Marketecht, trouble-maker, challenger, Lisa Gansky is a dynamic entrepreneur and investor, author of the bestseller, The Mesh: Why the Future of Business is Sharing. She recently launched the Global Share Economy Directory (or Mesh directory) to support businesses, governments and organizations. Her personal interest is in urban innovation, design and manufacturing and their intersection with social innovation. Lisa is also a person with a great sense of humor and an incredible source of inspiration; all sorts of interesting stories about real life. As I started my interview, she in turn said, “I would love to interview you.” We laughed.
PH – Your twitter account is @instigating. What does that say about your professional philosophy?
LG: Oh! (laughs) My professional philosophy is that if I am not making trouble I may as well not be working!
The most difficult thing for most people is to get started. Most people whether they’re architects or designers, engineers, moms or dads, they do not give themselves permission to experiment and play. A lot of what is happening in the world today in terms of creativity and innovation is happening because people are giving themselves permission to play, to experiment, to make mistakes and to learn fast and try again. For me, instigating is a core concept that I have learned since I was a kid. I am good at being an instigator. I realize in working with people, communities and companies that the ability to ignite something and get people going is something that we need to capture.
The second thing about instigating is that it is just an appropriate identity brand for my trouble-making personality!
PH. (laughs) Because you are involved in so many businesses, do you think there is a learning curve to business? Can we teach old dogs new tricks, recalibrate economy dinosaurs or does business respond to cycles?
LG: Yes and yes.
Certainly as an entrepreneur we always think we can create something that is fresher and more time-appropriate and more than anything, lean and responsive to new kinds of customers, or old customers that old companies simply aren’t listening to. Nature abhors the vacuum and entrepreneurs are very, very good at observing those vacuums and jumping in, often before big companies even notice they exist.
In addition, many big companies are learning to create places for experimentation. The strategy many companies are embracing is to create a lab. For example, General Electric’s GE Garages or Ecomagination challenge. Companies like Barclays with its focus on digital and social infused products like Ping it or Wal-Mart created a lab to move very quickly into digital and mobile retail and other things that they couldn’t otherwise get. My most recent personal experience as a founder is Ofoto, created in 1999 and sold to Kodak in 2001. I then ran digital Kodak for 4 years. At the time they purchased us they were the largest photography company in the world; an impeccable brand with a huge distribution network and all sorts of things but they also owned among their assets all property rights for digital capture.
LG: Yeah! They created the first digital camera and they owned all of the rights. This is a really important part of my answer to your question… The thing I learned at Kodak is that for many big companies, unless and until they think the end is near–and since their current model, their current business processes, partnerships and talent-base are all organized around executing–it is very difficult for them to move things from the lab into the core-business.
That is what happened at Kodak. We were literally shopping around in the R&D department of Kodak and they had some really market making technology that we could have made into companies. Each of them would have been the billion dollar idea but they couldn’t get past the fact that the work was aligned around an old model. Really what happened was that George Eastman created a business for consumer photography and decided to give the distribution network (the retailers) profit on the print so both he and they would take profit on their own. When the market started to go digital, film digitized first and print was still a viable business…
I remember clearly when I gave a presentation to the board of Kodak so they would give me money to build out Kodak mobile services, which we did. When I sat down they immediately said “Yes, we should definitely go do this! Go! Go!” They had such an overly enthusiastic response that when I sat down, and I sat down next to a French guy, I said ”I did not expect THAT reaction!”. He looked at me and said something in French– I speak Spanish not French– so I said to him “I don’t know what you just said…”, and he said “The sight of the guillotine clarifies the mind!”
PH: What a French statement! (laughs)
LG: Right?! It really is… It can only come out of the mouth of a French guy!
Besides thinking that it would make a great statement for a T-shirt (laughs) it is really an important phrase because it signifies what it takes: people have to be facing the reality that it is really over.
A lot of the older companies’ executives have to be concerned not about their own retirement but about the next generation’s market leadership for them to look at models that are relevant 10 or 15 years from now.
So that is the long answer to your short question…
With the sharing economy and mesh strategies, one of the main tenets is unused value is waste. The factories that GE has sitting around, Kodak’s intellectual property, talent that is sitting around at Nike because they are between projects, Barclays’ office buildings, DHL’s parking spaces, all sorts of processes and techniques, are assets that when not used, are wasted. A lot of the opportunity is in partnering: established brands with young upstarts testing new models or creating public-private partnerships and accelerating experimentation and the adoption of innovative models!
PH: What are you interested in empowering in small businesses and in larger businesses?
LG: I am interested in instigating on both sides a few things:
In a larger established company, the practice of experimentation and exploration as something that anyone in the company can and should do and that companies must get good at doing or they’ll fail.
