What Rod's Been Up To
Rod's biggest news since the last newsletter is the launch of his new company, TWIKI.NET, at Linux world, on August 7th. When asked about his experience launching TWIKI.NET, here's what Rod had to say:
It was exciting and surprising. Anytime you launch a new company there’s always an intense focus of energy and then the big question—how will the company be received?
We were pleased that our little booth at LinuxWorld was packed solid for all three days of the event. More than 1,000 people stopped by to speak with us about TWiki and more than 550 registered with us to receive more information from the company. We were thrilled by the reception by TWiki open source users, industry partners, and talented people looking for employment with a hot new company.
So why did we get involved with TWIKI.NET? This starfish network story started in February when Rod met Peter Thoeny, the founder of TWiki, an open source wiki software product. The product exemplified the starfish principles of allowing everyone to contribute (as an open system), spreading virally (as a free product), and helping people to network and collaborate better in companies. Rod fell in love with the product and the business opportunity immediately.
A wiki software engine is the software you install on a PC or server that allows you and others to collaborate on creating a shared website or knowledgebase, Wikipedia is a great example of a consumer encyclopedia wiki, but many businesses are now installing TWiki as a wiki software engine to create the same kind of knowledge bases internally. TWiki is often used for company intranets that are open and allow employees within or across departments to share information, for project management, issue tracking, document management and storage, and many other applications.
Peter designed TWiki in 1998 specifically as a wiki for business and the enterprise, with tight security, supportability and scalability. Since then TWiki has spread virally to more than four million users around the world, as a free, open source software product. More than 800 engineers have contributed to the system, which is now very large scale.
When Rod did a Google search on TWiki, it came up with more than 6 million hits! That’s when he knew this major open source platform had tremendous potential. Then when he found out that on average more than 300 companies or groups download the system every day, he knew it was greatly valued by the users and community.
Users of TWiki include companies such as Motorola, Yahoo!, Nokia, TrendMicro, DHL, and approximately 80% of the Fortune 500 companies, as part of a broad base of users. Having seen what TWiki can do for businesses, Rod now believes that more than 80% of all businesses with more than 10 employees in the world will be using wikis within the next 10 years. According to a recent online interview by blogger Robert Scoble, only 16% of Americans even know what a wiki is today. Within 10 years, there will be few who do not.
Rod’s role in the new company is as a catalyst and accordingly his title is Chairman and Chief Catalyst. While he has successfully applied the starfish concepts and principles to numerous non-profit projects and has advised many companies on their business strategies using the principles, he now faces a new challenge. Rod must lead a company which is married to a great and vibrant open source community with 31,000 registered members! In addition, the starting TWIKI.NET team of 30 fulltime staff and consultants around the world is also being organized using project plans, team minutes, notes and knowledge all shared on TWiki. Rod is extremely excited about this new opportunity and role.
Here is a link to WWW.TWIKI.NET.
If you would like to receive more information on the company, simply send an email to info@twiki.net. If you would like to register for the free beta software program or buy TWiki services, please click here: http://twiki.net/pricing.html
In addition to launching TWIKI.NET, Rod attended the TWiki Community Open Source Summit Meeting in Rome, Italy, from August 13 - 18. Also, on September 3rd an interview with Rod aired on BBC's The World.
Starfish Principles at Work - The Miracle of Kaputei
Seven years ago, Wilson Naima was a homeless, glue sniffing young thief, using knives and sometimes guns to extort the poorest of the poor in Kibera to earn his next meal or rush. As he slept beside the rusting tin shacks piled on top of each other, he sometimes rolled in human excrement that covers the paths and nooks of this wretched slum in Kenya.
Next month Wilson will move into a brand new clean home, built by the poor, for the poor in the Kaputei project north of Nairobi. The project has outside equity and debt capital, but every concrete block and roof tile will be paid for by Wilson who now owns four businesses. Wilson got a lift from Jamii Bora, a local microlending group that first loaned to Wilson back in 2000 when they first got started.
Now Jamii Bora is a well-managed, high growth microlending group headquartered in Nairobi. At the global Microlending Summit in Halifax Nova Scotia earlier this year, Nobel Laureate Dr. Muhammad Yunus proclaimed, “Jamii Bora defines Microlending 2.0. They are showing the entire industry the way forward.”
It all started in 1999 when 50 homeless beggar women asked Ingrid Munro, a former Swedish model and UN housing director who was trying to retire, to help them. After 40 years in the development sector, Ingrid was ready to take a long break, but the women told her they would probably die if she did not help them. She heeded the call.
The group those 50 women started with Ingrid has now grown to 130,000 members, with more than 700,000 family members served, using just drops of capital and no government aid. The secret to the success has been Ingrid’s “catalyst” style leadership which has helped unleash the take charge, entrepreneurial spirit of the poor themselves. They, after all, are now the ones running every one of the 26 bank branches, filling all of the other management roles, and running the various related projects and businesses, including the Kaputei Project.
