Video Of The Week: Alex Ljung on Emergent Behavior
I've frequently said on this blog that emergent behavior in a service is a sign to me that the service is scaling into something important and valuable. It is a feature that we look for a lot in our investments. I don't love it when entrepreneurs build services that are too tightly constructed around a single use case. I do love it when entrepreneurs build services that the users can take and do interesting things with.
Here's a short (3min) video where Alex Ljung, founder and CEO of our portfolio company SoundCloud, talks about how that happened in SoundCloud.
Comments (Archived):
If Emergent Behavior = = intended to be X but turned out to be Y, what’s the best way to pitch the adaptability in the pre Y days and not look like you don’t believe in X?
i think you just need to build a service that is open enough and “horizontal” enough to be able to do many things
Its tough to design for that flexibility. Even tougher if you are mobile first as it is invariably a point solution.A post by yourself or guest on designing for flexibility at an architectural and community perspective would be useful.
Good to think of your product as a service.Evolution would be: Product ==> Service ==> Platform ==> Ecosystem.
But then there is snapchat, do one thing better than anyone else, for one very important demographic.
even snapchat has benefited from emergent behavior
How so? What do you consider the emergent behaviour?
from sexting, to “don’t want this to get on to facebook” photo texting, to just every day photo texting
Wouldn’t a better term be more emergent value, unexpected value or usefulness? The behaviour of having a separate application for taking expiring photos is the same behaviour.Perhaps I am just taking in the words too literally – or misunderstanding the words, which is also very plausible… I’m getting old you know..
It’s sure looks to be positioned to be one of the premier emergent behavior ad platforms.
I think Fred answered that.
convenient recombinant App utility ==> user-focused PlatformOptimized granularity and cleverly accessible tools for visualizing and executing recombinant opportunities seem key here ?To me Twitter’s “global shout out utility” seem very weak on recombinant user opportunities. Couldn’t it act more like a collaborative synaptic-spark utility capable of drills down into an available array of recombinant social-construction tools similar to the now unfortunately defunct/murdered GoogleWave.Twitter needs some sort of actionable social-utility extensions.
I’m not sure if you’re implying that the Y behavior would be incidental. To the contrary, Y and manyY would be intended.
But there is a difference between use cases and emergent behavior?
It feels like emergent behaviours are just use cases the founders didn’t think of beforehand …
Emergent behavior = unanticipated usage of your product. I think these are related.
Not necessarily …types of emergent behavior
Yes, getting to that unanticipated user behavior opens up a lot of possibilities, because you cannot think of every use case for your product. Users will.Funny, a long time ago, Peter Drucker said this:“It is the customer who determines what a business is. What the business thinks it produces is not of first importance; especially not to the future of the business and to its success. What the customer buys (or uses) and considers value is decisive, and it is never a product. It is always utility, that is what the product does for them.”Google isn’t a search product. Google makes us become researchers. I wrote about how this applies to startups, Forget the Product, Remember Peter Drucker http://startupmanagement.or…
drucker is right
If you’d be a core user yourself – and IMHO you should be building a product you’d find really valuable/useful – then shouldn’t you be discovering or have thought through those possibilities yourself?Is emergent behaviour just use cases that weren’t thought of beforehand?
Maybe that’s a key design metric with which to prime the pump?Developing your product or service with an eye to optimizing a palette of easily accessible recombinant user utility.When God designed the atomic table around a powerfully recombinant palette of convenient valence utilities, did She really anticipate all possible use cases?OK. .OK. . so maybe She did because She’s God!But the rest of us mere mortals need to be cut a little more slack here. We may well need to rely on emergence as our guide 🙂
That’s too risky for comfort IMHO.. 🙂
if only the relationship between citizen and GOV worked in this way too then the world would be a more equitable place.
If only we more more mobile physically / your physical living space, and then we could just leave the country not treating us well for a better one – or go create a better one — like how the U.S. was first formed …
i wonder what the legal process is to secede from the union?could a state reinvent itself as independent Bitland?
I think kidmercury has some ideas about this, of how possible or impossible it is – I imagine it could be difficult, at least if you owe money to someone. And you’ll have your properties, etc. taxed before you leave.
I’m not sure I follow your thought completely. You mean if gov sees citizens as customers?
i’n not sure i follow my thoughts at all.the citizen should determine what GOV is. GOV should be a product of, by, and for the people. it isn’t.
too many bureaucrats….they aren’t elected.
