From: jya@pipeline.com (John Young)
Date: Sat, 18 May 1996 20:24:24 +0800
To: cypherpunks@toad.com
Subject: RUL_net
Message-ID: <199605170114.BAA08578@pipe5.t1.usa.pipeline.com>
MIME-Version: 1.0
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   May-June, 1996, Harvard Business Review. Two related 
   articles which examine c'punks interests -- proposed 
   business regulation of the Net; on-line security; 
   copyright; encryption; authentication; E-cash; electronic 
   commerce; protected communities to escape "frontier 
   anarchy." 
 
   Executive summaries by HBR: 
 
 
   "Ruling the Net." Debora Spar and Jeffrey J. Bussgang 
 
   The Internet promises a radical new world of business. But 
   for many companies, it has yet to deliver. Although doing 
   business in cyberspace may be novel and exhilarating, it 
   can also be frustrating, confusing, and even unprofitable. 
 
   Debora Spar and Jeffrey Bussgang argue that the problems 
   companies face have little to do with a lack of technology 
   or imagination. Their problems stem instead from a lack of 
   rules. Without the order that rules create, business cannot 
   be conducted. 
 
   The authors explain why the informal rules that have 
   developed on the Internet since the 1960s are no longer 
   sufficient. Businesses thinking of allowing millions of 
   dollars of transactions to occur on the wide-open Net need 
   specific assurances. They require clear definitions of 
   property rights, a safe and useful means of exchange, and 
   a way to locate and punish violators of on-line rules. 
 
   The authors believe that the key to commerce on the 
   Internet lies in the creation of managed on-line 
   communities. Such communities can be formed by service 
   providers -- entities that will restrict on-line options, 
   fine-tune offerings to match a select group of users, and 
   provide some means of recourse in cases of fraud or abuse. 
   Under those conditions, they will draw new companies 
   on-line and increase the productivity of those already 
   there. And, say the authors, the rewards for service 
   providers will be substantial: Companies that make the 
   rules on the Internet's emerging frontier have the 
   opportunity to reap the greatest profits. [40 kb] 
 
 
   "The Real Value of On-Line Communities." Arthur Armstrong 
   and John Hagel III 
 
   The notion of community has been at the heart of the 
   Internet since its early days, when scientists used it to 
   share data, collaborate on research, and exchange messages. 
   But how can businesses best use its community-building 
   capabilities? Not merely by putting their products or 
   services on-line, the authors contend. Real value will come 
   from providing people with the ability to interact with one 
   another -- from satisfying their multiple social needs as 
   well as their commercial needs. Companies that create 
   strong on-line communities will command customer loyalty to 
   a degree hitherto undreamed of and, consequently, will 
   generate strong economic returns. 
 
   The authors present four different types of community: 
   communities of transaction, interest, fantasy, and 
   relationship. Examples of each type already can be found on 
   the Internet or through on-line services, but the 
   successful community of the future will incorporate all 
   four -- or as many as possible. As for economic value, the 
   authors see four ways for a company to generate returns: 
   through usage fees, content fees, transactions and 
   advertising, and synergies with other parts of its 
   business. 
 
   In the near future, new business definitions may emerge 
   around the notion of owning a specific customer segment 
   across the full range of its interests and needs; owning 
   specific products and services may no longer be so 
   important. The authors urge businesses marketing to 
   consumers to make the small investment required to "buy an 
   option" on electronic communities in order to understand 
   both their potential value and the radical changes they may 
   cause. [33 kb] 
 
 
   RUL_net (for the 2) 
 
   ----- 
 
   Reprints of "Ruling," No. 96309 and "Real Value," No. 96301 
   may be ordered from HBR for $5.00 each by email to: 
 
      custserv@cchbspub.harvard.edu