The Dimensions of Worth

Everyone loves a good list. Lists of things, if complete, give us a definitive account of the contents of a category. They let us put things into easily understood groups and help us make sense of what those groups are. Colours of the rainbow. Planets in the solar system. Quantifiable and legitimised, tick ‘em off at your pleasure.

Lists also provide great fodder for debates, because who’s to say that a list is truly definitive? It’s not just that everyone loves a list, but that everyone loves the list they love, and loves to contest the lists other people love. Seven colours of the rainbow? What about the myriad hues between those seven colours? There are lots of people still insisting on putting Pluto on their list of planets.

Defining the creative industries seems to me to be a similar debate about what to include on a list. It seems to have started, by nearly all accounts, in 1998, when the UK’s Department of Culture, Media and Sport (those three happy bedfellows) described the creative industries as “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property” and provided a handy list of 13 sectors. And it seems people have been arguing about that list ever since.

I’ve written about that debate before and the variations proposed and rejected. It is a crucial debate for policy makers and researchers, as boundaries need to be set in order to effectively map, measure and learn about the creative industries (how can we analyse the solar system if we don’t know where it starts and finishes?). At the same time, it’s a pointless debate for many creative industry practitioners, with no day to day impact on their activities (call it what you like, Pluto is still a big ball of rock and ice orbiting the sun).

Having sampled this debate, I’ve been considering a couple of questions. One, how to add to this discussion, in a way which isn’t simply arguing about other people’s lists. And two, what do we mean by the term ‘industry’ anyway? What is one and how do we recognise it?

This article, by Mukti Khaire, offers an interesting perspective on these questions. In it, she talks about the identification of a new industry, not by its vital statistics (is it in orbit around the sun, does its self-gravity make it a globe, has it cleared its orbit of smaller objects) but by a series of socio-cognitive actions.

An industry is self-defined by a process she calls “distributed sanctification”, whereby a variety of participants in an activity take a series of self-directed actions which legitimise that activity as an industry. It is a gradual and unplanned process, the start and end points of which are undefined. In essence, no-one says, “this is now an industry,” in an ABS sort of way. Instead, people start behaving like they’re in an industry and sooner or later, everyone else agrees with them.

To illustrate this process, she looks at the rise of the high fashion industry in India. This is useful because she can identify a time period (the 1980s) before which there was no such thing and after which there was. She then examines the actions which participants in the formation of the industry took during this time.

As might be expected, the steps taken by designers, clothes makers and sellers are important, but she argues, so are the actions taken by other more tangential players – educational institutions, the media and so on. The cumulative effect of these actions is the accumulation of social currency in the term “high fashion industry” in India. In her own words, she is mapping “the dimensions of worth.”

This process, she says, is difficult but essential for new industries:

These complexities make the construction of worth of new industries particularly difficult. New industries […] lack definition and coherence—that is, clear boundaries and identities, so they are difficult to understand.

Which seems to be to be exactly the problem faced in describing the creative industries. She goes on to say:

In addition, new industries  […] typically lack norms and conventions of evaluation, so it is difficult to determine their worth. However, the construction of the worth of a new industry is particularly important because worth is a prerequisite for cognitive legitimacy, which is a critical resource that pioneering entrepreneurs in new industries lack. A cognitively legitimate industry—one that is accepted “as a taken-for-granted feature of the environment”—is well defined and understood by both industry actors and audiences and broadly accepted as appropriate. Cognitive legitimacy, or taken-for-grantedness is a condition of complete intersubjective agreement and total absence of dissent regarding the right of an entity to exist.

Which again, seems to aptly describe the creative industries – lack of definition, leads to complexity in evaluation, leading to a lack of legitimacy and “taking-for-grantedness” which in turn is an impediment to entrepreneurship.

It’s tempting to describe Khaire’s approach as the opposite of “definition by list making”. But actually, she does provide a list of actions she says participants take which legitimise an industry:

Curation Customers and outside influencers, like education, media and government orgs, identify what’s high and low quality product.
Certification Educational institutions start offering qualifications for entrants into the nascent industry.
Commentary Educational institutions offer instruction on what’s good and bad practice in the industry.
Critique Media publications offer opinion on what’s good and bad practice in the industry.
Co-presentation Various examples of competing product are displayed together enabling…
Comparison Customers to make judgements about the qualities of those products.
Commensuration The growing number of comparisons allows the development of standard measures of quality.

