A lot happened in 2008. The iPhone came out. Barak Obama became president. Unicorns like UBER and Airbnb started. We went through the last big economic recession. And Kevin Kelly wrote the fantastic article “better than free”.

 

The essay became an instant classic. It opened our eyes for companies and products that have an actual impact on our lives.

 

But in the last 10 years, the world has advanced – fast. We’ve moved out of the recession. Young unicorns grew up. The iPhone celebrates its 10th anniversary.

 

Kevin Kelly encouraged me to push his ideas. It’s time to update the list.

The 8 categories of “Generatives”

Kelly’s advice for companies is “sell what can’t be copied”.

 

In a time in which most things are free and abundant, what are values in goods that are hard to get? It’s all about things that have to be “generated, grown, cultivated, nurtured” and can’t be “copied, cloned, faked, replicated, counterfeited, or reproduced”.

 

 

Kevin Kelly lists 8 categories of “Generatives” that can’t be copied:

  1. Immediacy – getting things not only right away but earlier than others. Examples are beta-versions or pre-release screenings of movies.
  2. Personalization – goods personalized to the user, e.g. movies adapted to your preferences (violence okay, dirty language not).
  3. Interpretation – Paid support for free software or interpretation of results for your case.
  4. Authenticity – Due to so much copying the stamp of authenticity, like an artist’s signature, becomes incredibly valuable.
  5. Accessibility – Making goods accessible anytime, anywhere and on everything.
  6. Embodiment – Performance, e.g. reading a book vs. listening to the author reading the book.
  7. Patronage – Users rewarding creators by the amount they feel is right.
  8. Findability – Helping people dig through abundance, e.g. Netflix or Amazon (publishers, studios, labels).

 

If your product has at least one of these values it provides real value. Not saying that this is all a product needs to be good – it’s merely a requirement. But a requirement nonetheless.

 

The values that succeeded in the last 10 years

Kevin Kelly wrote “Better than free” in a time of economic crisis and uncertainty. Ever since we’ve seen an impactful change of the elite companies in the world. The top 10 most valuable brands today are (mostly) not the same as 10 years ago.

Top 100 brands in 2006 vs. 2017

Top 100 brands in 2006 vs. 2017 (source)

 

At the same time,

 

Price and access to certain goods and services have changed tremendously in the last decades.

price of goods and services

Price changes of goods and services in the USA 1997-2017 (source)

 

Those changes have a big impact on our lives and change the values we have over time.

 

That means,

 

We also have to update our understanding of what provides real value.

 

The new values that can’t be copied

All 8 values that Kelly saw still hold true. On top of them, I want to introduce the “new” values:

network effects

Network effects. Social networks provide value through network effects. The more people on the platform, the higher the value. You are on Facebook because your friends are on it.

 

The principle applies to all sorts of companies. Marketplaces, such as Airbnb or UBER, use two- and three-sided marketplaces that live off of network effects. Each side of the marketplace is crucial. Postmates can have billions of users – if there are no drivers to deliver the food the concept doesn’t work.

 

SaaS companies, such as Atlassian Jira, Slack or Salesforce, also employ network effects. Without your colleagues using them, those platforms hardly provide any value.

 

We use certain products because others use them

 

The oldest example is a fax machine. Who are you going to fax, when you’re the only one having a fax machine? 

 

You can’t copy this value because once users settle on a platform, they’re not going away unless it dies.

 

Examples: Facebook, Twitter, Anchor, Snapchat, Instagram, Pinterest, Linkedin, UBER, Airbnb, Jira, Slack, Salesforce, Doordash, Postmates

 convenience

Convenience. It’s human to lean towards the simple way, but in the last 15 years, convenience has become more important to us.

 

Kelly’s “immediacy” and “findability” play into this Generative but don’t paint the full picture.

 

We use Netflix because we can see the show we like right away. We also use it because it’s easy to find new shows.

 

But that’s not the whole story.

 

It’s very convenient. It’s available on all devices, usable on- and offline, in most countries and in many languages. New shows don’t come out episode by episode by in “binge-able” chunks. 

 

Goodbye, Weekend. Hello, president Underwood.

