Welcome to the era of business model proliferation.

Our obsession with scalability is getting in the way of unleashing the potential of the 21stcentury. We are so fixated with scalability we have taken our eye off of delivering value at every scale including the most important scale of one. The Industrial Era did that to us. Reaching the mass market takes precedence over delivering value to each customer. New customer acquisition trumps delivering value to existing customers. It’s not only business that is obsessed with scale. Our obsession with scaling a national education, health care, and government system has also taken our eye off of delivering value to each student, patient, and citizen. We have been talking about the idea of mass customization for years while we continue to hang on to business models that were designed for scale more than for delivering customer value.

The Industrial Era brought us the reign of the predominant business model. Every industry quickly became dominated by one business model that defined the rules, roles, and practices for all competitors and stakeholders. We became a nation of share takers clamoring to replicate industry best practices to gain or protect every precious market share point. Companies moved up or down industry leadership rankings based on their ability to compete for market share. Business schools minted CEOs who became share-taking clones of one another. It was all about scale. Bigger was always better. So what if the predominant business model doesn’t serve everyone’s needs? So what if it doesn’t even serve existing customers well? Scalability and share taking became about protecting the predominant business model by preventing the emergence of new business models. Incumbents do everything in their power to erect regulatory and legal moats to keep new business models out of the market.

You know the scalability frenzy is out of control when iconic entrepreneur, Facebook founder Mark Zuckerberg, proclaims;

“For us, products don’t get interesting to turn into businesses until they have about one billion users.”

No wonder entrepreneurs are obsessed with scalability. Everyone wants to be the next Mark Zuckerberg. Entrepreneurs always fall into the scalability trap of trying to imagine what it will take for a model to reach large numbers of customers before they have demonstrated that they can create, deliver, and capture value for only a few. Over many years of mentoring entrepreneurs I have observed them, particularly tech entrepreneurs, spend too much sweat equity and startup capital focused on developing code and a beta version of a web platform before they have a clear value proposition and a testable business model concept that can withstand initial customer contact.

Serial entrepreneur and Y Combinator co-founder Paul Graham says it well:

“As long as you can find just one user who really needs something and can act on that need, you’ve got a toehold in making something people want, and that’s as much as any startup needs initially.”

I always advise entrepreneurs to take a minimum viable business model to the market before thinking about scalability. Start by uncovering the job someone is trying to do, figure out how you can get the job done better, and demonstrate it.  Entrepreneurs skip this step at their own peril. Develop a business model prototype and test it with a few people.  If the business model prototype works, then and only then, start working on what it will take to scale it to reach more customers. It takes successful entrepreneurs three, four, sometimes five tries to get a business model right. Why worry about scalability until you land on one that works for the customer? Focusing on scale too early leads to too many elegant solutions too far removed from real customer contact resulting in too many dead ends.

Institutional leaders are even more obsessed with scalability than entrepreneurs. They fixate on protecting their current scale and assess all new customer value creating ideas through the lens of their current business model.  If opportunities to create customer value in new ways are distracting to the organization or would cannibalize current business they’re routinely dismissed.  The questions asked and metrics applied to evaluate new opportunities are more about scalability and fit, than about creating new customer value. The baseline for evaluation is the current business model. Market making opportunities are routinely screened out or ignored for more predictable share taking opportunities to increase scale.  This is why CEO’s are so hungry for merger and acquisition opportunities. It’s all about scale, not changing the customer value equation.  New business models force institutional leaders to rethink scalability.

We live in an era that screams for less share taking and more market making. Market makers don’t accept the idea that a predominant business model has to dictate the industry landscape.  They create a new market with a different playbook. We have access to more enabling technology than we humans and the stubborn institutions we live and work in know how to absorb. Today, it’s possible to unleash an infinite number of exciting business models to create, deliver, and capture customer value. Today’s consumers refuse to accept that there is only one predominant business model in every industry and that they have to take or leave its offerings.  Consumers now demand personalized experiences, products, and services.

Consumers are bringing the era of the predominant business model to an end. Business models don’t last as long as they used to. Predominant business models are crumbling all around us. The new strategic imperative for all institutional leaders is R&D for business models as a core competency.  It was easier to be a CEO in a world constrained by a predominant business model. In a world defined by business model proliferation CEOs have the trickier task of both pedaling the bicycle of today’s business model while leading the exploration for a steady flow of new business models.  If they don’t there is a market maker out there who will.

