- A Business Method Laboratory
- Inventing from Value and Extending Value
- Walker Digital's Big Idea
- Learning from Walker Digital's Practices
This chapter is from the book
This chapter is from the book
This chapter is from the book
Walker Digital's Big Idea
Just as the general debate over business method patents is polarized, so is the view of Walker Digital polarized. Some people see innovation and genius. They think that, just as Gideon Gartner invented a new kind of business when he created Gartner Group as a decision support and industry analysis service in 1979, so is Jay Walker creating a new kind of business with Walker Digital. Inventing is hard, requires different internal processes, and demands a different focus than most companies can afford to maintain as they manage the patterns and disciplines of their core businesses. It's like architecture. Most companies don't have architects on the staff; they hire them when they want to build a new building. Perhaps someday they will also hire a business method laboratory when they need to renew or reinvent their business processes.
Other commentators view Walker Digital as something closer to the work of the devil. They suspect that Walker is consciously using the weaknesses in the patent system to engineer a massive intellectual property land grab, providing very little value in return for a frighteningly large monopoly on business methods. They assume that, given enough property, Walker Digital will be able to litigate its way to wealth.6
Still others just see Jay Walker as the "guy with the patents."7 Not a threat, and not the harbinger of a new business model either. The tendency to write Walker Digital off as being an odd company of no real significance has been particularly strong since the fall of Priceline's fortunes, and stock market value, in the last months of 2000. Priceline's stock fell to less than 1 percent of the value that it had earlier that year. Because Priceline was a key component of Walker's strategy for bootstrapping Walker Digital, the enormous change in Priceline's value has had a big impact on Walker Digital's immediate operations. But it is a mistake to confuse the two businesses or to equate Priceline's troubles with a judgment on the value of what Walker Digital is doing.
My own take is that Jay Walker and Walker Digital have picked up on a really important new idea. Time will tell whether they can build on the idea, how they will make money from their portfolio of patents, and how other companies will respond to offers from a business methods laboratory—but the big new idea is right.
The idea is that we are reaching the end of interesting ways to use computers, technology, and better access to information to reduce costs and increase efficiency. We have been automating business processes for almost half a century and have been reengineering the enterprise for over a decade. It's over—we are chasing diminishing returns. Applying Web technologies to existing business methods to wring out more costs and save more time is a fine thing to do, if its cheap, but it's a thin play. It is certainly not the foundation for a "New Economy."
Having said all of that, I believe that the Web really does hold out the promise of creating new value. Getting at the new value involves inventing new ways to do business. With more information available more cheaply, the big win is not to find ways to use the information to improve efficiency; instead it consists of using the information to create new value. We are reaching the end of the time when rewards go only to speed and execution and are entering a time when rewards will be attached to thinking deeply and creatively to make something new.
That's the big idea. It is a hopeful, optimistic idea. Walker Digital understands it and believes it. We will see what they do with it.