In the same line of thought, Harvard prof. Christensen advocates the “job to be done” approach to understand exactly what the product is to the customer and what “job” it enables them to do. Here’s a video of Christensen talking about how this applies to milkshakes: http://www.youtube.com/watc…
Thanks for commenting on this, Nicolas. I’ve been thinking in these terms the past few years. The whole “use case” concept doesn’t appeal to me as I tend to think about products/services that can be used for lots of things. “Jobs to be done” does a much better job of describing the services. It is not, unfortunately, well recognized among investors, though. If you are interested in hearing more from Christensen through one of his disciples, I highly recommend Horace Dediu: http://www.asymco.com/?s=ch…Fred, as usual, you are a unique investment thinker.
because you cannot think of every use case for your product.One of the advantages of attending trade shows and paying attention to what people are saying and the questions that they have for your products. [1] You meet all sorts of sales prospects that you didn’t even know existed in all sorts of different niches that are working in obscure places within large and small companies. Feedback. Valuable feedback and obviously sales prospects.Does Soundcloud attend any trade shows? (I was able to find one ona13 from a quick search).[1] I don’t mean conferences and being (as Mark Suster says) a “conference whore” and giving a speech. I mean working the actual trade show booth. And I mean working the trade show booth not off having a lunch with someone (have dinner when there is no exhibit) or letting some junior staff talk to people. And I mean not getting wrapped up with some nudnik but paying attention and triaging the people who walk into the booth (not all attendees are created equal). I mean not spending to much time with any particular person but working “the party”. Every day. Not taking off the last day or the last hour or arriving late or taking in something in the city that might be fun. Also don’t eat a sandwich or your lunch at the booth. It’s a turn off..
But online connectedness is the new trade show, no? You don’t have to wait for the trade show to hear from your customers. (unless I missed something in your comment)
Well a trade show is different. It’s a place where people may show up for one reason entirely different from the product or service you are selling. In the same way that if you read a newspaper and turn the pages you may find interest in an article that you wouldn’t normally ever read. Or find in the typical places that you go for news or information. So the trade show attendee is a) going to see something they may not even know they needed and b) you are going to find a potential buyer (say a guy working at some obscure department somewhere) that you may not know even exists for your nascent product or service. Or perhaps get an idea of how to fork to something else.Also the direct interaction at a trade show (as long as you aren’t autistic) allows you to see the facial reaction of a potential prospect in real time. You can see and observe what floats their boat and what does not. Just by watching for visual cues. Not to mention that you can go by the booth of competitors and get a feel for what is hot and what is not just by watching the traffic and/or observing the interactions there. So you can gather intel.This is not “one or the other” it’s simply a venue that has great benefits.
Another benefit, I found, is that it lets me hone my customer pitch to the point where it resonates. Doing this in a non “trade show” setting takes so long. Nothing like trying it over and over again for four or five days to help it out.
Soundcloud is iterating and iterating with it’s customers. That’s good. A lot of businesses say they are customer focused but it’s lip service. Get the feeling he really means it.I don’t want to start a tangent, but a business writer wrote this yesterday, “Or to put it more concretely, he’ll expect them to sell something to somebody. And he will measure success by revenue generated not by investment capital raised.”Does Soundcloud have a revenue model that scales?The midwestern mindset is tough to change……
advertising
Does Soundcloud have a revenue model that scales? The midwestern mindset is tough to change……That’s not midwestern it’s the business mindset in 99.9% of places that business is done. Pre internet it simply didn’t exist and only still exists in a very small part of the business world.
Yes, but the article I was referring to (and blogged about) talked about how we have to put pressure on startups to make money. The article ripped Groupon as a failure. I disagree. If that’s the case, there are not a lot of internet businesses out there. Counterpoint-how many internet businesses can have ads as a revenue model?
