The future of blogging


The latest issue of BusinessWeek has an interesting interview with Mena Trott of Six Apart, the company that provides the software on which this blog is based, on the future of the blog. Some of the interesting issues raised include how blogging has brought a more personal tone to mainstream journalism, images, audio, and video being integrated into blogs, and introducing filters for readers and authors to select views into the blog. On another note, Six Apart is rumored to have recently raised $12 million in a highly bid C-round fund raising, with investors said to include Intel, giving a pre-money valuation of the company of around $100 million. Blogging is hot. Robert Scoble of Microsoft comments: “Well done Mena! We all forget just how bad things were for geeks five years ago.” Indeed, the massive front-page success of blogging is one of the centerpieces of the technology revival. I often find myself boggling at how transformational blogging and related technologies really are. We’ve only just scratched the surface here. Tradtional boundaries between content creators and consumers will dissolve. Assessment of the authority and integrity of any content will entirely change. Blogging is strongly accelerating the already powerful shift towards transparency, which impacts every domain of society and business. Email may begin to play a quite different role in our communication than it has over the last years. There are many other implications that are just unfolding. Very exciting times ahead.

Seven MegaTrends of Professional Services – #4 Transparency


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Continued from Connectivity. Full table of contents below.

MegaTrend Four: Transparency

On October 25, 2004, the board of directors of financial services conglomerate Marsh & McLennan announced “significant reforms to the business model… which will be rooted in transparency.” The controversy on the payments its Marsh insurance brokerage arm was making to insurers, unbeknownst to its clients, resulted in a settlement of $850 million to policyholders. While this tale relates to another MegaTrend—that of Governance—the result is greater transparency. Transparency to clients, to the market, to regulators, and often even to competitors.

Transparency is in fact one of the most powerful trends across all of business and society, hardly just professional services. One of the early catch-cries of the digital revolution was “information wants to be free.” In a world of email and the Internet, it’s certainly very easy for it to escape. The Internal Memos website claims to be the Internet’s largest collection of corporate documents and internal communication, providing a home for any company documents that may have been liberated by disgruntled employees. Clients and competitors can login and have a peek if they wish. At a broader social level, the presence of cameras—often video cameras—in many mobile phones today means that incidents, accidents, and misbehavior can be seen by all, whether or not a television crew is there to capture the moment.

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Doing microfinance well


Following on from my story from last November, Microcredit gains momentum, the leading Indian microfinance institution SKS India has launched a great new website, driven by Chris Turillo, who is in Hyderabad after acting as business development manager for my US partner organization Business Development Institute. The website provides details on the lending methodology SKS India uses, which is based on the community joint liability model originally developed by Grameen Bank. It describes how they select villages, form sangyam (centers) and do financial transactions. In addition it has case studies that help to bring the microfinance concept to life. SKS India has lent to over 150,000 women clients in some of the poorest parts of India, and aims to reach 1,000,000 clients by 2010. It is important to recognize that this is a financial institution, onlending from banks such as ABN AMRO, Citibank, and HSBC, yet using models that allow cost-effective, high repayment small loans that help lift people out of poverty.

Seven MegaTrends of Professional Services – #3 Connectivity


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Continued from #2 Governance. Full table of contents below.

MegaTrend Three: Connectivity

As we bustle about with Blackberries, mobile phones, WiFi laptops, and for the novelty seekers sometimes an entire armful of devices, we can now consider ourselves connected. Aside from when they’re out hiking in vast expanses, airplanes are for most businesspeople the last space where they’re more than minutes from a broadband connection. Not for much longer.

For knowledge workers, most of whose daily working material can be zipped about the globe in seconds, this is indeed a different world from when phone, letter, and fax were the primary ways of communicating. Certainly the first implication is clients’ expectation of faster responses. But it goes far beyond this. For example instant messaging, which allows you to see whether your counterpart is present and to rapidly exchange brief missives, is the antithesis of ponderous, formal communication. Thirty-six percent of over 400 professionals who participated in a webcast I did last year indicated they use instant messaging with their clients. This is just the beginning. These new forms of interaction start to change the entire client-professional relationship. The use of informal, highly interactive communication throughout a professional engagement means that clients feel they are part of the process. Increasingly, they are. Professional work is becoming visible, and the path towards client participation has begun.

