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12/15/2008
03:58 PM
Venkatesh Rao
Venkatesh Rao
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Will Your Enterprise 2.0 even make sense in 2009?

Before you worry about 2.0 technology for your company, ask yourself: does the business you are in even make sense for the 2.0 world? Enterprise 2.0 as an abstraction will obviously happen; it is only a matter of time. Whether your industry actually survives to benefit is not so certain. On this site, we often discuss Enterprise 2.0 principles in the abstract, usually with a hypothetical widget manufacturing company as our implied mental model. We then ask how social media and 2.0 principles affect various functions like sales, PR or engineering. What happens when you go from widgets to specific product or service industries, like baby food, cars, finance, farming or fast food? Will YourEnterprise 2.0 make sense in 2009, the year of dual disruption from 2.0 on one end and a recession on the other?2009: The Year of the DeathwatchIf you think about it, nearly every actual industry is being impacted by 2.0 technologies on two levels: form and content. As 2.0 enthusiasts, we focus largely on form ("how will widget marketing change?"). But content -- viability of business model and the economic value of your product or service in the 2.0 world -- is more fundamental. It only makes sense to ask, "should I use twitter for PR in my company?" if you first ask, "do my company's products/services make sense in the world of twitter?"You and I knew that 2.0 was going to be disruptive across the board, and that those who ignored it as a sideshow were going to get in trouble. But with the recession firmly underway, all industries are trapped between a rock and a hard place: dealing with 2.0 disruptors and a slowing economy at the same time.An Example: Traditional MediaThe best current example of an industry being completely undermined by social media is, well, its antithesis, traditional media. Across the board, newspapers and magazines are cutting staff. Book publishers are watching book sales plummet, and ebooks are taking off.You can watch the blow-by-blow account by following the twitter feed @TheMediaIsDying. If you don't like the firehose, check out this story in the NY Times about book publishers suffering (Random House, Houghton-Mifflin and other big names are hit badly) for a sample peek.And if you didn't know it already, any industry that relies on traditional media, such as traditional PR, is also being hit really hard. Chris Kenton has written some insightful pieces on the impending demise of traditional PR (article and webcast version). PR represents an interesting mix of form and content. It is both an industry in its own right, and a functional element of all industries. So to the extent the industry is dying, the function even in our abstract widget-manufacturing Enterprise 2.0 must necessarily change and evolve. It won't be a choice.Like PR, broadcast advertising is also getting hit hard, but more gradually. We've already seen the disruption of one piece (traditional stock photography) by 2.0 disruptors like istockphoto.com. Watch out for a lot more, with all marketing getting hit eventually.The Dinosaur Deathwatch ListI think the following industries (at least, traditionalists within them) should be on everybody's deathwatch list. They are the loci of "primary" impact of joint 2.0+recession disruption, and the closer you are to them in the economic web (i.e. you sell to them from 1 or 2 hops away), the more you will be impacted. If you are actually IN them, perhaps it is time to learn 2.0 skills and either jump to the disruptive startups within your space, or out of the space altogether if the sector as a whole is dying. Curiously, the apparent canary-in-the-coalmine newsmakers, finance and automotive, are not on the deathwatch list. Finance 2.0 and Auto 2.0 will live and thrive. I am also not including stuff we already knew was dying, like film photography.

  1. Traditional media (newspapers, magazines, books) (bet on citizen/nonprofit journalism, 2.0 media and on-demand publishing instead). Ironically, Dinosaur Man Michael Crichton, who died recently, called this out over a decade ago in a Wired article called Mediasaurus (1993).
  2. Traditional PR and marketing if the newspapers are dying, who's listening to press releases or broadcast marketing messages? (bet on 2.0 style PR and marketing instead)
  3. Traditional Office furniture and equipment will get into a slow decline as layoffs continue and corporate real estate is shrunk/consolidated, and cloudworking rises (bet on home/small office/"third place" furniture and equipment instead)
  4. Non-commodity retailing Books and DVDs have now gone online, pretty much killing Blockbuster and the like along the way. Other retail segments structured for disruption by e-commerce 2.0 style will topple like dominos (bet on online instead)
The New Thriving Mammals List
  1. Coffee shops. In a sense, there are no layoffs in the 2.0 era. You just reinvent yourself as a multiple-streams of income cloudworking professional. The people cloud lives in Starbucks, so even if they downgrade from lattes to regular brews, the coffee shop industry will revive and Starbucks especially will put its painful restructuring behind it. Of course, most of us have income portfolios skewed 90-100% in favor of one source, but still, these are better times to be thrown out of work than any other recession in history.
  2. Railroads: I am convinced that an unexpected impact of mobile/cloudworking lifestyles will be the revival of railroads. Even with gas at recession-level lows, the airline industry has a business model that makes less sense in 2.0 settings. With unified communications, decent quality video conferencing and other technologies (to connect anywhere, including inside a train), fewer and fewer people need to dash around the planet at 550 mph. With sufficiently high load factors, trains always beat road and air transport economics wise, and nobody will mind the longer hours if you can be sipping a latte and working on your laptop. I am waiting for a nice 'office class' 10 hour train between DC and Rochester.
Anybody got any other deathwatch list/thriving list additions?Venkatesh G. Rao writes a blog on business and innovation at www.ribbonfarm.com, and is a Web technology researcher at Xerox. The views expressed in this blog are his personal ones and do not represent the views of his employer.

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