Khaire’s example (high fashion in India) springs from the creative industries, which she says is appropriate because, “the highly symbolic nature of the products makes collectively understood definitions, shared meanings, and broad agreement on norms and rules crucially important…value construction in creative industries is a complex process because of the relative “singularity” of the products, and involves multiple actors and cognitive processes.”

No argument there. But while her criteria can be applied consistently to fashion, I suspect they could not be as easily applied to the creative industries, as defined as a collection of creative sectors, of which fashion is only one. I think all of her 7 Cs listed above create the “worth” she describes, but only within each creative sub-sector. We can’t measure a fashion designer by the same yardstick as a musician or an architect and so on.

This is leading me to the conclusion that whatever the “creative industries” is, it is not an industry in and of itself – at least not yet. It might be more helpful to see it as a selection of like industries, and that selection as being influenced by a variety of social and political pressures on the entity defining the term.

What makes them “like” is something we can’t quite grasp. Something alchemical, the transformation of imagination into IP. But just because a beautifully designed gown springs from the same creative well as a symphony or a grand old building, doesn’t necessarily mean they together form a cohesive creative industry. Pluto’s a really different place to Jupiter.

Khaire, M. (2014). Fashioning an Industry: Socio-cognitive Processes in the Construction of Worth of a New Industry. Organization Studies, 35(1), 41-74. Available at http://journals.sagepub.com.ezproxy.uow.edu.au/doi/full/10.1177/0170840613502766

What I learned from 100 Uber rides

About 18 months ago, my boss issued an instruction to all staff: for regular travel to client meetings, work functions and so forth, he wanted us to use Uber-X. His reason was simple; it’s cheaper than using taxis.

The biggest taxi user in the office is me; my job requires me to shuttle around Sydney to meet clients on a daily basis. I hadn’t tried Uber before, but I was happy to comply. And I quickly became oddly fixated on it. Yes, it was saving us a few bob. And yes, it was a novelty. But it also gave me a new mini hobby: talking to Uber drivers.

I made a decision before that first Uber ride, that I would talk to every driver who picked me up. I have now taken about 100 Uber rides in the last year and a half. I have only broken my “talk to every driver rule” twice. Once when a driver and his car smelt so terribly that the olfactory assault of it all shocked me into stunned silence. And once more when a driver’s inability to follow his own GPS system, made him take a wrong turn, and head to the other end of the Harbour Bridge from where my meeting was at, making me embarrassingly late and leaving us sitting in awkward silence with each other.

I had no strong reason for wanting to talk to Uber drivers, other than to discover what (ahem) drove them to take it up in first place. Was there also part of me which wanted to democratise the whole process? Did I not want to feel like I was participating in a sort of 21st century servitude? I don’t know. But I can report back on what I’ve found after slightly fewer than 100 conversations with Uber drivers.

I always start off by asking how long they’ve been an Uber driver. There is a genuinely wide response here, but I think within that range there are two clusters; people who have been doing it for less than 3 months and people who have been doing it for over 2 years. The newbies and the veterans. Interestingly, the veterans aren’t necessarily jaded and the newbies aren’t necessarily in love with it all. Why there’s not as many people in the middle of the range, I don’t know.

But nearly all of them are men. In 18 months I’ve had two female Uber drivers. One, a cheery middle aged woman in an SUV who had started driving that day (“you’re my third passenger!” she beamed) and one rock chick with purple hair and a silver floor matted hoon mobile. She advised me to correct my pick up address if the app had got it wrong, which it frequently does. This was after she gently scolded me for not being where the pin said I was.

She gave an interesting response to another question I often ask, about whether or not it’s a lucrative exercise for them. Her system, she told me, was to drive each day for as long as it took her to meet her self-imposed sales target. Then she went home. Having such as system is rare amongst my informal sample. But the general consensus on it being a money making exercise seems to be that to make good money, you have to drive a lot of hours, capitalise on the surge pricing and drive on Friday and Saturday nights, thus running the risk of drunken revellers vomiting in your mobile workplace.