.It is not a matter of “putting pressure on startups to make money”, it is a matter of fundamental critical business planning underpinning the creation of the business in the first place.Business planning must be part of any startup and those who espouse the notion that one can just develop a “cool” product and the fundamental planning be damned are setting the brush fire that will become the firestorm of failure.The Vision, Mission, Strategy, Tactics (what we used to call a business plan), Objectives, Values and Culture cannot be an after thought, they have to be part of the initial planning.We get confused about creating businesses — enterprises which create a sustainable and predictable set of profitable cash flows — when we see feeding frenzies like the Groupon and Twitter IPOs. Even when we applaud Amazon which still does not turn a profit.I am also willing to wait for the long term when building a business. It doesn’t have to provide immediate gratification but there does have to be a plan to get to profitability.Don’t get me wrong, I am in full favor of creating value even when it does not necessarily arrive in a long term sustainable manner but I hate deceiving ourselves as to whether we are creating sustainable businesses.This is what creates an unending cycle of bubbles which ultimately create more pain than pleasure.JLM.
and those who espouse the notion that one can just develop a “cool” product and the fundamental planning be damned are setting the brush fire that will become the firestorm of failure.Because that’s what they think others have done. It all seems so serendipitous.But the truth is if you get enough people not worrying about the details in some of those cases the details will not matter and there will be the lucky sperm of success. In all the other cases they lack of attention to details (like how will we make money) ends up being the reason the business doesn’t succeed.That said if you can keep your expenses low (or as the new age saying goes “burn rate”) and you can stay alive long enough to figure it out it can pay off. But in order to do that there has to be a rising tide which is of course the case with the internet.I ran the numbers when I got involved with the internet (1996) and the spreadsheet and napkin calculations didn’t make sense. But I did it anyway and figured it out. But most importantly I was focused every single day on how to make money. Same as with the business I started out of college. Didn’t even do the calcs on that one at all. Just figured it out as I went along. That said, that’s me someone who can wear every single hat and not have to pay for every single thing that others might have to do. If I did I would have for sure ran out of money.
.Everything you say is perfectly true. The only thing I advise is doing the fundamental planning, in addition. There is no good reason to abandon Vision, Mission, Strategy, Tactics, Objectives, Values and Culture.JLM.
Great. Took the time to write a long reply to this but disqus destroyed it.Good work disqus. Just to reiterate that you are pissing people off.It’s like driving a long distance and discovering that you need to drive back to get something important that you forgot. Except that that’s easy you just drive back. Try to recreate some thought you had on the fly.By the way if you haven’t watch this movie:http://www.youtube.com/watc…I just can’t imagine there are people brave enough to do this type of thing and have no fear.
.I’ve seen the movie and met those kind of men. Trained with them.Paratroopers, Rangers, Special Forces, SEALs — those are fearless guys with special and different missions.As George Orwell said:”People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.”It must be an incredible experience to come home and try to live a “normal” life.JLM.
rough men stand ready to do violence on their behalf.Meanwhile over the last few nights I’ve been watching “Black Hawk Down”. I can’t even tolerate that in one sitting. I’m up to the part where the rocket hit the tail rotor and it’s spun to the ground. I stopped and will continue some more tonight.
I agree with you and am a practitioner of this philosophy most assuredly.That being said, the most influential social platform at an early stage honestly, from my vantage point had none at all. Twtitter. FB, even (and I may be wrong) Kickstarter, early nada.Communities that I truly love, like Wattpad, early on (again with no inside knowledge), a behavioral land grab.Some just have it from day one like Shopify, some just inherit our behaviors and back into it.
Yes, but the article I was referring to (and blogged about) Can’t resist saying sarcastically “I’m not a mind reader!”. Counterpoint-how many internet businesses can have ads as a revenue model?The saying goes “you can name the price if I can name the terms”.So I will adapt and say “you can name the business model if I can name the timeframe”. Meaning ads as a revenue model may not mean much if the time frame is to short (no revenue to start because no audience) or to long (something else comes along that takes that ad revenue) but if you can sell out at the point where there is a greater fool that takes the bet you are in good shape. There was a guy who owned a great famous record store in Philly (third st. jazz) that sold his record store to his friend, a real estate lawyer, right as CD’s were coming into vogue. He saw the writing and got out. And the lawyer naively bought the place. Ha Ha Ha. Book smart.I’m not a sports fan as I’ve mentioned but there was a 60 minutes about some entrepreneur in California that coached his daughters basketball team to victory and he had never even touched a basketball (even I’ve touched a basketball). But the truth is that’s an outlier and even you get enough people trying enough shit something is bound to stick. But you can’t reverse engineer that and say “ok well see that technique it really does work”. Because in 99% of the other cases it doesn’t work you just don’t hear about the 99%.My point is groupon is whatever it appeared to be based on the conventional wisdom. And you can’t invest (from my perspective) not taking into account the conventional wisdom hoping that you happen to hit the one Indian entrepreneur that happens to figure out a way (mathematically apparently) to make his kids basketball team win. Probability wise you follow things which appear to be more in your favor plain and simple. Same reason people count cards at the casino it gives you a better chance at winning the gambling game.
