Recession -- Not for Ideas

One would expect stronger players to thrive and weaker ones to disappear into obscurity during times of recession. The recession that we're in right now lets us hold on to higher expectations. Not only is this a time for sound business practices to be rewarded and flawed ones penalized, this is also a time for various out of the box ideas.

As businesses realize that the markets in which they operate have changed drastically and that they will stay as such for the next several years, they are taking steps to secure market share and to increase profitability. We see the emergence of trends that underscore the cognizance businesses display in catering to the needs of the thrifty consumer and in coaxing money out of the marginalized consumer. While it will be almost impossible to write about each and every event that has contributed to my inference, here are some that you might find interesting...

1. Online TV: An average American household spends $700 a year on cable/satellite and watches 15 out of 100 channels that it pays for. The recession is making many of these households wonder if this is really something they want to continue. Although 80% of American households subscribe either to cable or satellite TV today, viewership for online videos is also on the rise. A tipping point powered by the reliability of the online entertainment experience will enable the majority to cross over, giving up cable/satellite for watching shows on TV using the internet. While the cable guys [read internet service providers] are trying their best to impede progress by delaying infrastructure upgrades, several start-ups are mushrooming, taking us toward that tipping point. Options are plentiful, including, but not limited to TVs that can be hooked on to the internet, gaming consoles [Xbox, Wii] that will play online videos, custom devices [Roku] that play content from providers such as Netflix and Amazon and applications [Boxee] that aggregate content from the web and provide a social networking experience in the process. While these options cater to the consumer who is keen on a cost-effective, customized living room experience, they don't help reduce the reliance on the infrastructure needs that are being delayed by the highly competitive [sarcasm] internet service provider industry. Nevertheless, there are also businesses aiming at making the cross-over possible with the existing infrastructure! Bit Gravity, for instance is focussed on adding the "reliability" ingredient that is much needed to make the tipping point a reality.

2. State of the States: I appreciate the best intentions to avoid any traffic blockages in Atlanta's roads during the Memorial Day weekend, when many have been expected to be on the road. However, I was able to attribute the multitude of cop cars I've seen on the roads this weekend to another reason -- GA Governor Sonny Perdue signed into law increased speeding fines few weeks ago. With rising deficits, every state is trying to improve the efficiency of existing revenue streams and create some if possible. Few weeks ago, California governor, Arnold Schwarzenegger wanted to debate whether marijuana should be legalized, as that would help create a revenue stream for the state. After all, businesses are not alone in customizing revenue models.

3. Mint.com: It's no secret that the thrifty consumer likes to stay on top of expenses and save money as much as possible. That's why Mint.com is enjoying 3000 new memberships everyday. It's giving Quicken and Microsoft Money a run for their money, by providing an online tool to manage personal finances, free of cost. Using the valuable spending patterns that you share with the web site, it presents customized offers from various financial institutions, thereby fulfilling the business's revenue needs. The recession has increased the population that feels the urge to be cost-effective. Innovators are capitalizing on this relative adversity and putting in place revenue models that benefit those who want to save.

4. For Sale: While folks are having enough of a hard time finding the right price for carbon, here is Nobel laureate Gary Becker floating the idea of finding the right price for an immigrant's American Dream -- yes, a price tag on US citizenship. He expects you to find this radical and repugnant at first, but explains that you might feel different once you get familiar with the idea: Becker advocates a price [TBD - prices mentioned in the article range from $20,000 - $50,000] that will ensure that the approach fulfills the following goals:
a. provide an opportunity for several illegal immigrants to get legalized
b. attract talented immigrants
c. provide a revenue stream for the country
d. reduce the likelihood of illegal immigration.
Becker also talks about a loan system to encourage those who cannot afford a down payment of $50,000 for the American Dream.
While this idea itself may not have anything to do with the recession, I'm wondering if #c may increase the attention the idea receives, in light of the economic times we live in.

It's hard to generalize if it's a good time to be a buyer or a seller. It doesn't hurt however to be an observer, if that's all you'll ever be!

What is Creative Tension anyway?

It never occurred to me [until now] that I should bother to say why I named my blog Creative Tension. So here we go...

I read about Creative Tension in Peter Senge's phenomenal work, The Fifth Discipline: The Art and Practice of the Learning Organization. I must say that this is as much a book for individuals, as it is for organizations. You can learn more from Senge, than you can from any "self-help" guide.

Typically, there is a distance between where we are today and where we envision ourselves being, in due course. This is why we journey and this is that which makes the journey worthwhile. Senge says that the disparity between where we are today [reality] and where we envision ourselves being [vision], gives rise to a "tension" between the two. This tension is "creative" because it energizes us to get a better sense of reality and to work toward the vision.

In business, politics and in personal spaces, we see people in pursuit of generating and sustaining creative tension. In this blog, I intend to share my observations of such pursuits.

Ready to lead

With what looks like a healthy combination of strategically planned research, innovative technology & government subsidies, China's BYD Auto pulled it off -- the first plug-in hybrid.

China is well known as an amazing follower with its unrivaled production & consumption capacities on one hand and cheap & committed labor on the other. Now, the China-watchers have something else to talk about -- China, the follower, who is ready to lead.

China's rapid mass-urbanization has challenged the country to create sustainable solutions to control the demands placed on its natural resources by today's technologies. The country is aiming high [higher than the US] in terms of fuel efficiency standards and renewable energy usage levels. The result is that China has not only produced inexpensive plug-in hybrids with indigenous talent, but has also built ultra-efficient power-plants that reuse "wasted heat", by collaborating with Western multinationals.

It's green tech initiatives such as these, that's gotten folks wondering how one could compete with China. In today's globalized world, China masquerades as many a character -- valuable customer to the multinationals that want access to its market, low-cost supplier to firms that want to reduce production costs, collaborator & competitor to those innovating the next big thing. Needless to say, seldom does one country gets to play these roles, at the same time. While there's plenty to be said about the synergies that exist and those that can be leveraged, I'll conclude this post with one thought -- this follower is ready to lead.