12 Guidelines for Deciding When to Persist, When to Quit 01-01

12 Guidelines for Deciding When to Persist, When to Quit

by Rosabeth Moss Kanter  

When you're getting something new going, the difference between success and failure is often a matter of time: how long you give it before you give up. Efforts that begin with high hopes inevitably hit a disappointing sag. It's Kanter's Law: "Everything can look like a failure in the middle."

In the messy middle, unexpected obstacles pop up because the path is uncharted. Fatigue sets in. Team members turn over. Impatient critics attack just when you think you're gaining traction. Tough challenges almost inevitably take longer and cost more than our optimistic predictions.

That's why persistence and perseverance are important for anyone leading a new venture, change project, or turnaround. But the miserable middle offers a choice point: Do you stick with the venture and make mid-course corrections, or do you abandon it? Do you support incumbents making progress even though the job is not yet finished, or do you abandon them for another group's unproven promises?

Persist and pivot, and the effort could go on to success. Pull out in the messy middle, and by definition the effort is a failure. The issue is deciding which direction to take.

Consider this real-time case. Airtime, a video conversation platform, launched in the summer of 2012 by Napster legends Sean Parker and Shawn Fanning with much hype and more than ample funding. After a mere 4 months, Airtime has been pronounced in critical condition by media doctors because it has attracted only a trickle of users. Now Fanning has reportedly departed, and critics are chattering about failure. Famed Facebook advisor Parker claims that it is "ridiculously early" to plan Airtime's funeral. He argues that it takes 6 to 12 months to get things up and running. I suppose that 12 months is considered almost a lifetime in the digital age.

But a year might seem short to other people. Just ask Hewlett-Packard's CEO Meg Whitman, who has already declared that she couldn't accomplish much in a year and needs more time. I hear woes-of-the-middle tales from all kinds of leaders in all stages and sectors; innovators getting a new idea off the ground, real estate developers facing stalled construction, companies approaching foreign markets, and CEOs leading complex turnarounds.

Whether it's a start-up like Airtime, a turnaround, an elected official, or your own pet project, there are 12 key questions that can help you decide whether it should be shut down or helped through the messy middle:

1. Are the initial reasons for the effort still valid, with no consequential external changes?
2. Do the needs for which this a solution remain unmet, or are competing solutions still unproven or inadequate?
3. Would the situation get worse if this effort stopped?
4. Is it more cost-effective to continue than to pay the costs of restarting?
5. Is the vision attracting more adherents?
6. Are leaders still enthusiastic, committed, and focused on the effort?
7. Are resources available for continuing investment and adjustments?
8. Is skepticism and resistance declining?
9. Is the working team motivated to keep going?
10. Have critical deadlines and key milestones been met?
11. Are there signs of progress, in that some problems have been solved, new activities are underway, and trends are positive?
12. Is there a concrete achievement — a successful demonstration, prototype, or proof of concept?

If the answers are mostly Yes, then don't give up. Figure out what redirection is needed, strategize your way over obstacles, reengage the team, answer the critics, and argue for more time and resources. Everything worth doing requires tenacity.

If the answers trend toward No, as seems likely for Airtime, then cut your losses and move on. Persistence doesn't mean being pig-headed.

"You've got to know when to hold them, and know when to fold them," Kenny Rogers sang in a famous song about playing poker. That's good advice for any leader struggling with change. It's a mistake to give up prematurely, because the middle is always messy. But be sure to heed the 12 guidelines to choose between persistence or pulling out.

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Five Self-Defeating Behaviors that Ruin Companies and Careers 01-01

Five Self-Defeating Behaviors that Ruin Companies and Careers

by Rosabeth Moss Kanter

In turbulent times, it's hard enough to deal with external problems. But too often people and companies exacerbate their troubles by their own actions. Self-defeating behaviors can make any situation worse. Put these five on the what-not-to-do list.

Demanding a bigger share of a shrinking pie
Leaders defeat themselves when they seek gain when others suffer, for example, raising prices in a time of high unemployment when consumers have less to spend, to ensure profits when sales are down. McDonald's raised prices three percent in early 2012 and by the third quarter, faced the first drop in same-store sales in nine years  . The executive responsible for that strategy was replaced.

