We're at a particularly interesting juncture as we reach the end of another fall enterprise software company conference season - arguably reaching the end of a cycle that started with the early web 2.0 green shoots after the dot com bust.
San Francisco feels eerily similar today to the halcyon days at the height of that boom - building of luxury apartments on a massive scale, packed pricey restaurants and even a resurgence of expensively clad people on two wheel leg powered scooters on the sidewalks, a hallmark of the turn of the century tech business scene.
With absurd valuations on nascent casual messaging companies like SnapChat, whose service of self destructing digital notes and videos will likely be as ephemeral as their business plan, rash purchases of start ups by Web 1.0 firms struggling to remain relevant, the signs of end of cycle are flashing brightly now.
As an example, Jim Edwards wrote on Business Insider earlier this month as part of a piece titled 'evidence that the tech sector is in a bubble':
Companies with broken business models are highly valued….Fab.com, the design retailer, recently raised $165 million in new investment this year, for a total of $336 million in all venture funding. It did so despite laying off 440 employees after deciding that the flash sales model — in which customers are asked to suddenly purchase a daily deal — doesn't work. It was Fab's second business model "pivot" — the company started life as a gay community site...
As was the case at the end of the dot com boom, the place to watch is the financial press: when pension funds stop believing and buying into frothy concepts the music stops and we will have another reset, and that time seems likely to be soon upon us. We may even have an overcorrection as happened after the dot com bust, which was arguably more about Wall Street pump and dump than idiotic business plans.
Once this latest bubble deflates - and some people I've spoken to recently think the whole business cloud sector is a parallel massive bubble - we will start a new reset and cycle.
As I've regularly written here, the way people work together in the business world remains very set in its ways, with Victorian paradigms of writing letters, mailing them and then filing them having been digitized, as exemplified by Microsoft's cash cow Office and Sharepoint products.
Business size and maturity defines very different practices around the way people are managed and the way knowledge is shared - just as during the dot com boom there is again widespread confusion about the way small innovative start up/boutique companies work together to 'disrupt' and the way huge multinational firms with many moving parts evolve, mutate and collaborate internally and externally.
Deep cultural grooves have been worn in the way workflows are organized which are difficult to shift - demonstrating simpler, more efficient ways to work tend to hinge on genuinely new realities. Android is arguably the MS Dos of our era which has forced a degree of change - the sheer volume of digital information created has overpowered the digital filing cabinets provided by companies, with superficial casual cloud cabinets being used informally by individuals as the quickest way to organize their stuff is another example.
"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run" to quote Amara's Law, but I would argue long term cultural digestion and absorption to find value models are the reason why a technology takes off rather than Canadian philosopher of communication theory Marshall McLuhan's idea that 'the medium is the message' which is is much beloved by those keen to sell you software seat licenses before the end of their quarter.
Despite the hype by software vendors of the fundamental shifts in culture their wonder products can enable and engender, the reality is the business of collaboration is far more about planning lots of small steps around changing the way people work with long term goals as the path to follow.
One of the most significant developments this year has been the widespread condemnation of Jack Welch's GE 'Stack Ranking' Vitality Curve concept whereby a workforce is graded in accordance with the individual productivity of its members in large companies, with Microsoft publicly abandoning the practice as part of their shift to a new CEO.
These shifts in thinking do more to break large companies out of ineffective management techniques and towards more efficient Teamwork and collaboration than adding new layers of technologies.
With the convergence of technologies that can enable and create the new Digital Enterprise, the boat anchor that holds firms back is typically outmoded thinking rather than failure to 'adopt' new technologies. The deflation of some of the more outlandish claims at the end of this current tech boom will hopefully help to focus minds on new possibilities in a new, more rational reality.
~ Image: girlandtheworld.com