Mclowd Newsletter November 2016

Welcome to the Mclowd Community Newsletter.

“Even more radically, the marginal cost of just about every feature on a website or an app is precisely zero. Program it once and you can give it to everyone. The ‘good’ version is merely the ‘best’ version with some software turned off, which is fine if you don’t have any competition.

Good, better, best is going to have to start being based on something else.”

Features and marginal cost in the digital age, Seth Godin Aug 30th 2016

Introduction

Many of you will know Seth Godin as an entrepreneur and world-famous author in the field of marketing (whose speciality is – ironically – pricing strategies).

He is also a man on a journey – one with which I am all too familiar.

Godin talks about ‘Good, better, best…being based on something else’. While he has yet to make the connection, that ‘something else’ is actually governance.

While not always obvious, we are surrounded by examples of the role played by governance.

The vast majority of the world’s websites run on WordPress. This is not because WordPress is functionally superior to the alternative platforms. It is primarily because:

  • The marginal cost of accessing the software is (to quote Godin) “precisely zero”
  • The software was created under a governance model that does not require licence fees to be paid for access to the core intellectual property

As a consequence today very few individuals or organisations need pay for web content management software, and an industry that used to employ a significant number of people has – to a very large extent – ceased to exist. (Exactly the outcome which Godin has begun to envision).

Wikipedia and Linux are similar examples where longevity and market dominance have been driven by governance as much as innovation. For those of you with a mathematical bent, the above process can be described as a formula:

longevity + dominance = innovation x governance

Accounting Software Update

Much of our recent efforts have been focused on delivering refinements to the year end process to make it more robust and user friendly.

As a consequence there are now a growing number of trustee and practitioner users who are able to stand up a set of auditable SMSF accounts inside Mclowd – for free.

Commenting on his experience Sydney-based trustee Doug Turner had this to say: “I recently received sign off on my FY16 accounts from SMSF auditor Ravi Nand of Moneytree Accounting, who is also participating in the Community. While I’m conscious that the software needs to continue to evolve to suit the more complex needs of practitioners, from my point of view Mclowd is already a success.”

As per Seth Godin’s comments, the code which generated that outcome can now be used millions of times over, at a marginal cost of precisely zero.

Introductory Webinar

For the benefit of new users and those considering migration, a free Introductory Webinar is being held on Thursday 8th December.

Register

Postscript

The implications of Seth Godin’s 30 August 2016 blog post extend far beyond the web applications to which he refers.

Earlier this year the Dubai Government accepted a tender proposal for an 800MW solar power plant at a price of US$2.99c per kilowatt hour, which is:

  • In itself 50% less than similar quotes of just two years ago
  • 85% less than the price paid by most electricity consumers in Australia

There is a very simple reason why the price of renewable energy has collapsed towards zero:

The marginal cost of renewable energy is approaching zero.

Similarly the marginal cost of a physical item printed from recycled feedstock on one of the 3D printers currently being installed by OfficeWorks in its network of Australian stores will also approach zero. As will the price.

The marginal cost of a trip in a driverless car, truck, tram or bus built by robots out of recycled materials within a supply chain powered exclusively by renewable energy will also approach zero. As will the price.

In the context of the above any collective human effort that is not backed by a marginal cost governance structure is utterly futile.

No matter how innovative it might appear in the short term.

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