Kevin Kelly really hit this one out of the park. I didn't realize it was written in 1998, not 2013 until half way through. It's that good. He's a futurist who believes that business has a logical flow to it. By following the "new rules" in 1998, you would have been very far in front of the curve. Today many of the things he talk about are a must in business. I want to read more from Kevin Kelly after I tried this one.
1. Plentitude, not scarcity, governs the network economy. Whatever can be made, can be made in abundance. For example the fax machine, the power of plentitude is so strong and that anyone purchasing a fax machine becomes an evangelist for the fax network.
2. In the network economy, the more plentiful things become, the more valuable they become. Copies are cheap. What becomes valuable is the relationships-sparked by copies-that tangle up in the network itself. The relationships rocket upward in value as the parts increase in numbers even slightly.
3. In the future, cotton shirts, bottles of vitamins, chain saws, and the rest of the industrial objects in the world will also obey the law of plentitude as the cost of producing an additional copy of them falls steeply.
4. There is a place for isolation in the infancy of systems, but openness is needed for growth because it taps into a larger wealth.
5. Every time a close system opens, it begins to interact more directly with other existing systems, and therefore acquires all the value of those systems.
6. The idea of plentitude is to create something that has as many systems and standards flowing through it as possible. The value of an invention, company, or technology increases exponentially as the number of systems it participates with increases linearly.
7. The abundance of the network is built on opportunity. The more interconnected the technology, the more opportunities for use and misuse. As opportunities proliferate, unintended uses take off.
8. A business that successfully occupies a niche immediately creates at least two niches for other businesses.
9. In a network, the more opportunities that are taken, the faster new opportunities arise.
10. The cost of replicating anything will go down (rep rap)
11. Sooner or later close systems will have to open up, or die. Closed system close off opportunities for others, making leverage points scarce. The key issue in closed-verses-open isn't private versus public, or who owns the system. The issue is whether it is easy or difficult for others to invent something that plays off your invention.
12. Companies are like organisms evolving in an ecosystem. The system is a complex dance of ups, downs, trips, and falls
13. New niches open up constantly and vanish quickly. All organizations face two problem : a. It is increasingly difficult to determine what hills are the highest and which summits are false. B. the new economy landscape is rugged disrupted by gulfs, precipices, and steep slopes. Trails are riddled with dead ends, lead to false summits, and made impassable by big-time discontinuities.
14. An organization can cheer itself silly on its way to becoming the world's expert on a dead-end technology.
15. Instability and disequilibrium are the norms; optimization won't last long. The product may be perfect, but for an increasingly smaller range of uses or customers.
16. Chaos on the edge is capable of moving the whole mountain by changing the rules. Each displaced industry, companies, or products were stuck on a less optimal local peak. In order to go from a peak of local success, it must first go downhill. A business must become less efficient, with less perfection, relative to its current niche. This is difficult because businesses are hardwired to be efficient.
17. Letting go at the top is not acting against perfection, but against short-sightedness. The problem with the top is not too much perfection, but to little perspective. Great success in one product or services tends to block a longer, larger view of opportunities in the economy as a whole.
18. The interlocking guild of competencies, gives companies advantages, but becomes a drawback to change. In the network economy, the skills of individual employees are more tightly connected, the activities of different departments more highly coordinated, the goals of various firms more independent.
19. At the edges, innovations don't have to push against the inertia of an established order; they compete against other innovators or inventors.
The new economy is a global economy favoring intangible things: ideas, information, and relationships and is intensely interlinked. Today, the new information based sector occupies over 15% of the total US economy. In the postindustrial society, communication has become the economy and the cultural, technological, and conceptual impacts reverberate at the roots of our lives. The financial sector has reshaped the economy; the financial sector ownership involves only a small number of people; the financial innovations include: mortgages, insurance, venture funding, stocks, checks, credit cards, and mutual funds; the financial sector has given rise to corporations, market capitalism, the industrial age, and has influenced how all business has been done. Since communication is the economy, the net is the future. The net has accelerated in usage due to the increase in silicon chips and fiber optic data transmission; the net is weaving lives, minds, and artifacts into a global scale network; the result is the swarm of information, reticulating the surface of the planet; the new economy will increasing obey the logic of the networks and understanding the network will be the key to understanding how the economy works. In 1997, there were 6 billion non-computer chips and by 2005 the predicted usage was at 10 billion.
