R(e)volution of digital content

With the rise of broadband Internet, mobile devices and the development of online secure payment system E-commerce is developing further on a large scale. Companies such as Amazon, Ebay and Taobao have defined and master the concept of E retailing in which consumers are able to find and buy a range of physical products online. As the digitalization sets forth and consumers continue to use Internet connected mobile devices such as iPads, Laptops, Smartphone’s consumers are not only expecting to buy physical products online but also to view, buy and storage digital content with their mobile devices. Movies, music, books, magazine etc are all being made available in digital format to enable the consumer to enjoy their digital content anywhere, anytime and on any device. This development opens a new type of retailing called ‘digital content’ retailing.

Apple paid close attention to this development and with its ‘iTunes store’ the company has been able to build an ‘Apple Eco System’ in which consumers can buy anything ranging from personal devices to personal entertainment. The development of the iTunes store took off when Apple began to operate in the mp3 player market with the introduction of the “iPod”. After the success of the iPod, it was a natural step for the company to start offering legal digital music to their iPod customers. However, the major challenge for Apple was to convince their consumers and the content producures (such as record Label companies) that households are able to buy music from a computer company… No surprise that Apple has invested millions in building pyhsical retail shops to change this branding perception.

Besides the use of the Internet as a retailing platform, the use of the Internet as a broadcasting platform is becoming increasingly popular. With unlimited broadcasting capacity, leading broadcasters such as ABC and HBO have invested significantly in online broadcasting platforms and have very strong brand images to secure a position in this new broadcasting market. The rise of the Internet as a broadcasting platform brings the marriage of Internet and television a step further. Several companies such as Google and Apple try to enter this market. The integration between Internet and television will unleash an explosion of business opportunities in terms of E-commerce. Consumers will be able to view, buy and rent anything via their internet connected TV.The popularity of Web-to-TV devices depends in part on the amount of programming available. Apple has already struck deals with Walt Disney Co’s ABC, News Corporation’s Fox and Netflix for some limited TV shows and movies.

The interesting part is that Netflix currently has such a large distribution channel via their loyal customers that they are pushing own production. It would be interesting to see when Netflix starts to offer in video or tv purchases. This opens up a new business model for Netflix. Imagine buying a Star Wars Drone when watching the latest episode on Netflix. However this is not something new, in September 2010, Apple introduced a less expensive, smaller version of Apple TV for $99. The move stepped up the battle with the likes of Google Inc and Microsoft Corp, which are all vying for control of the digital living room. Microsoft (not forget Sony) is in talks with media companies to license TV networks for a new online pay-television subscription service through the Xbox and PS. In the United Kingdom, Microsoft already have launches its MSN video player and uses their home brand Zune to offer entertainment on the phone, Xbox and pc. The company is trying to push their services via their Live ID users or hotmail users.

The competition in this digital content retailing continues to become fiercer as both producers and distributors of physical products are cooperating with each other to offer digital content online. For example major film studios have signed cooperation deals with large (e) retailers such as Amazon, Wal-Mart and Tesco to offer to view/rent and purchase movies online. Under different brand names such as AmazoneLoveFiLM, Vudu (Wal-Mart) and BlinkBox (Tesco) these companies are providing their customers not only the possibility to purchase the physical DVD in the supermarket but also to purchase the digital version, allowing the consumer to view the digital content anywhere, anytime and on any device.

In the Publishing Industry the larger Publishers are cooperating with Tablet companies to offer their digital content for their customers and subscribers. Apple continues to embrace more publishers in their ecosystem such as Time Magazine by offering subscribers of Time the possibility to view their favourite magazine for free on the iPad. However, the digitalization also threatens the traditional publishing industry as top authors signs exclusive deals with e.g. Amazon to offer their work on the Kindle devices and on the Amazon Ebook store. This confirms the continuous rise of electronic book market and the fears of publishing houses, which are bypassed by big-name authors, in search of a bigger cut of the sales profits. Also, exclusive author and book deals for the Kindle will easily set apart Amazon’s e-book reader from fierce competition from the likes of Barnes & Noble and Sony.

