Living in a Bipolar Business World

Nov. 13, 2009 -- Get ready for a bipolar world.

Despite the title of a best-selling book of a few years back, it turns out that the world isn't flat. And, despite all of the leveling forces being unleashed by the Internet, global business and social networks, it won't be getting any flatter in our lifetimes.

But don't believe the growing legions of naysayers to Tom Friedman's book either, because nearly all of them begin by accepting his underlying premise … and then set out to debunk it by showing how pockets of entrenched cultural differences won't succumb to Twitter and the iPhone.

As many recent stories have shown, if your business follows Friedman's advice you are very likely to get blindsided by markets with rules that are alien -- even antithetical -- to our own. But if you follow the advice of the Friedman debunkers, you risk even greater disaster by not taking advantage of the scalability of the new digital marketing, distribution and sales tools. In other words, while the "Flat Worlders" are likely to get bruised by real cultural diversity, the non-believers --or "Bumpy Worlders" -- risk being killed by more efficient competitors.

So what's the truth?

I'm not trying to be clever when I tell you that it is both. And yesterday, a new book of mine, "No Size Fits All," was published to explain that answer. If you are keeping track, yes, that's two books by me in a single year -- and I've got a nice case of tendonitis to show for it.

The first book, if you'll remember, ("The Future Arrived Yesterday") described the rise of a new kind of company, the "protean" corporation, that is beginning to appear around the world. The new book looks at the emerging global market in which these companies will joust for dominance. I've co-authored "No Size Fits All" with marketing guru and Silicon Valley executive Tom Hayes, whose own book, "The Jump Point" -- on the impending explosion of 2 billion more consumers around the world -- was published last year and neatly dovetails with the two other books.

Still to be written (next year, because I'm getting too old for this pace) is a fourth book, also co-authored with Tom, in which we will describe how these protean corporations will actually compete and eventually control the new global marketplace. That, with luck, will complete what we think is the first real vision of global business competition in the 21st century.

Now, let's go back to that apparent contradiction between a world that is both "flat" and "bumpy." To understand how that can be so, you need only look at your own life today as a consumer in the 21st century economy. I suspect that if you do so, you'll see that you are, in fact, moving simultaneously in opposing directions.

The Global Economy: Just Getting Fired Up

On the one hand, all of us are becoming major players (because of our comparative wealth) in an emerging, Web-driven global economy. We shop on Amazon, buy from eBay, send Tweets and IMs, write G-mails, search Google, download iPhone apps and iTunes, watch Hulu, etc. We no longer really know or care where these enterprises are located, and we are comfortable in the knowledge that wherever we are on the planet, we can simply use our cellphones or laptops to access them. If that item we just won on eBay, or that Web site we regularly visit, happens to be located in Nairobi instead of Nashville, we are largely indifferent. By the same token, when we sit in that conference room at work and use a Cisco system to teleconference a meeting, the novelty of the other participants being in Tel Aviv, Sydney and Brussels wears off quickly.

In other words, almost without our noticing it, that long-predicted global interlinked economy is now upon us, and we are daily participants within it. And there are a couple billion other people out there just like us, entering this vast worldwide marketplace/agora/souk, from offices, dens, coffee shops, Internet cafes and cardboard cell phone rental shops in almost every village, city, and home on the planet. And this global economy is just getting fired up -- wait until you see what happens when the current financial crisis ends.

We are about to see tens of millions of new enterprises, an explosion in intellectual capital, global fads emerging out of the most unexpected places and racing around the globe, hot new products and companies that appear and disappear overnight, and new centers of wealth and power. Out of this chaos will appear the first 10-million-employee companies, the first trillion-dollar corporations and the world's first trillionaires. It is going to be chaotic, exhilarating and more than a little scary. It will be 'flat', but only in the way that roiling lava is flat.

But that's only half of the story. As exciting as this global marketplace will be, few of us will have the inclination or the energy to spend our lives in it. And, as many of us are already discovering, this new reality is becoming a burdensome intrusion. The sheer noise of it all is exhausting -- each day we in the developed world are bombarded with radio and TV ads, web banner ads and pop-ups, spam, viruses … all trying to break through whatever barriers we have put up to them and all trying to capture our attention. And it is going to get much, much worse, both because as human beings we only have a finite amount of time and bandwidth, and because we have begun to actively resist these encroachments. That, in turn, is only going to make the advertisers and marketers of the world even more desperate, and creative, in how they try to get our attention.

Sub-Market Niche Groups: A Combination of Old and New

The result, both figuratively and literally, is that we are going to find ourselves increasingly hiding in our houses, behind thick doors designed to keep the crazies out -- and only going out on forays into that world when we need to, or the mood strikes us. The rest of the time, we are going to band together, mostly virtually, with small groups of like-minded people who share one or more of our interests. It's these small, sub-market niche groups, which, in time, will number in the millions, that will create the 'bumpy' end of this increasingly bipolar world.

You probably belong to a number of these groups already. Perhaps it's an online neighborhood group interested in bike lanes, or collectors of 19th century English cameo glass, or a black-powder shooting club, or an on-line gamer team, or a weekend bicycling team, or Oklahoma longhorn cattle breeders. Many of these are virtual descendents of physical groups, such as the local VFW or PTA, the difference now being that the membership is no longer confined to a single geographic area -- which makes their creation much simpler and their membership rolls far easier to fill. In the old days, you had to deal with that one jerk down at the Elks Club hall; these days, that jerk has been replaced by a good guy who happens to live in Capetown.

These sub-market niche groups are an interesting combination of old and new. Old, because most are likely to contain about 150 members, what sociologists say has been the optimal grouping of human beings since prehistory. They also behave like a traditional tribe -- insular, trading amongst themselves, and suspicious of outsiders. At the same time, they are very modern -- existing almost entirely in cyberspace, hidden behind firewalls, and with global extension.

By the time our current economic transformation is over, 3 billion people -- including you and I -- will be shopping, competing and working in the vast global marketplace. At the same time, most of those 3 billion -- including you and I -- will also belong to twenty or more sub-market niche groups. How we will choose to apportion our time between the two will be a personal choice based upon wealth, age, the demands of our work, and the varieties of our interests.

Meanwhile, for businesses everywhere, both large and small, a major decision is rapidly approaching: do you risk everything for the chance at great overnight success by launching into the global marketplace? Or do you take the time (and endless patience) that will be required to earn your way with trust into a hundred or a thousand of those small niche markets -- and enjoy a smaller, but infinitely loyal, customer base almost forever?

Finally, for government, the challenge may be the biggest of all -- because as individuals begin to migrate to these two poles (the global and the intensely local) intermediate entities like state and federal governments begin to look increasingly superfluous. And their ability to do things like collect taxes becomes increasingly difficult. If I were a bureaucrat or politician right now, I'd be wondering where I belong in this new world.

TAD'S TAB: Here's the perfect time-waster. "Let Them Sing it for You" is an online application that allows you to type in the text of your choice -- and then it will sing it back to you using samplings from a wide variety of popular music. Type anything you can think of, then hear it performed by your favorite (and not-so-favorite) performers. Check it out at http://www.sr.se/p1/Src/sing/

This is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNews.com "Silicon Insider" columnist since 2000.