It’s time end our obsession with scalability. There are too many consumer, student, patient, and citizen needs left unmet by predominant business models in every industry. There are too many new business model concepts stuck on white boards and in consulting decks.  We are still allowing predominant business models to slow down and block the emergence of new business models that can better meet our needs.  It’s time to move from the era of the predominant business model to the era of business model proliferation. Let a thousand business models bloom.

This is the ninth of a series of conversations originally published on the Time site, authored by Nicha Ratana and myself, with transformational leaders who will be storytellers at the BIF10 Collaborative Innovation Summit in Providence, RI.

“Today, smaller and smaller teams are building bigger and bigger things, faster,” he explains. In today’s marketplace—which is streamlined by technology and defined by abundant choice— “corporate muscle mass” such as factories and storefronts have lost the clout they had 50 years prior.

“What customers really crave is a sense of humanity,” claims Taylor.

“Leaders of economically successful organizations are every bit as rigorous about the human side of their enterprises as they are about R&D and acquisitions,” he maintains. Taylor encourages us to recognize the influence of passion brands. “Apple, Google, HBO” he lists, all have dominated their industry sectors thanks to the might of a zealous group of consumers.

“Ultimately, your culture is what sustains your strategy.”

The aspect of technological revolution that currently fascinates Bill Taylor is the power of businesses that are facilitated by technology, but driven by a human touch.

As a primer, he shares three guidelines for companies looking to embrace this new culture of work:

1. Capitalize on what makes you unique.

Breakaway success requires a commitment to the unprecedented.

“If your customers can live without you, eventually they will,” warns Taylor. “You can’t just be the best at what you do—you have to be the only organization that does what you do.”

Taylor looks up to an early adopter of this principle: Southwest Airlines. “They were never a “low-cost” airline,” he argues, “they were a “big idea” airline.”

Taylor says, “Southwest’s purpose from day one was to ‘democratize the skies,’ to give rank-and-file families the freedom to fly. In the early 1970s when they began to operate, air travel was a luxury of business travelers and the well-to-do.”

Southwest was successful because “their strategy was completely at odds with the rest of the airline industry.”

2. Create meaning and camaraderie at every level of the organization.

Instead of giving their employees the chance to amass power to get rich, companies must instead help them unleash freedoms from within, allowing people in their ranks to give input about the goods and services they produce.

“People want their work to be consistent with what they care about as human beings,” Taylor says. “The best leaders unearth the passion, energy, and commitment of their people by enabling them to make a real difference to their customers and one another.”

He urges companies to examine themselves. He asks them, “What does it mean—in terms of the language, the daily rituals—to be a member of your organization?”

Taylor shares a revolutionary tip: “The real use of social media is not so that we can market our product to a broader audience, but to give our people the capacity to humanize our brand.”

3. Be kind—it’s more important than being clever.

We can’t thrive in a corporate world that sacrifices humanity for the sake of profit, Taylor maintains.

At a BIF Summit several years ago, Taylor shared a story of two automobile dealers his father encountered while shopping for a car.

The first dealer sold Cadillacs, a brand Taylor’s father had long been loyal to. Cadillac sent the man a $1,000 customer-loyalty discount in the mail, but because he wanted to buy a car 24 hours after the coupon expired, the dealer refused to honor it.

The second dealer sold Buicks. After a conversation with Taylor’s father, this dealer offered to honor the expired Cadillac discount. The same dealer let the man test-drive the car over a weekend, and, when an emergency surgery prohibited timely return of the vehicle, sent a lovely bouquet of flowers with a “hilarious note.”

“Which car do you think my father bought?” Taylor asks.

“Small gestures of kindness send big signals about who we are and why people should want to affiliate with us.” He adds, “It was the highest ROI on a bouquet of flowers in history.”

Bill Taylor says he “always looks forward” to the Collaborative Innovation Summit, hosted by the nonprofit Business Innovation Factory (BIF) in Providence, RI. Taylor has joined the lineup of radical business thinkers at BIF Summit more than once.

“I’m proud to say I crashed the first BIF Summit in 2004,” he says, “because I’ve been back every year since. It is one of the most exciting and authentic learning laboratories I’ve ever encountered.”