All in all, these developments in the digital retail industry are just the start of a new area. Both software and hardware companies are cooperating more intensively with each other, new partnerships are developed and new distribution channels are created via investments in traditional retail players. For the consumer the rise of mobile devices and cloud computing offers them the ability to purchase any content (digital and pyshical) any time and any where. Their consumer path differs per day, creating a challenge for the suppliers and pushes them to build and improve their digital infrastructure (online & offline). And don’t forget it is estimated that in the future over 25 billion devices will be connecting and interacting with each other, making the R(e)evolution of digital content inevabitable.

War for Talent

With most of the baby boomers retiring and an insufficient amount of young people that can replace them, the war for new employees and talent has begun. McKinsey had noticed this development before the millennium by publishing the article ‘The war for Talent’ in the McKinsey Quarterly of 1998, in which the scarcity of human capital was being predicted. However, few organizations adjusted their recruitment process in order to cope with these anticipated changes. With the current financial crisis, the ‘war for talent’ seems to be quickly forgotten. Organizations are reorganizing and lying off huge numbers of employees. However, as soon as the economy will recover, the war for talent will begin again in full force. From a demographic perspective, it is hard to ignore the aging workforce as a key challenge facing employers and the economy as a whole. About 76 million Baby Boomers in America alone (those born between 1946 and 1964) are set to retire in large numbers and there aren’t sufficient numbers of younger workers to replace them. Labour shortages in key economical sectors will force a radical rethinking of recruitment, retention, flexible work schedules, and retirement. As a result, it is utterly important that organizations are investing now in a new ‘low touch’ and cost effective selecting and recruiting method in order to deal with the war for talent.

To start off, identifying and recruiting students for an organization is the first step in the war for talent. However, students are not fully aware of their career possibilities and have no idea which organization fits their personal profile. As a result the recruiting process consists out of one way, namely from the organizations. Organizations know what kind of people they need and how to recruit them. They use the traditional recruitment talks on Universities and internships in order to attract students. It is through this approach that mistakes are being made within the recruitment process. Due to the marketing approach and impressive recruitment talks, students will apply for organizations based on their brand power and image instead of a match between their own values and the values, culture and career possibilities the organization can offer. This can create a mismatch between students and organizations due to a shortage of information from both sides.

If the student is able to know which organizations fit his or her personal learning goals, the matching process will take place from two directions, (the organization and the student) making a successful match likely.

Below a video where I share my view on the future of education and recruitment at Campus Party Europe 2016, Utrecht.

Don’t forget the Dream

“Another dream really?? Come on.. just work and stop dreaming!”

This is the reaction most people get (including me) when you tell people “I have a dream”. But I believe the dream matters. More importantly, the pursuit of the dream. Let me explain;

When I was just 12 years old my first idea was about solving traffic jams through building magnetic high way lanes. Say what?? Yeah it sounds fancy but the idea come from a visit in Disneyland. I was driving in those little magnetic cars that could not bump into other cars. Most kids found this annoying but I thought it was great! Why? Cause I knew my dad was always late at home due to traffic jams.. And I thought if we all drive like this to our homes there won’t be any traffic jams…

It sounded simple and I was convinced that it will work. I told my dad about it and he advised me to write a ‘business plan’. No idea what it was but it sounded ‘important’. So I wrote my first plan “RTS Company” (rapid transport systems). It failed of course…little did I knew about politics, self driving cars and finance at the age of 12 🙂 What a bummer

The gut feeling

You dont need to talk to customers… you need to listen

Keeping your mouth shut and listen to your customers is one of the hardest things when you have a great ‘idea’. In 2008, I was constantly talking about how great my idea ‘FaceCareer’ was.. But did I validate my riskiest assumptions? Filled out the value proposition design and business model canvas..? No! Why? Nobody told me. I thought I just get money and build it. Together with Michael, Roel and Wietze we start writing our business plan and did managed to reach the semi-finals of the ‘business plan’ competition of the Hong Kong Polytechnic University. We did not win the competition but it was a great trip!

