White Space teams

During this Great Recession, we are seeing new companies who are reinventing what it means to be an American corporation. One aspect of these corporations is the constant trying new ideas and putting them to market. For some companies, they do not have any limits on what those new ideas are. In order to evaluate the ideas, they have something called "White Space" teams.

A "White Space" team is a team of marketers, developers, and executives who are tasked with finding a new market and delivering something to that market. What makes a "White Space" team different from any other task force within a company is that the "White Space" team has no constraints on how and what they are to design and deliver. In other words, if they deliver a product that will "cannibalize" an existing profitable product and uses none of the existing corporate structures, that is perfectly fine.

White Space teams are how corporations can break free from the tyranny of the past. Many a corporation gets stuck in defending their "cash cows". Just look at Kodak with their support for film photography when everyone is moving to digital. Most corporations are not willing to jettison their investments in their current products in order to get a new market. Yet, in a major recession, that is often what is needed for the corporation to survive.

It is far more common that the existing structures, agreements, and ways of doing business will destroy the new. Just look at GM and IBM as examples. The GM Saturn brand was established far away from the way the rest of the company was operating and the customers loved it. Instead of changing the rest of GM, the old ways were brought into Saturn and the brand was destroyed. Similarly, IBM used a radical approach to build the first PC, but then tried to bring that division back under corporate control - only to lose the whole market.

For a "White Space" team to succeed, it has to have the support of top management for the creative destruction that will follow a successful launch. Every new idea will have some costs to the company and people will defend their turf. But if the idea is successful, it will generate enough new business to justify the cost to the existing product.

Part of the reason for using a "White Space" team is because they will provide a new corporate structure to meet this new market. If the market were just an evolutionary upgrade from an existing market, then the current corporate structure would be sufficient to capitalize on the opportunity. In most cases, a new corporate structure will be needed. Thus, bypassing the current stake holders is not only wise, but essential.

Google is using many such "White Space" teams to try to find where the company will grow in the future. PayPal is doing something similar to try to find new ways to provide value transfers between people. What these companies are counting on is that any company focused on preserving its market will stagnate in the current economic climate. Only those companies that radically innovate will thrive.

Managing "White Space" teams takes a good bit of learning. Apple took a number of years to learn how to do that. Other companies have failed. Part of this is to recognize that the criteria for success is very different. For example, one place noted that after the introduction of the iPad, the number of people who said that they would not want one doubled and based on that result, predicted that the iPad would be a dud on the market. What they did not recognize was that the small number of people who wanted one tripled from 3% to 9%. The device was not going to be a mass market fad right away, but was clearly meeting a market need. The criteria for success is not the same as for the established market.

Cloud Computing Issues

A lot of people are talking about "Cloud Computing" as if that were the wave of the future. Microsoft has released support for their version of "Cloud Computing" and other places have published their interfaces for using their servers for such work. While "Cloud Computing" has a place in the future, it is not the only answer and adoption depends not just on the prices, but also on features and security.

What is "Cloud Computing"? It is a method of outsourcing servers where the party that provides the service manages the servers. The difference between this and regular outsourcing of a server is in the definition of what is provided. In traditional outsourcing of servers, what is rented is a specified physical location with specified characteristics such as the power system, the cooling, the phone and internet connections, etc. In "Cloud Computing", those are not specified. Instead, the agreement specifies certain server behavior and the provider gets to select where the servers are located and manages the physical aspects of the server.

By decoupling the server behavior from the physical renting, the provider is able to squeeze a number of clients on one physical box and also spread a large client out over multiple boxes without needing to negotiate those details in advance. The clients get the ability to grow without the headaches of managing the physical aspects of that growth. Both sides save money.

There are a number of legal, security, and practical challenges for working with "Cloud Computing". Many countries have rules on what data can cross their borders and rules on which data has to be protected in which ways. The other challenge is that the government may search your data on the "cloud" without you even knowing about it. The challenges for security on the "cloud" are just as great if not greater than on a server within your corporate walls.

Risky World

A BofA computer specialist put a way into a number of ATM's so that he could take out cash without being tracked. He got more than $5,000 and faces 5 years in prison.