My last post focused on tolerance of ambiguity – my latest ‘card’ on the shift from scarcity to abundance – in this instance in relation to the potential impact of 3D printing on replacement human organs. And to me there is an enormous link between the two. Really since the dawn of mass commercialisation, our business models have been predicated on scarcity – even mass manufacturing serving really to highlight how appetites stimulated by scarcity and rarity (not that many Maseratis are made) can be met by cheaper mass produced models (the model T Ford being the classic). The decisions around operating models and pricing are therefore linked to how scarce I choose / have to make my offering. When I worked in research level publishing, there simply weren’t that many libraries / institutions working in some of the fields that we published – so the price of those books was geared to the tiny market size. Equally, Rolls Royce choose to create an incredibly high class product and charge accordingly in comparison with smaller and more mass market cars. Whilst the optimum decision is not necessarily easy the model is widespread and established.
But just look at how many assumptions are challenged in the business models based on abundance. Assets are owned not by the customer but by the providers / suppliers who may also be users / viewers /customers. Pricing is more transparently related to quality but is not necessarily homogeneous (think about the range of prices on Airbnb for example). Audiences are less mass market segments and more about tribes – tribes whose values may be similar within themselves, but where the values from one tribe to another may vary hugely. And abundance is opening up markets that never existed previously – how many of the artists and craftsmen on Etsy would previously have had a global market available to them?
And this requires a huge tolerance of ambiguity around business models – the recognition that pricing and marketing principles that worked well in the past will no longer be optimal necessarily in the future. Other people’s views (especially if more comfortable in the digital arena) may be as, if not more, valid. And new competition may arise not only from left field but within timeframes that we traditionally think of as project cycles at best.
In this context tolerance of ambiguity is really about the ability to question the status quo, to reassess fundamental assumptions (many of which are not even necessarily overt assumptions), to be humble enough to admit that not only does one not have all the right answers but that for some questions there are in fact multiple right answers. Because part of the problem with tolerance of ambiguity is understanding just what the phrase means . . .