Letting plumbers duplicate your product

Letting plumbers duplicate your product can be beneficial to you. Really, it can. But before I’m crucified, let me be clear (and honest): That was just a catchy headline for this idea...

"In any industry, when the factors of production are placed in the direct control of a larger audience than is currently predominant, the players in that industry who are at the centre of that shift get big benefits from the offshoots of the new economy."

Ok that’s a lot of big English, back to plumbers.  Every once in a while someone somewhere looks at a particular way of doing things and says “why does Mr. Mutombo happen to be the only one who can do xyz stuff for all of us? I’ll make a way for everyone to be able to do it for themselves.” Typically, Mr Mutombo by virtue of his position is sitting pretty high on the food chain of xyz product or service. And he’s a big man. Imagine Mr Mutombo to be the local coffee farmer who has the only coffee shop in Shangana village and all farmers on their way to their respective farms stop by his shop for their daily fix of caffeine.  Everyone is used to this. You only get your coffee and and some early morning gossip from Mutombo & Sons Cafe. So, everyone gets up, gets their gears and on their way to the farm stop by Mr Mutombo’s shop. That’s it. That’s the way it works. This positions Mr Mutombo at a very nice spot as far as the economics of coffee is concerned in Shangana village and over the next 10 years he totally cleans out. Builds a better house, grows his business and sends his children to the state university 80 kilometres away. By Car! Until one year, his neighbour’s science oriented son get’s a brain wave – “what if I can package coffee beans into a nylon bag and sell to every household? Then they can make their own coffee at home!”. Ingenious, he thinks.

So Mfasa (that’s the kid) walks up to Mr Mutombo and asks what he thinks of the idea, he says they should be able to work together on it. Mr Mutombo looks straight into the kid's ernest eyes for a long time, jabs a finger in the air, smiles patiently the way a wise old man smiles at an exuberant youth and says to Mfasa, “Boy, that’s a nice idea, but It’s not gonna work. People come in to hang out at Mutombo & Sons Cafe while getting their daily juice. Tell you what... you seem like a bright young man, come work for me as a waiter, I’ll pay you well”. Mfasa walks away from the offer and decides to go to the next village to get his beans. He does this every Friday. Goes to the next village, buys coffee beans, grinds it and packages it into little nylon bags then he goes from house to house selling his do-it-yourself coffee packs. At the beginning it’s slow and people seemed only to buy out of goodwill, but later it picks up. Ultimately Mfasa ends up building a big factory that serves the coffee in cans and throws Mr Mutombo out of the coffee business. He even sells coffee makers that work with electricity when NEPA works. Little electrical coffee making thingies, Damn it!

We see this drama play out again and again in human society, decade in, decade out. Century in century out. Once upon a time, to preserve your looks so that the next generation can know what you look like, you would call a specialized artist. A painter or a sculptor. You will pose for him for days on end and ultimately he comes up with a masterpiece. You would place this in the hallway of your big house for all visitors to see and you will pass it down to your son who will do the same. The artists of the time owned the factors of production as far as the looks preservation business was concerned. What this implied was that because there were only so many artists, the price of seeing your face has to be high. So only well to do individuals could afford it. Anyone ever wondered why paintings of lower class people do not adorn our museums? It’s probably because they were never made. Then comes photography, and the game changes. Someone would point a machine covered in black cloth at you and a couple of days later after processing the film, bam! Your face on paper. And so painting becomes an exotic art and photography takes over the common market. Now more people can buy cameras and take their own pictures. Later, companies like Kodak are born. Today, cameras and photography are a big game, think Flickr, Picasa and the plenty plenty photo sharing services out there and ask yourself, ‘could Michael Angelo have seen this coming?' Don’t get me wrong, painting is still a big business, but it has it’s place in the world of the exotic, not the mainstream. And the players in the new photography economy? C’mon Kodak and Canon are BigCos now.

Another example. More recent. As in 20th century recent. Once, if you wanted a computer you wait in line for IBM et all to give you one. Along with the software that can run on it. And it wasn’t cheap. As such only Incs. and Limited’s could get one. Along comes Apple. And much later PCs and Operating systems and shrink wrapped software and web services are the norm. One goal, put computing in the homes. In the bedrooms, in the Mom-and-Pops and nursery school laboratories. The result? The players in this new economy are in our faces. Apple, Microsoft, Google... Ah... Google. Sure you were wondering when I’d get to that. Okay, I won’t disappoint you.