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Mashups and Edgeio give power to the edge


In web parlance, a “mashup” is a computer application that brings together elements of other applications. One of the key concepts behind it is that of APIs (application program interfaces), a term that is increasingly hard to avoid seeing. An API basically defines how other programmers can access a particular application. When Google first published its APIs, it was big news, as it allowed people to take specific data from Google and use it in their own applications. This helped set a trend, and now the whole much vaunted “Web 2.0” phenomenon is based on most new web applications having APIs that others can use to create new applications. For example MashupFeed compiles all the new mashups, that are appearing at a rate of around 2.5 per day. The just completed Mashup Camp conference was centered on mashups, including the economic models as well as the technology and emerging applications. Arguably the majority of the innovation and creative intent on the Internet now centers in this space.

One of the hottest applications in this space is the soon-to-be launched Edgeio (which comes from “edge” – where all the interesting activity happens on the web, and “input/ output”). In a nutshell, it allows people to post classifieds listings on their own blog, and for these to be taken and presented in one place, with links back to that person’s blog. It can also be used for any other content. In principle, this could challenge eBay and other classifieds giants – instead of posting a listing to sell something on eBay, you put the relevant information on your own blog or website, and anyone else can find it and compare it to all other offerings on the Internet. A good overview is given by the very first report on Edgeio on BusinessWeek’s tech blog. Some worry that Edgeio is too cognitively complex for people to understand. However I think the basic concept isn’t too hard. If you have a blog, you have power. You can do what you want there, and automatically participate in the collective space of all interactions. Why work by the rules others create?

Seven MegaTrends of Professional Services – #2 Governance


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Continued from #1 – Client Sophistication. Full table of contents below.

MegaTrend Two: Governance

The cowboy days are over. In the space of a couple of years at the beginning of the century, the business world shifted dramatically. Enron, WorldCom, Arthur Andersen, and similar debacles in other parts of the world, such as Parmalat in Italy and HIH in Australia, demonstrated to the investing public that companies weren’t to be trusted. Ever-ready with voter-friendly legislation, US Congress swiftly enacted the Sarbanes-Oxley bill, which put strict measures in place on public companies and their auditors to ensure strong governance.

The rise of governance as a key driver in business impacts professional services firms across the board. The first driver is in how clients deal with their professional services providers. Sarbanes-Oxley specifically legislates how audit firms can and cannot work with their clients. However in a world in which regulators, investors, and media commentators are keenly seeking potential transgressions, few companies are prepared to test the boundaries.

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10 Trends for 2006+


My colleague Richard Watson, who among other claims to fame runs the fabulous NowandNext site, has just come out with what will be an annual report. 2006+ 10 Trends: Predictions & Provocations is through Richard’s generosity available here as a free download (usually £35), and Richard is allowing any use of his material with acknowledgement. The ten trends Richard explores in the report are:

1. Anxiety

2. Connectedness

3. Speeding-up

4. Mobility

5. Convergence

6. Privacy

7. Nostalgia

8. Localisation

9. Authenticity

10. Happiness

He then goes on to explore specific sector trends, including society & culture, government & politics, media & communications, money & finance, healthcare & well-being, travel & tourism, and far more.

Just a tiny smattering of the juicy tidbits from the 64-page report:

* In the UK the Royal Society for the Protection of Birds (RSPB) now has more members than the three main political parties combined.

* Reason magazine recently sent out 40,000 personalized copies of its magazine, each with a circled aerial photograph of the subscriber’s house on the cover, and detailed information about that subsciber’s neighbors.

* 42% of the US workforce is unmarried.

* More young people voted on American Pop Idol than in the last US Federal election. But politicians in Lithuania gave away drinks at polling stations, to help increase voting from 23% to 65%.

* At Harvard University, 75% of students support the armed forces, compared to 20% in 1975.

* 36% of high-school students believe the US government should approve news stories prior to publication.

* In 1900 Americans slept 9.0 hours per night, today they sleep 6.9 hours a night.

* It took 30 years for Japan to build to 17 million outbound trips a year, but only 5 years for China. There are 800 million internal trips in China each year, similar to the number on the rest of the planet combined.

* The MTV Starzine magazine, produced by MTV and Nokia, consists entirely of text and photo submission by mobile phones from readers.

Stacks more insights, trends, predictions, and observations in the report.

