Services Innovation

It’s a truism, at least in VC circles, that “services busineses don’t scale”.  In the very basic sense that services are provided by a human (I’m talking about real services businesses here and not XaaS businesses) and that more services requires more humans, this is, of course, true.

But there’s motion in the ocean in services, and it’s worth paying some attention.

What’s new?

  • Crowdsourcing.  By chopping up a services function into minimal parts and farming the minimal parts out to a large crowd of temporary workers, one can do hefty projects cost-effectively, use “time slices” of otherwise-expensive experts, or even achieve novel insights (as with prediction markets).  Crowdsourcing is an extremely interesting area for Valhalla.

(Crowdsourcing actually reminds me of RISC (“reduced instruction set computing”), where a processor is designed to use a small instruction set at high speed and efficiency instead of a CISC (“complex instruction set computing”) architecture where each instruction is specialized but requires variable cycles to execute, hurting predictability.  Crowdsourcing = RISC, “conventional” services = CISC.  Well, CISC did win out more or less (although RISC is making a comeback in GPUs.  But we digress).)

  • DoGooders.  A significant number of youths want to do good, and are actually doing good.  Teach For America is sort of the paradigm for this kind of thing.  I don’t know if it’s significant compared to my youth, but as these new service workers come into NoGooder jobs later on they’re going to want those jobs to have some kind of significance beyond the paycheck.
  • Death of the professions.  I know the most about medicine here, which is transforming from a profession/craft business into an industry.  Since the drivers are the same, I expect we are seeing the same thing in accounting, law, science, engineering, and teaching.  What does it mean to have “professionals” without a professional esprit de corps or, more appropriately, a professional code of ethics?  I don’t know, but we’re going to find out.

Enough for one day.  Your thoughts?



One comment on “Services Innovation

  1. Danny Allen says:

    I agree completely with your second and third points (the first point is interesting, but I don’t have strong opinions on it).

    I saw the DoGooders phenomenon in action last weekend at the NOVAedu startup weekend. Almost every team was pursing the holy grail of a viable business that did good for the world through education, and many of them were much more focused on the mission than the payoff.

    As to the death of professions, the legal profession has long since sailed as a profession and is absolutely a business now. There will be fallout as lawyers adjust to this, as evidenced by the demise of my old firm, Dewey Ballantine.

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