Reed's Law and the Support Economy

If you have not read Reed's law yet here is the link

What he is saying is that the big value to come will not be in selling a thing, not in having a broadcast network or even a association network but will come from facilitating the development of communities.

eBay is the model of such a new type of business that facilitates the needs of the customer. Those companies such as Dell that made their name by building a community with their customer but then gave up the service in the search for margin have I think missed the point. They have now chosen a commodity death spiral. The link takes you to Johnnie Moore who has had a problem with his dell and who links us to Dave Pollard who suffers the same indignity in trying to get help from Dell.

So Dell have I think blown it. They have walked away from the potential in Reed;s law and have regressed to the commodity path to hell.

What they missed was that the service and the community of users was the business and that the product was only the instrument. It is clear now that most products price to zero over time. How much does a DVD player cost now $50? What does this do the price of a DVD? If you are a DVD player manufacturer you are now in hell and cannot get out. This is what is happening to all those that make and sell a thing.

Do we need the things or do we need their service? This is a big idea that is explored by Paul Hawken and the Lovins in Natural Capitalism. Do we need an air-conditioner in hot wweather or do we need "Coolth" - the service of an air-conditioner. If carrier sell Coolth, then they get out of the trap of selling a thing and sell a service. They then develop a long term community of "Coolth" customers and start to meet Reed's law.

I think that the future of computing will be in service. I need someone to manage my home network. I need someone to uncrash my crash and to keep me free of spy-ware and viruses - not Symantec with a product to sell but someone who cares for me. If I really have a bad attack, the software is only the beginning. I need real help on the ground at my machine.

If you think a bit - this applies to most major purchases where I don't really want a car, I want carefree transportation. I want to buy the ongoing service of a car. For instance, 3 weeks ago my lawn tractor died - a broken transmission. It took 2 weeks for the dealer to fix it. 2 weeks in the middle of the grass season! I don't want a tractor i want my lawn cut easily. If Deere offered me the "service" of a lawn tractor, I would buy years and years of the service. They would have a real relationship with me and could facilitate the growth of a community of users. Why then would I go to another supplier, especially if the dealer was up the road form me as he is.

Is this such a difficult idea to grasp? Isn't this the essence of the Support Economy?