Business Blog: Hoover’s Business Insight Zone

I like reading Umair’s stuff, because he has a firmly held perspective and he’s smart. But I think he’s at least partially wrong about this one:

Industry Note: More Evil Than Evil

. . . I’m not sure how much pressure Facebook is getting from investors to “monetize”. I’d wager that it’s a great deal indeed.

But remember - that’s exactly how LinkedIn died, why the music industry is dying a slow, agonizing death, why your favorite TV shows aren’t being made, etc.

The point is: in the edgeconomy, business models happen. The days of business model fascism are over.

Business models can no longer be planned in an ivory-tower boardrooms, announced by grand decree, pushed through the value chain by inert market power, shoved down helpless, hapless consumers’ throats, and left inert for the next century.

That approach to commerce is as obsolete as a mainframe or a Model T Ford. And the venture guys, CEOs, etc who don’t get it are great at killing their companies dead.

The specific part Umair’s got right: Facebook’s walk is a lot different from its line of talk. As Henry Blodget has pointed out, Zuckerberg should flat-out apologize for Facebook’s Beacon mistake — by admitting it was a mistake: Lesson learned, my bad, and now we’re ready to move ahead more wisely, treating your data with the respect it deserves. How Zuckerberg handles this crossroads moment will say a lot about Facebook’s prospects.

The bigger thing Umair’s got right: business models are changing, and you’d better keep up with the technology-driven realities of how you do and should communicate with your customers, i.e. the people who pay your paycheck.

The thing Umair’s not right on — at least not yet: the work of writing business models isn’t dead, and business model “fascism” also isn’t dead.

Maybe he’s right to put LinkedIn in this camp, but . . . it’s not dead. The music industry as we know it seems certain to collapse utterly, but . . . it’s not dead yet, and there’s no telling but what we’ll be talking, ten years from now, about how, say, Sony BMG went off the reservation and became the other pillar (alongside Apple) in the revolution of the music industry. And we don’t yet what that business model would look like.  Apple, for that matter, could be called business-model fascist, if you wanted to — but so what?

If the product is good enough and the price is right, people will put up with your business-model fascism.  Declarations to the contrary don’t change that.