Saturday, May 31, 2008

Bangalore 10K run and a (N=1, R=G) model

Bangalore 10K run: It was a sheer joy to be part of the Sunfeast Bangalore 10K run a couple of weeks back. The amount of time I took to complete the run (1 hr 10 min) was almost 4 times my usual jog. However, the spirit of crowd gives so much energy; I did not even realize when the finish line came (it took me the next 3-4 days to recover though). There was another reason why the experience was very satisfying. The person who took the initiative to register me – my wife Gauri – completed the run in almost the same time as me and she had happiness all over her face for the rest of the day. What I did not know was that there would be a business associated with the race exemplifying C. K. Prahlad’s (N=1, R=G) business model that is going to generate a smile again on Gauri’s face in a week’s time. Before we look at the business, let’s take a short detour and understand what (N=1, R=G) is all about.

(N=1, R=G) model: In their latest book, “The new age of innovation” C. K. Prahalad and M. S. Krishnan present evolution of business models over the past century. The two pillars of this model are: (1) How many consumers does one product target? (2) Where all does the firm mobilize resources from? For example, let’s look at Ford’s Model-T which came out in 1908. It was a product based on “one model fits all” principle (“Any color is ok as long as it is black”). Moreover, the resources producing the car had to be with the firm all located in and around Dearborn, Michigan. Ford was one of the most vertically integrated firms. Now, compare this model to Amazon’s model. When I log-in to amazon, it displays the books (say, on innovation) which interest me. When I e-browse a book, it also shows me the reviews and also other books which are related to the topic. I certainly feel it is an experience unique to me. Where all does Amazon pull the resources from? From a number of bookstores across the world, developers in US, Europe, Asia, in short, all over the world. Prahalad calls this model (N=1, R=G) i.e. value is based on unique & personalized experience and is based on access to resources across the globe (as against ownership of resources co-located). Coming back to Bangalore 10K run. Both I and Gauri got emails from saying that to see our photos from the run, we need to go their website and type our bib-number. When we typed Gauri’s bib-number, there were 7 photos with Gauri in the centre (and my bib-number showed only one photo, I guess looks matter). Clearly an N=1 model. The firm is headquartered in New Zealand and is market leader in event photography. However, the people who took our photos were locals sitting back-to-back on a motorcycle while taking the snaps. I am sure the project was contracted to them. An R=G model.

You can read more about the book and C. K. Prahalad videos in this recent businessweek article.

1 comment:

  1. Read my review of this book on my blog:

    Like I was talking to you, I doubt the universality of the concept, and as I mention in the review I think this model always existed in the services industry, though it was not scaleable due to lack of communications infrastructure that is today easily accessible.