The network represents connectivity. We are connection everything to everything. The network values the dumb power of bits in the swarm; the connectivity and usage of the dumb bits or parts in the swarm yield smart results; and we don't need advanced Artificial Intelligence to make an intelligent system. The network is a link of distributed, bottom up, data bits; it lets things communicate among themselves and takes a decentralized approach for communication, for example, manufacturing robots scheduling their own work based on incoming requests, as they bid on work dependant on their capability. The swarm aim is superior performance in a turbulent environment. Consider the power of the "Wisdom of the crowds". In one case sample, 5,000 attendees, at a computer graphics conference were give individual access to a simulator and the task on how too land a plane. The attendee had novice knowledge about how to land the plane. The jet responded to the average decisions of the swarm. The group landed the jet with almost no direction. In another case example, the group was given the task to navigate a submarine and go look for buried treasure. The group could not initiate any movement until leadership from a loud speaker was given to "go right". The leadership unlocked the paralysis of the swarm and the direction facilitated action.
Technology success is measured on how invisible it becomes to the end user and how effective it becomes to the long term strategy in developing products and services that can't be ignored. The power of the network increases in value n power 2 where n is the number of members. Therefore, networks need to increase their critical mass of members to become effective. Innovation attracts members. Innovation is more important than price; price is the derivative of innovation; monopolies push up price and decrease quality and create a dangerous singular source of innovation; and the network destroys monopolies through collective innovation, such as, open source.
An excellent writer, with an overflowing imagination. An artist, a futurologist, a philosopher, an evangelist, a prophet. Disturbing, unconventional, and spicy, with lots of humor and a dash of cynicism. Because of its style, the book could advantageously be delivered as a live conference. Because of its far reaching vision, the book belongs to a bookstore's fiction department. The far reaching vision and the stretched reasoning of the author require a rare combination of intelligence, of imagination, and of openness from the reader. If I go by the use of my highlighter pen, there is a crescendo of thought provoking statements culminating in the last chapter of the book: opportunities before efficiency. More than just being provocative, the author is a true revolutionary and, in other places and times, he might have been censored and put in prison by the business establishment. It is amazing how many new words and terms the author could coin and fit into the book. There are enough of them to bust the most robust spelling checker. Here is a sample of them: Chief Destruction Officer, compoundfinitum, econosphere, feelgoods, mess media, pharmagenomics, recommendation engine, rigmarole, taste space, zillionics. Right off the introduction, the author says: "Even manufacturing companies are affected by the network economy". This statement sets the book apart from many other books, in the same category, that are more explicitly oriented towards services companies. However, there is a huge gap to bridge between the vision put forward in the book and the current state of the technology used by the average manufacturing company. The weirdest element of vision put forward by the author is, in my opinion, when he talks about a lettuce head with a disposable computer chip attached to its stem, so that the price displayed varies as the lettuce ages and as goes the exchange rate of the Mexican peso. The book is an invitation to think strategically and to radically change the ways of doing business in the connected economy but, beyond suggesting strategies, it does not provide the reader with specific recipes as of how to actually do it ... and that is fair enough. The author proposes an action oriented philosophy of quick and frequent trials and errors, betting that the success of some of them will, by far, offset the failure of most of them. Two characteristics of the books are worth mentioning: a sorted and annotated bibliography and a series of 10 three liner summaries, one for each radical strategy. Although the author frequently quotes other best-selling authors, as well as well-known economists and futurologists, contrary to other best-selling authors, who happen to be management consultants or university professors, he does not refer to as many company examples and business cases. It is therefore more difficult, for a consultant, to translate the author's vision into practical use for his day-to-day work. The author may be right with the vision he puts forward but, contrary to some other best-selling authors, he does not try to demonstrate that his vision is right, he simply shares his vision and his wisdom with the reader. The reader should not therefore expect to find the same apparent scientific rigor he is used to find in a typical Harvard Business Review article.
I don't agree with author's every point, nevertheless, this is probably the best book on the subject - New Economy. At the beginning of Chapter 2, the author was struggling to explain the math behind the number of connections. Unfortunately, the author confused about connection versus network. If the author studied Topology, he should realize his connection is actually "network" composed of a net of paring. The total number of connections is n^2. However, his network should be renamed to "internetworking" which means grouped or associated into many subsets in a astonishing 2^n ways. Then, his intuition can be put to rest. It is indeed an exponential growth. I don't agree with the author's logic that eventually companies like Microsoft will sweep the market and then, wait for another Microsoft to rise up and replace it. It is not a world of boxers which can take only one world champion in each weight category. Look at the auto industry. GM will never be like MS sweeping the market. In the future, it will be a tropical rainforest eco-nomy rich in bio-diversity. Ants and bees are all mighty, but they can never dominant the eco-system. Just like PC users may be in large number, but UNIX, MAC, LINUX users will continue to thrive. When you read this book, please reserve your keen judgement. Chinese has a old saying: "Totally trust a book is worse than not reading the book."
