Network-Based Businesses

network.jpgRecently I was asked what’s the difference between a network-based effort like my experience leading the Bluetooth SIG compared to a normal type of company. Here were some of the thoughts I shared about their differences and what is the best way to approach making the former successful. I’ll start with the list and give more detail below:

  • Find 2-3 iconic companies and personally sell each one to get involved
  • Enable discussions by developing/publishing draft guidelines
  • PR, PR, and more PR. Create momentum that the train will soon leave the station
  • Build compromise into your culture
  • Give folks a way to show they are still a work in progress
  • Branding solves the education problem

Iconic companies. Needless to say, having big players endorse an effort instantly establishes credibility in the market. While the pre-incorporation period of the SIG pre-dates me, I know that early on the Bluetooth effort was a company-to-company affair. There was a conscience effort to reach out to the iconic companies in the relevant industries and encourage them to get on board with the effort. In some ways Bluetooth had an advantage because many of the engineers initially involved in the effort were very experienced in the IEEE standards process. So proposing a company-to-company standards idea was familiar to them. Unfortunately, most folks outside of the standards effort see everyone the market as competitors. It might not work all the time, but get the big folks on board and the smaller ones will follow and cross your fingers contributors will see past their hyper-competitive natures.

Enable Discussion. In a network-based effort there has to be something to talk about to get engagement and the easiest way to do this is to publish draft specifications and encourage comments. Live with as much transparency as you can tolerate. Open up email lists and invite and facilitate feedback. Arrange for weekly conference calls and get strong folks to lead groups with a set of deliverables and a timeline. Set up quarterly face-to-face meetings and schedule when your group will publish final standards. Deadlines create a sense of urgency.

PR, PR and PR. Selling a cause (yes Bluetooth was a “cause” for me), is different than selling a widget. I found it to be much more gratifying since you were trying to get people to believe as opposed to buying. When you talk to editors and analysts about a cause you have more freedom to give an honest portrayal of the situation of the market. You have more credibility since you’re not selling a product; take advantage of this fact. Educate the market about the problem you’re trying to solve, what the challenges are and use examples of how companies are making solutions a reality. You have the freedom to cherry-pick; do that too. Defend your cause from poor corporate efforts to do it right. Do your job well and it will be easy for companies to tell their story later about how they fit into the solution.

Compromise Culture. Jokingly I like to observe that the definition of a good compromise is when no one is completely happy. I think compromise is a necessary component of a successful network-based effort. No set of players can hold all the cards. There are many forms of governance that make this possible. Resist the temptation to invest a lot of power and benefits in a small number of players. If you do, you ultimately limit your reach and success. I’m not saying you can’t overcome this challenge if you start heading down the wrong path but once you do you might not ever get back. Case in point: the lack of success of Bluetooth in the stereophonic audio market.

Hey, I’m a work in progress! Make it easy for people to initially get involved and show they are making an effort. They shouldn’t have to take a oath of office to admit they would like help. Give companies a way to show they’ve started down the path to success. Most of the companies that build Bluetooth end-consumer products did not participate in designing the initial radio designs, but they were members. They joined the group (for free) and bought designs from others which they integrated into their own products. Make it a five minute effort to sign up and try to keep the lawyering to a minimum.

Branding and education. Doing branding well is a rare art. It is the indirect sell, the cat and mouse game used to educate the market about a product, service or cause. If you do it well, the initial investment is high but the long term future value is invaluable. If I can get you to associate a brand with an attribute, say “overnight,” when you want to ship something quick you will first, on your own, think of FedEx. The beauty here is the consumer thinks of using FedEx as their own idea; not something you had to sell them on. I see a lot of push back on the sustainability/renewable story from people who feel insulted by the message or messenger. We need to remove that – and a brand could do this. And of course the huge win for network-based efforts is a strong brand makes it easy for a tremendous diversity of players to contribute to the market since the ground work has been laid when it comes to market education.