“Community is an overused word, but BIF truly is a community. We come together once a year, and learn from and support each other all the rest of the year.”

“I live for months off the energy that I get from the BIF Summit,” he professes. “It’s a poetry slam for innovators. What a refreshing break from standard operating procedure.”

The BIF Collaborative Innovation Summit combines 30 brilliant storytellers with more than 400 innovation junkies in a two-day storytelling jam, featuring tales of personal discovery and transformation that spark real connection and “random collisions of unusual suspects.”

This is the eighth in a series of conversations originally published on the Time website, authored by myself and Nicha Ratana, with transformational leaders who will be storytellers at the BIF10 Collaborative Innovation Summit in Providence, RI.

Innovating in Afghanistan certainly brings new meaning to the corporate term “change or die”. Over the course of the project, Col. Fritz had to resolve vast technological limitations and overcome cultural and language barriers. Together, he and his team synchronized the activities of 16 nations, spread across six geographical locations within Afghanistan, to build air power capability and ensure security for the country’s future.

The colonel, who in his spare time curates a blog at  GeneralLeadership.com and tweets management insight from his @fritzmt account to 95,000+ Twitter followers insists that lessons gained on the battlefield have many applications in the boardroom.

“People may not see innovation as one of the core competencies that come out of a military career,” Fritz says, “It’s actually the opposite — military leaders deal with change in complex situations every day.”

As a leader, “I am constantly finding ways to make my message connect with my team,” Fritz says. He considers himself a firm believer in “getting feedback and exchanging stories” — perhaps an unusual admission from a colonel who commands such authority.

Expected to deliver change on an incredibly tight schedule, Fritz encouraged his team to engage in conversation with their Afghan counterparts, in the hope of getting valuable feedback. The result: the coalition and their Afghan partners participated in one of the most open exchanges in the history of the mission. As a result, Fritz claims, they were able to “question basic assumptions and together, transform the training process.”

He adds, “Leaders often get wrapped up in the brilliance of their ideas and forget to include their teammates… Americans are used to doing things the ‘American way’; but in this case, what’s important was being Afghan-right.”

In conversation via Skype from Afghanistan a few weeks before his return to the U.S., the square-jawed, direct-speaking Col. Fritz makes it clear that he will not discuss politics (“because I don’t influence that”). He is a man of ideals – “more than just a guy in a uniform,” Fritz says.

One ideal Fritz lives by is that everyone should embrace “service” in their day-to-day lives, “in businesses, teams, churches and communities,” he says. He believes service should not be a concept singularly assigned to the military.

Fritz traces this ideal back to his grandfather, a shopkeeper in small-town Arthur, Illinois, who also served as the town’s mayor. Grandfather modeled for grandson the behavior of the ideal citizen — committed, engaged, proactive. “He used to say, “If it’s to be, it has to be me.’ That’s something I grew up with. Especially in a small town, you’re expected to participate in church, community and school; otherwise it just isn’t going to work.”

As a first step, Fritz recommends that we slow down and be more intentional. Talk to people, listen to them, see what they know, he says, just as his grandfather did while sweeping the sidewalk in front of his store.

Matthew Fritz looks forward to sharing his story this month at the BIF10 Collaborative Innovation Summit, a storytelling jam featuring transformation leaders, hosted annually by the nonprofit Business Innovation Factory (BIF) in Providence, RI.

How he helped to bring the Afghan Air Force to self-sufficiency is a tale about how to drive complex change management simply, a tale Col. Fritz is hopeful will resonate with the BIF10 community, a group he began to engage with via Twitter from Afghanistan.

He adds, “I hope to share a perspective into the military that might be a little bit different, and engage in the conversation.” He is “beyond excited” to be participating in his first BIF Summit. “I’m nervous,” he confesses. “I have worked with congressmen and ambassadors, but the folks at BIF10 are real movers and shakers. People whose work I’ve read and learned from, now I get to meet in person!”

The BIF Collaborative Innovation Summit combines 30 brilliant storytellers with more than 400 innovation junkies in a two-day storytelling jam, featuring tales of personal discovery and transformation that spark real connection and “random collisions of unusual suspects.”

