The 6 D's of Exponential Organisations
The 6 D concept has become a thing now, especially in our digitised world and markets. Born of the book, BOLD
by Peter Diamandis and Steven Kotler, the concept is a handy little roadmap to making sense of where industry is heading towards.
This is the process wherein a product goes from being physical, to digital. Many things in our daily lives have since made that transition. Photographs and news being prominent examples. No longer are pictures only printed on film. Now with digitisation, even the press is beginning to feel the pinch as news moves from newspapers to the online news apps and social media sites. And once a product moves into the digital space, it is no longer bound by the physical laws or logistic limitations and therefore it is free to grow exponentially with the internet as many services and products have demonstrated to us.
The idea that the authors are propagating here is that exponential growth can start off being extremely misleading. The doubling of small numbers may not look in any way meaningful at first, like a 0.1 doubling into the 0.2. But once it begins to gain traction, the upward trajectory is immense, like a 100 doubling into 200, and it suddenly becomes significantly disruptive to the industry.
This means that these industry disrupting innovations would pretty much be exploding onto the scene without so much as a “how-do-you-do?”. You used to be able to see competitors coming from a mile away with their linear growth rates but not anymore. Not anymore.
This is where things start to heat up. As always, Kodak is used as a cautionary tale to warn against being fooled by the deceptive insignificance of early stage exponential organisations or ideas. No one thought that the digital camera could become anything more than a novelty item when it was first created. But just as computing power has and is increasing exponentially, so is tech and so did the digital camera in the span of only a few years, completely disrupting the photography industry. Just as the digital camera created a new market for itself and relegated the film camera into the niche of antiques, kitschy, retro and arthouse projects, so are many things in this digital age.
VR is certainly beginning to take off. And just as complex AI and machine learning may seem to be starting off on rather shaky legs, they could very easily become the norm in just a few years time.
Demonetisation is the stage where money starts moving out of the picture. Or rather, the more obvious sources of money does anyway. It used to be, you paid directly for everything you used. It is not quite the case anymore. Chris Anderson described the situation perfectly in his book FREE
. He stated that today, the easiest way to make money is to give things away for free. Just like how many online and digital services are free for us to use and yet the companies behind them are making billions from indirect revenue streams that stem from but are not directly from the pockets of the billions of consumers using their products.
As Chris Anderson put it, Google is giving their browser away for free but they are making money off the information they get from people using their browsers. And the coffee shops he is sitting in does not profit directly from the usage of their wi-fi but from the copious amounts of drinks purchased by their caffeine-fueled customers who stay there for long periods of time, precisely because of the free wi-fi.
If demonetisation is the vanishing of money from the chain, then dematerialisation is the vanishing of the physical product itself as a result of being integrated into something else. The best example given in the book, BOLD
is of course the smart phone. Since the explosion of smart phones onto the scene, it has become the fastest spreading technology in history as well as effectively absorbing many technologies that used to come in separate devices like the digital camera, voice recorder, watch, GPS, music player, video game console and many more.
This is the last step in the digitisation chain reaction. Democratisation is essentially when the hard costs of something becomes so low that it can be widely available and accessible to almost everyone. I remember when buying a 2GB USB drive would cost as much as three whole meals in a low-budget restaurant. Now companies are practically flinging them at you for free with recruitment drives and promotional material. Even that now stands to be disrupted by the Cloud.
As with the smart phone, data sharing and digital camera examples given above, the process of sharing photographs and data has become democratised to the point where it is free. You can upload your free digital photos taken for free to Instagram which is free. Completely democratised.
So, will you be one of those entrepreneurs that takes advantage of the power of the exponentials and rides it all the way to commercial success, disrupting markets and sowing seeds of innovation wherever you go?
We hope that you will.
Books we can highly recommend in this blog article:
. Exponential Organisations
by Salim Ismail
by Diamandis & Kotler
by Chris Anderson