Table Of ContentContents
Cover
Title Page
Copyright
Dedication
Preface
Introduction
Part I: Classifieds— User Connections
Chapter 1: A Tale of Two Geographies
Chapter 2: The Real Problem with Newspapers
Chapter 3: Networks
Chapter 4: Schibsted
Chapter 5: The New York Times Paywall
Chapter 6: Television: Connecting Streams
Chapter 7: Crowds
Chapter 8: Cost-Based Connections
Chapter 9: Chinese Connections: Tencent
Chapter 10: Create to Connect
Part II: Concerts—Product Connections
Chapter 11: Jerry Maguire
Chapter 12: Music
Chapter 13: Apple and Complements
Chapter 14: Four Lessons About Complements
Chapter 15: A Detection Challenge
Chapter 16: Spillovers
Chapter 17: Getting Noticed
Chapter 18: IMG
Chapter 19: Expand to Preserve
Part III: Context—Functional Connections
Chapter 20: A Digital Contrast
Chapter 21: Connections and Strategy
Chapter 22: From Atoms to Bits
Chapter 23: A Strategy Process for All Seasons
Chapter 24: Dare to Not Mimic
Part IV: Everyone’s a Media Company
Chapter 25: Advertising—the Promise and Debates
Chapter 26: Reimagining Advertising
Chapter 27: Education at a Crossroads
Chapter 28: Creating HBX
Chapter 29: From Strategy to Launch
Chapter 30: Education: What Lies Ahead
Afterword
Acknowledgments
Selected Bibliography
Notes
About the Author
To my parents, for starting me down this path and Anju and Rhea, for walking with me on it
PREFACE
I loved music growing up. I was enchanted by my mother’s voice when she sang
—and for many years I indulged in singing too. I also read books, newspapers,
and magazines, and watched Bollywood movies and even commercials (which
in India were often perversely memorable). In Mumbai, India’s media capital,
music and the arts were everywhere. And they were an obsession in our family.
So when the Internet came along, years later, I was fascinated by its impact on
all these things—the things we hear, watch, and read. It would eventually touch
much else besides—cars and taxis, hotels and airlines, banking and fashion. But
it impacted certain things first, threatening to destroy them. First was music, then
newspapers, then books, movies, TV, and education. These remain the
businesses at the bleeding edge of technology—businesses that are being turned
upside down. These are the laboratories of change where destruction and
reinvention are happening simultaneously. These are the canaries in the coal
mine.
Like nearly everyone else tracking these worlds, I wondered how to make
sense of it all. Then I noticed something curious. It became commonplace, even
fashionable, to try to predict what was going to happen next. What is the future
of TV or newspapers? Where will the next innovative ideas come from? What is
the next Big Thing?
It’s exhilarating to try to predict the future. It’s also draining. And the
predictions are almost always wrong. This sort of thing, I came to realize, cannot
be worth very much. That’s what led me and one of my colleagues at Harvard
Business School, Felix Oberholzer-Gee, to create a program on digital strategies
nearly a decade ago. Rather than making predictions, we tried to make sense of
the ground we stood on.
We taught this program for many years. As we did so, I noticed something
else happening in the world of experts. New ideas were being tossed around
every day, new theories and prescriptions crafted seemingly every week. Many
were fascinating. But for anyone trying to keep up, it was no less exhausting
than trying to keep up with the predictors. Hypertargeting. Personalization. Core
competence. Focus. Accelerators. Incubators. Networks. Platforms. Bundling.
Disruption. Every time you blinked, it seemed a new concept emerged, and a
new term was being coined.
And this was the next thing I came to realize. The real challenge is not trying
to understand these theories—that’s the easy part. The real challenge is to
understand where these ideas are relevant, to see how they connect, and to know
when they are limited—when not to use them.
Those who attended our program—entrepreneurs and managers, editors and
artists, lawyers, analysts, and investors—were each experiencing a world of
rapid change. They were trying to keep up, figure out when to act, and what to
do. They were trying to make sense of what was going on. Above all, they
yearned for clarity.
That’s how I came to write this book.
This book is about digital change, and how to navigate it. It’s about change
that has been happening for twenty years now, and an attempt to make sense of
it. It’s about what’s happening today, while recognizing that tomorrow will be
mercilessly different. But to get things right, we cannot solely focus on the “here
and now,” or start by obsessing about tomorrow. Quite the opposite. To make
sense of what’s happening today, we almost need to forget what’s happening
today. We need to take a step back, and make sense of what’s already happened.
