22 November 2007

Week 24 Blue Ocean Strategy

Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant by W. Chan Kim and Renee Mauborgne (Harvard Business School Press) is a book I read before applying for this grant. I referenced this book in my application because of its good analytical framework for entrepreneurs to create an business strategy for sustained growth--something very difficult to achieved after attaining blue chip size.

I will discuss a strategy for a company leveraging the power of X3D to enable a blue ocean of value for an individual's life management 3D application, nHand software, which is extensible to enterprise management applications. The discussion will be dual tracked: one for the individual's view and one for the enterprise owners' (i.e., service-oriented and materiel-oriented businesses).

The value innovation (p.16 figure 1-2) is the simultaneous pursuit of differentiation and low cost according to Kim and Mauborgne. Favorably reducing the time, effort and cost to plan, acquire, manage, and archive one's possessions (i.e., man-made and natural resources) and one's health (i.e, fitness, illness, wellness and diet) from pre-birth thru post-death are the strategic goals.

For an enterprise, the goals include reducing the its cost of doing business--less energy consumption, fewer hectares of land, people and/or floor space, or less insurance without more risk exposure. Increasing nHand buyers value by creating X3D models of traded goods and rendered services that are comprehensively tagged with metadata for applications like nHand software to integrate into one's life story is the other pursuit.

I must say here I'm not talking about "life-logging", per se--this conceptualization is a subset. At the enterprise level, increasing consumers' value means the same--giving the international standard format of the good or service to a buyer for her virtual world so she can manage her efforts towards her goals more effectively than without having access to the cumulative results of her economic behavior.

So how much time does it take and money does it cost to do this to some arbitrary grade and quality?

A benchmark and baseline have to be documented before a claim of reduction is put forward. For the sake of bounding the limits of X3D information creation, integration and accumulation, assume the life span of economic activity is 100 years (= 36,525 days). For now lets just guessimate an average accumulator of wealth with average American health will need 365 GB (that's 10 MB per day) to archive her 100 years of life's property and personal services. I'll flesh out a better estimate as this grant unfolds. One can hold that much data in the palm of there hand today so toting around a 300 GB or 300 TB solid state or biological storage device that is smaller than the palm of your hand a century from now should not be a surprise. I wonder what's the largest X3D model out there now!

Baselining the time and effort one would have to take just to have an integrated economic record of her health and wealth is difficult--I haven't such a record nor do I know anyone who has! So let's assume several things to get a WAG on this blog and move on. First, the average instances of daily economic and health activities (e.g., she goes to the grocery store and buys 50 items, that's 50 X3D models and 50 instances of economic activity, not cash register receipts) over her life of 100 years is 10, so 365,250. Next, assume it takes a minimum of one minute to log each instance, maybe two minutes, so 365,250 - 730,500 minutes or 101 - 202 days! That's 0.138 - 0.277% of her lifetime just transcribing the alphanumeric only data into the paper or electronic log. Who knows how much time would be spent formatting the data and trending plots resulting from aggregrating the data but let's assume 1 - 2 minutes per item as well. Now the time is up to 0.277% - 0.554% of her lifetime for using the composite data for any number of reasons.

nHand software and business partners have to be faster than 4 minutes per economic and health actions while providing more value to her to be compelling to buy. The same goes for an enterprise. The biggest source of error in my time WAG is knowing how much time it takes for format data and generate the kinds of correlation plots to make sense of all the data.

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