At bankrupt Hostess Brands, bakery workers refused to make concessions (though the Teamsters did), thereby forcing the company to liquidate  , eliminating 18,000 jobs. By trying to grab too much, the bakery union could lose everything.

This happens to executives too. A manager in a retail company demanded a promotion during the recession, because he was "indispensable," he said. The CEO, who had cut her own pay to save jobs, fired him instead. Greed makes a bad situation worse.

Getting angry
Anger and blame are unproductive emotions. Post-U.S. election, defeated Mitt Romney blamed his defeat on "gifts" that "bought" the votes of young people, women, African-Americans, and Latinos for President Obama. Losing the Presidency is a big defeat, but Romney further defeated future electoral prospects with public bitterness and insults. History might remember the bitterness, not his gracious concession speech.

Anger hurts companies too, especially if misplaced. Years after a tragic explosion on an oil platform in the Gulf of Mexico in April 2010 in which 11 people lost their lives, BP was back in the news with a record fine and criminal charges. Former CEO Tony Hayward defeated himself and damaged the company in the public mind by issuing bitter statements about how unfair this was.

Angry words leave a long trail. An employee in another company who threw a temper tantrum over a denied proposal was surprised that this episode was still recalled two years later, overwhelming his accomplishments. He was the first terminated in a reorganization. Bitterness turns everything sour.

Giving in to mission creep
Sometimes self-perpetuated decline occurs more slowly, through taking core strengths for granted while chasing the greener grass. I can't say that this is happening to Google, a company I admire, but I do see potholes ahead — although driverless cars are an extension of mapping software close to Google's core strength in search. But should Google expand its territory to be a device maker and communications network provider, building a fiber-optics and mobile network? This could be mission creep. Perhaps Google should focus on improving Googling.

Trying to become something you are not while there's plenty of value in who you are can be self-defeating. For professionals, this can mean branching out into new fields while falling behind in the latest knowledge in the field that made their reputation. People can get caught in the middle — not yet good enough to compete in the new area, while losing strength in the old area.

Adding without subtracting
A related form of self-defeat is to allow bloat. Adding new items without subtracting old ones is how closets get cluttered, bureaucracies expand, workloads grow out of control, national budgets go into deficit, and people get fat. It takes discipline to cut or consolidate some things for every one added. Too often that discipline is missing.

A technology company tacked on acquisitions without integration, which made acquired companies happy. But one consequence was 17 warring R&D groups and the lowest R&D in the industry. Bankruptcy followed. Growing without pruning is bad for gardens and for business.

Thinking you'll get away with it
Whatever "it" is — lying, cheating, foreign corrupt practices, or swallowing extra bites of chocolate — lapses cannot remain secret for long in the digital age. Believing otherwise is delusional. The mistake will show up somewhere — in routine audits, unrelated FBI investigations, smartphone photos by strangers, or the bathroom scale. In the ultimate example of self-defeating behavior, too many otherwise-intelligent politicians, military leaders, and CEOs think with their zippers, thereby jeopardizing companies, countries, and careers.

Happily, there's a cure for self-defeating behavior: Get over yourself.

Humility prevents self-defeat. A desire to serve others, an emphasis on values and purpose, a sense of responsibility for long-term consequences, and knowledge of both strengths and limitations can make it easier to avoid these traps. Google has enjoyed outstanding success, but that doesn't mean it will succeed at everything. The bakery union that fought Hostess into liquidation had solidarity, but perhaps it, too, should have eaten a little humble pie.

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Four Reasons Any Action Is Better than None 01-01

Four Reasons Any Action Is Better than None

by Rosabeth Moss Kanter  |  10:21 AM March 28, 2011

It's well-known that busy people get the most done. Their secret is simple: They never stop moving.

Of course, sitting still can be a good thing if it involves renewal, reflection, and focused attention (or having meals with the family). But sitting still can be a bad thing if it involves procrastination, indecision, and passivity.