Lean Startup

At the end of graduation in 2010, everybody was talking about drinking coffee with alumni at nice companies. Back then Facebook and LinkedIn were on the rise and I thought why don’t we make use of the network of each University and show all the alumni + companies. Together with Wietze, we started the project AlumUnited and managed to give a nice presentation to the RUG Careers. We build a MVP in powerpoint and had a technical guy with us to convince them we could build it. They were asking for a price but little did I knew about pricing.. We priced it too high and failed… I finished my master at RSM Erasmus and did some research about knowledge sharing at Alibaba Group in Hangzhou in 2011.

After “crying” my project had failed, a close friend of mine said: “read the lean startup” Lean Startup..?? What the heck is that..? I had heard about Toyota lean process at University of Groningen but no idea it applied to startups as well. By now everybody knows Eric Ries and his book. But back in 2012, I thought that making Powerpoints matter but now I know better 🙂

Being lean is like eating your fruits and vegetables, we all know it… but it is hard to eat it everyday

Food on the table

During lean startup machine in Rotterdam, I quickly learned that you need to make a living out of your dream. Cause you do need to pay the bills and put food on the table. If you are just passionate about what you love somebody will eventually pay for it. So your first job is to find a business model…

I discovered that this “somebody” is called a customer or early adopter. Most of the time this is your mom, dad or friends. It doesn’t matter who they are.. if they pay for your product or service, you got a first customer! Celebrate this but after that it is time for making more customers happy (growth).

Making happy meals

After your customers are paying for what you love to do it is time to think about serving more customers. They only way to find more customers is to find out the “taste” of these people via experimenting. This is something I learned at ZEEF in 2013. Some call this data driven marketing or growth hacking but the whole idea is that you make happy meals for everybody based on data and give them custom gifts in their happy meal.

Pursue the dream

It is not about the dream..it is about the willingness to solve the problem and pursue the dream.

The moment you are serving many happy meals it is important you keep your smile. The process and pain of pursuing your dream is the hardest part… I have failed at this point and took some time off to rest, reflect and think about the “mistakes” I made. But after a time of rest a new time comes of doing it again.

Fail and learn

What I learned in 2015, is getting up and pursue a new dream takes time…I will never forget the story I read about a guy who was surfing in Australia and got attacked by a white shark. He survived it but his passion for surfing never got away. He got back on the board and surfed throughout his life. Even tough his loved ones rejected the idea. In his story he made a great comparison with boats;

Boats are “save” in the harbour but they are build for the sea

The story ends that he continued with surfing and overcame his fear. But he knows the signals of danger and how to react…

Friends, family and fools

Today, I always tell myself what is the worst thing that can happen if your dream fails. What if all goes wrong and you got nothing… What will happen? Well you lose material stuff..live at somebodies place and less “friends” on social media.. But you get over that…

I am reaching 30 in two years but I’ve learned that the people that stick around are the ones that matter. Luckily that is called Friends, Family and Fools 🙂 I know that these people are important when pursuing a next dream… But I’ll never forget that the first investment is always done by me, myself and I…

#Keepondrieming

Link Directory: The History and Future

“Quality information can be found through people, not machines.”

The link directory was the forerunner of search. But yesterday’s announcement about the shutdown of the Yahoo! Directory marks the end of an era. Why did the link directory become so popular in the first place? How did it evolve? And is there any future for a new link directory?

The past of the Link Directory

When the Internet was young, and there were fewer websites, it was easy for people to keep track of information. As a hobby project, Jerry Yang and David Filo started categorizing websites. They called it ‘Jerry and David’s Guide to the World Wide Web’. In 1994, they officially launched Yahoo! (‘Yet Another Hierarchical Officious Oracle’). This might feel out-dated, but back then, this personally curated approach was very important. It stood out among the inferior search engines of the time. Due to the success of Yahoo!, other directories soon followed, such as DMOZ.org.