I’ve been thinking a bunch about this. Part of me says why do I care? Build a business, build it only on providing a cool service/value don’t worry about revenue and only care about investment capital raised, no issue for me…Same as I’ll build my businesses on the exact opposite theory, what do I care if you heckle me.There is some overlap. If you have tons of cheap capital that can really hurt my model. But its always been that way. If you overbuild and go bankrupt then you hurt my model, but I don’t want to see bankruptcy laws go away.I do see your point however, when you are not building direct value, but rather selling to somebody that does.Obviously is better to be seen as Cost of Goods Sold, then Marketing, then just overhead like technology. Taking the restaurant example: Groupon/OpenTable, Yelp/Foursquare, Square.But you are right, there is only so much money that can be taken out of the system without killing the host. A restaurant only makes so much.I used to think if I had a business I’d take Google everyday over Amazon 1,000 to 1. Now I’m not so sure. People go to Amazon to search for things because they know they can get them delivered through the gianormous supply chain they have built with their capital.Anyway long rambling post, but I’ve been riffing about this in my mind
I’m of the club that different businesses need different models. Very consumer-oriented stuff must be free (or ad based, actually) as what do consumers pay for when it comes to digital goods? Nothing. Business-oriented models can charge, subscription or otherwise.Google charges businesses (Docs) but doesn’t charge consumers (search). Amazon charges businesses (AWS) but doesn’t charge consumers (goods). [1]I’m not certain that Google and Amazon are really that different. Google lets you find information and Amazon lets you find stuff.Maybe I’ve completely missed your point and maybe I’m contributing to your thought process. Whichever, these were thoughts that came to mind while reading your comments, Phil.—[1] Yes, they charge but just above the costs to deliver the products, which in my mind is as close to not charging as consumer products can reasonably get.
Amazon and Google are total competitors.Both are in the middle of transactions.I still have a hard time figuring out monetization for attention.I.e. great you and I are talking but transactionally how much is that worth? I am not looking to buy anything right now and ignore ads. When I am searching Amazon, different story.
Agreed re: competitors and I’m not comfortable with monetizing attention, either, although I see lots of cases now where the match fits nicely and then it makes sense. (i.e., AdWords as an example, or ads in certain tech podcasts I listen to are often as interesting as the content.)
I think that when you are building a startup ecosystem, we shouldn’t worry if we are creating businesses that have revenue or not. What we should be concerned with is solving problems and creating value for customers. I am an investor in businesses that depend on revenue as a measure of success (UICO.com), and some that aren’t (brilliant.org). Both bring big time value to their users and have a different reason for existing. I don’t subscribe to the midwestern ethos that only revenue generating companies are good. It’s one measure of success. Fitting the business model to the type of target customer and type of business makes a helluva lot of sense to me.We have a gigantic way to go in the midwest to create something great, and it does us no good to run down companies like Groupon which is a big parlor game here now.
At some point any business needs to make money but I don’t have a problem with one that takes time to figure that out. Given that, it is more urgent for some than others. After all the expenses have to paid for some how and if you don’t raise money than cash has to come from somewhere.Where in the midwest are you? I grew up in NE Ohio but haven’t lived there since I was 14.
I used to think if I had a business I’d take Google everyday over Amazon 1,000 to 1.Off the top, strictly philosophically, seems like profit margin at Amazon is so thin that any disruption causes great loss. Like the read write head on a disk platter with close tolerances. Little mistake? Head crash.Google otoh seems more resilient to economic downturns because of their “dominant” position and margins. And the ability I will guess to cut jobs if times got tough that Amazon couldn’t do.And by “take” we assume “today”. Not what will happen 5 years from now.
Yes…but on the other hand if somebody comes up with a better algorithm you can be done. Building the distribution system of Amazon?
