Command to Democracy

Anybody who has used Google's services has known that they run them in beta for the longest time -- Gmail has been out there for 5 years with more than 100 million users, and it's still in beta. It has become very common in the IT industry to add features incrementally to an existing service, be it in alpha, beta or gamma versions.

It's important to separate the business model from the industry in this case, to truly appreciate the value offered by this approach.

Threadless, an up and coming start-up thrives on a business model that engages the consumer at a deeper level through in-market innovation. People get to grade designs for T-Shirts. The design's grade determines whether/how it gets printed and sold. Instead of planning inventories centrally, based on market research and the judgment of a select few, the company manages its supply chain based on actual demand which is driven by real value, not perceived value.

The concept is not irrelevant beyond the internet. In fact, it was not even pioneered by internet based businesses. World Water Corporation attempted to provide water and power to developing countries, using advanced technology, by getting several central governments signed up for multi-million dollar projects. The corrupt governments impeded progress and the initiative was not successful. On the other hand, KickStart, an international social enterprise based in East Africa, managed to provide water and power in rural areas, through its Micro-Irrigation Pumps, which were co-invented with its potential consumers, to ensure value addition, acceptance and affordability. KickStart was able to accomplish what WWC set out for, primarily, by collaborating with its customers early on in the process, and on an ongoing basis.

KickStart, Threadless and Google embody the transition of business operations from Command to Democracy. Instead of running a business in a command and control fashion, they engage with customers & other stakeholders in a deeply democratic fashion. This in turn helps them run a profitable operation which at the same time is focussed on the outcome -- the value customers gain through their products and services. That's what we call Win-Win.