That is one piece of the story: the democratization of access to industrial grade manufacturing at scales available to amateurs and hobbyists (democratized innovation). Part two is extending the actual design of products to customers (mass customization and crowdsourcing). Somewhat along the lines of the Open Source Car project, which I wrote about previously, Local Motors sought to solicit ideas and designs from members (of which they have 5,000). They are producing a pretty wicked looking car designed by contributor Sangho Kim that will be built in distributed building centers. Similar to the ubiquitous Threadless, which inspired Local Motors to some extent, users submit designs and it is voted up until a car reaches a certain popularity after which it will be produced in limited runs. This fills in the market with specialized, small run cars and meet needs that would not be possible with the large auto firms.

Local Motor's first car

“Thus the new industrial organizational model. It’s built around small pieces, loosely joined. Companies are small, virtual, and informal. Most participants are not employees. They form and re-form on the fly, driven by ability and need rather than affiliation and obligation. It doesn’t matter who the best people work for; if the project is interesting enough, the best people will find it.”

Each step of conceiving, designing, prototyping, manufacturing, and selling are within reach of just about anyone with a surprisingly small amount of capital. Couple that with bringing in the crowd at any point to help fund or vet ideas and the current situation becomes that much more interesting.

The Next Industrial Revolution is a post from: co>innovative

Jason Fried recently pronounced that Joel Spolsky‘s assertion that growth is essential for his software as a service bug tracking software company to keep up with competitors. Jason’s 37 Signals has succeeded wonderfully with a small team, a focus on simplicity, and by saying “no” far more often than not. Joel however, may not wish to remain small, he may wish to be a large player in the market which might require greater investment and marketing spending. And it may be that bug tracking IS a network effect business in certain respects. Both are wrong. Both are right. Thus we arrive at the most unsatisfying of answers: It Depends.

For every hard, unwavering proclamation by a successful business person one can find an equal and opposite rule from an equally successful business person.

Just as species evolve to thrive in a particular environment so too do businesses survive and thrive in their own particular environment in pursuit of their own ends.

This helps resolve the seemingly contradictory paths one might take, for example, in the design of a product or service along the spectrum of open vs. closed development, of open source vs. Apple. Both are right, both are wrong. It depends on what your environment, goals, company position, and industry are.

Speciation and useless business advice is a post from: co>innovative

Many have listed their reasoning for Twitter’s ultimate demise ranging from spam, to lack of monetization, to a steep dropoff of new users, but I believe the best argument has been articulated in various forms by Dave Winer and Marc Canter who have been saying for a while that the service Twitter offers should not be controlled by a single company and in fact cannot be controlled by a single company long term. A single owner creates a bottleneck, fail whales, and stifled innovation. A communication platform such as this will be subsumed into the web as a distributed service. There is no one Email Company, no RSS Company — these are distributed services that interact through standard interfaces.

What if every email in the world was forced to go through a single company? A single bottleneck? It would make no sense. Within a couple of years a standardized set of protocols will develop such that there will be thousands of Twitter clearinghouses through which messages travel — with robust new features and use cases that haven’t been imagined yet.

“Take a look at internet history: News Groups (NNTP), Email (SMTP/POP3), Web Pages (HTTP), Voice over IP, Video Conference, etc. All have standards and generally operate in a distributed fashion.”(Via Sumolabs)

Facebook has already moved in the direction of testing Twitter-like status updates in that one can open up their updates to everyone on an individual post basis. Add the ability to follow other people’s public status updates without requiring a reciprocal relationship, and most of Twitter’s utility disappears.

The original innovator is rarely on top when the market shakes out, so Twitter better sell out to a larger company soon or evolve to accept the future open standards.

A further opening of the system through open standards (extensively laid out by Marc Canter) will pave the way for the next incarnation of posts of status updates, photos, videos, links, etc — the concept of Twitter which will live on. This type of communication, asymmetric following, and sharing will not be going away. It will evolve and expand through thousands of decentralized services… one of which will be Twitter.

The reason for Twitter’s downfall is a post from: co>innovative

You may not have heard about the Dunbar number, but in essence it is a “a theoretical cognitive limit to the number of people with whom one can maintain stable social relationship”. Developed by a fellow named Dunbar, as luck would have it, he came up with about 150 — but the number swings from 100 to 230 with 95% confidence intervals.

Regardless of the exact number, we as humans are limited by our neocortex to hold a certain number of social relationships with any significance in our head at once.

Dunbar’s surveys of village and tribe sizes also appeared to approximate this predicted value, including 150 as the estimated size of a neolithic farming village; 150 as the splitting point of Hutterite settlements; 200 as the upper bound on the number of academics in a discipline’s sub-specialization; 150 as the basic unit size of professional armies in Roman antiquity and in modern times since the 16th century; and notions of appropriate company size.