Microlending is a decentralized starfish activity where the poor manage their own credit risk by saving and borrowing in circles of five people each, who all guarantee each other’s loans. This decentralization of the credit risk not only makes the microlending work, but with real and regular loan repayments, it also teaches the borrowers the responsibility of tight business and financial management.
When Jamii Bora first loans to a poor borrower like Wilson, the first loan is usually to provide $70 or less of capital for funding a new business. Once that business grows, and the loans are repaid on schedule, more capital becomes available. Given Wilson’s business success, he was able to take an increasing series of loans finally leading to four businesses.
The next step for many families is... more
See photos of the Kaputei development. Learn more about Jamii Bora.
Decentralization: Collaboration, Resilience, and NO PROFIT?
by Dave Kresta
(Dave Kresta's blog is CollaborativeEye Business Collaboration Journal)
I spent about an hour at the recent Open Source conference in Portland with Rod Beckström, co-author of The Starfish and the Spider. I won't give a book review here (see the Amazon.com link for some excellent user book reviews), but will focus on a few observations.
The book makes several statements to the effect that decentralized organizations (or decentralized industries) do not make much money. I want to fight this statement, but have to concede that if you look at most examples, it is true. But is it necessarily true? For example, al Qaeda does not make money, but it certainly is an organization that raises a lot of money. The fact that the money is raised and spent in a decentralized fashion doesn't change the fact that money is being made. In a different type of example, IBM's involvement in the Open Source community does not generate any direct software revenues for Big Blue, but it estimates a savings of over $1B per year in development costs in addition to sizeable service revenue (Source: Wikinomics). I believe the real innovation that needs to occur is to take the concepts of decentralization as outlined in Beckström's book, and develop sustainable businesses that generate value for investors, participants, and all other stakeholders.
Starfish points in this direction with the interesting concept of a hybrid organization: one which combines centralized components with decentralized components. Two types are presented:
1) A centralized organization with a decentralized customer experience (for example, eBay)
2) A centralized organization that decentralizes internal parts of the business (for example, Sun and IBM with Open Source).
So what is new here? Certainly the concepts of empowerment, decentralization, moving decisions "to the edge" have been around for a while. What is new is that "2.0" technologies are now available that can make decentralization feasible on a very large scale (and ironically on a very small scale as well). What else is new is a growing demographic that prefers working in non-hierarchical, decentralized environments (see my post on changing demographics of the Web 2.0 Net Generation).
A new competence that will be required of organizations (and their leaders) in the future is to identify specific elements in a business that need centralization, and which elements need to be cut loose with decentralization. This will certainly involve some risk taking, and the ability to reconfigure business operations and even business models in sometimes radical ways. Beckstrom calls this "finding the sweet spot", and the exciting thing is that it is not really a "spot", but a moving target that changes as industries and customers evolve. Companies which develop a strategic competence in being able to find (and keep tracking) the sweet spot of their businesses will produce market leading profits.
Dave Kresta has over 18 years experience bringing focus and clarity to chaotic high-tech environments. With a technical background as a software engineer, as well as extensive product management and product marketing experience, he’s helped companies such as Mentor Graphics, Synopsys, SAS, as well as several startups, turn vision into reality. During this time, the "secret sauce" which always seemed to accompany successful initiatives, and which was usually lacking in the failures, was Collaboration.
Share Your Starfish Story
Michael Grove and Mike Takamoto of Open IT are catalysts who enable customers to communicate with each other and define shared needs and requirements. At their customers' request they bring suppliers into the process to help the customers address their needs. The two groups work together to solve the customers' problem. Michael and Mike share the following story on "Doing business with a Starfish."
Open IT is in the business of making CIOs, and therefore their organizations, more effective. We do this by getting CIOs to form collaborative groups, called forums, around IT projects such as security, Green IT, or compliance. As we have evolved our model we also have learned to extend the network effort to our thought leaders who facilitate our collaborative project activity, and to the suppliers who want to solve problems for our collaborative teams. In the traditional seller push model the seller talks (hopefully) to a few customers separately; customers then get engineering to build a solution that at best is a compromise of different customer interests. The finished product is then handed over to the sales department to "close business" with customers.
In the collaborative "starfish" model the customers share with each other their respective needs and define their collective requirements. Compromises are made among customers with the help of a thought leader that represents their interests—not the supplier's. In effect, the collaborating customers are the inbound marketing department of the supplier. Product revisions and next generations are driven by customer demand pull. Please note how the value exchange went from a seller pushing product features to get a sale to a knowledge exchange and a problem solving relationship between buyers and the seller. There are fewer moving parts and a far more profitable exchange.