We need to get off the bullet train, even if only for a moment, to learn where it’s
going. We need to understand the game being played before we can know how
to win it.
Many of the theories addressed in this book have been written about before,
somewhere. But in trying to understand the limits of each and connecting the
dots between them, in trying to identify the common mistakes we make in each
case, and the right solutions, I came to realize that navigating digital change is
all about having a certain mindset.
It’s a mindset that I came to see in people who have managed or led digital
change successfully. They are humble in recognizing what they can’t control, yet
primed to take advantage of what they can. They don’t claim to know every
answer, but are confident about asking the right questions. They are unafraid to
go against the grain, to try something different. Throughout, they are able to see
the forest and the trees.
And that is, ultimately, the central message of this book. Getting things right
requires understanding how small things are tied to big ones. More concretely, it
requires three things: seeing how what we do is increasingly linked to what
others do; looking beyond where we play to bring related but invisible
opportunities into focus; and recognizing how what we do is impacted by where
we are .
It requires recognizing these connections—then respecting, creating, and
leveraging them as well. Do so, and you’ll avoid a danger that plagues many
who fail, and is deceptively hard to avoid: what I call the Content Trap.
My argument is evidence-and case-based. I will draw on research studies
conducted in multiple domains—economics, marketing, and strategy—and on
the experiences of various organizations. In researching this book, I traveled
around the world to talk to key players navigating the digital challenges
businesses everywhere face. The stories here include the accounts of researchers,
managers, entrepreneurs, analysts; what they’ve gotten right, what they’ve
gotten wrong. What have they figured out that has eluded so many others?
Along the way, this book became a personal journey. Three years ago at
Harvard Business School, we began creating our own vision of a digital future—
in education. We began reimagining our own classroom, and what it should look
like. I was drawn into this effort with a few inspired colleagues, and then asked
to lead it. As I did so, I found that my thinking on these matters both drew on
and fed the ideas in this book. Certain features of our digital classroom are a
product of this book—and the book, in turn, is in part a product of our
experiences creating our digital classroom. As this journey continued, I was no
longer just an observer of digital efforts; I became a participant as well.
This book centers on digital transformations we’ve seen in the worlds of
music, newspapers, books, TV, film, advertising, and education. These are often
described as information goods —things that rely, ultimately, on moving
information, bits and bytes. But I hope the lessons gleaned apply far beyond
those domains. There is reason to believe that will be so. After all, everyone
today—a businessperson, an educator, a politician, a student, an artist, an
entrepreneur—can reach and interact with others directly. In other words,
everyone is a media company today.
INTRODUCTION
1. MANAGING FIRES
The Yellowstone Fires of 1988
July 22, 1988. Targhee National Forest, Idaho. After several hours of cutting
timber, a woodcutter gets together with three buddies for a break and a smoke—
and drops a still-burning cigarette into the grass. He doesn’t notice the small fire
that ensues. Within hours the flames spread, soon engulfing five hundred acres
of forest. The “North Fork Fire,” as it came to be called, would ultimately spread
eastward into Yellowstone National Park, whose boundary lay a mere four
hundred yards away.
Yellowstone is the world’s oldest national park and encompasses 2.2 million
acres in the northwestern states of Wyoming, Idaho, and Montana. Within three
weeks the North Fork fire consumed 53,000 acres of parkland, making it the
biggest fire in Yellowstone’s 116-year history. And the fires weren’t over. On
August 15 a spark from a horseshoe ignited brush in Montana’s Gallatin
National Forest, giving rise to the Hellroaring Fire, which also quickly spread to
Yellowstone. On August 20, a day that became known in Yellowstone as Black
Saturday, wind gusts of up to 80 miles an hour whipped the fires into a frenzy.
Flames climbed three hundred feet above the forest, trees “ snapped like
toothpicks,” and new gusts were generated by the fires themselves. Two new
fires were started by trees falling on power lines. In less than eight hours the size
of the Yellowstone fires doubled.
By the time it was over, nearly a month later, these two fires had burned more
than 450,000 acres—or 20 percent of the entire area of Yellowstone.
If the fires’ triggers were unremarkable, the response to fighting them was
anything but. Already in the weeks leading up to these fires, National Park
Service managers let several blazes burn, reasoning that they did not appear to
