Harvard Business Publishing

You reminded me of John Hagel’s thoughts on orchestration of loosely coupled processes and of Daily Telegraph Aug 2007 comments on M&S “Marks & Spencer’s biggest shoe supplier is being taken over by the Hong Kong-based group Li & Fung in a deal that will pave the way for it to act as a consolidator of Europe’s supply chain management industry.”
Is ETSY the tool to enable Li & Fung (or similar) to become a key orchestrator in production.. actually a dominant one as they are already key?

Is there a transcription of this anywhere?

Fantastic Umair. Now the whole "Etsy could be the next Google" thing makes more sense. :)

In a way, as Etsy could provide an alternate means of organizing production of goods, one of the things we're trying to do at eduFire is provide an alternate means of organizing production of education.

Reading stories like this one (specifically the part about the teachers in Minnesota) is just one more piece of evidence that the means of organization in education and other industries is going to change radically in years to come.

I figure I've read Umair's stuff for too long without contributing, so here you go:

Hi everyone, this is a response--a belated response--to my "Manifesto for the Next Industrial Revolution" post. There was one response that really leapt out at me, so I thought I'd share some thoughts with you. And that was by Mary Anne Davis. And Mary Anne said, right away, she read my manifesto, which ended with a challenge to you guys, which was to go out and think of other things that you can organize, because I ended it by saying there are many different things we can organize like healthcare and food and water and energy. And so Mary Anne read this and the thought that instantly leapt into her head was, "why doesn't somebody organize the world's production?"

I think that's a really important and a really insightful comment. So let's think about it for a second: Who is doing that? Or, who has the greatest potential to do that right now? I think it's a startup that many people see in a very different light, which is Etsy. Etsy right now is a market for handmade goods. But recently, last year or earlier this year, it got investment from two top venture funds: Acel Partners and Union Square Ventures. So why would these guys invest--and they made a significant investment, $30 million--in Etsy? In simply a market for handmade goods? There must be something more there for them to put that kind of money on the table. And I think what is there is the potential for Etsy to become the party that organizes some component of the world's production. And so I think the way to see Etsy right now is not so much purely as a market for handmade goods, but as the seeds of an engine that can provide a remixable production network for the world. And if that sounds really...big, or really grand, perhaps it is. And perhaps that's why they put so much money on the table, and we'll be discussing that in a post very soon. So for now, chew on that, fire away in the comments, and thanks for all your responses. Bye for now.

Rats! This is the third time I've come to page to try to watch and listen to the video, and the third time it's been without sound. Don't know if that's the fault of the video or my browser.

But, in general, video sucks as a medium for serious ideas. I read faster than you (I mean, I don't know for sure, because I can't hear!) talk. On smaller screens. On lower band-width connections.

Hope this isn't going to become a trend because you'll lose me as a regular attention payer.

You've mentioned this "bigger" picture for Etsy a few times now.
I've been debating it with some people i know trying to get a handle of what I think you've been saying but maybe i'm just too dense. I'm not quite getting it.

How about a use case? Just one. Pretty please?

hey guys,

no transcript, apologies about audio - don't worry, there will be a longer post about etsy after my vacation.

leigh, for now, consider a simple scenario something like this. i want a (very specific) shirt. i discuss it with numerous etsy sellers, who cooperate to cut, sew, and finish it for me.

that's radically reorganizing clothing production, flipping the value chain on it's head, redefining labor productivity, and atomizing value activities - i can think of few other places where anything similar is possible. ebay, for example, offers few of the same sources of value creation.

a general note: please note the discussion is not that etsy *will* 100% do anything.

rather, mary ann pointed out that organizing the world's production is going to be very valuable - and i am pointing out that etsy is one of the very few players with the potential to take on a component of that challenge. see the difference?

for example, people probably won't sell handmade fridges on etsy. and it will require tremendous insight, courage, and purpose over the coming years from the etsy guys to make these economics even partly a reality.

thx for the comments guys.

