the stakeholders’ collective intelligence through open innovation, taking advantage of the stakeholders’ motivation for contribution to the destination’s mission, to address some of the community’s social and environmental challenges. This example illustrates how other international bodies tackling global challenges try to leverage the motivation for contribution to the greater good through open innovation.

UNICEF is hoping to do more to help the world’s poorest and most vulnerable people thanks to a new open innovation initiative. The United Nation program for children recently launched CauseTech looking for unique alternative solutions to propel their work forward. This dedicated global community site will enable participants to share ideas, vote and discuss refinements. 

CauseTech aims to aggregate the world’s best and brightest innovators, technologists, IT professionals, product developers, researchers, entrepreneurs, academics and post-graduate students in a global open innovation ecosystem. The new portal is part of a new private sector initiative to crowdsource breakthrough ideas, inventions, products, and emerging technologies that can advance the work done by the UNICEF Global Innovation Center worldwide. The CauseTech website features novel technologies and solutions that serve as inspirations for the community moving through the ideation process. These technologies are also profiled for crowdsourced discussion through the ideation platform.

The aim is tap collective thinking and input to identify, adapt and deploy inventive technology solutions that can help UNICEF scale its efforts to meet the ever-growing needs of the poorest and most vulnerable and excluded children across 190 countries. This includes health, drinking water, renewable energy, food security, hygiene, education, communication, and self-sufficiency.

CauseTech.Net will register and profile contributors and run crowdsourcing contests and challenges developed by UNICEF offices. Once registered, community members can submit ideas and technologies to solve a need and/or take part in one of the global challenges.  UNICEF also wants this new platform to engage with mentors, other innovators, and potential partners and collaborators in order to improve upon potential new successful ideas, therefore becoming the connector between all the relevant actors in the value chain to ensure innovative solutions can be successfully implemented and scaled across regions and contexts. 

While the platform will enable ongoing open ideation around challenges, it will also run timed contests curated by UNICEF Innovation teams. The first official contest was launched last June through UNICEF’s Burundi Innovation Lab. This challenge focus on alternative energy solutions for this country, where only three percent of the population is connected to the electricity grid. The aim is to accelerate product development and market expansion while building local entrepreneurship and testing a new hybrid public-private partnership. 

UNICEF has already experienced the positive benefits of private-public partnerships. The United Nation organization hope private sector partners will use the new platform to provide funding for crowdsourced innovation challenges besides engaging their smart minds in solving real-world problems UNICEF workers are facing in the field. As declared in the “Q&A” section of the new platform, 

“We  are  seeing  a  shift  in  private  sector  companies  away  from  competition  and  towards  collaboration.  Companies  see  that  by  pulling  in  the  resources  and  strengths  of  different  groups,  they  can  really  extend  their  value  proposition. This is the same in the social sector. We  realize  that  we  cannot  achieve  everything  on  our  own,  and  while  we  are  experts  in  development  we  don’t  necessarily  have  the  technological  background  to  ensure  the  best  solutions  can  be  found  and  scaled. The  goal  of    CauseTech  is  to  expand  the  sphere  of  how  we  look  at  private  public  partnerships  so  that  we  can  really  go  beyond  philanthropy  and  move  towards  engagement 

We  believe  that  for  the  global  challenges we  are addressing, the  solutions  are  out  there.

This article is from www.co-society.com/unicef-looks-co-innovation-solve-challenges

Collaborative business modelsCollaborative cultureCulture changeInnovationInnovative culture

A fresh outlook to public-private sectors relationship where a Co- mindset is key

Since the latest global financial crisis, new evidences prove the mindset shift ingrained in the private sectors in accordance with the trends of Marketing 3.0, namely referring to the business mission driven purpose and the cooperation between businesses and also with governments. This article deepens in the new role of governments in this new paradigm. For Willian D. Eggers and Paul Macmillan, authors of The Solution Revolution, it’s time to contemplate a fresh outlook to public-private sectors relationship where a Co- mindset and practice is key.

As tough societal problems persist and government budgets tighten, citizens, social enterprises, and even businesses, are relying less and less on government-only solutions. The Solution Revolution describes how, as the subtitle puts it, “business, government and social enterprises are teaming up to solve society’s toughest problems”.

These wavemakers range from edgy social enterprises to mega-foundations that are eclipsing development aid, to Fortune 500 companies delivering social good on the path to profit. In order to make the biggest impact, they have started to think holistically about their role and their relation to other players, not as competitors fighting over an ever-shrinking pie, but as potential collaborators. By erasing public-private sector boundaries, they are unlocking trillions of dollars in social benefit and commercial value.