When asked what they like about Uber driving, there’s one thing I heard over and over again: flexibility. Flexibility is something I take for granted in my working life. Whether it be through understanding employers or a blundering habit of mine to do my own thing without asking, it’s something I’ve always felt I had and naively, I get slightly confused when I hear others longing for flexibility around hours worked, time off and so on. But time and again I’ve heard Uber drivers nominate that as it’s number one benefit. I work when I like. I’m my own boss.

If I’m being judgemental, some of these blokes (as they almost overwhelmingly are) don’t seem like the sorts who would be happy working for a boss anyway. There’s a notable subset of people who quit their last job because, “the boss was an idiot” or something similar. There’s a definite streak of anti-authoritarianism. Many are between jobs; the one who sold his café and looks for a site for his next business as he drives around, the 63 year old laid off last year who’s doing this while waiting for job interviews and – worryingly – the management consultant who takes it up during the inevitably quiet months of December and January.

Others have something else on the go. They’ve got a business on the side, there’s a project they’re working on, they work another job at night. Entrepreneurship can do with some regular income coming in. Some have grander plans; like the one who plans to use Uber to fund the purchase of a second car, which he’ll then lease out to other Uber drivers to raise money for a third car, and so on until he has a fleet of five and he’s given up driving, and living of the lease income.

Many are students; the engineering student who wants to work on cars, but can’t see the prospect of any jobs in Australia, the communications student selling health food parcels as well (“here, take my card”), the Iranian migrant earning money to complete his course in aviation.

Some gripe about Uber, but not many. Some gripe about riders, but not many. Some talk of the inevitable conflict with taxi drivers, of being abused as allegedly happened to one in Wollongong this week. Many are taxi drivers who having failed to beat ‘em, have joined ‘em. (These are the least talkative but the strongest on navigation, the perennial weak spot of Uber drivers, despite GPS assistance.)

And all the time, I’m thinking about the good and bad of all this. The freedom and flexibility of it, versus the lack of workplace conditions, seemingly left behind without a thought. In this post, futurist Sam Sammartino says we should all be giving up our fixation with jobs anyway, thinking about how we can use our own assets and skills to generate the revenue we need and want, taking charge of our own destiny. I think that’s hugely problematic, but his call is part of ongoing national crush on entrepreneurship. Through this lens, being an Uber driver is the opposite of servitude; it’s picking yourself up by the bootstraps and having a flamin’ go.

I wouldn’t discount this view out altogether, but it neglects that at the end of all of this homespun entrepreneurialism, there’s a multinational corporation taking 25% of every drive, not paying for leave or insurance and waiting to replace the whole system with driverless cars. Can something be entrepreneurial on a personal level for its participants, while being an exploitative business with lowly paid suppliers at heart?

My one-hundredth Uber ride was to Melbourne airport with a man from Pakistan, and if he felt exploited, he didn’t show it through his cheery demeanour. I asked all my questions and got my standard responses. Then the subject turned to Australia and he said he had come here by boat. From Pakistan to Malaysia to Indonesia to Christmas Island. From there to months in a detention centre in Weipa. And finally on to Melbourne where no job awaited, but where he could drive an Uber and work on his citizenship application. Enterprise. Entrepreneurship. Courage. Tenacity.

“Thing is,” he says, “when Chinese people get out at the airport. They don’t know how to call a cab. But they can work Uber. Uber is everywhere.” He’s got that right.

On who’s in and who’s out: Part 1 –Creative Industries

Since my last post, I’ve been having a series of discussions about this tricky, slippery term, the creative industries.

The first was with Gavin Bowman who pointed out that industry definitions exist to include or exclude things; things like businesses, occupations or people. We draw boundaries around these things because it helps us make sense of them, but also because there’s usually a more specific purpose in mind. We want to lobby, to form alliances, to compare etc.

In this sense, a definition of the creative industries is indivisible from its purpose. Or perhaps the logic behind any definition can only be understood by how it’s applied. A government policy, for instance, might limit its definition due to budgetary restraints. A trade union might apply the widest possible definition in order to attract the most members.