Through my semi-coherent logic, it seems to follow that a Communist group in which everyone knows everyone else and in which the contributions, points of view, and needs of everyone are understood, the group can prosper. Bureaucratic layers are not present and people are on generally equal footing, all working towards the group’s survival. This hypothetical, isolated group falls apart when it expands beyond this point.

And to the main point: would this not argue for companies or operating groups to remain under 150 or 200 people? If a company or group of people who have to work together grows beyond that point, the friction and interaction costs become too great, and people fall outside of your Monkeysphere. The amount of social “grooming” (attention and communication between group members) becomes too great. The center cannot hold. The group (whether a commune or business) has an incentive to stay together and work towards a common goal of survival — actual survival in the case of the commune; marketplace survival in the case of the business. Christopher Allen sees the number for active creative and technical groups as “somewhere between 25-80, but is best around 45-50″

We covered a case in school in which a successful manufacturing company capped it’s plants to 150 people. Once a plant got above 150 they would open a new plant, thereby keeping each group under 150. (Of course, I can’t find the case, but the general thrust of the above is correct.)

Whether the Dunbar number is correct or useful within a business context, there is something to the concept of considering the impact of a group growing too large. The number of people in your team, company, society dictate the best operating approach, as the dynamics change dramatically based on the situation.

Pay attention to the tribes within your organization; understand the monkeysphere.

The magic Dunbar number: Why Communist societies and operating groups should be fewer than 150 people is a post from: co>innovative

1. Radical Transparency; internally and externally.
2. Simplicity
3. Flexibility. Owning as little as possible: software, infrastructure, inventory. Use SaaS. Outsource/Freelance. Light weight operations.
4. Continuous Iterative improvement.
5. Making life easier.
6. Authenticity.
7. Radical customer centricity. Worrying less about the competition or term strategy and more about what the customer is asking for. Soliciting ideas, designs, and help from everywhere: internally and externally.

Guiding principles for a new venture is a post from: co>innovative

Email, calendar, spreadsheets, docs: Google Apps (Up to 50 accounts free on my domain! And it supports Blackberry! Now I just need a Blackberry…)
Phone: Skype
Scheduling: Time To Meet
Domain/Hosting: GoDaddy (Okay, this isn’t free but it’s cheap enough for now.)
Project mangement: Basecamp
Contact management: Highrise
Blog: WordPress, Feedburner
Conference calls: freeconferencecall.com
Wiki: pbwiki.com
Surveys: surveymonkey.com
Video: YouTube
Payment: Google Checkout, Paypal, Yahoo Merchant Services.
Fax: (Who faxes!?! But it’s free so, what the hell.) eFax

That’s not to say I don’t have a few programs up my sleeve that are just ridiculously expensive, but nice to have considering: Microsoft Office, Illustrator, Photoshop, and Quickbooks.

As for outsourcing of web development and other technical stuff out of my reach, I will be looking to elance.com, scriptlance.com, or rentacoder.com. At each of these sites you post your needs and coders/designers bid for the job.

Any questions?

How to set up your small business IT needs for next to nothing… is a post from: co>innovative

I’ll also be posting here, which is really aimed at friends/family, my thinking being: instead of emailing folks who SAY they are interested, but are really just evil/soulless and secretly couldn’t care less, I’ll post everything here, and I’ll leave it up to you to check here if you’re interested or not. I plan to post 2 to 3 times a week and will be polling about stuff from time to time. Feel free to comment away and let me know what you think about all this.

To find out more about this whole laser etching thing: The guys from Make magazine who popularized it a few months ago; Some photos of etchings they’ve done. They’ve opened up the business model and technical specs and several other shops will likely be opening up in the near future in some other cities. There are only a few other folks who do this kind of etching, that I know of right now.
So in my first attempt at getting people involved: (Thanks to Rob, Sarah, and Natalie for the following suggestions that made the cut so far. If you have any to suggest, let me know.)

So what am I going to do? is a post from: co>innovative

• Social computing/Web 2.0
• Crowdsourcing
• Great design
• Radically open business
• The world is flat/outsourcing/the ability for tiny companies to outsource/freelance what in the past only large companies could
• Entrepreneurship in general

One day, after following these topics over several years, I was struck by an idea about how I could bring all of these together. I was still waiting to hear from several B-schools, but I decided to quit my job anyway, in order to start a project centered around this. I had originally intended to work on how I could apply social computing and crowdsourcing to physical product design: what is the next step in terms of product configuration and design complexity along the lines of Threadless? Along the same lines, some other folks are working on just that: Cambrian House and Crowdspirit. Very interested to see how those two develop (Cambrian has yet to develop physical products, focusing instead on crowdsourced software ideas and Crowdspririt won’t be launching until this summer).

A few other examples of crowdsourcing type projects: A Swarm of Angels (movie financing), Sell A Band (funding to produce an album), Ringside Startup (funding and idea voting for an online startup).

And, thus, it begins… is a post from: co>innovative