Companies heading downhill have passive cultures. Unmade decisions pile up. Opportunities are lost. No one wants to risk making a mistake. It becomes easier to sit it out than get into the game. One of my favorite examples involves the backwater bank in which employees would send customers who had complicated problems to the rival bank across the street, rather than try to do anything.

In contrast, in companies with high levels of innovation, people take initiative. They start new things. They don't wait to be told. They get routine work done efficiently in order to free up the time to get involved in something new. Here are some of the reasons.

Small wins matter. Small wins pave the way for bigger wins. A nudge in the right direction, asCass Sunstein   and the new behavioral economists tell us, can lead to major tipping points   (per Malcolm Gladwell) when you achieve critical mass. As I saw in my study   of business turnarounds and sports teams, confidence — the expectation of a positive outcome that motivates high levels of effort — is built on one win at a time.

Accomplishments come in pieces. A journey of a thousand miles is daunting. The single step with which the journey begins is manageable. Every step you take now adds up by getting that much closer to a goal. Busy people in high-productivity environments tend to take just one more action, return one more phone call, set one more thing in motion before calling it quits for the day. By tomorrow, new demands will start piling up. Mental tricks like dividing big tasks into numerous small steps make it possible to identify immediate actions to get big things off the ground.

Perfection is unattainable anyway. Forget perfection. Just do it. So what if you're wrong? You can always try again. In an uncertain world of rapid change, business strategy includes room for improvisation. Live by some classic slogans: Best is the enemy of good. (Don't wait for perfect conditions.) Nothing ventured, nothing gained. (It takes a little risk to get rewards.)

Actions produce energy and momentum. It simply feels better to take action than sitting around navel-gazing and getting sluggish. Overwork can bring stress, but, in fact, many studies show that the important factor in work stress is lack of control. Identifying a positive action is a way to feel in control. Getting moving doesn't drain energy; it tends to build energy. For people trying to solve the national obesity epidemic, or just to lose a few pounds, exercise is more fun than dieting.

These principles represent more than management tips. They reflect a can-do philosophy that is essential for any entrepreneur or any place that wants more entrepreneurs. The only way to activate potential is to support action.

Sometimes it doesn't seem easy. Organizational cultures, autocratic bosses, uncooperative co-workers, long losing streaks, the uncertainty of shifting industry conditions, and big world events like natural disasters and revolutions can stop people in their tracks. But those who emerge triumphant, and get the most done anyway, are the people who would rather take action, any action, than wait around. 

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Why Winning Streaks End??? 01-01

Why Winning Streaks End

by Rosabeth Moss Kanter  |  11:08 AM February 8, 2010

That crashing sound you hear is not an accident caused by sudden acceleration of your hybrid car; it is the continuing toppling of idols, such as hybrid car companies, off their pedestals. Listen hard, lest you be next.

Toyota, the world's leading auto company, faces a series of product problems causing a $2 billion recall  , an investigation   by the National Highway Traffic Safety Administration, and a galling loss of face for a company from face-conscious Japan. This follows its first annual financial loss in 50 years, with profitability regained partly through cost-cutting.

Sayonara   for a while to Toyota's reputation for quality control and invincibility. But in Dearborn, Michigan, there are no smug smiles. Ford announced that it is also fixing electronic brakes in its hybrid cars after a damaging review by Consumer Reports   and more generalized concerns about electronics in cars.

The noise continues. In banking, the latest jackhammer blow to any remaining pedestal pieces is acivil fraud lawsuit   against former Bank of America CEO Kenneth Lewis. Okay, bankers might not be saints, but the saintly are crashing, too. Ten U.S. missionaries were arrested   in Haiti on charges of abducting children, apparently admitting that they had neglected to secure all the necessary permissions, and with hints that some of the "orphans" had living parents. Do some people who feel they are doing good think that they can bend a few inconvenient rules to do it?

And if these weren't enough reminders about fallen idols for one week, the Super Bowl   did not feature my favorite team, the New England Patriots, whose period of NFL dominance   snapped this fall among hints of eroding focus and discipline.

