You only have to know one thing

“ You only have to know one thing :  you can learn anything” 

said a very young man  addressing a 20 odd volunteers at Khan academy’s office in Mountainview.

This volunteering was to prepare for their LearnStorm maths challenge event that will be launched in bay area in feb 2015. Whole evening was managed by 4 young college grads. No manager, no supervision !!

I am a big fan of this MOOC concept but never imagined it would be run in such a coolest way – more like a start-up.

Whole office looked like a lounge or working cafeteria. High chairs, tons of fruits and munching lying beside big screen Mac machines.

This program was a huge success in Ireland that swept the whole nation. Some surprises from the event.. Some of the not-so-good schools kids fared far better in the challenge. True democratization of learning.

Experience Curve

In 1966 BCG devised learning curve concept based on available academic literature including HBR article by Prof Hirschmann and its own work for some clients.

After studying various industries for 4-5 years, BCG concluded that with each doubling of experience, costs and prices should typically decline by 15 to 25%

Francis Lucier, executive from Black & Decker got fascinated with this concept when he read about experience curve in BCG perspectives. He wanted Bruce Henderson (BCG founder) to work on this for Black & Decker. Bruce declined but sent his best man for the assignment – Bill Bain (who later founded Bain & Company).

B&D was one of the very first companies to apply experience curve. To build volumes and increase market share it reduced prices by almost half. It convinced dealers what it was trying to do as their commission took hit in the short term. It was a great success in the end. Lucier became CEO of B&D, first CEO outside of Black and Decker families.

In another industry, in late 1970s, soft lens manufacturer Bausch & Lomb behaving like a firm believer in experience curve slashed prices to gain market share. It did gain market share. But this led its competitors to desperation. One by one all of its competitors got sold out. And who were the buyers? Revlon and J&Js of the world, all of them more powerful and bigger than Bausch & Lomb.

With infusion of capital to its competitors, Bausch & Lomb now had a serious fight to contend with. Bausch & Lomb converted good competitors in to bad ones. 

(Based in excerpts from 'Lords of Strategy' and Competitive Advantage by Michael Porter)

Baidu

Yesterday on lunch table one of my Chinese colleagues mentioned about her travel to China and how Baidu was better than Google (Google is banned there anyways).  

I got curious and looked up… I didn't know that Baidu founder Robin Li is the pioneer of search algorithm that used page ranking even before Larry Page.  Around 1997 Page and Brin even met Li  and exchanged ideas.

Apparently Li was working in D E Shaw in 1997 and wanted the company do something with his search engine but they didn't know what to make out of it. Frustrated with this Li returned to China and founded Baidu in the year 2000. Rest is history !!

Passion

Have you ever wondered why Steve Jobs didn't get in to eReader business  or why Jeff Bezos never challenged Apple in ipod in initial days?

In one of the famous books on Amazon the author concludes that Jeff was always fascinated with books and Jobs had fascination for music all through his life. This fascination by and large dictated the choices they made in their business lives.

I think Jeff deserves more praise for the risk he took in getting in to ever risky devices business. Traditional strategy wisdom calls for moving in to adjacent business areas for growth. Are online retail and ereaders business adjacent to each other?
Disrupting and cannibalizing established business for new frontier is superhuman. Remember Kodak?