Living Networks: 30 things it accurately anticipated 20 years ago
Two decades ago the publication of Living Networks anticipated many of the fundamental shifts in business brought about by the hyperconnected economy. The book, now released in its 20th Anniversary Edition, is just as relevant today as when it was published.
Read below to discover 30 prominent developments over the last 20 years that Living Networks correctly predicted. Read the book for free for its detailed prescriptions on how to succeed in our intensely networked world, many even more pertinent today than when it was published.
Living Networks 20 years later: 30 things it got right
My book Living Networks: Leading your Company, Customers, and Partners in a Hyperconnected Economy was published by Financial Times/ Prentice Hall in 2002, laying out the implications of a connected world.
Twenty years later it turns out I got it pretty much all correct. Here is a selection of 30 of the book’s themes that accurately anticipated developments over the last two decades.
Some of these ideas may seem pretty obvious today, but hindsight and foresight are different. They were far from evident to most people at the time. If you’d like to see more of the book’s insights and its strategy recommendations, all of which still apply today, you can download the book for free.
1. The rise of social networks
Before Facebook, LinkedIn, Twitter, Instagram or any of the other social networks of today existed, the book discussed online discussion forums, technologies to broaden social connections, and the potential of micro-messages, which later came to fruition with Twitter and Slack. A header in the book ‘We, the media’ described how “media is becoming a participatory sport. You can tap into what any of a vast army of people are seeing and thinking, or contribute yourself to the global flow,” two years before Dan Gillmor’s book ‘We the Media’. In 2013 the New York Times acknowledged the book’s anticipation of the rise of social networks.
2. Work from home and flexible work
In describing how employees were gaining power, I wrote “many of those classed as employees frequently work from home, on flexible hours, or on productivity-related pay… companies that want to attract the best workers are offering great flexibility in working conditions.” Perhaps a little ahead of schedule, I noted that “virtually every company is in the same situation, understanding the necessity of shifting into new ways of working, but hesitant in the face of these risks and challenges.”
(Chapters 10, 3)
Living Networks pointed very early to the “shift to providing software as an online service,” saying that, “our ability to connect to the networks almost anywhere and anytime means that using software over the web is an increasingly viable alternative.” It referenced the first appearance of Microsoft Office as an online service as well as SaaS pioneers such as Outtask.
4. Open innovation
The book deals extensively with open innovation, then a nascent movement, referring to Procter & Gamble’s Connect & Develop initiative, which became the most quoted example of open innovation after the 2006 Harvard Business Review article, as well as others such as Eli Lilly. I used the term “distributed innovation,” saying, “the real reason for distributed innovation is simply that you can no longer be self-sufficient. You must bring together more and better resources than you can hope to have inside a single organization.”
Pointing to how devices were converging, I wrote “Humanity is just beginning to emerge from a strange phase in its technological evolution, in which people have carried a multitude of separate digital and communications devices for different purposes,” describing the emergence of “lightweight devices that combine mobile phone, e-mail, Internet browser, and a calendar, all literally in the palm of your hand.”
6. Work platforms
The book pointed to platforms as a fundamental drivers of the future of work, noting that “the markets for professional work are already global. Matching freelance professionals with clients is proving a natural for online exchanges.” I pointed to the recently launched eLance, which later merged with oDesk to form today’s world’s largest marketplace Upwork.
Years before Jeff Howe coined the term crowdsourcing, I pointed to numerous examples that have were later used to illustrate the phenomenon, including [email protected], BountyQuest, Goldcorp’s innovation challenge, MIT ThinkCycle, MovieLens, and a number of other early pioneers.
(Chapters 2, 5, 10)
8. Subscription music
I pointed to the potential of all-you-can-eat subscription music, writing, “US music consumers currently spend on average $60 a year on CDs—equivalent to perhaps four albums. If each of those consumers were given the option to pay $10 per month, and in return get all the music they wanted, it is safe to predict that most would take it up, feel they are getting great value, and the industry would double in size.” Exactly as we have seen with Spotify, Apple Music, and others.
9. Everything over IP
“Internet Protocol—usually called IP—is the clear winner as the most effective and versatile communications framework,” so “telephone, television, Internet, and all other digital flows can be carried through the same pipes, potentially merging these businesses.”
10. Mobile broadband
Six years before the iPhone 3G I wrote that mobile broadband “will allow people to access all the resources of the Internet, do video phone calls with friends, access music and video clips, participate in graphic multi-player online games, and far more, all while you’re on the move.”
11. Customer innovation
Customer innovation is now considered central to design thinking and how companies bring products to market. I wrote, “The challenge for companies today is to find effective ways of involving their customers in the innovation process,” using examples such as how Procter & Gamble enabled “a substantial acceleration in the… product development process” through its customer engagement. I suggested to “get designers and product developers… to interact directly with customers,” and “design development processes that involve customers throughout.”
12. Creative Commons and new Intellectual Property models
I discussed the Creative Commons IP model (which has also just celebrated its 20th anniversary) to illustrate that “intellectual property is not an all or nothing proposition. There doesn’t need to be a stark choice between total protection, or release to the public domain.” Since then over 2 billion Creative Commons licenses have been issued, with users including Wikipedia, Khan Academy, MIT OpenCourseWare, Arduino, and many others.
