Discover more from The Ten Year Startup Journey
Nested Networks & the Species Most at Risk
How Microsoft Viva Can Disrupt the Online Education Market.
We are Nodes
We think we are individual in charge of our own destiny, but annoyingly not! Everything is connected and we don’t get to not be. We think what we think because we read it/heard it/watched it, or were exposed to. Mix this with years of other peoples thinking invading our brains and we are basically a node in the fabric of existence! Getting pushed around by the energy and information we receive and pushing others around in return as we pass it on. All in the name of surviving and adapting. Our businesses are the same. A business is a node in a market, shoved around by its competitors and customers, regulation changes & technology breakthroughs.
Related reading on mapping an ecosystem
So what can we do if we are just nodes?
Start by Seeing Connections
Climate change is allowing people to see the connections between forests and their own viability. Fossil fuels and melting icebergs. Covid has allowed people to see someone getting sick half way round the world can be the reason we now wear a mask and have our liberty taken away. We can transfer a virus and accompanying rumors faster than ever! Working from home has connected and disconnected people in new ways we love, and hate. A change in privacy rules on Apple’s iOS14 platform changes how the advertising markets of Google and Facebook work. Open banking regulatory rules transform the speed of payments and lending, and so how firms collaborate and compete. APIs likewise, have been transforming how products and services work, speeding interconnectedness, information exchange and innovation. Competitors become collaborators and vice versa. Information platforms like Twitter and Facebook have democratized media and at the same time made it impossible for people to know what information to trust. When everything is connected, competition and collaboration explode. Opportunities and threats come at us more often.
Understand Speeding Connectivity
Technology is marching us on to ever more connectedness. The efficiencies of joining literally everything together using software and the internet means winner take all platforms are dominating and able to control whole markets. Amazon, Facebook, Google, Apple & Microsoft can make billion dollar competitors shake in their boots with a product announcement. And a change in one of their polices or approaches can crush competitors and close sub-markets, reliant on the ecosystem big-tech creates. A tweet from Elon Musk can add billions to a companies share price in hours. Speed and increased frequency of information are driving more commerce. Ever faster, ever easier, ever more complicated. Power resides up high, ebbs and flows below, and can be fleeting and fragile.
Nested Networks & the Species Most at Risk
Networks (or groups or tribes) live within bigger networks, within even bigger networks. Collaboration and competition is a never ending dance of layers of friends and enemies in conscious and unconscious groups. Mutually reliant on others for our own survival, humans have become the apex predator because of our ability to collaborate better than any other animal on the planet. But we still compete like hell in our respective tribes against other human tribes for resources. Family is one tribe. Friends another group. Work colleagues in our department. City Mayors are another tribe across the globe sharing best practice but also competing for best New Year’s eve fireworks/labor markets/ inward investment. The US vs other countries on trade. The United Nations vs everyone else. The world against alien invaders! You get the picture, we constantly spin up groups of ‘them vs us’. Some named, some not. Many nested within others. We can’t help it. Collaboration and competition is in our DNA.
The thing about networks is some flow hot and cold. Where changes in one part of the network have wider ramifications across the whole network (hot). And in others, effects are local to a specific network group with little effect (cold). In business you need to know where you are in the network, what type of groups and nodes also affects your risk of extinction. Every network has its species most at risk ( travel agents in the travel industry, local newspapers in the news industry, Universities in the education industry). You can take a look here how nestedness works and risk of extinction. Think carefully where you sit in your ecosystem. Understand the ebb and flow so you can go with the grain.
“For instance, two insect species might "help" each other by pollinating the same subset of plants, thereby reducing the extent to which they are harmful to each other.“
Deciding What to Be in a Network
Clarity comes from always inverting your thinking and approach, turning it upside down and your business ideas inside out. Holding up competing ideas and being able to execute both. Where collaboration and competition are both possible with the same party. Think about your business as part of an ecosystem where technologies enable frictionless transactions and you need to know who are the super nodes that control the ‘species most at risk’ and flows of services and revenues. Which are the right groups to be in and are they hot or cold networks - i.e. can a regulation, data or product introduction wipe you out? Make sure you a unique node in the network that others draw on for value they can’t easily get elsewhere.
