
The Generativity Advantage
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How can businesses systematically profit from innovations they never predicted, created by people they've never met, solving problems they didn't even know existed?
While many businesses celebrate user innovation, few take their user-innovators seriously enough as entrepreneurs. The Generativity Advantage brings powerful ideas from technology generativity theory into the domains of business strategy and entrepreneurship. It explores ways to specifically design products to spur user innovation (product generativity), and to build dynamic markets for those innovations (market generativity), in order to achieve a strategic "generativity advantage"-the ability to systematically profit from the unpredicted innovations of others on a massive scale.
Through numerous case studies-from Apple and Google to emerging leaders in generative AI and no-code technology like OpenAI, Anthropic, Bubble, Notion, Coda, and Webflow-it shows how product generativity and market generativity can together create a powerful flywheel effect and sustained competitive advantage. Yet the book also demonstrates that achieving a generativity advantage is neither easy nor trivial; the world's leading companies struggle to implement these ideas effectively. The book's key lesson is to help your user-innovators succeed as serious entrepreneurs and you will benefit generously in turn.
Whether you're building a digital platform, a marketplace, or any product that allows users to innovate, this book provides the conceptual tools and practical strategies needed to transform your platform into an engine of continuous innovation. Learn how to move beyond celebrating user creativity to systematically enabling and profiting from user entrepreneurship, creating value at scales previously unimaginable.
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Mohammad Keyhani is Associate Professor at the Haskayne School of Business, University of Calgary, where he directs the DBA program and teaches courses on generative AI and no-code technology for entrepreneurs. Mohammad's research has been published in leading journals and presented in international conferences where he has received multiple best paper and best reviewer awards. Mohammad is co-founder of www.HoneybeeLogic.com, advisor to multiple startups, and has held roles as Lab Strategist at the Creative Destruction Lab Rockies, and a David Rockefeller Fellow at the Trilateral Commission. He holds a doctorate in strategic management from York University, and M.Sc. and B.Sc. degrees from the University of Tehran. His blog and projects can be found at www.DigitVibe.com.
Content
- Intro
- Acknowledgments
- Contents
- Chapter 1 Introduction
- The Messiness of Generativity
- The Saga of Laundry Buddy
- Generativity in Computer Science
- The Other Generativities
- Outline of this Book
- Chapter 2 The Competitive Advantage of Generativity
- A Definition of the Generativity Advantage
- Product Generativity
- Market Generativity
- Product-Market Generativity
- The Generativity Flywheel
- Generativity as a Deliberate Strategy
- The Case of Bubble.io: Democratizing Software
- The Genesis of Generativity: From Product to Product-Market
- Navigating Strategic Trade-offs: The Tensions of Generativity
- Bubble's Generativity Flywheel: Key Mechanisms at Play
- Bubble's Path Forward
- Chapter 3 Understanding Generativity: The Engine of Unpredicted Innovation
- Zittrain's Conceptualization of Generativity
- Adding Profitability to Generativity
- The Evolution of Generativity Theory
- Architectural Generativity
- Extended Generativity Theory
- Bounded Generativity
- Inverse Generativity
- Concluding Thoughts
- Chapter 4 The Generativity of Products
- An Ode to Possibility
- Examples of Generative Products
- Generative Products as Sources of Surprise
- Generative Products as Vehicles for Serious Entrepreneurship
- Designing Products for Generativity
- Leverage: Empowering a Wide Spectrum of Tasks
- Adaptability: Building Blocks for Customization and Evolution
- Ease of Mastery: Lowering Barriers to Entry
- Accessibility: Enabling Openness and Participation
- Transferability: Facilitating the Spread of Innovation
- Profitability: Taking Users Seriously as Entrepreneurs
- The Generative Properties of Digital Artifacts
- Programmability: The Foundation of Unlimited Possibility
- Addressability: Enabling Targeted Innovation at Scale
- Sensibility: Creating Context-Aware Innovation
- Communicability: Building Innovation Networks
- Memorizability: Learning and Evolution
- Traceability: Understanding Innovation Patterns
- Associability: Combining and Recombining
- Leveraging the Power of Digital for Generativity
- Chapter 5 Managing Generative Products
- The Pros and Cons of Generative Products
- A New Mindset for Managing Generative Products
- From Fail Fast to Patient Play