The Seven MegaTrends of Professional Services – #1 Client Sophistication

By the complete White Paper: The Seven MegaTrends of Professional Services

Continued from Introduction. Full table of contents below.

MegaTrend One: Client Sophistication

What do you prefer? A sophisticated client, or an unsophisticated one? It’s an interesting issue to debate with professionals. Some say they like unsophisticated clients, because, as they usually express a little more euphemistically, they can take advantage of them (for a little while, anyway). Others prefer sophisticated clients, as they know what to expect, they know how to work effectively with professionals, the professionals can learn from their clients (as they must to keep ahead!), and usually the opportunities are far larger.

Irrespective of what professionals want, the reality is that professional services clients are becoming increasingly sophisticated. The rubes off the street that you can awe into silence and charge like a wounded bull without protest are rather thin on the ground these days.

The drive to greater client sophistication has in turn been created by other broad shifts in the business environment. The most powerful is the ever-increasing pressure on corporations to reduce costs. Whenever business conditions turn down, the edict goes out to cut expenses. In order to cut supplier costs, companies need to understand what they’re buying. In 1992 DuPont established its “DuPont Legal Model”, which consolidated its legal suppliers from 350 to 35, and established clear processes for how its law firms would work for the corporation. This program established a precedent that has been copied by many other companies, and is highly innovative in how aligns the objectives of the company and its service providers. However the initiative was initially driven by the then-chairman’s drive to cut $1 billion from DuPont’s costs.

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The Seven MegaTrends of Professional Services – Introduction


Around six months ago, I wrote a White Paper for the enterprise software company Epicor titled “The Seven MegaTrends of Professional Services: The Forces That Are Transforming Professional Services Industries and How To Respond”. The paper has attracted a huge amount of interest, however up until now, it has only been available on sites requiring registration. The White Paper is now available for free download from this site (no registration required!) as a pdf here:

The Seven MegaTrends of Professional Services.

I will also serialize the paper on this blog in 13 parts:

– Introduction (below)


MegaTrend 1: Client Sophistication

MegaTrend 2: Governance

MegaTrend 3: Connectivity

MegaTrend 4: Transparency

MegaTrend 5: Modularization

MegaTrend 6: Globalization

MegaTrend 7: Commoditization

Responding to the MegaTrends

Lead Your Clients into Knowledge-Based Relationships

Build Strategic Transparency

Create a Highly Networked Firm

Evolve Your Business Models

Developing and Implementing robust strategies


Not so long ago now, professional services were a solid, predictable domain, performed by gentlemen (and only rarely ladies) who played by gentlemen’s rules. The world has changed, and pine as they might, those who yearn for the “good old days” are finding that the nature of their chosen occupation has irreversibly shifted.

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Peer-to-peer banking


A new peer-to-peer bank,, is launching in the US, attracting articles in both the New York Times and BusinessWeek, with the latter titling the story “The eBay of Loans”. The principle is simple – you lend to individuals at interest rates based on their credit rating, and since you’re cutting out the bank as middleman, both lender and depositer get more attractive interest rates than they can get commercially. This is not a new idea – UK-based Zopa has been running for almost a year with essentially the same business model. Anecdotally Zopa is doing well, and intends to set up in the US soon. One of the differences is that focuses on groups that know each other or have common interests. It also has a more evolved bidding model so lenders bid to have the lowest (and thus winning) interest rate for a particular lender.

Banks are the archetypical intermediary, in this case between depositers and lenders. They get a very hefty spread for lending to individuals, however they do some things to create that value, including insurance (by pooling loans), risk assessment (making independent and accurate assessment of creditworthiness), and convenience (at their best!). allows lenders to split their loans across many borrowers, giving some loan pooling and security against default. Certainly, an online marketplace cuts out the middleman and the spread it charges – all part of e-commerce 101. However rhe really interesting part of this model is the risk assessment. In the first instance, people can find out about someone as an individual and make a personal assessment on their default risk. The next phase is when more sophisticated models are used to assess credit risk, aggregating a wide range of perspectives. This is not possible by a financial institution. However, with a borrower willing to disclose information, arguably more accurate credit assessment is possible. If some kind of effective deposit insurance through pooling or other mechanisms is put in place, in addition to superior credit assessment (not difficult given the paucity of the bank’s data and models), then there is no reason peer-to-peer banking will not over time become a competitive issue for mainstream banks.