All this made me wonder if I knew what an industry was. In my last post, I proposed a definition of creative industries that excluded activities without a commercial intent (which would include hobbyists and not-for-profit entities).

I did this in part because I had one eye on entrepreneurialism and the looming question about where that resides in the creative industries, but I was also wondering just how industrious one has to be to be part of an industry. Does membership of an industry require you to have a commercial intent? My colleague Ben Fletcher of this fine establishment here thought not; profit and not-for-profit activities sat together within an industry, each being of competition to the other.

***

A quick sidestep to the mighty Australian and New Zealand Standard Industrial Classification (ANZSIC) as maintained by the ABS since 1993, in an attempt to define what an industry is.  It says,

The objective when developing an industrial classification is to identify groupings of businesses which carry out similar economic activities. Subject to certain criteria being met, each such grouping defines an industry and the similar economic activities which characterise the businesses concerned are referred to as activities primary to that industry. (my emphasis)

So if an industry definition only makes sense when you understand its purpose, we know the ABS’s is to “identify groupings of businesses”, for administrative ease in use by government, businesses and um, citizens, I suppose. A kind of Dewey decimal system for industry classification.

It goes on to confidently assert:

When the classification is completed, any individual business can then be assigned an appropriate industry category on the basis of its predominant activities. (my emphasis)

And it agrees with Ben, by saying:

The term business is used in its widest sense to include any organisation which provides goods and services, including companies, non-profit organisations, government departments and enterprises.

The first classification of ANZSIC looks like this:

blog1

Which seems straightforward enough, but take it down a level and the complexities start to show. Take “R Arts and Recreation Services” as an example:

blog 2

And so on down through the superstructure until we hit individual occupations such bird reserve operation, journalistic services, netball club operation and bookmaking operations. All part of good ship “R Arts and Recreation Services”.

Any industry definition is obviously going to have its oddities and miscellaneous items. I suppose the point is that as much as they seek to include and exclude, they are also contestable and are, no doubt, contested.

Naturally enough, the creative industries (as defined by, take your pick, but let’s say the UK’s Department for Culture, Media and Sport) are scattered throughout sections J, M, R and probably others too. Which is apt for a term which places architects next to actors and fashion designers next to games designers and says, you lot… you all do kind of the same thing.

Another regular and robust conversationalist is Tony Shannon who reminded me that back in the day, we used to wonder about whether it was the “creative industries” or the “creative industry”. If we took the ABS at its word, it’s an industry singular, because we can identify a “grouping” of businesses, no matter how diverse and call them an industry. Even though its own library catalogue on the subject tells us that to get to that catch all term, we have to collate businesses from across a range of industries. If anything, it’s a creative cross-section.

***

This whole “creative industries” malarkey started when a politician had a need to name it as such, as Australian academic Justin O’Connor points out in his literature review on the topic:

blog 3

In its genesis, then, the term “creative industries” was not a literal term, but a political one, designed, at least in part, to win votes and increase support for a government. It was invented to make sense of a group of businesses which existed across industry lines, but had a shared meaning to government and presumably, voters. It continues to be reinvented, but still, it has come to mean something which is broadly understood as a collection of organisations and individuals which create products and services. After that though, its boundaries blur, defying more precise definition.

Where does entrepreneurship intersect with this ambiguous term? Surely its definitional boundaries are even hazier than those of the creative industries. Perhaps as I talk more about entrepreneurship as a personal trait (that’s Part 2, you see), it is the individual creatives which become more important than how they classify themselves. As Tony remarked to me, perhaps what we’re talking about here is creative entrepreneurs, rather than entrepreneurship in the creative industries.

