Cybersam's Blog - User community as a competitive advantage?

Friday, June 30, 2006

User community as a competitive advantage?

This is not going to be another long winded essay on business strategy but rather a quick blog entry to capture a recent thought of mine.

I remember hearing this being mentioned in one of my classes before (probably Prof. Tom Allen's class): "Before you can build world class innovations, you need to build a world class organization." When I look at the Internet today, I see the success of MySpace, Wikipedia, and Del.icio.us (just to name a few). Yet all these sites share one thing in common, which is: they all have a rich community of users and contributors. Indeed, web sites can no longer compete solely on content alone, especially single source content. In the world of Web 2.0, websites are becoming more social-centric. Users are drawn to web sites that offer rich social interaction with like-minded people. From my observation, almost every new site that debuted in the last two year or less have grown significantly when it has a rich component of social interaction or social networking feature. In other words, the competitive advantage of a web company, especially a startup, may indeed lies in the community that it builds and the people that it attracts. Maybe the new pointer, appropriate for today's Internet business environment, should say: "Before we can build world class websites, we need to build a world class community."

6/30/2006 12:24:28 AM (Eastern Daylight Time, UTC-04:00) Comments [2] Business

6/30/2006 7:33:33 AM (Eastern Daylight Time, UTC-04:00)

I completely agree. I'd even go a step further and stay Tom Allen's statement became out of date somewhere in the late 1970s / early 1980s: if he were right Apple, Dell, HP, and numerous other companies would have never existed.

Yoav Shapira |yoavsAT NOSPAMcomputer dot org

6/30/2006 9:05:24 AM (Eastern Daylight Time, UTC-04:00)

I actually didn't imply that Tom Allen's statement was obsolete. In fact, I think that his statement probably has more relevance today than before. In an economy that values innovation more than ever, we need to realize that human capital, human resource policies, organization morale, culture, and organizational processes are critical factors that foster an innovative environment.

But in this day and age, it is not just about attracting the best employees but also the lead users. The role that customers play in providing ideas and experimentations for a product cannot be underestimated. Web 2.0 is a good example to illustrate my point. Your advisor Eric von Hippel says it best: innovation is rapidly becoming democratized. I think, overall, this is where product development is moving to.

Cybersam