All too often, long periods of continued success are undermined not by the competition but by self-inflicted wounds. I uncovered common patterns in business, sports, leadership, and life in research for my book Confidence: How Winning Streaks & Losing Streaks Begin & End  .

Winners become sinners when confidence turns into complacency and arrogance. They over-estimate their own invincibility and under-value mundane disciplines. Whenever someone feels on top over a long period of time, they are tempted to neglect the very fundamentals that helped them succeed in the first place. They might even start to feel that the rules don't apply to them.

Success means that people or teams or organizations survive long enough to need maintenance, repairs, and reinvestment. Winners undergo natural aging processes, as people get older, slow down, leave. Facilities, tools, and bags of tricks get older, deteriorate, and run down. Newcomers might get less rigorous training while long-timers forget what they learned. As momentum runs down, people and buildings begin to look run down. Neglect takes on tangible physical manifestations, such as out-of-shape bodies or broken windows. Add to this the pressures in a recession to cut costs and defer expenditures.

Erosion begins by removing a process or discipline. Let's defer those roof repairs for another year... Let's cut out one practice; we already have so many... Let's save time by eliminating the weekly team meeting... The Chernobyl nuclear plant disaster   was said to be caused by engineers neglecting small portions of routine safety   checks because they had done so before, and nothing had happened. Oops.

Whether you head a company, lead a good cause, or coach your children's soccer teams, your job is to root out complacency. Remember to:

• Keep up the essential disciplines every single day, not skipping a single one.
• Keep checking everything carefully.
• Repair, renew, relearn, and reinvest regularly.
• Don't rejoice in others' misery, because you could be next.
• Thank anyone who points out flaws. Listen to disgruntled customers or disaffected constituencies.
• Treat even small setbacks as occasions for redoubled efforts.

"Winning is great, but sometimes it takes a loss to get you motivated again. It humbles you down to reality," said a high school athlete in my research. That youth speaks truth! Although he might not be old enough to drive a Toyota, he is headed in the right direction.

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The lottery of life Where to be born in 2013 12-29

The lottery of life

Where to be born in 2013

Warren Buffett, probably the world’s most successful investor, has said that anything good that happened to him could be traced back to the fact that he was born in the right country, the United States, at the right time (1930). A quarter of a century ago, when The World in 1988 light-heartedly ranked 50 countries according to where would be the best place to be born in 1988, America indeed came top. But which country will be the best for a baby born in 2013?

To answer this, the Economist Intelligence Unit (EIU), a sister company of The Economist, has this time turned deadly serious. It earnestly attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead.

Its quality-of-life index links the results of subjective life-satisfaction surveys—how happy people say they are—to objective determinants of the quality of life across countries. Being rich helps more than anything else, but it is not all that counts; things like crime, trust in public institutions and the health of family life matter too. In all, the index takes 11 statistically significant indicators into account. They are a mixed bunch: some are fixed factors, such as geography; others change only very slowly over time (demography, many social and cultural characteristics); and some factors depend on policies and the state of the world economy.

Despite the global economic crisis, times have in certain respects never been so good. Output growth rates have been declining across the world, but income levels are at or near historic highs. Life expectancy continues to increase steadily and political freedoms have spread across the globe, most recently in north Africa and the Middle East. In other ways, however, the crisis has left a deep imprint—in the euro zone, but also elsewhere—particularly on unemployment and personal security. In doing so, it has eroded both family and community life.A forward-looking element comes into play, too. Although many of the drivers of the quality of life are slow-changing, for this ranking some variables, such as income per head, need to be forecast. We use the EIU’s economic forecasts to 2030, which is roughly when children born in 2013 will reach adulthood.

Enlarge

What does all this, and likely developments in the years to come, mean for where a baby might be luckiest to be born in 2013? After crunching its numbers, the EIU has Switzerland comfortably in the top spot, with Australia second.

Small economies dominate the top ten. Half of these are European, but only one, the Netherlands, is from the euro zone. The Nordic countries shine, whereas the crisis-ridden south of Europe (Greece, Portugal and Spain) lags behind despite the advantage of a favourable climate. The largest European economies (Germany, France and Britain) do not do particularly well.

