Leveraging Existing Assets

There appears to be a shift in the way businesses are being built due to exponential technologies. Exponential technologies are technologies (and organizations/businesses) whose performance doubles on a periodic basis.

According to the authors of Exponential Organizations, the most efficient and effective method of building a business is by leveraging existing assets. That is to say, leveraging assets owned by others as opposed to building or acquiring them yourself.

Historically the goal of a business was to build something, increase revenue over time, and acquire the most assets. The authors of Exponential Organizations argue that this strategy leads to bloat, and ultimately the inability to pivot on a dime as market conditions change. The ability to pivot quickly is becoming increasingly important as exponential technologies accelerate the rate of change within our society.

Conversely, in an Exponential Organization sense, it is preferable to use assets already in place without the burden of ownership. As market conditions change you can move from one existing asset to another without the burden of having to divest yourself of said assets.

The following diagram from Exponential Organizations shows the architecture of an exponential organization, or ExO.

As shown, a small core team is the heart of an ExO. Another layer of the ExO is the product Users/Customers/Alumni. The next ring is the Vendors/Partners/Fans. These first three rings comprise the Community that organically forms around the product or service. Outside the Community are the Staff On Demand (i.e., consultants and other freelancers). The final concentric ring, or layer, is comprised of Everyone Else, or the crowd.

This diagram shows how companies such as Instagram (an ExO) was purchased for $1 billion USD, while an existing photography firm such as Kodak (a traditional organization) collapsed under it’s own weight within months of the Instagram acquisition.

Beyond a business organization, one must wonder if the concept of exponential organizations will extend throughout the Internet, and around the globe. For example, in the case of blogging - is it better to build your own blog from scratch (platform, community, etc.) or is it preferable and more advantageous to leverage an existing platform and community (assets) such as Svbtle?