 

Amazon delivers faster than anyone else and has the biggest selection.

 

True. But those are not the only benefits.

 

It also has the most reviews, answers, and questions around the product and offers subscription services. It has even movies and songs. It’s easy to find new and better products on it. 

 

WeChat is a messenger that also allows you to pay in a store or send money to friends, hail a cab, pick up your laundry or play games.

 

All mentioned platforms live from combining the values “immediacy”, “findability”, “accessibility” and “personalization”. The new Generative that comes out of that is  “convenience”. Everything on  one platform.

 

Even Google moves in that direction. You got Email, Docs, Sheets, Calendar, Presentations, Drive, Hangouts. 

 

You can’t copy that value because the integrations with the product aren’t replicable.

 

Examples: WeChat, Facebook Messenger, Amazon, Netflix, Google

Exclusivity. The reason the iPhone is one of the most successful products is not its technology. Other manufacturers were able to create phones with similar and sometimes even better technical specs. It comes with something that others don’t have: exclusivity.

 

Exclusivity comes from tangible and intangible parts. The tangible part is material and design. The intangible part is the value we give something and the access we have to it.

 

Nowadays, companies either compete for price, which is a race to the bottom or create something of exceptionally high quality that’s accessible to the masses.

 

Apple didn’t invent the smartphone but brought out the first smartphone for the masses with touchscreen.

 

Tesla didn’t invent the electric car but brought out the first one for the masses and made it exclusive.

 

Both brands provide an eco-system. The iPhone has the App store, iTunes, iPods, iMessenger and integrates with Mac and iPad. Tesla has the Powerwall and solar roof panels.

 

Both brands create high value from their legendary leaders Elon Musk and Steve Jobs. A big part of exclusivity is created by what others have or people we look up to promote.

 

Humans want exclusive things because they were (and in some cases still are) reserved for a small group of people that has a better living standard. If you’re among the lucky ones who get the new iPhone on the first day it ships you belong to an exclusive circle yourself.

 

A product can lose exclusivity but you can’t copy it.

 

Examples: iPhone, Tesla

 

How to apply the (new) Generatives

The (tech) world is changing – fast. Companies, young and old, have to adapt. It’s the biggest challenge right now for any venture out there and most fail it.

 

Established companies fail because they lose product-market fit. Young companies fail because they never find it.

 

Product-market fit describes the moment at which you provide something useful to (a part of) a market (there are plenty of definitions).

 

The Generatives are pre-requisites for achieving PMF. If your product doesn’t have at least one of them, it’s likely not going to be something people love.

 

So,

 

If you ask yourself what to do with these values the answer depends on your situation. If you think about creating something let the Generatives inspire you to make sure it has real value. If you already have a product let it be a sanity check to protect you from failure.

 

What many fail to understand is that PMF is a moving target. It changes over time.

 

That’s why,

 

Companies need to embrace two things: flexibility, the willingness to change or compromise, and agility, the ability to move quickly and easily.

 

Without flexibility and agility, it’s hard to adapt to new values and drop old ones. Netflix is a great example because it realized that the DVD rental industry was dying fast. In response to that, they created the online platform we know today.

 

Understanding what’s valuable is key to success

The values that sold 10 years ago are not the same as 20 years ago and definitely not the same as 30 years ago. As technology is advancing, we need to sharpen our understanding of what is helpful and what just looks nice.

 

Does that mean old values don’t hold true?

 

No!

 

Some values don’t change.

 

Asked for business advice to other companies, Jeff Bezos says “Focus on things that don’t change.” People will always want certain things: Lower prices, faster delivery, simpler products.

 

But other values do change and if we miss those trends we make things nobody wants and go for career paths that are meaningless. Instead, we need to strive for makings things that are truly valuable.

 

True value is even better than free.

 

 

 

PS: A couple more things that happened in 2008:

  • The first season of “Breaking Bad” aired
  • Fidel Castro retired as president of Cuba
  • “Iron Man” and “The Dark Knight” hit the theatres
  • Lady Gaga released her debut album “The fame”
  • The Olympics were held in Bejing
  • SpaceX launched the Falcon 1
  • Spotify was launched