Welcome to the Machine

Welcome my son, welcome to the machine.
Where have you been?
It’s alright we know where you’ve been.
You’ve been in the pipeline, filling in time,
Provided with toys and ‘Scouting for Boys’.
You bought a guitar to punish your ma,
And you didn’t like school, and you
know you’re nobody’s fool,
So welcome to the machine.

Welcome my son, welcome to the machine.
What did you dream?
It’s alright we told you what to dream.
You dreamed of a big star,
He played a mean guitar,
He always ate in the Steak Bar.
He loved to drive in his Jaguar.
So welcome to the Machine.

Remember that song? From the album Wish You Were Here, Pink Floyd in an almost prophetic motion saw a generational change coming years before it actually arrived. The song was widely believed to be about the music industry and the “slurping” of fresh blood artists into the controlling depths of the recording industry, but I see something far more nefarious and relevant to today in light of the economy and business.

Photo by <a href="http://flickr.com/photos/tonivc/382150181/">ToniVC</a>
Photo by ToniVC

In fact, we are so out of our league with the concept of open innovation in a web environment that the generational, societal and economic corrections are about to kick in. The economics are already kicking in with the entire marketplace shrinking, if you look at market conditions, 50% in the last year.

I asked a VC a few days ago what he was investing in in a down economy and his answers indicate low-risk investments – that is, investments that are cash flow positive with an existing customer base. Yeah, not much risk and certainly different than the VC market we’ve been used to. If this is the mindset that is prevalent, there will be fewer innovators as less cash is available to be had. Fewer, or smaller innovations. Welcome to the Machine!

Generational corrections occur when a generational mindset changes. While my friend, Jessie Newburn is the resident generational expert in my circle of influencers, I believe she would point out that the individualistic Generation X that helped create the internet by challenging the established norms of the 1970s and 80, and who possessed the innovative prowess to create two generations of web companies is being replaced by a generation that is more likely to band together and hunker down for the nuclear winter. Hibernation, in a way. Those corrections are beginning to occur, I believe, as consolidations will likely become the name of the game. Welcome to the Machine!

Generational corrections beget societal corrections. Societal corrections merely reflect the mood of the workforce, the innovators and the money movers. When the finances dry up, the companies move into a mode of slow burn/slow growth as opposed to high burn/high growth, then business decisions are made safely. The Machine is safe. It is robotic and automated, programmed with computer-like precision. The Machine makes few (if any) mistakes, yet it is uncreative. It lacks pop and sizzle that innovators provide. When the society corrects itself away from innovation, it becomes precise and routine, but loses the juice that can be risky but productive. Welcome to the Machine!

If you’ve read this far and feel like I desire the demise of innovation, you have read me wrong. I do not. However, there are corrections happening that could last a long time (far beyond the 18 months experts think the economy will take to come back). It is a generational impact that could delay a proverbial Web 3.0 for 10 years or more.

With the trends of the incoming Presidential administration, my feeling is that the next generation of innovation could occur within the public sector itself, but won’t have the exposure or sexiness of that which was considered “hot innovation” in the last 20 years. Less private sector bling. More public sector growth.

What are your thoughts?

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Tribune Company Bankruptcy Highlights New Media Opportunity

About an hour ago, the privately held Tribune Company filed for Chapter 11 Bankruptcy protection. The Tribune Company is the owner of the Chicago Tribune, Los Angeles Times and Baltimore Sun, as well as a minority owner of the Chicago Cubs (not included in the bankruptcy filing).

The conversation I’ve heard around this news has been interesting. For as much grief as some of these main-stream press have caused some community members, mostly in politics or local governments where the Tribune papers are, the feeling is that metropolitan areas served by these papers currently cannot function without a hard format newspaper.

The cities with the biggest three Tribune papers all have alternative daily circulars. Kind of. Los Angeles could lose the LA Times and still have the Los Angeles Daily News. Chicago could theoretically lose the Chicago Tribune and still have the Chicago Sun-Times. Baltimore would be stretched thinnest losing the Baltimore Sun and leaving the Examiner (though proximity to Washington, D.C could position the Washington Post or the investigative journalistic Washington Times to fill the void).

What strikes me is the difference between long-standing community members (those who have been born and raised in an area, and have been shaped by the daily circular) and the generational transience of those who simply don’t care, and move from locale to locale throughout life.

I’ve personally lived in the Baltimore area for most of my life, and have no loyalty or affinity to the Baltimore Sun. But those who have lived here all their life (and maybe from another generation) have been directly impacted by the Sun and can’t cope with life without it.

In my life, I can’t answer the famous Palin question/non-answer “What newspapers do you read?” because I don’t. If there is a loyalty to a paper, it is the New York Times. Why? Because they adjusted to a world not based on the physical paper. They are no longer “the grey lady” and now represent something so much more, and have extended their base outside of the previously known and understood paradigm. (Of course, that won’t necessarily keep them out of trouble either, but I digress.)

It will not sadden me to see the Tribune company go. It is obvious to me that newspapers, like the Tampa Tribune, who don’t adjust to the 21st Century need to fail. That does not mean that the age of hard print should die. On the contrary, it is possible for news organizations to rise up around an open culture of information sharing and digital cultural change, and provide an offline (paper) offering as well. It’s not just a possible change. It’s a required one.

Also to be clear, Chapter 11 is reorganization… not apocalypse. The Tribune Company will likely spin off some of these assets to, hopefully, better digitally savvy stewards. It is possible for these papers to reinvigorate and jump into the 21st century as well. If not, they will be replaced by lighter, more nimble and astute media organizations that are digitally competent.

I can’t wait to see how it plays out.

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With the Holidays Comes Reason to Have Confidence

If you listened to the talking heads last week, you knew that everyone was holding their breath waiting to find out just how bad black friday sales were going to be. If you listen to the so-called experts, there was no reason for hope and the holiday shopping season would only be the nail in the proverbial coffin.

I suspected that people were not listening to the experts and saw a reason to hope in this economy. As touchy feely as “hope” can be in an area that is defined tightly by the ink of black and white P&L reports, hope, faith and confidence is the driving force behind an economy. We win big because we feel like nothing can go wrong and so we buy, buy, buy and invest, invest, invest. We lose big because the air of an entire way of life is deflated beneath us taking our will and drive to win away.

It’s all about the feeling.

So when economists said that this holiday shopping season would be the worst on record, and that people just weren’t buying like they used to, we could take the prophets at their word, or change the future.

According to Reuters, online sales spiked from a year ago. Some reports used the word “dwarfed” to describe the upsurge and this morning, economists were trying to explain away how they were wrong by saying there was “pent up demand”.

Yes, there was. And the economists missed it. The prophets prophesied doom and were wrong! Mind you, these are the same folks who willingly peddled the economic concepts that buried the mortgage market in the past year.

Folks, I am not an economist. I am not a financial adviser. I know what I hear on a day to day basis talking to people like you and I. I know people are buying. Yes, they are being cautious. But they are buying.

In fact, I may buy a new car before the end of the year when the dealers are dying to make any deal they can. I’ll save some money, and still buy, buy, buy. Don’t buy the hype. This is not the end of the world and the longer we go, the closer we are to the end.

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