- Jay Maharjan (06.08.09)

The business landscape and the economy as we know it is changing and it is changing fast. What you have is an endless collaborative opportunities, with an abundance of knowledge and free means at your disposal. How can an entrepreneur take advantage of this historic time of abundance?

Regardless of the changing settings in the economy, as I often write, you can not undermine the importance of embracing fundamental principles – taking time to separate ‘means’ from understanding and offering a ‘true value’, i.e. understanding what your customer wants versus what you think is a great product- the fancy tools you choose are not going to help you if what you have to offer is not something that your customer is looking to buy. This might sound like a Business 101 but I see plans all day long with a clear emphasis on so called “state-of-the-art” technologies and ‘proven’ processes that entrepreneurs would blatantly fail to emphasize the value behind what they are selling.

Having said that, the power of abundance in the conceptual economy does create unique opportunities for entrepreneurs. Free tools allow entrepreneurs to experiment, try premature concepts with a minimal capital, risk and introduce products and services fast to the market. This begs the question of how one should leverage the power of abundance to use it either as a business tool or as a part of  a larger business strategy.

As an entrepreneur simply wanting to tap into the the power of abundance, you can choose free tools out there wisely – making sure to leverage on the tools that compliment your product. If you are offering a product that sells well over the internet, you must have a website with selling capabilities and more importantly get seen on search engines. However, if you are selling a consulting service with no tangible offerings, in most cases where you are selling you, having a static website will not deliver the credibility nor the confidence that you will need to convey to close the sale. However, in almost all cases, leveraging on the abundance if done right would help you with your business.

Now, the more strategic question would be on how you could use the model of abundance versus scarcity for the benefit of your business model. Lessons can be learned from the models of companies like ‘Youtube’ and ‘Hulu’. Both companies are clear about their definition of scarcity and abundance. Youtube, in one hand, a Goliath with deep pockets is practicing the principle of abundance, encouraging innovation by allowing individuals as well as institutional users to leverage on their free video hosting platform for free. In the other hand, Hulu is offering videos for free to the users but introducing some form of scarcity by bringing advertsing model from the TV industrial revolution and by injecting ads within the high quality videos. Chris Anderson points out the case of Hulu and Youtube in his latest article this week that new model of free might be a hybrid one that also includes a scarcity element to create a business model that generates revenue. This might be a true statement to a certain extent. However, this statement does pose a threat in a larger scale – discouraging innovation and collaboration at the core. Even though Hulu might be generating revenue in a short run, the implied strategic assessment between Youtube and Hulu can not be compared in the same context.

In the conceptual economy, there is a place for companies like Hulu. However, if the ‘Hulu’ model stays the same as it is now, relying only on the ‘tv industrial’ advertising revenue model, it will be very hard for them to sustain a clear competitive advantage. Buying the Super Bowl ad for over 2 million dollars definitely gives you the momentum but the world is changing. Conceptual economy demands innovation at the fundamental level.  Advertisement based web business models will be very hard to sustain becasue of a simple reason – there will be more distribution channels like ‘Hulu’ sharing the advertising dollar.

From a bigger picture, the success or the failure of ‘Hulu’ is less relevant to the point that I am trying to make that the conceptual economy will demand and help entrepreneurs with innovative, sustainable ideas to bring them to the market, and this will be done through collaboration, open paltforms and value-added models.

Lets not ever forget that when creating a business in the conceptual economy, the fundamental principles still rule the day. Make sure that the dog wants to eat the dog food (- Eugene Kleiner). Do the right thing before doing the things right (- Peter Drucker) – and always keep in mind that a true business strategy and what is simply a mean to execute your strategy is not the same.

Tags: conceptual age, Conceptual economy, harnessing the power of abundance, power of abundance