America, where babies will inherit the large debts of the boomer generation, languishes back in 16th place. Despite their economic dynamism, none of the BRIC countries (Brazil, Russia, India and China) scores impressively. Among the 80 countries covered, Nigeria comes last: it is the worst place for a baby to enter the world in 2013.

Boring is best

Quibblers will, of course, find more holes in all this than there are in a chunk of Swiss cheese. America was helped to the top spot back in 1988 by the inclusion in the ranking of a “philistine factor” (for cultural poverty) and a “yawn index” (the degree to which a country might, despite all its virtues, be irredeemably boring). Switzerland scored terribly on both counts. In the film “The Third Man”, Orson Welles’s character, the rogue Harry Lime, famously says that Italy for 30 years had war, terror and murder under the Borgias but in that time produced Michelangelo, Leonardo da Vinci and the Renaissance; Switzerland had 500 years of peace and democracy—and produced the cuckoo clock.

However, there is surely a lot to be said for boring stability in today’s (and no doubt tomorrow’s) uncertain times. A description of the methodology is available here: food for debate all the way from Lucerne to Lagos.

Laza Kekic: director, country forecasting services, Economist Intelligence Unit

from The World In 2013 print edition

China Opens Longest High-Speed Rail Line 12-29

European Pressphoto Agency

China’s high-speed trains at a maintenance area in Wuhan.

By KEITH BRADSHER  

Published: December 26, 2012

China Opens Longest High-Speed Rail Line

HONG KONG — China began service Wednesday morning on the world’s longest high-speed rail   line, covering a distance in eight hours that is about equal to that from New York to Key West, Fla., or from London across Europe to Belgrade, Serbia.

Trains traveling 300 kilometers, or 186 miles, an hour, began regular service between Beijing and Guangzhou, the main metropolis in southeastern China. Older trains still in service on a parallel rail line take 21 hours; Amtrak trains from New York to Miami, a shorter distance, still take nearly 30 hours.

Completion of the Beijing-Guangzhou route — roughly 1,200 miles — is the latest sign that China has resumed rapid construction on one of the world’s largest and most ambitious infrastructure projects, a network of four north-south routes and four east-west routes that span the country.

Lavish spending on the project has helped jump-start the Chinese economy twice: in 2009, during the global financial crisis, and again this autumn, after a brief but sharp economic slowdown over the summer.

The hiring of as many as 100,000 workers for each line has kept a lid on unemployment as private-sector construction has slowed because of limits on real estate speculation. The national network has helped to reduce air pollution in Chinese cities and helped to curb demand for imported diesel fuel by freeing capacity on older rail lines for goods to be carried by freight trains instead of heavily polluting, costlier trucks.

But the high-speed rail system has also been controversial in China. Debt to finance the construction has reached nearly 4 trillion renminbi, or $640 billion, making it one of the most visible reasons total debt has been surging as a share of economic output in China, and is approaching levels in the West.

Each passenger car taken off the older, slower rail lines makes room for three freight cars because passenger trains have to move so quickly that they force freight trains to stop frequently. But although the high-speed trains have played a big role in allowing sharp increases in freight shipments, the Ministry of Railways has not yet figured out a way to charge large freight shippers, many of them politically influential state-owned enterprises, for part of the cost of the high-speed lines, which haul only passengers.

The high-speed trains are also considerably more expensive than the heavily subsidized older passenger trains. A second-class seat on the new bullet trains from Beijing to Guangzhou costs 865 renminbi ($139) one way, compared with 426 renminbi ($68) for the cheapest bunk on one of the older trains, which also have narrow, uncomfortable seats for as little as 251 renminbi ($40).

Worries about the high-speed network peaked in July 2011, when one high-speed train plowed into the back of another near Wenzhou in southeastern China, killing 40 people.

A subsequent investigation blamed flawed signaling equipment for the crash. China had been operating high-speed trains at 350 kilometers an hour (about 218 m.ph  .), and it cut the top speed to the current rate in response to that crash.