In 1999, Yahoo! reached its peak, becoming the number one destination to start searching for information. But as the number of websites grew, it became impossible for Yahoo! to keep the directory up to date. And site owners would get frustrated that submissions sometimes seemed to go into a black hole, never to appear. Or, if they were listed, a Yahoo! editor might alter their carefully worded description — which caused them not to show up at all in response to some keyword searches. There were a number of other complications with the ‘old’ link directory systems:

  • Spam
    Link directories were spammed because back linking resulted in higher search engine rankings.
  • Speed of search
    Finding a website on a directory took many clicks, in comparison with search engines.
  • Paid listing
    The link directory required you to pay in order to be listed. That made it impossible to provide a complete (and fair) overview of quality websites about a certain topic.
  • Ranking
    The listings were unranked. The first website in the link directory listing was not necessarily the best, most viewed etc.
  • One editor per topic
    Most directories only had a single curator who was responsible for listing all the websites, which made it a daunting task to keep the listing up to date. Additionally, the identity of the curator was not displayed, making it hard to verify his credibility.
  • Broken links / Outdated
    Single curators, now overwhelmed by the task at hand, caused the listings to become outdated and the links to become broken.

As a result, the people-curated link directory was replaced by an algorithm. It became the fastest way to search for an overview of sites on a specific subject. It became the age of search engines.

The Present of the Link Directory

But everyone knows the limits of algorithms. Smart SEO specialists can bring a site to the top of a search engine result in no time. And that doesn’t say anything about the quality of the information that you’ll find on the sites. Today, there’s no way to tell the quality difference between the #1 search result, and the #3. Or the #20. Even Google admits that search is far from solved:

“You often hear people talk about search as a solved problem. But we are nowhere near close.”

– Eric Schmidt, Google

And, despite the advent of the algorithm-based search engine, the act of categorizing and ranking websites (content curation) still remains popular. People like lists of links. In fact, 30% of all blog posts are ‘Top 10 lists’. So it is no surprise that the link directory as an information source is still operational.

The modern day link directory still faces the same challenges challenges that Yahoo! did: objectivity of listings, paying for ranking, spam and broken links. A problem that the modern day link directory can’t seem to solve.. Only multiple curators can reduce complications, and help avoid manipulation, monopolies, and missed opportunities.

Multi human curation is needed if you look at the three major problems on the Internet today:

  • Information overload and the search for quality information
  • Trustworthiness of online information
  • Inability to qualitatively rank search engine results

As often is the case, content curation finds strength in numbers. Multiple curators share responsibility for finding the latest, best and most reliable information available online. And if one curator fails, another curator can pick up the slack.

And The Future of the Link Directory

Does the link directory have any future? Yes… if they learn from the past. The basic idea of finding information through people instead of machines is still important. It’s human nature to categorize and rank information. And, when it comes to topics they know little or nothing about, people still refer to the expertise of those in their network who know more. The guys at Facebook are well aware of this.

So, how do we provide a platform for the next (r)evolution in search? Is it possible to restore the former glory of the link directory? Is there a future beyond the search engine? Of course there is. And it’s a future that combines the power of the algorithm with the necessary human touch.

Of course, the search still begins with search engines. But then, with human curation, an actual person sifts through those search results, filters out the best content, and ranks it according to quality. To be successful, a future link directory should be:

  • Maintained by active human editors with verifiable credentials – manipulation and fraud may still occur, but everyone will know who the ‘bad guys’ are
  • Categorized and ranked by knowledgeable people (curator and crowd)
  • Searchable and easy to use
  • Equipped with a social review ranking system
  • Open (to suggestions) and freely accessible to edits and suggestions of links
  • Extensive and broad-scope to provide complete information
  • Localized for relevance to specific communities
  • Listings can be distributed via widgets on other websites

Building this kind of a link directory takes time. But by learning from the past, we will be able to build a next generation of directories that will help us navigate through the world wide web. And by working together, we can achieve maximum results from combining algorithm speed with human sensibility.