For the “Solution Economy” new players, government is an essential part of the solution but government’s role have to change dramatically. The traditional boundaries between public and private sector should blur in order to get better results when dealing with social problems. There are some on both sides of the divide who doubt whether there should be such a divide at all. They are realizing that each sector stands to do better with a little help from the other.

Fortunately, as The Solution Revolution points out, international companies are increasingly seeking “progressive structures” through which co-operation is endorsed and regulations are created to engender higher levels of trust and mutual interest between companies, sectors, supply chains and markets.

Thus, the business world is undergoing such profound change that a fundamental rethink of the relationship between companies and governments is required. For instance, the so called “Purpose Economy” or “Purpose-Driven companies” where a new CSR mindset is less about PR and more about looking at problems as opportunities, including social problems as education, water, low-cost healthcare, sanitation, recycling, or reducing traffic congestion.

The Solution Revolution examines scores of examples of how this kind of Co- approach is already solving social problems. Here are some of them:

  • Recyclebank turned recycling into a game by uniting cities, citizens and companies around a system of exchange and rewards. Citizens are encouraged to recycle more by earning points that can be redeemed for discounts and deals on products and services from Recyclebank’s network of more than 100 corporate sponsors.
  • Unilever created an entire ecosystem of diverse partners to address an urgent sanitation problem affecting more than 600 million poor Indians. It acted as a partner with NGOs, banks and schools to create a profitable market for cleaning products in rural India.
  • NASA partnered with SpaceX and other private space companies when fiscal constraints shut down the agency’s space shuttle programs. SpaceX’s unmanned Dragon capsule successfully docked on the international space station in May 2012.

You may find the original article in The Solution Revolution

This article is from www.co-society.com/fresh-outlook-public-private-sectors-relationship-co-mindset-key

Beyond the proposed destination models 3.0, which other public-private partnerships do you envision for tourism destinations?

Business model innovationBusiness trendsCollaborative business modelsCollaborative cultureCulture change

Business ecosystems come of age

As it has been explained in many posts and Whitepapers, one of the key success factors of destinations in their evolution towards the Vision of Tourism 3.0 is to develop an innovation ecosystem integrated by different types of contributors. In that regard, Business Trend Series Deloitte’s report Business ecosystems come of age presents a series of articles describing how businesses are moving beyond traditional industry silos and conjoining networked ecosystems, creating new opportunities for innovation.

The report offers a glimpse of how some view the rise of ecosystems as an opportunity for creating powerful new competitive advantage as it becomes increasingly possible for firms to deploy and activate assets they neither own nor control and expand the possible beyond of their expertise and activities.

This brief summary outlines the various subjects and ideas dealt with:

Introduction: A brief history of the concept of ecosystems applied to business and how it all started in the technology sector but now is also taking root far beyond.

Blurring boundaries, uncharted frontiers: Long-standing boundaries and constraints that have traditionally determined the evolution of business are dissolving, allowing new ecosystem possibilities to flourish.

Wicked opportunities: Many kinds of complex, dynamic, and seemingly intractable social challenges are being reframed and attacked with renewed vigor through ecosystems formed by unprecedented networks of NGOs, social entrepreneurs, governments, and even businesses coalescing around them.

Regulating ecosystems: Regulators are challenged to create policies and solutions that protect the public’s interests and are also dynamic enough to keep pace with innovation born through ecosystems.

Supply chains and value webs: A set of powerful developments have worked together to help transform the business environment, changing how supply chains are configured, further heightening their strategic significance for many firms, and creating new leadership imperatives for the years ahead. Now “companies don’t compete—supply chains do.”

The new calculus of corporate portfolios: The rise of business ecosystems is compelling strategists to value assets according to an additional calculus, often generating different conclusions about what should be owned.

The power of platforms: Properly designed business platforms can help create and capture new economic value and scale the potential for learning across entire ecosystems.

Minimum viable transformation: Business model transformations are not unprecedented, they have always happened. It is not even new that business model transformations must consider the evolution of a company’s broader ecosystem. What is new today is that such transformations must be considered and accomplished routinely—not as storm-of-the-century events.

