Joe Batista and Commoditization

Well, I had the most interesting morning with Joe Batista, the “chief creatologist” of Hewlett Packard. A quick bio :

Joseph (Joe) Batista, Director & Chief Creatologist at Hewlett Packard (HP) Corporation, is responsible for building new business realties leveraging HP’s portfolio of assets, and driving new growth, strategy and implementation agendas that deliver real business results.

As you might know, I’m a former chairman of the Cape Cod Technology Council, which sort of sounds like “President of the Orleans Kiwanis”. In a way, it is, but with a twist. Tons of successful Boston area executives and engineers have houses down here on the Cape, Nantucket or Martha’s Vineyard, and they all have a vested interest in seeing high tech on the Cape flourish. So, we tend to have excellent speakers come to our breakfasts. As an example, we had the director of NASA’s Institute for Advanced Concepts (NIAC), who has a house here, speak to us about all the neat 10 to 40 year projects that NASA is working on, including anti-matter drives and hopper bots. And yes, it does sound like Star Trek. That’s because the producers of Star Trek make regular visits to NIAC for TV show fodder. Yes, anti-matter drives are a real project, ableit nascent, at NASA. Cool, huh? But, I digress.

Joe was speaking to us about the new economy, where the real asset is ideas. As part of this, he spoke about commoditization, and used as real world examples Clorox and coffee beans. Now, here’s an excellent take away based on coffee beans. It doesn’t take a creatologist to relate this to today’s world of telephony:

Commodity == coffee beans, 1-2 cents per pound
Product == Maxwell house coffee, $1.25 per pound
Service == Dunkin Donuts Coffee, $1.25 per cup
Experience == Starbucks Coffee, $2-$5 per cup

I’ll leave you with a quote from Pulp Fiction :

                                 BUDDY                     How ’bout you, Peggy Sue?

                                MIA                     I’ll have the Durwood Kirby burger                     — bloody — and a five-dollar                     shake.

                                BUDDY                     How d’ya want that shake, Martin                     and Lewis, or Amos and Andy?

                                MIA                     Martin and Lewis.

                                VINCENT                     Did you just order a five-dollar                     shake?

                                MIA                     Sure did.

                                VINCENT                     A shake?  Milk and ice cream?

                                MIA                     Uh-huh.

                                VINCENT                     It costs five dollars?

                                BUDDY                     Yep.

                                VINCENT                     You don’t put bourbon in it or                     anything?

                                BUDDY                     Nope.

                                VINCENT                     Just checking.

Later…                            VINCENT                     Can I have a sip of that?  I’d like                     to know what a five-dollar shake                     tastes like.

                                MIA                     Be my guest.

      She slides the shake over to him.

                                MIA                     You can use my straw, I don’t have                     kooties.

      Vincent smiles.

                                VINCENT                     Yeah, but maybe I do.

                                MIA                     Kooties I can handle.

      He takes a sip.

                                VINCENT                    Goddamn!  That’s a pretty fuckin’                    good milk shake.

                                MIA                    Told ya.

                                VINCENT                    I don’t know if it’s worth five                    dollars, but it’s pretty fuckin’                    good.

      He slides the shake back.

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