Ten Commandments for Success on the Net

There are no stand-alone products on the Net -- and that changes the nature of products themselves. As more devices interconnect and depend on one another, they develop interactions that no one can anticipate -- and that become the basis for entirely new applications.

The lowly telephone is a classic example. One telephone is an invention. Two telephones enable a conversation. Millions of telephones become the basis for a vast array of services that revolutionize how people communicate. So it is with all Nets: more of something inevitably turns it into something different.

6. There's safety in speed.

Nets obey the laws of increasing returns: as more people sample and select a product, they generate interest, excitement, and an installed base that attracts still more people -- unleashing positive-feedback loops that increase momentum. And when products for the Net get distributed over the Net, these feedback loops operate with remarkable speed. Think of it as the "whoosh effect."

The whoosh effect explains how Netscape's engineers could begin writing code in April 1994, introduce their first product in December, and hold a 75% market share by April 1995. Distributing the Web browser didn't require Netscape to hire a fleet of trucks, conduct long negotiations over retail shelf space, design elaborate ad campaigns. Netscape posted its software on the Web and allowed users to click and download; the whoosh effect was under way.

Warning: The "best" products don't automatically achieve the greatest momentum. Companies like Netscape understand that the whoosh effect is 25% engineering and 75% imagineering -- using the Net to dramatize, promote, and popularize innovations.

7. Win-win beats win-lose.

Too many companies associate winning with control -- using an innovation to acquire a dominant position in technology, distribution, or cost. On the Net, companies seldom win unless they find ways to help others share in the wealth their innovations create.

The "value chain" is giving way to value webs -- market structures in which customers have multiple pathways to the products or services they need. Value webs explain why the Net spawns so many alliances between rivals and joint ventures between companies in different industries. More than ever, winning big requires giving up a piece of the action.

8. Familiarity overcomes inertia.

People everywhere are prone to inertia: they do what is familiar even in the face of superior alternatives. And familiarity comes in various forms. Interface familiarity is what allows us to rent cars we've never driven before without having to learn new ways to steer or accelerate; cars are designed to maximize familiarity. Behavioral familiarity helps people accept new products because they resemble old products. Much of Intuit's success with Quicken can be explained by the fact that the software makes electronic bill-paying feel similar, visually and procedurally, to writing checks.

What works for cars and Quicken works across Nets: breakthrough innovations must evoke a sense of the familiar if they are to successfully overcome inertia.

9. There is no central control of anything.

Fish swim in schools without any single fish being in charge. Monarch butterflies don't need a Monday morning staff meeting to decide when to migrate south. Birds flock without voting on their destination.

Nets operate more like nature than man-made assembly lines. Indeed, the defining companies of the Net era -- Netscape, Sun, Yahoo! -- apply the power of distributed intelligence to how they function. They are obsessed with meeting performance goals and winning -- but they are also thoroughly decentralized. They're organized around small teams that work when they want, how they want, and (often) where they want. On the Net, even the most hard-charging leaders don't fool themselves into believing that they are "in charge."

10. No one is as smart as everyone.

Nets enable greater participation among larger and larger groups of people. That's why millions of people are getting into the habit of visiting the World Wide Web every day. The Web changes like a newspaper, but the changes are co-constructed by the users. No one is in charge and almost anyone can find something of value. That's why intranets (knowledge-sharing systems designed for use within companies) have become the fastest growing market for Web servers and software.

In short, Nets allow individuals to shape and share information and ideas more quickly than ever before -- a principle that winning organizations embrace rather than resist.

Larry Keeley (lkeeley@doblin.com) is president of Chicago-based Doblin Group, a leading design-strategy firm, and an adjunct professor at the Illinois Institute of Technology's Institute of Design.