The crash crystallized worries about the haste with which China has built its high-speed rail system. The first line, from Beijing to Tianjin, opened a week before the 2008 Olympics; a little more than four years later, the country now has 9,349 kilometers, or 5,809 miles, of high-speed lines.

China’s aviation system has a good international reputation for safety, and its occasional deadly crashes have not attracted nearly as much attention. Transportation safety experts attribute the public’s fascination with the Wenzhou crash partly to the novelty of the system and partly to a distrust among many Chinese of what is perceived as a homegrown technology, in contrast with the Boeing and Airbus jets flown by Chinese airlines.

Japanese rail executives have complained, however, that the Chinese technology is mostly copied from them, an accusation that Chinese rail executives have strenuously denied.

The main alternative to trains for most Chinese lies in the country’s roads, which have a grim reputation by international standards. Periodic crashes of intercity buses kill dozens of people at a time, while crashes of private cars are frequent in a country where four-fifths of new cars are sold to first-time buyers, often with scant driving experience.

Flights between Beijing and Guangzhou take about three hours and 15 minutes. But air travelers in China need to arrive at least an hour before a flight, compared with 20 minutes for high-speed trains, and the airports tend to be farther from the centers of cities than the high-speed train stations.

Land acquisition is the toughest part of building high-speed rail lines in the West, because the tracks need to be almost perfectly straight, and it has been an issue in China as well. Although local and provincial governments have forced owners to sell land for the tracks themselves, there have been disputes over suddenly valuable land near rail stations, with the result that surprisingly few stores and other commercial venues have sprung up around some high-speed stations used by tens of thousands of travelers every day.

Zhao Xiangfeng, a farmer in Henan Province, said a plan to build a mini-mall on his and six other farmers’ land near a station had been shelved indefinitely after he and three of the other farmers refused to lease the land for any price close to what the village leadership offered. He said he worried that local leaders might try stronger tactics on the farmers to force them to lease the land and revive the project.

The 664-mile southern segment of the new high-speed rail line, from Guangzhou as far as Wuhan, has been open for nearly three years. The trains, which come every four to 12 minutes, are often packed, which could limit the number of seats available for travel to Beijing.

Mia Li in Beijing contributed research.

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The Most Disruptive Companies In 2012 12-28

The Most Disruptive Companies In 2012

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By Reuven Gorsht, Vice President, Customer Strategy, SAP

They lurk quietly in neighborhood garages and large offices, concocting wild ideas and rolling out new business models and products that can take entire industries by storm.  These companies have big ideas that are driving profound change by challenging the conventional market while making incumbent companies completely re-think their strategies.

  Beats Electronics: A musician’s personal promise

Rapper Dr. Dre,  recently toppedForbes’ list of highest paid musicians, netting more than $110 million in 2012. But Dre has not released an album in 13 years. How did he get there? Most headphones don’t allow listeners to hear “all” of the music, according to Dre, so he founded Beats Electronics   with Interscope/Geffen/A&M chairman Jimmy Iovine and introduced their first set of headphones right in the midst of the financial meltdown in late 2008 flaunting a hefty price tag of more than $300. Beats by Dr. Dre headphones lured customers away from flimsy $20 earbuds with their signature turbocharged bass and sleek design, as well as the musician’s personal promise: Beats would allow people to “hear what the artists hear, and listen to the music the way they should: the way I do.”

These headphones were handed to selected athletes at the London Olympics, making a big play for the brand, despite the fact that the IOC prohibits non-official sponsors from advertising around the Olympics.

Dre and Iovine continue to expand their Beats empire, creating a line of boomboxes to go along with their headphones. Beats speakers can now be found in the Chrysler 300, the Dodge Charger and a line of HP laptops.

The Bottom Line
Founded: 2006
First product in market: 2008
Current market share: 51 percent of an estimated $1 billion headphone market

  Square: Elegant hardware and software

Everyone is predicting that our phones will soon become our wallets.

Square’s elegant hardware  lets users turn their device into a cash register and do business from anywhere. Taxi cab drivers, street vendors, independent store operators and others can plug the device into a smartphone’s speaker jack to easily accept credit card payments.