Think of markets as goldrushes, that now grow and change quickly with lots of competitors and decide do you want to be a company that joins the gold rush or enables it. Do you want to sell shovels, transportation to the gold mines, maps on how to find it, or dig for it yourself? And because of the concept of nested networks, you could be the digger in one side of a market and the shovel seller in another.
Key Questions to Ask to Understand Our Node
Success comes our way when market, timing and team are aligned. We need all three. The below helps thinking on the first two.
What are the market characteristics (market forces see Porter)?
What’s working to fuel growth in the market and what is holding it back? (eg banking regulation in the US holding back Fintech)
Does our business model enable us to take advantage of networks and connectivity? (hint: if it doesn’t, another company will take that node)
What platform do we give others to succeed so our node gains in importance?
What marketplace between buyers and sellers are we creating or are a part of?
Are we taking advantage of the wisdom of the crowd or making everything ourselves?
What data will be accumulated and how will we create an advantage from it?
How do services and revenues move in our ecosystem and who controls them?
Collaboration, Competition and Clarity.
Here is an example for context, answering most of the key questions above.
Hivelearning.com is one of our portfolio companies at Blenheim Chalcot. It is an education service that operates in the digital B2B learning market. It is a Peer Learning Platform that delivers important behavior change for companies ( e.g. Inclusion or Leadership behavior change). It receives license fees based on use of its technology and how many of its customer’s employees are enrolled in its cohort-based online programs.
What are the market characteristics?
It lives in a B2B digital-learning market that is $25 billion market in size and growing at 10%+ per annum. It compliments the in-person training market, which is a much larger market that has been disrupted by Covid. Microsoft just made a huge play to capture a larger share of the education market with its launch of Viva. Affecting the position of most market incumbents including learning management systems, large MOOC’s like Coursera, in-person training consultants, employee engagement SaaS companies and many more. Nested groups in specialty fields such as oil and gas training may be less affected. So lots of growth and lots of large technology players jostling to be the platform from which businesses learn and manage employees. Power up top and below is very much in play now.
What’s working in it?
Video services like Teams and Zoom are enabling greater connectivity for live training sessions. Digital learning is becoming more of a habit for all employees and part of business life. Remote work has meant employees have saved commute time, so have more time to improve their personal skills. Employee skills can be better measured and specific learning recommendations made. Culture has grown in importance as a strategic imperative to act on, as companies struggle with supporting their employees remotely.
All of these trends benefit Hive Learning because its service enables employees to learn important soft skills together in groups, mimicking many of the features of human social networks. It “goes with the grain” of the remote work trends trying to ensure people stay connected to an organizations purpose.
Can it take advantage of networks and connectivity?
Yes. Hive Learning’s service is delivered on mobile in a consumer quality application; it takes advantage of peoples constant connection to their phones (and laptops). It also collects extensive data on use of its platform and learning content, user interactions and engagement. It also integrated via APIs with various existing services its customers use; removing friction via tools like Slack, Zoom & Teams.
What platform do we give others to succeed so your node gains in importance?
The Hive Learning service lets employees create their own learning (UGC) alongside its expert programs. So they teach each other best practice unconsciously using peer-learning techniques, meaning improved clarity of communication across a company and faster problem solving. It also crowd sources the best education from the web to create leading content programs, eg D&I, at very low cost. It also allows its customers to create their own content and education consultants to sell its digital services as resale-partners, augmenting their own face to face training. Finally it gives a voice to its customers in regular public webinars and best practice sharing, highlighting their work and views. Hive Learning is very much a platform business in a number of ways, but is also a service that can be accessed on larger tech-platforms. (Nestiness again).
“Its a complex system of interrelationships, things feeding on each other and cultivating each other at the same time. The idea of the friendly enemy, the necessary adversary.”Alan Watts, Don’t Force Anything
What data will be accumulated and how will we create an advantage from it?
Hive Learning produces a Culture Score from its data, enabling customers to understand desired behavior change metrics. This allows its customers to make targeted decisions on further training or communication to employees, to continue to drive improved organizational health.
Conclusion
Clarity of business strategy comes from understanding collaboration and competitiveness as part of an ecosystem. Know your business is a node. Nested in multiple groups in a larger network. Where speeding connectedness is removing friction and growing opportunities; at the same time heightening risks of being the species most at risk. You need to be aware of the ebbs and flows in power, services and revenues, and go with the grain.