- From Problem-Solving to Meta Problem-Solving
- From Hypothesis Testing to Hypothesis Development
- From Customer Feedback to User Tinkering
- From Traditional to Thick Documentation
- Conclusion: Reimagining Product Management for Generativity
- Chapter 6 The Generativity of Markets
- The Market as an Innovation Machine
- Flipping the Agency Problem on Its Head
- The Power of Large Numbers
- The Power of Collective Intelligence
- Markets as Learning Systems
- On the Terminology of "Market Generativity"
- Chapter 7 Designing Markets for Generativity
- The Three-Layered Architecture
- The Allocation Layer: Building the Foundation of Markets
- Market Thickness: Building the Foundation for Generative Innovation
- Strategic Approaches to Building Thickness
- Building Robust Participation Mechanisms
- Managing Strategic Growth
- Efficient Matching: Balancing Market Clearing with Discovery
- Trust and Safety: Creating a Secure Space for Innovation
- Building Trust Through Layered Infrastructure
- The Generative Power of Trust
- Conclusion: The Allocation Layer as Innovation Infrastructure
- The Generation Layer: Spurring Innovation at Scale
- The Power of Diversity for Innovation
- The Intellectual Orders of Generativity
- Embracing Outliers as Potential Game Changers
- Making Ideas Interactive: The Communication Infrastructure
- Social Processes and Serendipitous Discovery
- The Memory Challenge: Building Collective Knowledge
- The Experimentation Engine: From Natural Selection to Active Learning
- The Platform's Privileged Knowledge: Broadcasting the Frontier
- Boundary Resources and Innovation Toolkits
- Standards and Interoperability
- Enabling Organization: The Power of Teams and Organizations in User Innovation
- Engineering Markets for Generativity
- The Appropriation Layer: Capturing Value from Distributed Innovation
- Innovation-Friendly Pricing and Revenue Models in Generative Marketplaces
- Reducing Barriers to Entry and Aligning Incentives
- Leveraging Cross-Subsidization
- Ensuring Perceived Fairness and Trust
- Control Points and Value Capture
- A Staged Approach to Control Points
- The Data Advantage
- Curation and Promotion as Strategic Levers
- Ethical Considerations in Profiting from Other People's Innovations
- Capturing Value while Spurring Innovation
- External Factors: The Broader Context of Generative Markets
- Cultural Dynamics and Innovation Mindsets
- Networks and Knowledge Flows
- Educational Institutions and Learning Ecosystems
- Leveraging Urban Population Centers
- Regulatory Considerations
- Conclusion: Architecting for Generative Growth
- Chapter 8 The Generativity Flywheel
- Market Incentives as Innovation Accelerant: The Power of Profit
- Sustaining Innovation Through Career-Level Commitment
- The Product-Market Generativity Framework
- Quadrant 4: High Product, Low Market Generativity
- Quadrant 3: Low Product, Low Market Generativity
- Quadrant 2: Low Product, High Market Generativity
- Quadrant 1: High Product, High Market Generativity
- Building Generative Markets from Generative Products
- Raspberry Pi: From DIY Innovation to Ecosystem of Tools and Add-Ons
- Notion: From Customizable Workspace to Template Marketplace
- LEGO: From Blocks to Collaborative Design and Monetization
- Coda: From All-In-One Document Tool to Packs Marketplace
- Building Generative Products from Generative Markets
- The Six Stages of the Generativity Flywheel
- Stage 1: Attract Innovative Users
- Stage 2: Create Novel Applications
- Stage 3: Increase Product Value
- Stage 4: Attract More Users
- Stage 5: Enable Value Capture
- Stage 6: Expand Innovation Possibilities
- Conclusion
- Chapter 9 Generativity in Practice: The Trade-offs and Challenges of Generativity
- Control Versus Generativity
- Real-World Example: Apple's Shifting Stance on iOS Development
- Potential Remedies: Balancing Control and Generativity
- Stability Versus Flexibility
- Real-World Example: Google's Android Fragmentation
- Potential Remedies: Modular Design and Versioning
- Variety Versus Utility
- Real-World Example: Video Game Consoles
- Potential Remedies: Balancing Variety and Utility
- Originality Versus Remixing
- Real-World Example: The Scratch Online Community
- Potential Remedies: Balancing Generativity and Originality
- Ecosystem Boundaries Versus Product Boundaries
- Real-World Example: LLM Platforms
- Potential Remedies: Aligning Ecosystem and Product Expansion
- Openness Versus Value Capture
- Real-World Example: The WordPress Ecosystem
- Potential Remedies: Balancing Openness and Value Capture
- Conclusion: Embracing the Paradoxes of Generativity
- Chapter 10 Celebrating the Shared Potential of Humanity
- Embracing the Unknowable
- AI Agents and the Future of Generativity
- A Challenge to You
- References
- About the Author
- List of Figures
- List of Tables
- Index
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