Earlier this year, Square sealed a deal with Starbucks   as an investor, planning to roll out Square to more than 7,000 Starbucks locations.

Starbucks customers will only have to give their name at the cash registry, thanks to Square’s GPS technology. When the customer enters the store with their smartphone, their name and photo will be automatically sent to the cashier’s screen. After matching the name and photo, the cashier will quickly complete the order.

The Bottom Line
Founded: 2009
Valuation: $3.25B
Growth rate: >25 percent per month
Transactions per year: $8 billion

Kickstarter: Pitch, raise and win

Do you have an idea, but lack funding? Or would you like to test the market before going into mass production?

Disrupting both retail and finance, Kickstarter is changing the way ideas are financed and launched. Before Kickstarter, entrepreneurs had to bootstrap or seek funding before testing the idea in the community. It cost a lot of money and was a very risky process. Kickstarter lets the community validate business concepts   in their infancy, sometimes before a prototype is even made. Projects can raise funds and test the market without wasting money creating inventory that wouldn’t sell.

Kickstarter has helped launch 33,000 ideas, since its inception in 2009, raising nearly half a billion dollars. This was a blowout year for Kickstarter, thanks to notable products such as the Pebble   smartwatch and the Ouya   gaming console.

The Bottom Line
Founded: 2009
Ideas launched: 33,000
Funding raised (for projects): more than $430 million from more than 2.5 million people

  

Gigwalk: A 200,000 people workforce

With nearly 60 percent of employers planning to hire temporary or contract workers this year, combined with widespread device penetration, we are on the verge of an explosion of mobile, virtual and local workers. Gigwalk, which launched last year  , lets companies tap into a flexible workforce for simple tasks.

Businesses post entry-level “gigs” or jobs that may take just a few minutes at a time, such as snapping a picture of a specific office building, mystery shopping and much more. The gigs are then instantly delivered based on location to  more than 200,000 users who have downloaded the Gigwalk app on their smartphone.

Workers have earned as much as $850 per day, according to individuals on Gigwalk’s platform. With companies like eBay, Microsoft and BMW on board, Gigwalk is enabling entirely new possibilities for short-term employment for both individuals and businesses. The company recently signed a deal with Microsoft’s Bing for placing 100,000 photo-capture Gigs in 3,500 cities across the country.

With 47 percent of the US workforce being under 35, Gigwalk and some of its competitors are out to change the temporary employment market. This is especially disruptive to temporary employment agencies that make a living though connecting employers with employees.

The Bottom Line
Founded: 2011
Jobs completed: 190,000
Users: 200,000+

Waze: The people-powered GPS you can trust

Instead of making massive investment in physically mapping every street and alleyway, a start-up decided to collect map data from all its users. Waze  relies on its 30 million global users, who report traffic incidents and delays in real time. It then provides directions based on that data to find the fastest driving route. The more users contributing data, the more accurate the map. In an industry largely dominated by cash-rich companies, such as Google, Waze has enjoyed a remarkable trajectory to the world’s largest crowdsourced traffic information service. It has 30 million global users, and is growing at an astonishing rate of 2 million users per month.

FEMA and the Whitehouse enlisted help   from Waze users to identify which gas stations were in need of fuel in the wake of superstorm Sandy.

While revolutionizing the everyday commute, Waze is already monetizing its platform through location and contextual based ads from partners that that want to attract the attention of nearby drivers. With users spending an impressive average of 7.3 hours on Waze every month, these ads will act as virtual billboards.

The Bottom Line
Founded: 2009
Users: 30 million
Growth rate: 2 million users per month

  Ouya: Upending the gaming console

Nintendo, Sony and Microsoft still rule the television-based console gaming market, but their console games still depend on expensive productions that command up to $60 per game.Ouya   aims to take advantage of a gap in the market by bringing a variety of affordable games and content to living rooms everywhere through its own Android-based and developer-friendly console.

Portable gaming consoles have already been disrupted by the massive proliferation of iPhones, iPads and Android devices. Traditional handheld consoles, such as the Nintendo DS or PlayStation Vita, are experiencingsluggish sales  , upended by the $0.99-cent-per-game economy introduced by app stores.