References:
Australian Bureau of Statistics 1993, 1292.0 – Australian and New Zealand Standard Industrial Classification (ANZSIC), viewed 6 May 2017, http://www.abs.gov.au/Ausstats/abs@.nsf/2f762f95845417aeca25706c00834efa/5BD72C7D74F64C6BCA25697E0018FD27?opendocument
Australian Bureau of Statistics 2006, 1292.0 – Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) viewed 6 May 2017, http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/1292.0Contents12006%20(Revision%202.0)?opendocument&tabname=Summary&prodno=1292.0&issue=2006%20(Revision%202.0)&num=&view=
Department for Culture, Media & Sport, Creative Industries Economic Estimates January 2015, viewed 6 May 2017, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/394668/Creative_Industries_Economic_Estimates_-_January_2015.pdf
O’Connor, Justin (2010), The cultural and creative industries : a literature review [2nd ed.].
Creativity, Culture and Education Series. Creativity, Culture and Education, London.

A creative industries definition that recognises commercial intent (WIP).

Talk about the  term “creative industries’ seems to inevitably lead to questions of definition. And those questions lead to more questions. And before long, we’re in a world of confusion.

Who’s in and who’s out? And what does it mean when we leave some creative types out? Is the term ‘cultural industries’ a better term? What about the ‘creative economy’? What happens when we shoehorn the arts and culture in with architecture, design and games? And have we only added software development into the creative industries because it makes the numbers look better?

This matters to approximately no-one working in the creative/cultural industries/economy. But it absolutely matters to people analysing these industries, trying to make sense of what role they play in society and why government is supporting them. And as I’m thinking about entrepreneurship in the creative industries, it matters to me.

This literature review, section 5 of a paper by Justin O’Connor, gives a thorough overview of how the terminology and definitions of creativity have changed since the 1990s. He airs questions well worth asking, such as, was the term only created to legitimise culture in the eyes of government number crunchers? How legitimate is the much-mentioned link between the creative industries and creation of new IP? Is the arts strengthened (through legitimisation) or weakened (through dumbing down) by inclusion as an industrial output? And what place for the idea of quantifying the creative economy by counting creative workers in non-creative industries?

O’Connor also outlines various attempts to define the creative industries, and each model has its pros and cons. And each, I think, misses something about how the creative industries work in practice – that there’s a range of products created in these ‘industries’ which lack an essential element of industry: the intent to exploit the work commercially.

Existing models

Here are three models outlined in O’Connor’s literature review. David Throsby’s relies on a hierarchy of creativity, with purely artistic endeavours at the top of the tree:

throsby

A European Commission report from 2006 seeks to stratify the industries into arts, culture and creative.

KEA

The Work Foundation presents a version which positions the industry segments as part of the overall economy. It also introduces the concept of ‘expressive value’, to differentiate between the ‘pure’ arts and distribution based enterprises. It also places IP production as central to the definition.

workfoundation

We can use any of these to define the creative industries; none are widely adopted, all are contested in some way or other. For me, the distinguishing between activities within each industry sector by commercial intent is a missing element.

A model which recognises commercial intent

Every subset of the creative industries includes activities which are driven by commercial intent, and some which are not. For the purposes of definition, we might consider that only those with commercial intent truly sit within an ‘industry’, with its connotations of producing a product to a profitable end. Activities with little or no commercial intent can be seen as artistically valid – even essential – but their lack of connection to industry could allow us to classify them differently.

The level of commercial intent within each industry subsector will vary. Some, like architecture, exist almost entirely within the for-profit arena. Others, like visual arts, straddle between not-for-profit and for-profit activities.

My diagram below (not based on real numbers) is an attempt to illustrate this proposition. Each subsector is represented by a column, showing 100% of that subsector’s activity. The position of each column indicates the estimated proportion of each sector which is commercially driven. Under this model, we might see the ‘creative industries’ as existing only in the upper band.

sharpe

For my purposes – thinking about entrepreneurialism in the creative industries – such a model could be very useful. If we start with the idea that a critical component of entrepreneurship is driven by commercial intent, the definition used could exclude activity in the creative industries which although artistically valuable, lacks that commercial intent. It might save us from having to argue the centrality of the arts – or any other creative endeavour – with the creative industries. But it would also require a debate about what qualifies as commercially driven product, and how much of that commercial intent resides in each industry subsector.

Ref: O’Connor, Justin (2010)
The cultural and creative industries : a literature review [2nd ed.].
Creativity, Culture and Education Series.
Creativity, Culture and Education, London.