For a start-up, seeing larger companies as potential partners to scale. Not in all cases… but in some cases like when Relay Rides partnered with General Motors – that was a very good partnership because GM has millions of customers that have an onboard technology called OnStar that allows those cars to be part of the RelayRides network, overnight. That was great because it makes the GM customers immediately potential customers for this new idea, and it gives the customers the possibility to generate money from their car. GM was very smart and RelayRides got overnight a larger national network of potential cars to offer. That was just a win-win partnership.
PH: Do you think that there is a scale limit in all the projects in Mesh or is there for example a product limit to the Mesh?
LG: The whole notion of scaling, which was huge in the last century, was around widgets and things. If I could make tires or light bulbs in Michigan, Oporto or Sao Paulo and ship them all over the world–make it in one, maybe two or three places and create a footprint everywhere–that is how people thought about scaling. With Ofoto, for example, we had a whole printing facility for Europe and Africa in Amsterdam. It was a big learning curve for us to go to Amsterdam and build the team and the tools to do that. If we could have partnered with someone it would have been great but at the time we could not figure out how to do that in terms of opportunity cost…. Sometimes scaling also meant that people also purchased other companies. That is the mentality when you have a physical product.
The other thing about a company scaling is that the venture capital model pushes you to scale. For the most part venture capitalists are investing in Fastgrab, Airbnb, Sidecar, Taskrabbit, Science Exchange, Honest Buildings, Mosaic, and all these companies. Get it as big as it possibly can and do what needs to be done to get it as big as it possibly can. Increasingly, however, the VCs and certainly the entrepreneurs are looking for other strategies that face all sorts of partnerships. It is a rapidly changing reality and I think that good entrepreneurs and good VCs are really tapped into temporal opportunities and relevant partnerships. In other words, not so attached to the how but more the what. They’re more focused on customers, they’re more focused on building value, and less focused on capturing value whereas the old model was much focused on capturing value in a mood of urgency.
In the case of the Mesh (http://meshing.it/) companies, is that I have been playing with some of my investments, but with some of the companies that I know how and like to bother, scaling may happen in other ways. It may happen when you have a kind of constellation of like-minded companies that each represents geographically a response for a particular area. Structures like cooperatives where you can have 60 people playing key-roles in different parts of the world, all owners of the company and sharing the benefit — certainly companies like Mondragon in Spain and Evergreen or Touchstone Energy and others in the US — have shown us that it is a very viable and interesting structure and in my view it is very meshy. It allows people to come together and do their independent goodness and to still have the benefit of a global or national brand and momentum. People are experimenting with a lot of those forms and I continue to be very bullish in looking at new ways to scale.
PH: For anybody working on the web, another important aspect is how often the issue of copyrights comes up. We were actually just talking about Kodak before… In this reality of the web where do you think the boundary between what is or should private and what is or should be public domain should be?
LG: I am extremely in favor of open source! There are all sorts of data and all sorts of historical experiments in different domains that we can point to that demonstrate that, if what you are trying to do is accelerate the creativity and accelerate the innovation, open source and sharing is something that inspires and provokes people to think differently or come up with the same idea in a different location. If what you are focused on is value creation and generating inspiration and driving innovation, the whole idea of open source is well-known to be una fuente, it is an absolute source.
If what you are trying to do is to capture value, open source in most cases has been a bit of a struggle although there are many exceptions to point to – Mozilla is one, Red Hat is another in the tech business.
I look at open source agriculture for example and I think that for thousands of years seeds were created and hybrid forms made and planted and food was prepared … to me the whole business of food and agriculture is something that I look to and say “ well, this is open source!” There are other issues I won’t get into with Monsanto and so on, that are an intersection where suddenly you have someone who is trying to capture value from something they did not create, things that are in nature.
When you look at Brazil, for example… My book was launched in Brazil, the minister of culture was there at the event and one of the questions I asked him, knowing the answer, was ‘Why did a country like Brazil decide to embrace open source?’
PH: That is right, Brazil was the 3rd country to join Creative Commons…
LG: Yeah! Publicly he said: because we are focused on innovation, we want to drive the volume of innovation. If we look at Brazil and what is happening there, if we want to make that happen here or anywhere, we should un-niche the power of open source and sharing by inviting people to share liberally.
As an entrepreneur I come from what I call a culture of generosity. When I was learning how to make mistakes and build companies in the early days, I had many people who had a lot more expertise than me giving all sorts of support, advice and coaching. I didn’t need to ask for it, it was just there. Likewise I do the same for others. In general that is the mood I have funded my career as an entrepreneur upon and that is the mood we want to cultivate – this notion that a rising tide lifts all boats and that we are building something together.
There is an acronym, DIY (do-it-yourself), which has really been changing to DIT (do-it-together).
The Mesh – Why The Future of Business is Sharing by Lisa Gansky