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The catastrophe of the economy is believing it will recover unchanged

27 Jan 2010

The driving forces behind the collapse of trust and utility in our current economy are based upon a discrepancy in value. As long as any structure continues to be abused by inflating and deflating its perceived value, we suffer the risk of going through the same collapsing economic bubble over and over again.

We can't expect a rapid recovery either. Unemployment rates will continue to rise until new leaner and more agile business structures take hold. Large slowly changing business was the foundation of the industrial era. Too big to fail has been replaced with too large to adapt. The momentum of these lumbering giants has turned against them in today's economy. The primary cause for the re-evaluation of size is based upon market forces. While big corporations race to shrink their size, new startups are growing from the ground up with a big advantage. They understand the value of dynamic market adaption, and have built it into their company's DNA.

The consumer market has drifted from being fairly predictable to heavily dynamic. This change really started happening about 10 to 15 years ago. In the age of mass media, a business which sells products could count on marketing dollars to drive product demand. This is no longer the case (unless you're Apple).

Successfully marketing a product requires more rapid research upfront. Marketing and engineering must listen to and learn from user needs before trying to design, build and sell their next set of products. Businesses simply can't expect to dictate to consumers what to use. In addition, consumers can buy directly from manufacturers, so there's less of a need for middle organizations which function soley as distributors (unless you're Walmart). The New Middle must offer each consumer preciesly the set of tools and products which best aid them.

Lets look at why Apple and Walmart have bucked the trends. Their success can be traced to controlling the market in one way or another.

Product Creation is Moving to Consumers

Business prototype designs have been remastered by consumers to best fit their needs. This yields surviving business structures which embrace this market force, and make it part of their strategy. Don't get too caught up with your user design, they'll customize it themselves. Brands will be known more for their flexibility and ubiquitous utility than for specific designs.