Yes. About twenty years ago, I got my first taste of solid modeling on a branding assingment for a SW company. That also included an early peek at 3-d printers and the magic of rapid prototyping. A few years later came a stint positioning some early CRM and data mining tools,

With every step, the vision of a universally accessible mass-customized production chain gets clearer and clearer as a business model. NikeID is a great experience that should be replicable across many industries.

Etsy and/or something like Etsy on top of an Amazon or Ebay platform could be a very cool way to bring this to market. Make it yorz.

Thanks for another interesting post Umair.
Etsy is definitely one link in the chain (or node in the value network) of how production could be organised in the future.
But there are many examples of citizen product design, rapid prototyping and user-led manufacturing.

Ponoko is an all-in-one marketplace, factory and community.
People can send in their designs for physical products and Ponoko creates them and ships them to you.
Designs can be shared through Creative Commons licensing.
http://www.ponoko.com

Shapeways offer a similar service:
http://www.shapeways.com/

eMachineShop allows users to design their own plastic and metal parts for industrial use.
http://www.emachineshop.com/

I recently co-authored a report on the subject of user-led innovation which can be downloaded here:
http://tinyurl.com/63dlbs

We are seeing the emergence of a post-industrial innovation system which I believe has the potential to drive sustainability by potentially creating cradle-to-cradle manufacturing networks which are trans-local and low-cost.
In the future it's likely that most physical goods will be produced locally using 3D printers, laser cutters etc.
Neil Gershenfeld wrote about this years ago in 'Fab, The Coming Revolution on Your Desktop - From Personal Computers to Personal Fabrication'.
Bruce Sterling also has lots to say on this in 'Shaping Things'.
If each physical object had a unique URL (Internet of Things) we could trace it's make-up (toxicity, chemical breakdown, carbon footprint, recyclability) and use these metrics to make an informed choice about what we consume, what becomes of it after we throw it away, and hopefully embrace our role as agents for positive social change. Such transparency would be radically disruptive and lead to new forms of value creation.

So to provide a counterpoint to your earlier post, I think there's plenty of evidence that innovation and sustainability have the potential to work hand in glove.

So basically a world where micro-production becomes the standard which theoretically is hyper-local and planetarily (if that's a word) more sustainable?

It would mean (would it not) more of a steady state model and a rather radical global mind shift. Environmental economists and theorists have posed a number of different models over the years most of which have been dismissed by main stream economists.

Hum....interesting food for thought.

@Jim Rait

Yeah, I think the easiest way to think about it is Etsy = software version of Li&Fung (firm).

Software-mediated market-networks are more scalable and cheaper than a firm, right? So instead of Li&Fung handling all the coordination, Etsy would be a huge market/network that enabled production chains to self-organize.

"LiFung.com...where firms and individuals get together to make refrigerators"

;-)

Enjoyed the follow-up video post. I'm going to have to think about Etsy abit. I love the site and what they are trying to do, but haven't really seen it as leading the revolution in production. Hmm, maybe.

Meanwhile, I've been wrestling with your earlier post and its impact on what I'm trying to do in the green energy finance space: http://snurl.com/3h6a6

Thanks for the inspiration and food for thought!

Umair,

I have just read your Manifesto. Wow.

I have been thinking alot about what a step change in how we can organise activities might mean for big business.

Isn't the whole lesson of free market econony versus command economy reason to believe that, as systems get complex (i.e. connected), command and control doesn't work well at all.

And that fundementally means the way big business works today, simply won't cut it tomorrow.

It think this is deeply related to capital versus talent.

what do you make of the following mini essay on the fall of big business?
http://www.justinleavesley.com/journal/2008/8/7/essay-is-big-business-heading-for-mass-extinction.html

Organising production? I think not. When I hear this it's always from people - to be blunt - who haven't actually experienced the realities, the messy realities, of production. Okay, perhaps production of one simple item - printed teeshirts or some-such - I can imagine Etsy taking on. But beyond that? Forget it!