13. Crowdsourcing traffic data
Five years before Google started crowdsourcing traffic data on Google Maps from their mobile users, I wrote about the first firms that were “using data from the movement of thousands of mobile phones as they register with the local cell station to generate an accurate and up-to-the-second picture of traffic delays.”
14. Commercial open source software models
Living Networks describes in details how open source software, until then largely the province of counter-culture advocates, was growing rapidly and entering the commercial arena, with tech companies such as Sun and IBM among the leaders open sourcing their software and building new business models for open source software.
15. Word of mouth marketing
The book discussed early examples of word of mouth marketing and how best to achieve effective results years before the Word of Mouth Marketing Association was formed, and long before the approach became truly mainstream.
16. On-demand streaming content
Noting the rise of “streaming media, the technology that is enabling the Internet to begin to compete with radio and television,” I predicted that “content will be accessible wherever you are, through whatever device you are using at the time.”
(Chapter 7 and 8)
17. Web services and APIs
Living Networks looked extensively at the programmable web services that enable interoperable systems, saying “this powerful new set of technologies has the potential to allow totally seamless integration of internal and external processes.” Pioneering examples such as Ford Credit and Collier showed how modular software and widgets would be at the foundation of distributed software architectures.
18. Collaborative filtering
Collaborative filtering was a central theme of Living Networks, noting that “as more sophisticated collaborative filtering systems are developed and widely used, we will be able to tap the collective experience of the many people that have similar taste to us, but we will never meet.” Four years after the book came out, Netflix offered a prize of $1 million for whoever could improve their collaborative filtering algorithms, bearing out my prediction that “improved ways of tapping the power of collaborative filtering approaches will be at the heart of the networks.”
(Chapters 1, 4, 8, 11)
19. Personalized AI assistants
AI assistants such as Siri are effectively agents. Living Networks notes that “agents are software that act on behalf of a person by performing a specified task… More sophisticated agents can learn your preferences and over time improve at their tasks.” Prefacing articles Ihave writtenmore recently on this topic, I suggested “Agents in particular have the potential to lock-in customers to your service. If a customer has spent time training an agent to deliver more useful information, sometimes simply by using it repeatedly, it can become hard to go without. You cannot recreate the ability of agents to personalize in the same way that you can through profiling. As such, agents can be a powerful relationship tool.” This lesson has now been well understood by Amazon, Google, Apple, Facebook, and Samsung, among others.
20. Polarization of work
“For free agents, connectivity can be both a blessing and a curse. Some will benefit enormously by being able to tap into global markets, and collaborate with the best in the world. Others will find that there is relentless downwards pressure on the fees they can charge. The result will be a polarization of knowledge workers, with on the one hand many reaping massive rewards, and on the other many more who struggle to do well.” As we can see in practice today.
21. XBRL and accounting standards
I discussed the potential of the recently launched eXtended Business Reporting Language (XBRL). Seven years later the SEC made the standard compulsory for financial reporting. It is now a central platform for financial reporting globally.
22. Online professional services
A section of Living Networks examined the impact of connectivity on professional services, noting how “professionals of all stripes… are discovering that digital services and connectivity are beginning to transform their world… providing comparable services at a fraction of the cost.” Extensive examples from the likes of Deloitte, EY, PwC, Clifford Chance, and Davis, Polk & Wardwell showed how professional services were already being significantly delivered online, and delved into the implications for these firms.
23. Innovation platforms
Today platforms are fundamental to open innovation initiatives. I pointed to the recently launched Innocentive, which has been an exemplar of open innovation initiatives for two decades, and numerous other platforms such as IBM’s alphaworks, yet2, SourceForge, PL-X and more.
24. Meme marketing
Writing about memes and their behavior at length, I noted that “memes have the potential to propagate incredibly fast and wide, but the competition is remorseless… This is the world in which marketers live today.” Nineteen years later leading marketers are saying it’s time to take memes seriously.
25. Proximity dating
I described how “proximity dating” connect people based on their mobile phone location a decade before Tinder shared the distance of potential matches with those swiping.
26. Professional networks
I described how “professional networks’… evolution is being driven by both new ways of working enabled by connectivity, and the swift shift to professionals working as free agents.” This is now a powerful trend. Among other examples I introduced the recently established Axiom Law, today a leader in the space, which now has over 5,800 lawyers servicing half of Fortune 100 companies.
27. Movie release windows
The book suggested that the movie industry will need to rethink its release schedules across cinemas and digital platforms. This shift has gradually evolved for many years then accelerated during the COVID pandemic to see a dramatic reshaping of movie distribution.
Last year Google introduced Project Starline, which enables immersive 3D video calls. In Living Networks I introduced examples of earlier versions of similar technologies including Teleportec and Teleimmersion.
30. Information overload
I wrote that, ”Information overload is the defining feature of our times. Those who are most effective at making sense of the flood of incoming information and turning it to action lead our world,” later observing that “If you think we’re living in a world of information overload, you ain’t seen nothing yet.” Two decades later, this is the central theme of my next book (coming soon!)
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