WWGD: Jarvis on the Google-Economy

Jeff Jarvis explains in his book What Would Google Do?, how new economic principles have evolved and how he has grown into/adapted to this new system. He uses therefore illustrative examples from the new media industry (e.g. blogs such as his own buzzmachine.com and many more) but he also compares to the old world, where control of content and scarcity have been the rule. And he gives many examples of how young, innovative companies have emerged from the classical media market or have taken the chance to gain some momentum in the internet because the classical publishers have been too slow.

This article here should be an extended version, since it is used as a discussion base for the course "Digital Media" at the University of St. Gallen, which will take place next week. So as Jarvis puts it in his book: "Free is a business model" I will provide here a summary of the first, more important part for discussion, so that all of my colleagues can profit from my knowledge.

So as mentioned here, the book is divided into 2 respectively 3 parts: The first part covers the introduction and the "Google Rules" (no not the 10 Things Google has found to be true). This summary will focus on this part. Second part is called "If Google Ruled The World", where it is about different industries and how the principles from the first part would apply there. The final part is called "Generation G".

So let us start with an extended summary of the first part. It is divided into chapters and corresponding sections. I will therefore stick to this schedule, but only write the central statements for the sections, since the chapters give only an higher abstraction to the sections.

New Relationship

Give the people control and we will use it: Here the central statement is about the stronger customer, which has gained immense influence through user groups and communities, rating services ... on the internet.
Dell hell: The most famous example of Jeff Jarvis' own blog, which made Dell rethink their position about bloggers and ''off site'' customer reviews/critics.
Your worst customer is your best friend: Bloggers and users in the internet age, give away their opinions and ideas for free. Companies have just to use it.
Your best customer is your partner: Word of mouth is the strongest weapon in the war about customers.

New Architecture

The link changes everything: Linked entries on blogs (or on the internet generally) make news spread faster.
Do what you can best and link to the rest: Division of labour re-invented - you do not need to write, what already has been said, you can link to it.
Join a network: Live is already a network, internet is only the enabler. So companies can not ''own'' or ''control'' the customers any more.
Be a platform: Networks need structure which is given by platforms. The internet is a platform and so is Google - enabling its users to be efficient.
Think distributed: Google is everywhere and comes to us, not the other way round. But distribution opens up also new business models or at least enables the model of Google, since all the bits of information are spread out in the cyberspace and need to be found.

New Publicness

If you're not searchable, you won't be found: Google helps us to find distributed information, but we have to stick to some simple rules (e.g. permalink, clear titles) to be found.
Everybody needs Googlejuice: The influences of the Google PageRank - opinion leaders (those who have already a good ranking) weight more for the relevance of a search. And the link is the magic formula to get a good PageRank.
Life is public, so is business: More things are public now, also thanks Google. Here he tells about the photo service Flickr, on which the uploaded pictures are public by default (and can be made private if desired). This ''publicness'' made Flickr an attractive tool for communities.
Your customers are your ad agency: Public interaction with (dis-)satisfied customers leads to better relationships (PR) and thus is one of the best advertising you can have.

New Society

Elegant organisation: This is the example of Mark Zuckerberg, 22 and founder of Facebook. The title of the chapter was his answer to the question how to create successfully a community (in the context of media works). So the bottom line here is: Help communities to do their things better than before, this is what ''Elegant organisation'' means.

New Economy

Small is the new big: Big is still important (economy of scales), but you can start with small, lean organisations and have a chance on the internet, because you could for example produce at an existing factory and sell online.
The post-scarcity economy: Product-oriented markets (like supermarkets) build their business model on scarcity. But on the internet there is rarely scarcity: you can choose from all available products (to be found via Goolge) and you have a vast amount of information available.
Join the open-source, gift-economy: Open-source does not mean chaos, it is a collective effort to produce optimised products (i.e. Linux) and the contributors live this values.
The mass market is dead - long live the mass of niches: This chapter is mainly about the ''Long Tail'', or as Jarvis puts it with the words of R. Williams (sociologist): ''There are in fact no masses; there are only ways of seeing people as masses.''
Google commodifies everything: Google makes information, products etc. commodities, since everybody can find it with a simple search. You just have to ask Google.
Welcome to the Google economy: Google enhances its network, even when there is recession (such as in 2008 and ongoing today).

New Business Reality

Atoms are a drag: In the internet ''digital equity'' is possible and you the physical products are just a need, if you want to sell them. But the real value in the age of Google is the value created from services, such as Amazon with its API.
Middlemen are doomed: Middlemen, such as literature agents, face heavy competition from the search service from Google, since we can find everything with its help, without having to ask a specialist. But for sure, the middlemen have special knowledge, which is sometimes more comfortable to use, or brings other advantages.
Free is a business model: Network effects give a new aspect to software, which is mainly used on the internet. Giving them away for free (e.g. Skype) makes them spread fast and you can earn money with additional services.
Decide what business you're in: On the first sight it seems as if Google would be in the search business, what it is. But when you look exactly you will see that Google is in the ''organisation and knowledge business''. It knows what we want and organises the content for us and the advertisers.

New Attitude

There is an inverse relationship between control and trust: The more you control people the more they will mistrust you and the other way round respectively the less you control people the more they will trust you.
Trust the people: Collective intelligence will be much more precise than some other forms of estimation. Therefore you should trust that the people know what is right for them.
Listen: You can learn from your customers, when you listen what they have to tell you. Google does this, because it improves its services on the base of the (search-)requests we send to them.

New Ethic

Make mistakes well: Nobody is perfect, but if you do a mistake ''make it well'', which means learn fast and improve your product.
Life is a beta: The internet has, like life, an evolution and therefore you need to keep up with this evolution. Thus there is no ''finished product/service'' but only a further improvement in the chain of evolution.
Be honest: To be honest gives you trust.
Be transparent: Revealing relationships/interdependencies is part of being honest and thus will be rewarded with trust.
Collaborate: Collaboration with customers gives you a strong relationship to your community and this is a competitive advantage. And you can save some money in research because people will tell you, what they like to have in a product/service.
Don't be evil: Well the famous statement from Google and what it could mean.

New Speed

Answers are instantaneous: A search on Google takes only a blink of an eye (0.3 seconds).
Life is live: New trends in the internet such as Twitter, where news spread really fast.
Mobs form in a flash: Flash mobs are a new form of getting together spontaneously with the help of technical means (such as SMS or Facebook).

New Imperatives

Beware the cash cow in the coal mine: A blind spot makes you slow and inflexible. This happens especially when you have a product that is a cash cow (generating much profit) and why should you modify a product if it generates a lot of cash? The answer is to be prepared for the future and not become overrun by Google and bloggers (valid for the media and ad industry at the moment).
Encourage, enable and protect innovation: Innovation is a competitive advantage and keeps you up to date. This is important, therefore Google allows employees to work 20% of their working-time on own projects. Most of the improvements in the applications of Google came out of projects began in this 20%.
Simplify, simplify: The Google page is simple: Logo, search field, 2 buttons and some links to important documents from Google. And this is also the case with their applications, they built them as simple as possible.
Get out of the way: Once you have enabled a community with a platform, do not try to control it - get out of the way and let them do.

So this would then have been all of the first part of the book. Now Jarvis takes this principles and makes more illustrative examples and thoughts about how an industry would be if these rules would apply.
I have to say, the book makes fun to read and has a lot of exciting examples, but sometimes it is a little bit too simplistic (but this is my opinion as an student of business administration/economics).