A Quote by Justin Kan
If you look at our original business model with the verticalized law firm, a lot of these companies that have this kind of full stack model are not going to survive. A lot of these companies, Atrium included, did not figure out how to make a dent in operational efficiency.
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Generally, the technology that enables disruption is developed in the companies that are the practitioners of the original technology. That's where the understanding of the technology first comes together. They usually can't commercialize the technology because they have to couple it with the business model innovation, and because they tend to try to take all of their technologies to market through their original business model, somebody else just picks up the technology and changes the world through the business model innovation.
The model a lot of companies use is a very pyramidal model which sort of designates that all creativity, all wisdom flows from the top. We think that's the absolute wrong model.
A lot of people will say, "what's Facebook's business model?" I always find that a kind of funny question. Our business model is out there, which is: we monetize largely through advertising and a little bit through the gift revenue, the virtual gifts we have on our site. I think those continue to be the most promising avenues going forward.
Companies will need to pursue a more diversified business model, but I think those companies that have what I call a focused diversified business model will be more successful.
All too often, a successful new business model becomes the business model for companies not creative enough to invent their own.
The Lockean assumption that if we put our labor to it then it becomes our own is totally fallacious. We have to figure out how to leave things alone, and build an economic system that's not built on a linear model, but instead on a cyclical model, because that's the natural world - it's cyclical and not linear. That is going to take a lot of transformation.
Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.
Companies that acquire startups for their intellectual property, teams, or product lines are acquiring startups that are searching for a business model. If they acquire later stage companies who already have users/customers and/or a predictable revenue stream, they are acquiring companies that are executing.
Trust-me companies are companies whose financial results gallop ahead of their businesses, companies with seemingly perfect control over their quarterly sales and profits. Companies whose financial statements are loaded with footnotes: companies that short-sellers often attack but rarely dent.
When you look around Silicon Valley at new companies, there are very few ideas that are going to make a dent in the universe.
The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption. Companies in fact are specifically organized to under-invest in disruptive innovations! This is one reason why we often suggest that companies set up separate teams or groups to commercialize disruptive innovations. When disruptive innovations have to fight with other innovations for resources, they tend to lose out.
Companies that actually survive and flourish are going to change their business model from production to aggregating the networks and the network services and solutions. If you're a construction company or an IT company or a logistics company or an information data operation, to the extent that you can find ways to help build the commons, you can get some commercial value in that.
In many cases, Rhode Island is just not on the radar of a lot of companies. But once companies or people take the time to look at our high quality of life, low cost of living, great talent, good business environment, often people see it's an excellent place, and they want to take a harder look.
Over the years, I've had fairly benign record companies who gave me a lot of rope, but in spite of that, there's still restrictions and expectations. It's nice to be at the cottage-industry size, which I think is kind of the business model of the age anyway. It's the way to be. The Internet makes a lot of that possible. Having a loyal fan base is also very useful to keep me operating; people can find your website, and the venues that you're playing at, the merchandise you have for sale, all that kind of stuff. It's great to be able to reach the audience in a more direct way.
The issue for the major companies is how, is how when and where to make their content online. So you look at these major cable companies, whether it's Disney or Time Warner, News Corp., ESPN, USA, they're being very very careful, about making their content available over the internet, and they're trying to figure it out.
I see basically two models of law firms in the world. One of the global law firm they go by the name of one-stop shops, which will open an office, everybody see and opportunity and will also practice the local law of that jurisdiction. That's a successful model as well but that's not the only model. And the other model is those of independent law firms, national champions which have some unique strengths as well and I think both have their strengths and weaknesses.
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