Decisions, visions, brain functions and storytelling

Recently, I’ve become interested in decision making. My job is frequently about helping people make decisions which impact their businesses and their lives. It’s also about selling services, which requires some clue about how and why people make purchasing decisions. And these professional interests in decision making, and underscored by the constant stream of decisions contemplated every day, both large and small. What shirt will I wear? What car should I buy? Where should my kids go to school?

With all this bouncing around my prefrontal cortex, I’ve found much insight in Jonah Lehrer’s book How We Decide. It’s about what happens in our brains when we’re making decisions, the roles played by rationality and instinct. It’s also about which parts of our brains are used when making these decisions. As you’d expect for a popular science book, narrative accounts play an important role in bringing the various examples of decision making to life. When you’re kicking around terms like ‘stochasticity’, ‘posterior cingulate’ and ‘dopamine receptors’, it helps if you can relate it to stories about football matches and Deal or no Deal.

There’s a couple of stories about mid-flight incidents on board passenger jets, a topic which can always be relied upon to raise the heart rate. One is about a United Airlines flight from Denver to Chicago, which was interrupted by an internal explosion which took out all the hydraulics, leaving the pilots without the ability to steer the plan. The story is about decision making under pressure, and the ability to invent a tactic for landing the plane on the run.

“…[the pilot] needed to solve his problem, to invent a completely new method of flight control. This is where the prefrontal cortex really demonstrates its unique strengths. It’s the only brain region able to take an abstract principle – in this case, the physics of engine thrust – and apply it in an unfamiliar context to come up with an entirely original solution. It’s what allowed [the Pilot] to logically analyse the situation, to imagine his engines straightening [the plane’s] steep bank.”

This last phrase, about imagining an end result and creating a process to achieve that result, caught my eye. This is, I think, what many creatives do. They imagine the end result and corral the resources (time, capital, labour etc) to bring about that vision. Some will be able to design prototypes to communicate that vision to others in the production process; a fashion designer will do so through sketches and patterns. Others will have to do so without visual tools; a screenwriter has to imagine what a film will look like and sell that vision to others, long before a frame is shot.

Entrepreneurs do this too. They have to imagine a version of their business which fulfils what they want from it: money, lifestyle or whatever it is that sparks their motivation for being in business. They have to imagine the end result and ‘see’ it long before others can. Then they invent a way to achieve it. And ‘invent’ is really the right word because although they can follow the steps others have taken in the past, each business’s journey is unique, with its own ups and downs.

The Pilot’s story is about the suppression of emotion (in this case, panic) to focus on rationality.( It’s not always like this though; the book also highlights decision making which is enhanced by instinct and emotion). But it’s also about the ability to screen out all unnecessary information in order to concentrate on the crucial data. For example, the Pilot had no time to focus on the hydraulics – they were gone and never coming back. He had to focus on the elements he could control – in this case engine speed –and block out the rest.

Again, there’s something in this for entrepreneurs. I met this week with a fellow who runs a creative industries business and he told me that his company now focuses less on small, labour intensive jobs and more on larger scale jobs for corporate clients, on which he can spread his resources more evenly. Such is the dream of many a small business owner, so I asked him how he achieved it.

He didn’t really know how; there had been no deliberate strategy, other than to adopt a vision for his company which involved work with large corporate clients. He was inspired to do so by a presentation by a Hindu priest he met at a bank’s innovation conference (I know, right?). The priest talked about balancing a peacock feather on your finger. If you look at your finger, apparently it’s really hard to balance the feather. But look at the top of the feather, and it’s much easier. (Peacocks are hard to come by at my place, so I have yet to try this for myself.)

Choose the metaphor you like – looking at the top of the feather, forgetting about the plane’s hydraulics – the point is that focus on an end goal and screening out distractions count for something. And that there’s nothing like telling a good story to illustrate abstract concepts.

PS. Talking of good stories..While adding some links to this article, I discovered that How We Decide has been withdrawn from sale by its publisher. The story’s here.

Ref: Lehreh, J. 2009, How We Decide. Houghton Mifflin Harcourt, New York.