Anyway, if it was to happen in a more revolutionary way I would bet it wouldn't be via Etsy. Apart from anything else the site is, whatever it says, far too USA-centic (even one particular urban culture centric) to look out there and begin to understand where most production these days actually takes place. And how it works.

My advice would be to look to Asia in five years or so if you want to see the first seeds of anything even approaching what you're describing. It won't emerge from a very conservative ("Cool is conservatism dressed in black" as Bruce Mau said) crafter's site, however appealing Etsy is in its own way.

Great post, and so many interesting ideas/ links in the comments, too! Thanks for this!

Another area that's ready to be revolutionized is the already-produced world. That is, goods that are available for re-sale / re-use. Lots of potential there.

Eg., I have this killer idea for retail clothing sales and re-sales, involving social media/ networking, but have zilch "magic sauce"(*) skills to make it happen, haha... But it should soon be possible to totally re-organize that industry.

(*)(The "magic sauce" stuff would involve programming that enables imaging & photography magic, uploadable avatars, and the ability to "re-size" items, etc. But since I'm just an art historian and urban design critic, and not a programmer, it's just an idea, alas...)

By the way, I came to this video post after reading your "America's Addiction" post (http://tinyurl.com/572rs5), where I also really appreciated Bill Seitz's pointer to the Clay Shirky piece on "Gin, Television, and the Social Surplus."

The urbanist in me is intrigued by the idea of an Industrial Revolution-era multi-generational "gin bender" as a reaction to newly organized "togetherness."

The brilliant urban theorist Jane Jacobs had a lot to say about togetherness (too much, too little, and when it's just right), and how it works in cities. Now the Earth is 50% urbanized, and ...well, together we are. We better figure it out, eh? ;-)

My question is - "Is it Etsy that is this vehicle or is it the idea behind Etsy's structure that is the vehicle for the organization of the world's production?"
As I try to understand what is happening globally during this economic crisis, it appears that one of the realities is that the integration and complexity of global society, at all levels, is not a good fit with 20th type organizational structures. Those structures are too bureaucratic lacking in the capacity to be flexible and adaptive. I know that is not an earth shattering observation. That is what I see in how both business and government are responding to this crisis.

What makes sense to me is that the kind of organizational structure that is like Etsy is a kind of structure than any business could adopt if it had a proper perspective on what is required. There may be plenty of executives world-wide that would agree with your manifesto, but don't know what to do about it.

For me the key is not identifying where we need to be, in essence, having a vision for the future. The key is in knowing how to make the transition from old to edge, using your vernacular. From my perspective, the crisis we face is just that. An old kind of organizational structure that is ill-suited to the realities of our day. This isn't just in the executive office, but in all organizations at virtually all levels of management. The people who are in leadership, both on Wall Street or in Washington were incapable and possibly unwilling to lead this transition that could have avert much of the problems we now face.
Every one of my client situations is at this transition point. There is no clear formula for making this transition, but a daily attention to the steps that needed to be taken. While there isn't a formula,there are guides, and many of them are the kinds of things you write about here, Umair.

Recently, I went back and reread some of Peter Drucker's thoughts on the economy, some as far back as the mid-1980's. He was prescient in what he saw. I've posted some quotes from him at my blog - http://edbrenegar.typepad.com/leading_questions/2008/11/peter-drucker-and-the-new-world-of-economics-society-and-the-individual.html. To know that he saw basically what is happening today, says to me that we are "simply" in a long transition to a new world that is highly interconnected and quite complex, and that we are susceptible to the kinds of crisis that we are not experiencing.
The key to this transition is found in how organizations can develop the interaction of people. There is a need for structure, but it serves the relationship structure of a business, not the other way around. As Drucker once said, "Leaders lead people, not organizations." That is the fundamental reality that is at the heart of the changes that must now be adopted in business and government.