Once upon a time (think the late 90s and dot com boom/burst) you spent a lot of money building a website and data centers and hire designers and consultants. Ultimately, you want people to reach your website and stay there. So you provide news, sports, gossip, the whole bladadash. Anything that can be called content. When people think internet, they think ‘you’. Search was just a way to let people get around the massive content you have put together. One stop internet content production centre. Along comes 2 guys with oversized brains and half done PhDs with technology that lets other websites also become web destinations. A text box and a button that gives you links to other sites on the resultant page. Links to other websites! You gotta be kidding me. So, they offered to sell you the technology, and you refuse to buy. Fast forward to 2008 and now they have built a new economy around letting people reach ‘other websites’ and are saving you from the corporate evil lords. Hope I’m getting somewhere.

I could give examples on and on about how the statement holds true: 

"In any industry, when the factors of production are placed in the direct control of a larger audience than is currently predominant, the players in that industry who are at the centre of that shift get big benefits from the offshoots of the new economy”.

I don’t know economics much but I'm sure there should be some theory around this that's related. It should be in there somewhere. Think telecommunications in Nigeria. Once it was all NITEL. You want a phone, you go to NITEL and wait in line and they charge high and it doesn’t work. So only big men who have friends high up in NITEL can have phones and we have to go to their houses to make phone calls after asking our friends at the other end to wait at his own neighbour’s house by 9.00 AM when the father of the house will not be home. Sound familiar? Along comes a technology called GSM and a government willing to give licenses to about 4 companies at once. Fast forward 5 years and MTN, GLO Mobile, Econet (oops! Sorry, Zain :) ) have become Mamoths in their own rights with revenues running to Billions in a month. Someone tell me, where’s NITEL? Oh, they have a mobile arm called Mtel. I see.

Let me repeat (at the risk of sounding like a bad record): 

"In any industry, when the factors of production are placed in the direct control of a larger audience than is currently predominant, the players in that industry who are at the centre of that shift get big benefits from the offshoots of the new economy."

And the biggest example: Salvation of the soul. Hope I don’t blaspheme here. Once, the Jews had a high priest who approached God on behalf of the common sinner. Folks had to wait till the different festivals to have the priest carry out sacrifices on their behalf. If they wanted some info from God on something, they asked the priest. And the Pharisees (think offshoots of the priests) were big boys. Along comes Carpenter Jesus with a different message: “I’ve come to fix it so that you folks can approach God yersefs and call him ‘father’”. What! So they bundled him on to a wooden cross and killed the upstart. What nonsense. Fast forward 2000 years. Christianity dominates the planet and Judaism seems to work only in middle east, some parts of Europe and America.

Hope I didn’t offend anyone there. Phew!

The examples don’t stop. Win32 API allowing developers to also write software for the Windows operating system helping the dominance of that same OS, Facebook ‘Platform’ kicking MySpace’s butt and sending every social network running to create ‘platforms’, Henry Ford and his plan to put cars in every family, announcement of Google android forcing Apple to sit up with the iPhone, etc ,etc. E effing T C.

Ok... so what does all this mean? What does it imply for BigCo’s and Small Co’s and everyone out there with a product or service? To survive, you’ve got to bake it into your business’s genes to create a framework that allows others to play and spread your service while seeming to create theirs too. You’ve got to set it up such that your app, or business or product does not make you the only person with the knife and the yam. I know that might be contrary to traditional business thinking where human nature wants you to be in control, but if you give it a shot, you stand a big chance to gain a lot. And if you don’t? Well others will and it’d be your loss. Mr Mutombo could have embraced little Mfasa and created a subsidiary of Mutombo and Sons to try out the new concept, that way he keeps a leg in the new school while preserving his investment in the old school.

Hell! The whole concept of franchising hinges on this. Let others have a shop with ‘Mr Biggs’ on the name plate. To the consumer he’s going to a Mr Biggs, to the guy who runs Mr Biggs in Abeokuta, he’s making profit. Mr Biggs spreads, Abeokuta business man makes more money. Win-win.

So in conclusion, if you are in the process of creating a product, ask yourself ‘what can I do to make it allow others spread it for me and also benefit?’. Also if you are already in business and you are trying hard to ‘protect your turf’, re-think your strategy and see how you can create ‘some kind of platform’ around what you do that allows others to also play. Opportunities for this are immense in Nigeria particularly, payment processing and e-money generally are in the hands on one company (more or less), a lottery company gets Federal Government to pass legislature saying only that company has ‘license’ to run a lottery, NEPA is still NEPA, etc. Opening up in all these industry verticals will promote whoever is at the centre of the opening up. And it’s safer for these companies if they are the ones at the centre of the shift. If they are the ones who create the shift.

A closing line: After you have done the right thing, watch out, someone out there wants to take it even further, wants to even democratise things more... let that person still be you.