Interesting but look at it this way.Google profits are primarily based on ad words ad sense and that is where people go to place ads. Yahoo pales in comparison. Not because of the algorithim (although that’s what got them there) but because a mass of people do it that way and aren’t going to shift behavior to something else. And without that mass doesn’t matter. (Like didn’t yahoo fail at yahoo auctions vs. ebay?). That’s a big legacy heavy iron type thing. Same reason there isn’t another Craigslists or ebay although there certainly people who have ripped off and done better with parts of both (there was a chart on this for craigslist floating around showing the niches). Personally to me craigslist is worthless hit or miss for selling. For buying it’s great if you are persistent.Anyway, a distribution system like Amazon is more possible simply because you can start small you don’t need the network effect or getting a large amount of people to change behavior to make it work. Note I didn’t say easy or maybe even possible I said “more” possible.Building warehouses or distribution isn’t “as” big of a deal as getting a whole bunch of people who are placing ads because there are a whole bunch of web surfers who will view those ads.Not to mention the fact that Amazon is utilizing existing “last mile” things (ups, fedex, usps) for the delivery of things. Of course I think it’s totally expected that they will employ delivery people or perhaps use a route delivery model [1] (like tastycake or herrs potato chips) to do the last mile. That’s one way they can knock the shit out of the unionized fedex and ups deliveries and shave some costs.[1] That’s where instead of an employee you get someone who is an independent contractor that can buy and sell their route and do all sorts of under the table off the grid business methods that you could never pull off with you own employees.
I’ll continue since we are at the bottom. Totally disagree about how hard it is to build distribution, and that yes they will have independent distribution.
“I don’t love it when entrepreneurs build services that are too tightly constructed around a single use case. I do love it when entrepreneurs build services that the users can take and do interesting things with.” That’s key.I think one test for this might be to answer the question: What does your product enable your users to do?If you start to run out of ideas with a long list, then you’ve got a product that sparks the imagination and that has almost limitless potential.Twitter, for example, is in the ultimate category of almost unlimited usages or consequences of usages.
I love this quote, too, from Fred. I did, however, find this to be unique in the couple of times I’ve raised money. Or at least it was amongst the people I pitched to.
Inspirational and timely quote! If each idea is a piece of wood and the object is to create a bonfire using only one match (the situation many entrepreneurs seem to face), then it’s really important to select the right pieces of kindling to start. Any advice on kindling selection?
As someone who loves building products, the key to such emergent behavior is building your service as platform and let users be creative with it. SoundCloud has brilliantly build and maintained a solid API platform that the developer community has embraced and in turn created some unimaginable apps, plugins etc that have led to such diverse use-cases.
Sounds like Serendipity meets business
I like how Alex says: “The users guided us….”
twitter, for example — 21st century ap wire servicethe associated press could have invented twitter; in some ways, the old proprietary newsroom systems notification tools were precursors to the irc/aol status messages that were the direct predecessors, and the scroll across the corner of your field of vision acted in a not so different wayrelated: newspapers also could have invented craigslistbut they didn’tin both cases, the disruption and the new tool came from outside
Design for misuse.
yes, quite a bit actually. mostly from sound creators who want to host/post large amounts of audio. kind of like dropbox in that way.but they are moving toward an ad model and you can see some ads on the platform. this is one.https://soundcloud.com/blue…
yesssssssss
I’m going to carry around your comment with me today as I have some design challenges I’m noodling on,
This ain’t bad at all! And I’m the naysayer for advertising as anything other than tolerance.Have a bunch of audio interviews that I should consider building a channel there.
I saw an embeded soundcloud track on a blog. As it played, soundcloud member comments popped up. Really liked it. Lots of neat stuff getting wrapped around the audio backbone
you should do it!
yes, i agree. but becoming an ecosystem takes some time.
as an internet business.
You mean the soundcloud track included disqus comments? That’s cool.Do you have a link to that?
I like that commenting feature on Soundcloud…thinking of ways to use it in a B2B market to create community….
Just some inspiration for you ;-)http://xaxor.com/images/Fun…
I don’t have the link to the blog post – it is lost in the Twitter verse.Here is the Soundcloud link – https://soundcloud.com/dsco…Its sound cloud user comments, not DsQs
A shrink wrap heat gun would do much better with that. The right tool for the job.http://www.pack-secure.com/…The other thing you can do with an iron is cook hot dogs (after wrapping the hot dogs in tin foil of course.)Hair dryers are intermittent duty not continuous duty.