 

Entrepreneurship: led by data, design or instinct

This blog has been on pause for a bit while I’ve been attending to various other bits and pieces. But throughout that time, I’ve been savouring a book called Streaming, sharing, stealing by Michael D Smith and Rahul Telang. (As recommended to me by Tony Shannon, who can be found on Twitter here. He likes likes and retweets.) Smith and Telang outline a number of examples of creative industries (defined for their purposes as consisting of music, film and publishing) businesses which have responded successfully to technological disruption. They did so while others floundered, they argue, because they effectively harnessed data about customers to predict what they wanted to listen to/watch/read and how they wanted to access it.

An example like the failure of the Encyclopaedia Brittanica to move to a digital format fast enough, and therefore allow Encarta and later Wikipedia to neutralise its business model, is a familiar cautionary tale against stubborn refusal to innovate. More interesting are the examples of companies which adopted strategies which seemed counter-intuitive because they went against long standing industry practice, but were successful because they tapped into customer data their competitors either didn’t have or were ignoring.

The example of Netflix’s commissioning of House of Cards is one of the book’s killer examples. Using data gained from the viewing habits of its subscribers, Netflix knew that its customers liked Kevin Spacey, David Fincher and movies with strong female leads. Their confidence in this data led them to commission two series of House of Cards without a pilot, a strategy its competitor networks would have considered prohibitively risky. The existing system of selecting pilots, tryouts in sweeps, executive interference and eventual progress through to series was slow, but safe. Except for Netflix, the risk of failure had been negated by having reliable customer data. No experimentation involved; they already knew their audience would lap up House of Cards. And they did.

Smith and Telang’s argument, that those disrupting the creative industries are really collecting and mining customer data smartly, seems to me to have something in common with the design thinking movement (which started at IDEO, and who knows where it will end). The design thinking credo is that by observing the way customers use products, unique insights can be gained which can then be used by designers to create new features, or whole new products. These products will then have a competitive advantage in the market place. (The most practical example I’ve found of this in action is the development of the “croc jaw” catcher on the  Rover Challenger Mower.)

So whether a company is using data about customers buying habits, or conducting qualitative research into how products are used, the end result is products better suited to the needs of the customer.

How does this matter to creative industry entrepreneurs? After all, most people starting up a business will have no access to the resources of Netflix or Apple or whichever corporate behemoth is capturing information about you as you read this. Collecting and analysing such data is likely beyond them. As is having a team of design thinking poring over their work.

This has never stopped entrepreneurs succeeding without the competitive advantages gained through data mining, design thinking or any other process. A small set of entrepreneurs will succeed based on gut feel alone. How does this process work? Is it some innate ability to know your target customer well enough and correctly predict what sort of services they need? In short, do successful entrepreneurs do what Netflix does without realising?

This week, I was asked to think about arts organisations and how they might be supported to generate new sources of revenue. It’s a familiar old chestnut, but the House of Cards example led me to wonder about the role on in-depth customer data collection in prompting initiatives which might generate these new income streams. If we could suddenly grant arts orgs the sort of data Netflix had about their consumption of all sorts of media, would they allow that to shape their creative decisions? Or would they resent being forced to create content to a target market’s demand.

Another potential less controversial route would be to identifying the skills inherent in those entrepreneurs who seem to instinctively know what an audience/customer base wants. And/or identifying the processes they go through in identifying various business opportunities and evaluating their chances of success.

These practices are not usually taught in creative industries vocational courses. But if creative industries practitioners could learn them, perhaps it would go someway to reducing the perceived risk involved in a new venture (without the need for customer analytics or end-user observation) and provide the confidence needed to turn a new idea into money in the bank.

Ref: Smith, M D and Telang, R. 2016, Streaming, sharing, stealing. MIT press, Cambridge, MA.

Mambo and Halfbrick: two versions of Australian creative entrepreneurship

mambofruitnin

Arts programming on ABC TV has long been characterised by one major factor; its ability to be reliably dull. Though lately there seems to be an effort to liven it up. In recent weeks, two documentaries in particular have shown the ups and downs of creative entrepreneurship in Australia.