This is the sixth of a series of conversations originally published on the Time website, authored by myself and Nicha Ratana, with transformational leaders who will be storytellers at the BIF10 Collaborative Innovation Summit in Providence, RI, on Sept. 17-18

How many people end business meetings with an “I love you” and a hug? Venture capitalist and former AT&T Labs scientist Deb Mills-Scofield does.

To Mills-Scofield, to do business is to negotiate diverse personalities to get things done — and she has the gift for it. “The broader, deeper, and more diverse your network, the bigger the impact you can make on the world,” she says.

She explains her network this way: Her consultancy, Mills-Scofield LLC, is her livelihood and passion; venture capital firm, Glengary, where she is a partner, is her way of giving back. She helps entrepreneurs get their ideas off the ground by connecting them with clients and collaborators who are hungry for innovation. Furthermore, she mentors a small army of students at her alma mater, Brown University, introducing them to opportunities where they can help “kick things up a bit.”

Each connection Mills-Scofield makes is an iteration of her business philosophy, which is as old-school as it gets: she believes, simply, in “paying it forward.”

“Your network is not about you. A network is to be shared,” she maintains. “Networking is about people: seeing what makes them tick, and connecting them to someone to help them.”

She admits to being selective in networking, but her criterion is humble: “I only help people who are willing to help others.”

+++

Mills-Scofield grew up in Rumson, NJ. She and her sister attended public school, but every Tuesday, her mother took them into Manhattan to visit the museums. The girls were also encouraged to take another day off every week — to stay home and play.

“Right from the get-go,” Mills-Scofield says, “my model for education was that it is a personal responsibility.”

At Brown, she created one of the country’s first undergraduate majors in cognitive science. She went on to work for Bell Labs, where she was responsible for engineering the most lucrative messaging-system patent in the history of AT&T Lucent.

Long before corporate America started to sloganeer its rebellion, before “Work is Personal” and “All Business is Social,” Deb Mills-Scofield did business the only way that made sense to her — with curiosity and compassion. She called herself a “troublemaker.”

“Part of what I bring when I’m consulting is the fact that I care about you as a person, and not as your function,” she says.

In conversation, Mills-Scofield asserts a motherly kind of authority. She is frank but affectionate; she genuinely asks after your family. She doesn’t miss anything.

Her consultancy helps companies humanize their practice. “Any business that wants a return on investment needs to focus on how it impacts its community,” she says.

Mills-Scofield urges CEOs to put themselves in their customer’s shoes. “Have you ever tried to buy from yourself? Have you ever called your own customer service line?” she asks them. She teaches leaders to trust their employees’ desire to learn and create. “Treat them like adults!” she insists. “Give them the autonomy to innovate.”

Fundamentally, she believes that management’s job is to exercise “stewardship” over the organization, not control. “Business strategy is a living, breathing thing,” Mills-Scofield claims, “It’s not a plaque on a shelf, which is where most companies have gone wrong.”

+++

When Mills-Scofield visits the Brown campus in the fall, she will hold her “office hours” in the cozy kitchen of the student community service center. Over the years, the guidance she has offered her “kids,” as she calls them, has made her a household name within the institution.

This September, she looks forward to introducing her mentees to one of the greatest resources within her network: the Collaborative Innovation Summit hosted annually by the nonprofit Business Innovation Factory (BIF) in Providence, RI.

In 2009, Mills-Scofield connected with Saul Kaplan, BIF’s founder, to encourage a student’s interest in local business innovation. She and Kaplan struck up a friendship, founded on their belief in the better nature of business, and he invited her to speak at the BIF Summit.

“We desperately need to see real examples of world-changing innovation and the “ordinary” people who come together to create it,” Mills-Scofield says.

“I call the BIF Summit a ‘wedding.’ It is better than any other conference at creating connections among strangers at a profoundly human level, because it provides the space — physical, emotional, and intellectual — for you to challenge yourself to think differently, surrounded by other people who are willing to take the risk with you.”

“I came to the BIF-6 Summit, and my network has never been the same since,” she says. “It’s a gift. I’ve been to every one and I can’t wait to go to BIF10.”

The BIF Collaborative Innovation Summit combines 30 brilliant storytellers with more than 400 innovation junkies in a two-day storytelling jam, featuring tales of personal discovery and transformation that spark real connection and “random collisions of unusual suspects.”