It gets better. As our member CIOs succeed in collaborative projects, they share those successes with other CIOs who in turn share their successes. They are now acting as the peer based distribution channel for the supplier. The greater the network effect, the greater the demand pull and value exchange—creating more network effect.
Open IT Works is a Catalyst company as we enable networks of IT organizations to solve problems together as opposed the traditional within-the-enterprise approach. In other words, we are enable the network effect where the more that participate the more value generated for all the participants.
If you have a story to share that relates to starfish principles, please send it to newsletter@beckstrom.com and we'll post it in this section of a future issue.
Eco Corner — Bottled Water = Oil
Each edition of The Beckström Starfish Report will highlight a new environmental issue or factoid that comes out of the starfish web of information, including the blogosphere. This edition's topic is the hidden oil cost of bottled water.
Google blogger Chris Sacca recently posted a photo given him by David Coale, showing three different brands of bottled water. David had calculated the amount of oil required to ship a bottle of water from its source to the Bay Area of California. Then he poured this amount of oil into each bottle. Take a look. Seeing the oil actually in the bottle of water really drives the point home. If you're like Chris, you may not be able to drink bottled water again without imagining the taste of oil in your water.
It would have been nice if David had also calculated the amount of oil needed to produce the plastic water bottles, and to purify the water. But dependence on oil is not the only environmental problem with bottled water. The other issue is that a significant proportion of plastic bottle caps left on the ground eventually end up in the ocean, since that is where most all water eventually flows.
The caps end up inside fish and birds who mistake them for small jellyfish floating near the surface. Many birds are now dying on beaches and when their carcasses rot, their body is seen to be filled with plastic bottle caps and other small plastic objects. This is a significant environmental problem.
There are many possible solutions including drinking no or less bottled water, recycling the plastic, or developing new plastics that would at least deteriorate after a time delay of say 5 years. Right now, most plastics will last for hundreds of years, polluting the seas for at least 10 generations to come.
You can also filter your own water at home using one of the many filtration systems available, such as water ionizers, reverse osmosis systems, and home distillers. You can then take your own pure water with you in repurposed glass beverage bottles, or a Klean Kanteen, instead of buying bottled water.
If you have an environmental pet peeve, or you champion an eco cause you'd like to see featured in a future edition, send it to newsletter@beckstrom.com.
Ask Rod
Ken Emmer asked: What would be the best event or conference to find website developers
who
are conversant with the latest technologies to develop P2P interactive
websites?
Rod answers: Try these:
Web 2.0 Summit, October 17-19, 2007, San Francisco, CA
Web 2.0 Summit
November 5-8, 2007, Berlin, Germany
November 15-16, 2007, Tokyo, Japan
April 22-25, 2008, San Francisco, CA
September 2008, New York, New York
Have a question about starfish principles and how to apply them you'd like to ask Rod? If so, go to Ask Rod and post your question. Rod will answer as many of your questions as he can, and your questions and answers will be published on Rod's BECKSTROM.COM website.
Starfish Tip of the Month for Your Business
Here's a great idea that's free, which makes it even better…
Free Conference Call service. We use this at TWIKI.NET and at BECKSTROM.COM and are delighted with the quality of service. To learn about it, or to sign up, call (877) 482-5838 or contact customer support at services@freeconferencecall.com.
This company uses a great starfish model—they offer free conference calls to anyone and fund the entire business by sharing the local access charges from the long distance companies. In other words, the calling service you use to call FreeConferenceCall.com, must pay the local phone company in Iowa where FreeConferenceCall is based for terminating the call there. The local Iowa phone company shares that local access charge with FreeConferenceCall. The company uses that money to pay for their servers and other costs of hosting the digital conference calls.
This brings free conference service to anyone in the world. All you have to pay for is your phone call to their number, and with the starfish-like decentralized phone network Skype, the cost of that call from anywhere in the world is less than 2 cents per minute! Welcome to a great new freebie from the starfish world. May you or your company save thousands of dollars.
If paying for the phone calls is too much, you can have everyone in your group or organization use Skype and do a conference call for free. The only hitch is that you can’t use your normal land line phone.
Who We Are
Rod Beckström is an author, speaker, and the Chairman and Chief Catalyst of a new software company, TWIKI.NET. He founded CATS Software Inc., which he took public as CEO. Rod serves on the boards of Environmental Defense and Jamii Bora Africa Ltd. He is also on the board of the Pacific Council of Foreign Relations and on the Kiva.org Board of Advisors. Rod holds a BA and an MBA from Stanford and was a Fulbright Scholar. He lives in Palo Alto, California and can be contacted through BECKSTROM.COM.
The team at BECKSTROM.COM supports Rod with his writing, speaking engagements and web presence.
To inquire about booking Rod for a speaking engagement, contact speaking@beckstrom.com. To schedule an interview with Rod for your publication or blog, contact sandra@beckstrom.com.
© 2007 WWW.BECKSTROM.COM
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