The first is Mambo: Art Irritates Life (Dir. Paul Clarke, 2016) which tells the story of the famous fashion brand which seemed to be everywhere in the 1990s. Through interviews with the business’s founder, Dare Jennings, and the artists who contributed the brand’s anarchic designs (plastered on t-shirts, board shorts and assorted paraphernalia), it tells the story of how, almost entirely without planning or strategy, the clothing line grew in popularity and cultural significance.

As the company’s financial success accumulates year after year, a handy graphic shows sales revenue climbing like one side of giddyingly steep mountain. Mambo seems to grow through a series of intuitive leaps, celebrity endorsement and cross category infiltration, but if Jennings had a systematic plan which led to the brand’s success, the documentary doesn’t detail it. Instead there are pleasing tales of how the stable of contributing artists benefited from their designs suddenly bringing in truckloads of cash, and how an inter-group rivalry developed which pushed them to deliver edgier and more striking images.

It’s all very nostalgic, not just for a time when everyone was wearing farting dog t-shirts, but for a time when you could build a world-conquering fashion brand in Australia, something that a combination of high production costs and a cash hungry business model seems to have extinguished for good. The documentary’s main point seems to be that Mambo’s crude and brazen designs had an outspoken, rebellious ethos that was the secret of its appeal. That appeal dissipated when the brand went mainstream, which the film pinpoints to when the Mambo creative team provided giant inflatable kangaroos at the opening ceremony of the 2000 Olympics. From then it descended into ‘dadwear’ and forever lost its cool.

It’s this decline that the film shies away from. There’s no handy chart showing the slide down the other side of that mountain. Instead, the brand’s sale to overseas interests and journey onto the clothing racks at Big W goes undocumented. That’s a shame because it feels like we got half the story. But the half we got tells the story of creative entrepreneurship is familiarly Australian terms – outsiders, larrikins, iconoclasts, schoolboy humour.

Then there’s Play to Win (Dirs. Sue Swinburne and Michael Angus, 2016), the story of Brisbane games studio Halfbrick. Halfbrick was a struggling games development company which struck gold in 2010 with Fruit Ninja, a fun, colourful time eater for various iDevices. The game’s success was almost instant and stratospheric. The money started pouring in at rate which makes Mambo’s climb up that mountain look sedate.

The documentary focuses on CEO Shainiel Deo, a smart, personable and highly driven man who worked hard to engender a laidback and fraternal culture at Halfbrick. As the company’s success grows so does Deo’s ambition, and he looks to access the massive games market in China. But his closeknit band of buds at Halfbrick are fracturing. One of the critical issues is an ideological shift; mobile games are moving to a freemium model – free to buy, but requiring in-app purchases to progress through the game. Some of Deo’s compadres yearn for the days when you just paid for a game once and played it to exhaustion.

This is a story about leadership and the pitfalls of switching business models. It’s a truism that companies which are unable to innovate are destined to fail. Deo can see that the business model underlying games is changing, but is unable – as much to his regret as anyone else’s – to bring his key people along with him. Advocates of business model innovation as a road to growth will probably have some sympathy with Deo, rather than his likeable co-workers who want to hang onto the (admittedly pretty recent) past.

The company has trouble replicating the success of Fruit Ninja and its attempts to develop a movie franchise of the title seem to breed only resentment and confusion from those who put the game together in the first place. Deo spends much time overseas and looks enviously while a business colleague lists his company on the NASDAQ. Sadly, his family life suffers as does his surrogate family life at Halfbrick. Senior staff/old friends leave, one after another.

This is a far more personal view of entrepreneurship than the Mambo documentary presented. There, business success was presented as a kind of happy accident, and business decline glossed over. In Deo’s case, business success was his consuming goal and its decline a deeply personal failure. (Even so, this is the polite version of Halfbrick’s troubles. A more scurrilous version is here.)

Mambo’s fall from favour was years ago now (and, it should be said, tempered by a successful exit via trade sale for the founder). Its art is celebrated and exhibited in major public galleries. Its key creative minds look back fondly on wild, heady days. Halfbrick’s journey is not yet over, but its tribulations are raw, the raised voices and angry words still fresh in Deo’s mind. Two distinctly different narratives on creative entrepreneurship; one comfortable and nostalgic, the other raw and painful.