It has been a tumultuous year. And despite all expectations to the contrary we are not dinosaur’ed as people thought the Mayans predicted!
It was fun writing and more than gratifying to see you all read the stuff, extend the conversation by commenting and putting your faith by subscribing to updates on this blog. Words will sound hollow to express my gratitude
We will be winding down – as many of you also will – for the new year. I wish you and your family the best for the season and a very happy 2013
Thank you for staying with CDI and I’ll see you on the other side of the year
Humans are wired for two things that has not changed ever since we figured out how to live in societies. The first is social interaction. We engage in reciprocatory interplay with others with apparently no immediate intent of benefits. Without hijacking this into a sociology discourse, mutual profit motives in social interactions are quite deep rooted, fructify in a complex manner over time and are played out over a labyrinth of relationships. It is sufficient to say that social interactivity is a net positive outcome for both individuals and society. The second constant in our wiring is the desire to win. This truism is well borne out by the Darwinian theory of evolution and intersects nicely with the desire of social interactions. How would we otherwise know what benchmarks to hit – and exceed – in order to win at whatever is it that we wish to win at? It is at this intersection of social interaction and the competitive gene that the concept of gamification stands
Gamification can be loosely defined as application of competitive games (that is where multiple players engage each other with reward systems that setout cardinal rankings) to situations that can result in a collective net positive outcome by increasing competitive awareness and intent. Gamification existed for a long time, perhaps even before the term was coined. Sales personnel were rewarded on their performance relative to each other, support engineers were cherry picked for promotions by the numbers of cases successfully addressed and so on. What gamification has brought about is a transparent process where not only the benchmark is visible to players but also the ranking of all who are playing the game (what good is running a race with only the end tape visible? It is the breath on your shoulders that matter the most)
Corporations looking to create better engagement with end users take gamification out of their firewalls into the wider world. Take for instance the Chevy Volt. Volt is a car that runs of electricity but switches over to gas when the charge runs out. To get optimum mileage from your car it is important to charge the car batteries regularly. You get a certain mileage from your volt – but how do you know how you are doing vis-a-vis other Volt owners? Up comes a
website community where you can unleash your competitive spirit and while at it, get into good habits about eking the best fuel productivity from your vehicle. Net positive for the society. Corporations internally use gamification to improve upon – that is push the boundary of the net positive – goals that lend naturally to gamification. Sales and Support are two great examples (easily extensible to bugs per kilo lines of code for software developers!)
There are some areas where gamification can improve the net positive of societies outside corporate walls but these have not been tested well enough. Take for example outcome of financial savings and wealth creation. All of us save and invest in multiple financial and nonfinancial assets with an intent of maximizing portfolio value. It goes without saying that creation of wealth is a hugely competitive activity and hence should be a good candidate for gamification. But the play currently does not make it so – it is once again like that race where one does not know where others stand in this race (I am twenty seven, female, been working for three years and have a net worth of X. How does that stack up within my demography?). Keeping wealth creation at the core of this hypothesis it becomes easy to identify offshoots – like, a family of three in Hyderabad spends Y on groceries each month – so how do other similar families stack up?
I would love to know what you think about this and if there are services that have tried this out
By the way, I stumbled upon this interesting webcourse on Coursera on Gamification. It hasn’t started yet so there’s time yet to sign up – seems it will be fun
Scale is the antithesis of specialization. A idea is boiled down to its core for implementation but once successful, pressure mounts to scale the thing and soon the core starts expanding. Before long, adjacencies get targeted and conquered – either directly or via partners (since the flavor of the season is extensible platforms, partners come in and implement the extension sometimes into areas that clearly challenge boundaries the founding fathers of the platform had conceived). The service starts behaving like an aggregator. Some platforms (they did not call themselves platforms then) started off as aggregators. Take market data terminals for example. They became aggregators the moment they started plugging in more and more
exchanges liquidity venues, more newswires and more brokers. Common functionalities got overlaid so all incremental additions benefited from using those functionalities. Soon enough it became a mad scramble – add as much as possible, as much as the pipes would allow. Market data vendors started crisscrossing their content assets on different platforms. Very soon there were a couple of dominant players in the market who were mostly carrying all that was there to carry. So how does this model get disrupted?
Death can come in many ways. A single swift bullet often does not kill the incumbents in a deep seated market such as this (I would like to believe that what is true for the market data industry will also hold water with industries that display similar characteristics). Death comes by a thousand cuts. My colleague Kunal Mehta recently attracted my attention to Owlin. Owlin is a bottoms up news service that threatens to disrupt the market news vendors (like Reuters and Bloomberg) by scraping information off platforms where news tend to break quicker (‘break’ does not however mean verified. Anyone who has run a newsroom or consumes news for market price movement purposes must surely know the difference). If Owlin is successful then they would have inflicted an early cut (even if it does not and fails in the implementation, someone else will come up with a better way of reaching the same intended outcome). Aggregators also face threats of disintermediation – that is, a situation where competitors figure out the raw data source, get there and enhance value of the basic information more than what the aggregator does. In an era where information is reaching the public domain quicker than ever before, this is a clear and present danger for aggregators and a clear and present opportunity for disruptors. An area where aggregators yet have a moat is with content relationships. Over time, painstakingly they have built relationships with content creators who require a wide and effective distribution platform, which the aggregators have provided to them. Consider brokers who would want to maximize their distribution reach of research for investors but cannot make capital investment to build the infrastructure. They have been loyal (though slightly irritable) customers of aggregators for a long while (yes, this model can also be broken with a crowdsourced experts’ network but the actual moat here is not the content. It is credibility)
A thousand cuts is a nice phrase. It has an element of mortality to it but how useful is it for consumers in the industry that is getting slashed by the blades of the blind watchmaker? Aggregators make life easy for the users who make a trade off between convenience and the bleeding edge. It is acceptable to live with a sub-standard instant messaging system embedded in the aggregators’ system because it is just that much more easier to use that than a best of breed. History tells us that sooner or later the bleeding edge catches up. Early adopters who bravely withstand that pain of ditching the convenience factor are rewarded for their choice, leading to others following their footsteps. The small band behind the piped piper soon becomes a crowd. At a critical point of this crowd-swell people start thinking of mashups – where the best of breeds are brought together in a manner that the users can control (as opposed to ceding control to the aggregator). The integration, messy at the beginning start becoming elegant with passage of time with each micro-mashup (specific to an implementation) getting a development roadmap of its own
Unsurprisingly perhaps aggregators also see this situation via an identical set of optics. That is why the preponderance of building “extensible”, “open” (albeit walled garden) architecture platforms that are ready for the Great Bypass situation as and when it arrives. The next wave will perhaps be to acquire the bleeding edge capabilities (is that why rumors are rife – as are rebuttals of Bloomberg eyeing LinkedIn?)