Ouya’s console will be priced at just under $100 and will start shipping this month.

Earlier this year, Ouya ran a record-breaking campaign this year on Kickstarter, raising nearly $8.6M  , 2.5m of which came on the campaign’s first day. With its impressive value proposition for both consumers and developers, Ouya is now the second highest earning project in Kickstarter’s history. If the disruption in mobile gaming is any indicator, this space is ripe for new business models and fresh ideas.

The Bottom Line
Founded: 2012
Confirmed Ouya Games: 19
Raised: $8.6 million

Gumroad: Sell to your followers

If you want to sell merchandise or content online, you likely have to concede to hefty commissions charged by mega commerce networks such as Amazon or iTunes. But what if you already have loyal followers and fans on your own and don’t necessarily need to get exposure through costly distribution channels?

Gumroad   allows anyone to monetize their social networks by selling directly to their social connections. Instead of having to set up your own eCommerce site or use an existing market that takes a substantial commission, Gumroad offers a streamlined way to sell.

Gumroad removes all of the hurdles typically associated with online commerce, such as account creation, shopping carts and billing address, and provides a unique link for products that can turn into an impulse buy. Gumroad creates a much more fluid transaction and better conversion for sellers, and aims to essentially democratize selling things online.

The Bottom Line
Founded: 2011
Raised: $8.1 million

Spotify: Your music in the cloud

Worldwide revenue for the recording industry peaked in 1999 at $27 billion, plummeting to $14 billion by 2008. Record companies that once ruled the music industry now share a hefty part of their revenues with Apple’s popular music delivery service, iTunes.

Enter Spotify, a Swedish start-up that allows users to stream and listen to millions of songs instantly. This removes the need to download files beforehand or pay for songs and keep them forever.

Spotify entered the U.S market in 2011 and has experienced explosive growth in recent months. It has already dominated Europe’s online music market, having served more than 13 billion songs in its first year. Worldwide, the service boasts about 15 million users, 4 million of whom pay $10 a month for premium service.

The Bottom Line
Founded: 2008
Users: 15 million
Valuation: $4 billion

  Wal-Mart: A 50-year-old start-up

Wal-Mart is arguably the world’s biggest start-up, or at least it’s acting like one.

With 2011 revenue of $419 billion, Wal-Mart dwarfed Amazon’s 2011 sales of $48 billion, yet the giant is working hard to transform itself to an online leader by embracing a social, mobile and start-up mentality. The company is making significant investments in hiring high-tech talent and acquiring start-ups. Its 2011 acquisition of search and analytics specialist Kosmix was the cornerstone to WalmartLabs, which has already helped Walmart.com revamp its search engine and realize an increase of as much as 15 percent better conversion from visitors to buyers on Walmart.com.

WalmartLabs has also created projects that just get customers to think differently about Wal-Mart and e-commerce, including Get on the Shelf  , an online contest for people to submit their own inventions to go on sale at Walmart. The contest garnered more than 4,000 submissions, more than 1 million votes and news hits in small towns across America. Then there’s the subscription service Goodies  . Wal-Mart customers pay $7 a month for home delivery of a gourmet food box, creating a discerning test market for the retailer in the process.

By themselves, none of these initiatives will single-handedly boost Wal-Mart’s e-commerce business. Taken together, though, they showcase a new dynamism at the retailing giant. One that is set to disrupt competitors and even Wal-Mart’s core brick-and-mortar business.

The Bottom Line
Founded: 1962
Annual revenue: $419 billion
Total number of customers per week: 100 million

None of these examples introduce earth-shattering technological breakthroughs. These companies found the innovation levers that most of their competitors have either overlooked or ignored, creating new opportunities and experiences around them. These companies saw an unsatisfied need, a hidden power, an unused asset and, above all, an opportunity to innovate. They joined the game with that secret weapon in their pocket, not only aiming to win, but also planning to change.

Whichever industry you’re in, there is a disruptor in the making. Keep an eye out, because the rules of the game are changing quickly and quietly. Will you be the disruptor, the follower or the one forced to leave the game?

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