This is the fourth of a series of conversations published on the Time website, authored by myself and Nicha Ratana, with transformational leaders who will be storytellers at the BIF10 Collaborative Innovation Summit in Providence, RI.

Ethan Zuckerman’s job is to see the Internet for what it is.

As the director of the MIT Center for Civic Media and the author of Rewire: Digital Cosmopolitans in the Age of Connection, Zuckerman studies civic engagement within digital infrastructures. He has made the case that we are not as connected as we appear to be.

Zuckerman’s research explodes what he calls the “myth of connectivity.” As he claims, “The world is more global. Our problems and economics are global. And though we are inundated with content, the media is getting less global.”

He believes it is important to expose and rectify this fallacy; after all, “this leads not only to shocking ignorance about the world, but also to missed opportunities for marketing and collaboration.”

As it turns out, Zuckerman says, “What you don’t know can hurt you.”

“Atoms are more accessible than bits in many occasions,” Zuckerman says. “Fijian water is easy to access, but Fijian culture is not.”

He attributes the myth of connectivity to a lack of demand rather than too much supply. With the explosion of personal publishing and the “read-write web,” the issue isn’t so much the lack of stories told from other parts of the world, but rather, that these stories have been filtered out by the American attention span.

One of the problems of “free market journalism,” Zuckerman says, is that it relies on user behavior to recommend content. This filtering mechanism is deeply susceptible to what he calls “homophily.” Meaning “love of the same,” the concept is also known by the truism “birds of a feather flock together.”

Homophily explains the tendency of news coverage to cater to the lowest common denominator, or, speaking within the realms of Zuckerman’s research, of the disappearance of international or investigative reporting.

“What we need are new systems to help us stumble over things, to jog us out of ordinary reality,” Zuckerman says.

Zuckerman claims the key to integrating international or hard-hitting perspectives into domestic discourse is to provide relevant context. Fundamentally, he says, “What’s most important to you, is ‘you’ and ‘yours.’ If we’re not giving people some way in which they can interact with content, we’ll be missing giant opportunities.”

He forecasts that content recommendations of the future will be able to determine an audience’s interest and the “information rut” that they’re stuck in, before bridging that gap by suggesting novel, yet unexpectedly useful content. For instance, “following your interest in US mobile phones, you might find yourself reading about Chinese phone technologies, or about how much disposable income the mobile market captures in East Africa,” he explains.

“I was never in love with the narrative of the Internet startup,” Zuckerman says.

“Dot com” entrepreneurism did not excite him as much as the question of the Internet’s potential to transform the world.

Yet, for all his reluctance to view enterprises as one-stop fix-its for society’s ills, Zuckerman looks forward to returning to speak at the Collaborative Innovation Summit hosted annually by the nonprofit Business Innovation Factory (BIF) in Providence, RI.

At the Summit, Zuckerman intends to engage the BIF community — which he knows to be composed of unconventional tinkerers and seasoned social entrepreneurs — with a critical question he has been wrestling with: how to innovate journalism.

The BIF Summit has been a site of meaningful connections for Zuckerman in the past. He recalls meeting his MIT colleague Neri Oxman there, and marveling, from her talk about her first encounter with snow, Oxman’s intuitive thought process as a materials scientist.

“What I value so much about BIF is this notion that you’re not there to give a presentation, but to tell a story,” Zuckerman says, “With stories, the interesting motivations are never completely rational. That irrationality, that underlying passion, is to me what’s fascinating about anybody who’s trying to change the world.”

He believes that in BIF’s passionate community, he will find a receptive audience. “Storytelling is hugely underrated as a form of human communication,” he says, “It’s really hard to make money while doing good, investigative journalism, but that doesn’t mean it’s not worth doing.”

“Ultimately, I think we need to be having a deeper conversation about what public goods we should be willing to pay for, that the market isn’t good at provisioning,” Zuckerman says. He recognizes, “Those tend to be fighting words in the United States, but I think this notion of having really high-quality information is something that we’re not talking seriously enough about.”

The BIF Collaborative Innovation Summit combines 30 brilliant storytellers with more than 400 innovation junkies in a two-day storytelling jam, featuring tales of personal discovery and transformation that spark real connection and “random collisions of unusual suspects.”