Ideas and trust

The first chapter described the concept of the virtual cafe, which is a conceptual device for communicating and collaborating with a variety of contacts. One of the collaborators in the cafe, commented:

A question about how the e-business ideas will develop. I'm sure every collaborator could come up with an idea right now, but if starting out with one good idea is not the way forward, will fifty ideas be better? Also, (and this is very traditional business in thought) are we comfortable enough to offer ideas at this point? I mean, has a relationship of mutual trust been created yet?

Katherin Ekstrom

These two points have been covered in the first two books in this trilogy. Firstly, starting with specific business ideas is very limiting. Secondly, we have to assume that we can't trust anyone else. Let's recap here:

Initial ideas

The first book in the trilogy "The Entrepreneurial Web" proposed starting any e-business venture with a green frog. This green frog is the business idea and the business plan. Of course, this represents something ludicrous. How can a serious e-business be started with nothing more in mind than a green frog?

The point is that it is better than having a fixed idea or a business plan because you have no preconceived notions. An e-business can emerge more easily out of a green frog because you are forced to start from first principles, allowing ideas and opportunities to emerge without the danger of being sidelined into dead ends or handicapped by knowledge gaps.

Starting with an e-business idea and a plan is much like having a great design for a house and then trying to build it on quick sands. The sensible place to start is to look for solid ground and then build firm foundations. It is only then that the design of the house becomes relevant.

The idea of starting literally with a green frog is a way of being able to avoid a stereotyped way of thinking. Following what everyone else is doing or thinking either gives you unnecessary competitive pressure or sees you following the lemmings over the cliff. Stereotyped thinking is not the way to find a breakthrough into a novel way of doing business.

Trust

This was dealt with in the second book of this trilogy "The Ultimate Game of Strategy". The conventional notion of trust, as it is understood in the world of bricks and mortar, has no relevance in e-business. In its place is the notion of "playing the game intelligently". This means that although you might not have any basis for trusting somebody in the conventional sense, you may be able to trust them to act rationally in their own best interests.

By assuming that people are going to act selfishly, you know where you stand. You can predict what actions they should take to act in their own best interests and in this sense they will act reliably. This is much better than not being sure whether or not you can trust somebody.

This different form of trust assumes everyone will renege on a deal, steal a march, take your ideas for themselves, copy what you are doing, etc. if it is beneficial for them to do so. If this is assumed to be a legitimate way for others to play the game then the best strategy is to so structure your e-business dealings that it would not be in their best interests to do such things.

A little trick I learned from a shrewd old Jewish milliner was to give people a chance to cheat early in a relationship. If they cheated her, when she gave them the opportunity to do so, she would consider it a small premium to pay for a little insight into their character. It paid her to find out early in a relationship because it might save her from being at a greater risk of loss later, when dealings might be more substantial. It didn't stop her doing business with the cheaters though, she just dealt with them differently.

The question of trust in e-business is a calculated risk based upon the perceived relative values of the immediate gain of the cheat balanced against the loss of potential gains they might have by not cheating.

In the particular case of the collaborators involved in this book, the gains and losses of the fifty people have to be individually assessed on the basis of whether it will be more profitable for them to leave the group and run by themselves with any emergent opportunity, or, whether it will be more profitable for them to develop an emerging opportunity within the group.

This is another reason why ideas are not appropriate at an early stage in creating an e-business; people can steal or copy ideas, especially if the ideas are any good. Better for ideas to emerge after valuable relationships have been established then the cost of running off with an idea has to be balanced against the cost of losing the relationship. Ideas are cheap and plentiful, but, relationships cost time and effort to establish.

The thought that you can work without ideas and without trust or loyalty will seem utterly bizarre to most people. The trick is to realise that the e-business environment is about connectiveness and dynamic systems. Products, services and businesses are not isolated separate entities. They are all part of a whole where each part is dependent upon many other parts.

The individual, the isolationist, is at an extreme disadvantage because in any dynamic system the whole is worth much more than the sum of the parts. In a relatively simple world, people can offer a product or service which is complete in itself. They can be self contained and self sufficient. In a highly complex, interconnected environment such as the Internet, business or personal contributions are mostly only a very small component of a much larger and often incomprehensible higher order of natural organisation.

The benefits of being included within a system of many others is likely to be far greater than striking out alone. This knowledge provides a good reason for collaborators to remain with a group rather than cutting and running. Ideas are plentiful, but, links into a system of people are much harder to acquire.

It also give a clue as to what we should start looking for in an e-business opportunity. We should be searching to find or create a system to join. As a foundation, this would be far more valuable than simply a novel idea.