The New Rules presents an absolutely riveting long view of where our information-saturated world is headed. Kevin has seen the future and the news is good. How big a deal is it? Well, in essence he says the world has been around for about 6 billion years. Single celled life forms showed up after 4 billion years. One billion years ago neurons allowed the development of multi-celled creatures and BOOM! 2,000 some days ago the World Wide Web came effectively on line. Reading this book expanded both my confidence and ability to dream big dreams about the future of humanity. Kevin talks about swarms, hives, schools and how we humans share some of the same drifts. How do the birds in the sky, the ants in the earth and the fish in the sea communicate with such immediacy? How does the herd turn You will never look at society in exactly the same way again. There is a lot of talk these days about a new organic life form emerging and Kevin pulls back the curtain for look at this idea. Some folks are very worried about the humans being lost in a technological Armageddon. Some of these are thinks of substance and some are chicken littlers. Kevin presents a frank assessment of the potential for us all to become better people in this new age
Kevin Kelly's "New Rules for the New Economy" is no more about the economy than Alvin & Heidi Toffler's "Creating a New Civilization: The Politics of the Third Wave" is about politics--and no less. Kelly distills and synthesizes much of the current thinking of such luminaries as the Tofflers, Peter Drucker, Tom Peters, John Hagel III and Esther Dyson, into a practical guide for understanding the sea change affecting, and transcending, the emerging global economy. Kelly's ten rules are actually dynamic meta-principles that are helping to reshape culture and society, and with them the economy, organizational development and dynamics, management, computer-mediated communication, government, and changing notions of community. What Kelly's book sometimes lacks in originality it makes up for in accessibility -- a kind of literary "portal" (to borrow the Net term) that broadens access to thinkers and writers otherwise thought too specialized for a general audience. Yet, this very aggregation of multi-disciplinary vision and expertise, written with literary flourish and creativity, is exactly what makes Kelly's book so valuable.
Update: This is a book that I will probably pick up and read every 5 years for the rest of my life. It's still relevant and will continue to be. It's amusing to read my old review. Google is starting to show some cracks and Yahoo is irrelevant (circa 2011).
I was turned onto this book by a Seth Godin blog. I figured if Seth would put it in his blog, it had to be decent. It was more than decent. I was surprised that 10 years later, much of what Kevin Kelly had to say was/is true.
I think people rationalize why Google or Yahoo can offer everything under the sun for free and pass it off as some type of fluke. It's not and this book explains why.
Free is a funny thing. I tend to avoid it because there is typically a more annoying trade off than just money. Done right, free builds trust and it a lot of people trust you, the money will come one way or another.
You can read the book for free on Kevin's website. Don't worry, he wants you to. [...]
I tend to give a book **** stars when it should be read and ***** when it must be read. This book remains a good read even after the dot-com implosion. Perhaps even a better read afterward since the hype and frenzy are long since gone and the work can better live and die on its own. Kevin Kelly, as founding editor of Wired magazine, has long been one of the new economy's chief advocates. In New Rules for the New Economy, Kelly tries to encapsulate the characteristics of this emerging economic order by laying out 10 rules for how the wired world operates. It is very well thought out and well written. A superb synthesis of new economy thinking. Right or wrong, it does a phenomenal job of putting forth the premises and substantive arguments that make the new economy such a provocative topic. Kelly manages to do this while maintaining a fluid and natural story telling style. Here is a representative sample excerpt: "Communication is the foundation of society, of our culture, of our humanity, of our own individual identity, and of all economic systems. This is why networks are such a big deal. Communication is so close to culture and society itself that the effects of technologizing it are beyond the scale of a mere industrial-sector cycle. Communication, and its ally computers, is a special case in economic history. Not because it happens to be the fashionable leading business sector of our day, but because its cultural, technological, and conceptual impacts reverberate at the root of our lives." This book both informs and, more importantly, inspires. Its powerful message has no doubt launched careers and changed lives. It will remain an important read for many, many years to come. Kevin, like all good pioneers, has taken more than his fair share of "arrows in the back", but don't be mis-led by the naysayers, this one is the real deal.
Fortunately I read the book before I read the "official" reviews. I know people from a Presbyterian pastor in Baltimore to a union offical in Tallahassee who operate as if these rules are already in effect. This book is about the real world. Its challenge is to dare readers to measure the potency of their decisions against the "new rules." These are the the rules that business can use to validate its decisions. Violate these rules, and you put your profits at risk. Kelly's rules are a network (central theme of the book) of guiding principles. Each principle functions to serve each of the other rules in the network. Therefore, in contrast to the pop-press hodge-podge of futuristic notions, "New Rules" serves the reader by forging clearly stated relationships between the guiding principles of our increasingly technologically driven economy. This book will trigger ideas whether you are in a smokestack industry, financial services, or hi tech.