Beermats, Web 2.0 and Thinking Agile

Multimillion dollar Super Bowl ad campaign for a beer commercial? Or how 'bout trying the concept on a beermat (thanks, Hugh for The Beermat Story)?

The beermat concept isn't just about marketing and advertising. It's widely applicable. Lately, I'm into thinking about (not idly) beermat biz models and organizational structures, for instance.

John Battelle, in his conversation with Mark Benioff, copped to The Industry Standard spending some $6 million on enterprise software back in the day. But he went on to note it was far from a lightweight business model. Now he's involved with BoingBoing, which has twice the readership The Standard had — and four people. "Now that's a lightweight business model."

[P.S.] On reflection, it's probably misleading to characterize BoingBoing as having only a four person "staff." As the direct result of how much people love and trust the site, some of the work is distributed to the hundreds (or more?) who submit links they deem Boing-worthy. - via Bag and Baggage

John's confession makes it easier to admit that with $1.5 million in seed capital the start-up I was CTO of (though not a founder) in 2000 "just didn't have enough money" to roll-out the full-out infrastructure and services we wanted to provide. So much was put off until our definitive next round of funding - never happened but that's a long story. Yeah, we'll do that when we get the next round. The most creative thinking I did that whole year was when things started looking shaky. It's obvious many of us have learned - a lot - from the dot-com years. Sometimes, as I've said before, having too many resources makes you stupid - creativity can go out the door when throwing money and bodies at problems seems like a solution.

Meetings with each and every software infrastructure and middleware vendor ended up discussing licensing in the six figures. We were selling our hosted software built on their infrastructure on a monthy basis so paying a big upfront licensing fee was highly undesirable - but sales reps weren't into yielding much then or thinking out-of-the-box in terms of revenue models. Just about the time we were shutting our doors JBoss emerged into its own; and this open source application server would have been a good enough replacement for the $40K plus (plus when you throw in development seats, maintenance, training...) each production license of BEA Weblogic app server costed. Data centers with managed operations were all the rage - and pricey. The outsourced data center darling Exodus last time I drove by still sat empty. It was nigh unto impossible to find potential employees who didn't reneg because they got a few thousands dollars more on another job offer. Java software programmers wanted more than 2x what the CEO was making.

It was insane.

Even in those insane days, the COO (a friend) and I talked a lot about productivity per employee. We wanted to be careful how we scaled the company and make sure we would leverage the people we had. And now I think more about leveraging everyone's passion, commitment, resources with a stake in the mission of the business whether or not they are employees.

Technology is a lever. It doesn't add; it multiplies. If the present range of productivity is 0 to 100, introducing a multiple of 10 increases the range from 0 to 1000.

One upshot of which is that the companies of the future may be surprisingly small. I sometimes daydream about how big you could grow a company (in revenues) without ever having more than ten people. What would happen if you outsourced everything except product development? If you tried this experiment, I think you'd be surprised at how far you could get. As Fred Brooks pointed out, small groups are intrinsically more productive, because the internal friction in a group grows as the square of its size.

Till quite recently, running a major company meant managing an army of workers. Our standards about how many employees a company should have are still influenced by old patterns. - What the Bubble Got Right, essay by Paul Graham, founder of Viaweb (now Yahoo! Stores)

Big for bigness' sake is still in vogue. Jory Des Jardins brilliantly juxtaposes the 30-day Supersized meal odyssey depicted in Super Size Me with a feast of Tom Peter's Re-Imagine.

I once wrote a travel piece on the Dutch Antilles and toured a number of hotels. Touring the restaurants and more "contemporary" facilities, hotel staff boasted at how large the bathrooms were to accommodate American guests. The rooms were big, but ugly, like the lounge of my grandparents' favorite early-bird-special spot in central Florida. Who really cares if one can hear an echo while on the john?....