Knowledge sharing between Chinese firms in a transitioning institutional environment

A Case Study on Alibaba Group

A high transaction cost (TC) environment constrain firms in sharing their knowledge with other firms. Research indicates that knowledge sharing between firms is crucial for the innovativeness of the firm and that a stable institutional environment facilitates this process. We expect that China, characterized as a high TC environment due to its transitioning economy, weak market structures and high degree of uncertainty, constrain firms in the process of knowledge sharing between firms. However, China show signs of innovation indicating there is a high degree of knowledge sharing between firms.

As a result, there is a gap in what the literature put forward to explain the sources of influence on the degree of transaction costs within an institutional environment and the reality in China. Research on knowledge sharing between foreign and Chinese firms confirms that the transaction costs are high due to cultural differences and confirms there is a low degree of knowledge sharing between the firms. Still, culture by itself cannot explain the overall transaction costs of knowledge sharing between firms in an institutional environment. There are multiple sources of transaction costs that influence the degree of knowledge sharing between firms. Subsequently, this would indicate that between Chinese firms there would be a low degree of TC in sharing knowledge due to cultural homogeneity.

In order to fill in this gap in the literature, this thesis examines the factors influencing the degree of transaction costs in knowledge sharing between firms and its relation to the innovativeness of the firm. Our findings show that there is a high degree of knowledge sharing between Chinese firms. In line with Transaction Costs Economics (TCE), we find that the choice of governance form significantly influences the degree of transaction costs in knowledge sharing between firms. A business group, which is build on the values of personal relationships, reciprocity and face are found to lower the degree of TC and positively influence the degree of knowledge sharing between firms. Concerning the firm characteristics in lowering the TC in knowledge sharing between firms, we found that ‘tie strength’, ‘commitment to learning’, ‘shared vision’ and ‘use of ICT’ positively relate to the degree of knowledge sharing between the firms. Next, we find the degree of knowledge sharing between firms to have a positive influence on the innovativeness of the firm. Contrary to the general assumptions on China’s Intellectual Property Right, we found that IPR in China did not increase the TC in sharing knowledge between Chinese firms.

Finally, in accordance with agency theory, this thesis provides further evidence that firms are capable of sharing knowledge, creating legitimacy, finding substitutes and develop important capabilities in a transitioning institutional environment. A case study on Alibaba Group was provided in order to support our findings.

Frido Laurens van Driem
Master Thesis

Key words: Knowledge sharing between firms, Transaction Cost Economics, Institutional Theory and Innovation in China. Word count: 19.610

The copyright of the Master thesis rests with the author. The author is responsible for its contents. RSM is only responsible for the educational coaching and cannot be held liable for the content.

Rotterdam School of Management, Eramus University
Department of Chinese Economics, Leiden University
MscBA: Chinese Economy & Business

KNOWLEDGE SHARING BETWEEN CHINESE FIRMS IN A TRANSITIONING INSTITUTIONAL ENVIRONMENT

 

The Effectiveness of Transformational Leadership in Organizational Change

This paper seeks to understand the effectiveness of transformational leadership in organizational change. The concept of transformational leadership received considerable attention due to its ability to cope with radical changes in today’s business environment. The efficiency is acknowledged through several research studies, e.g. Burns (1978), Bass and Avolio (1993). Both studies indicate that the characteristics of transformational leadership, charisma, inspiration, intellectual-simulation and individual-consideration, have a positive influence on the effectiveness of transformational leadership in organizational change. Important is that the key people in the organization develop these sets of appropriate skills and attributes that are characteristic to transformational leaders.

The effectiveness of Transformational leadership in Organizational change