Practically everyone has a machine-to-machine Internet of Things story they like to tell. It might be refrigerators automatically reordering milk, cows that send texts to farmers when they’re in heat, or understanding the demand for ice cream in real-time. We are living in a networked economy.
The traditional understanding of networks is based on the following arguments:
- Value is created and shared by all members of a network rather than by individual companies. This is why it is sometimes called the sharing economy.
- Economies of scale increase (exponentially) with the number of active connections in the network. Thus, the collaborative economy.
- Open networks are preferable to closed ones, as transparency in operations typically increases usage.
Unfortunately, network theory typically gets summarized with “bigger is better” and networks focus on exponential growth. The financial markets and the popular press fuel this obsession. Mobile networks, social networks, and wireless networks all report on subscribers/users/scale.
Noted entrepreneur Jeff Stibel believes this is fundamentally flawed thinking. In his book ‘Breakpoint: Why the Web will Implode, Search will be Obsolete, and Everything Else you Need to Know about Technology is in Your Brain’, Stibel claims all networks reach a breakpoint at which they have gotten too big and begin to decline. He uses MySpace as an example:
It grew too quickly. Pages became cluttered and confusing. There was too much information. It grew too far beyond its breakpoint.
Stibel argues that Facebook and Google are in danger of reaching the same breakpoint.
By contrast biological systems inherently avoid the breaking point. Nature doesn’t focus on size. “The fittest species are typically the smallest. The deadliest creature is the mosquito, not the lion.” Ant colonies don’t get larger over time, they get smarter.
What is missing—what everyone is missing—is that the unit of measure for progress isn’t size, it’s time.
It’s a reminder for all of us who track ego metrics on the size of our social networks. Number of followers doesn’t matter.
Jonathan,
You’ve mentioned in a few posts how much ego affects people and companies. Meetings go on longer than they should, bad ideas get supported because of whose idea it was and good ideas get killed because of whose idea it wasn’t, customer relationships get damaged, bright people leave the company because of an egotistical boss and on and on and on. Even though there isn’t a line item on a P&L, egos affect every number.
I’m curious, how much do you think ego is costing your company as a percent of revenue?
Very interesting! With time, separated networks that know how to collaborate with each other, hold higher odds of beating adversity. In nature, there’s a law that describes the success of biodiversity when exposed to the right kind of disturbance, aka – change. An example? –> The Spanish “dehesa” or southern grazeland, where bulls run freely over pastures and record-high levels of biodiversity are achieved.