I wonder why we even have to bother to get big at all. It seems like such a circuitous path to finding the real deal. But then, it's in our national/generational/egotistical DNA to get bigger, somehow. - Ask Your Local Corporate Behemoth: Is Mo Betta Mo Betta?, Pause, Jory Des Jardins

But there is a parallel universe:

At first glance, Socialtext doesn't look like a company running on a shoestring budget. Founded less than two years ago, it now has more than 50 customers around the world, including Walt Disney (DIS ) and Eastman Kodak (EK ), which use its Web software to help people collaborate online. Yet a peek behind the slick Web site reveals a truly virtual company: no offices, only 10 full-time people -- all working at home, and a chief executive who answers the phone himself. - Championing a Wiki World, Business Week, on CEO Ross Mayfield and Socialtext

(And this company of the future hires and markets by blog. This pioneering nimble structure of Socialtext garnered BusinessWeek's attention, but it won't be a newsworthy angle much longer.)

About three years, a group of "lightweight" software development methodology and practices gurus whom espoused their alternatives to the "heavyweight" - in other words, bloated - software processes esconed at software shops got together at Snowbird to discuss the common ground between them. They realized that "lightweight" wasn't great branding. It sounded well, lightweight. The Agile Manifesto was crafted and their concerted evangelism kicked into gear. So although Marc Canter and Jason Fried christened their Web 2.0 workshop "Lightweight Business Models" [other write-ups: 1 - 2], it seems more fitting to call these agile (or, better yet, disruptive) business models. Or beermat business models ;-)

I like Laurent Bervas' post on Climbing Mount Everest. He borrows from the Extreme Programming movement (the most popular methodology under the agile software development umbrella) as well.

The old way :
- Build a big team (Minimum one hundred people)
- Bring a ton of food and material
- Wait for months before reaching the summit
- Don't take risks

The new way :
- Small team with commando spirit (10 people is enough)
- The lighter the better
- Speed is the key factor
- Use latest technlogies

Pack light. Go far.
See you at the summit.

Comments

[Bronwyn]

Isaac Asimov has also touched on the theme of how resources can limit you, in _Foundation_:

The Empire has always been a realm of colossal resources. They've calculated everything in planets, in stellar systems, in whole sectors of the Galaxy. Their generators are gigantic because they thought in gigantic fashion. But we...have had to work with brute economy. Our generators have had to be the size of our thumb, because it was all the metal we could afford. We had to develop new techniques and new methods.... With all their nuclear shields, large enough to protect a ship, a city, an entire world; they [the Empire] could never build one to protect a single man.

[Elizabeth Albrycht]

I am always amazed? confounded? when I see a thought I have been noodling on arrived more fully developed in your blog and others. It is exciting, and humbling. Exciting because so many people are thinking like me. Humbling, becuase so many people are thinking like me...and faster!

That being said, I have been musing about bigness alot lately...the need to have more clients, more money, more responsibility, more respect. In the pursuit of the more, it is so easy to lose oneself. Time for oneself. Energy for oneself.

I am jealous of things that take away that time and energy, but then the IDEA hits and zooooom off I go, working working working working...until exhaustion hits...friedness. And the slow return upwards to balance.

I am so bad at contatining my enthusiasms to some sane level. That is why I love reading your stuff so much...it helps to bring back the perspective.

[Jayanthan Bhattathiripad]

Do you have any thoughts on how agile methodology might translate into the management structure of an organization? Somehow when I look at companies, even the ones that are infant, they seem to prefer a "command and control" model that is hierarchical. I am not convinced that this is the best model. Perhaps team-based organizations that are self managed might be a competitive advantage?

[Evelyn Rodriguez]

That's exactly what this post is about. Not every company will choose to experiment with new organizational structures, but so much is in flux in the global competitive landscape, that perhaps some companies will be more open to it.

The whole structure of my start-up (still in concept stage) is based on what you describe: small self-managed teams.

Google has three people on its project teams (sometimes a few teams may need to collaborate for larger projects i.e. back-end infrastructure). They consist of two developers/implementers (technical) and one product manager (business) whom are co-located during the length of the project.

[Lina]

car insurance viking =-)) insurance car quotes New Orleans 94616 automobile insurance nj %-[[[ Levitra online 645539 cialis riu car insurance quotes vkuwi

[Elida]

generic cialis ybqrs cheap travel insurance senior opuwxu buy viagra 92168 purchasing generic viagra =-OO buy cialas on line no prescription uaqc