Scale efficiencies and hit making: what’s the Web 2.0 balance

This morning I continued the conversation regarding product factories with two colleagues at my favorite Silicon Valley institution, Bucks in Woodside. I came away feeling that there is still a fair bit of thinking to arrive at the right model for this form of activity.

Back in Australia, Ben Barren has also been thinking this through. He hit the nail on the head when comes to trying to arrive at the right balance between achieving scale efficiencies by essentially pooling infrastructure (in the broad sense, eg including adsense contracts), and hit making (this type of play could trend down disruptors and create a portfolio of me too products).

Ben says:

…product factories of now, risk overestimating the benefits of scale efficiencies, esp if the trade-off is a slightly commodified offering. It’s the intangibles of hit making really. The great films come from a confluence of people, events and capital. Outside the box. Hard to bottle. Not shrinkable.

I see product factories as being the ultimate portfolio players, which means they need to develop products that live along a continuum from own-identity disruptors that can morph into separate ventures to the keiretsu/network effect products that benefit from being part of a collective, eg a blogging network.

That is how they’ll achieve balance.

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