I’m at Auckland airport, on my way home from co-presenting a Value Networks Masterclass with Verna Allee. It was a fabulous event, with around 30 attendees. This included a group from the event organizers AgResearch, which is already well under way in applying value networks methodologies, including having a number of people certified in Verna Allee’s ValueNet Works™ methodologies. When I initially described the Value Networks approaches on this blog, I also wrote about Verna’s and my shared interests and background. In the few years since we’ve done anything substantive together, Verna and her network of colleagues, including Oliver Schwabe and John Maloney, have developed the state-of-the-art to make this a business methodology with deep and broad foundations. Part of the intent of the workshop was for Verna to use her value networks work, and for me to contribute my social networks orientation. However we both see not just that they are highly complementary approaches, but also that they represent different facets of a larger whole of network thinking and tools. Given the great success of our collaboration on the workshop, Verna and I will now seek new opportunities to run workshops or development programs on network approaches to business. In particular I’m keen to explore and develop the value network approaches, as I can see many, many applications. Having recently spent some more time on the open Value Networks site, I strongly recommend anyone interested to delve into the resources here. One major organization that the workshop organizers approached said that they had already successfully run a major project using the resources on the website, so they didn’t feel they needed to come to the workshop. I think they would have benefited substantially from the depth on methodologies we went into during the Masterclass, however their comments are a testimony to the quality of the resources on the site. Verna in particular has been more generous than any other consultant I can think of in sharing her resources with the public.

Many insights and thoughts and emerged for me in the process of running the workshop and in conversations with Verna. One simple phrase that she used: “We are in the middle of a huge barter economy,” struck me. It’s absolutely true that financial transactions represent a minority of value created in the economy. Money is central, but value is exchanged in created on many other dimensions. The value networks approaches help us to uncover those hidden value exchanges. Recognizing the multiple facest of value and perceived value are not only critical to effective organizational functioning, but also to designing solid business models. Most of the economy based around Web 2.0, for example, is non-financial, and to extract financial value, you need to recognize where non-financial value is created, and the configurations in which it flows. There will always be institutional power, yet at the same time distributed power is rising. How institutional power and distributed power interact will be central to the structure of the economy and society over the next decades. I will expand on some of these thoughts in more detail later…

Hey, how come I read about this on Scobleizer first? Randal Leeb-du-Toit and I are due to catch up for lunch when he’s back from Silicon Valley, so he can tell me about Outback Online, a new 3D virtual world his company Yoick is creating. Robert Scoble has just had lunch with Randal and executive producer John Wolpert (who when he was with IBM was mentioned to me with great reverence by his colleagues). Robert has now told the world about the new product, and he seems to think it’s possible that the new service could indeed offer real competition for Second Life, based on graphics quality, scalability, and age-based segmentation. I very much look forward to seeing the alpha. Certainly for the meantime there’s been some very good buzz generated, suggesting that people are open to an alternative to Second Life.

There are definitely some rather hefty network effects at play in this kind of virtual world, not least because the worlds are created from scratch, and thus require substantial personal investment from many people before they start to become interesting. However there have been many complaints about Second Life, not least on performance, as well as on some of it policies. Second Life has established itself as the de facto leader in user-created free-form virtual worlds. Yet it is more than possible that in 5-10 years from now others will have taken the lead. TD Goodcliffe believes that the space is open for the taking. Duncan Riley has doubts about the name (“the outback sucks”). Justin Thorp wonders whether virtual worlds are ready for mainstream acceptance. I certainly believe that virtual worlds will play a major role in our future, both socially and in business, though that may take quite a while to pass. I’m not prepared to punt on whether Second Life will be transcended by others, as this partly depends on how good a job Second Life does at defending what is absolutely a very solid incumbency. It’s definitely going to take significant capital to take it on. However I’m all in favor of competition, so I certainly hope that Outback Online has what it takes to put the field into play.