You may download the document at Business ecosystems come of age

This article is from www.co-society.com/official-business-ecosystems-come-age-deloitte-confirmed/

Business model innovationCo-creationCollaborative business modelsInnovationMarketing 3.0

Case study: Trip4real. Tourism experience collaborative business model

Trip4real is a paradigmatic example of how the collaborative economy flourishes in new business models for the tourism industry. Founded in Barcelona by Gloria Molins, it connects local experience developers with tourists eager to discover the destination through tailored experiences for them. Trip4real is a collaborative platform where any local may market a tourism experience to help the tourist discover the destination from a particular point of view or live special interest experiences.

The platform acts like a marketplace and also as an intermediary, so the payment is controlled by the platform and it gets a commission out of it. After the payment is done, the supplier and the client are connected to meet and live the experience. The motivation behind this business model is the will of the tourists for discovering the destination off the beaten track, where the locals go, and the hidden secrets that cannot be found in the Guides, as well as the authenticity brought by the interactivity with locals, who facilitate a deeper understanding about the local culture.

The first platform was developed for Barcelona, but other platforms have been developed in Madrid, Lisbon, London, Paris, Rome, Dublin, Berlin, Amsterdam, Edinburgh and a handful of Spanish destinations.

As has happened with Uber, do you think that these business models may be treated as unfair competitors to the local “official” tour guides and incoming agencies? Do you think there should be any kind of restrictions to letting it legally compete with standard tourism service suppliers?
You may check further details at www.trip4real.com

Business model innovationCollaborative business modelsStrategy

Small local brands: You either collaborate or you’ll be intermediated

In Destinations 3.0, DMOs work as marketing platforms intermediating for the local businesses and joining efforts with those businesses to reach the global market, just in the way that thousands of niche companies are willing to enjoy the benefits of the level of visibility and consistency that only a more “mainstream” brand can offer. This article explains the imperative need for small businesses and brands to develop cooperative marketing platforms to avoid being intermediated by wholesalers with a much higher negotiation power.

Some early Internet evangelists promised anybody with a website and an e-commerce platform can have a global market no matter how small the company or where it is located. A theoretical true, that statement does not take into consideration the laws of Attention Economics that Internet itself is boldly proving right from the very first moment.

It’s also true “Long Tail” niche offers can overcome this barrier by the same differentiation and exclusivity that made them niche in the very first place. Yes, it’s possible to create a global audience or market by offering something nobody else is offering and then establishing a relationship with your customers leveraging all new media and tools available today. Yet, still, this level of differentiation is not always and for everybody possible.

Collaboration with others such niche brands can make this strategy less difficult and more potentially fruitful.  Good news is people seem to be rejecting the notion of large corporations and are looking for companies whose people and story they can connect with. Bad news is Attention Economics apply, making impossible for customers to have a relationship close enough with all niche brands that could be relevant to them in a particular moment.

This is why even living in a flat world we still need intermediaries. A different kind, but still intermediaries. But in the digital paradigm, once eliminated geographical proximity as a factor, we only need one of these intermediaries for each of the limited list of categories our minds can deal with, making monopolies or oligopolies a natural and logical outcome for every market.

Good for those understanding becoming the perfect interface for a particular category of products or services is the fast lane to success (and dollars) in the digital realm. Too bad for the ones who will have (or already have) to deal with a monopolist in order to make their products or services visible and purchasable. Too bad for thousands of musicians or app developers taken a cut of a third of every sale that would have been considered outrageous if taken by a local record or software shop. For every Etsy or Zappos of the world, there is the menace of them taking advantage of a dominant position, the threat of the “Upper Hand” syndrome we wrote about referring the case of Fulfillment by Amazon.

Collaboration will be the only possible answer for the convergence of a growing number of niche offers and the challenge for these companies of having enough scale for their offers to be visible and purchasable. If these companies do not create and own their own intermediation by collaborating with others, somebody else will create a digital intermediation for them.

Co-Society was recently involved in a project for an association of cooperatives looking for new roles in a changing, much different world in which the Co-op concept was born. There is still an opportunity to build many middleware platforms between consumers and niche offers, an opportunity for umbrella organizations representing smaller or local brands and offers with a promise to the consumer of a guaranteed consistency and quality. But for these to be owned by the smalls brands themselves, there will be no other way that to be implemented and managed by a more collaborative, democratic and horizontal organizations we are used to, organizations similar to the structure and mindset with which cooperatives were born more than a century and a half ago.

This article is from www.co-society.com/small-local-brands-either-collaborate-youll-intermediated/

Up to what extend could the local niche brand be differentiated from the destination brand if this niche business has to be marketed through the destination branded platform?