From the Publisher
“The Starfish and the Spider is a compelling and important book.” —Pierre Omidyar, CEO, Omidyar Network and Founder and Chairman, eBay Inc.
“The Starfish and the Spider, like Blink, The Tipping Point, and The Wisdom of Crowds before it, showed me a provocative new way to look at the world and at business. It'salso fun to read!” —Robin Wolaner, founder, Parenting Magazine and author, Naked in the Boardroom
“A fantastic read. Constantly weaving stories and connections. You'll never see the world the same way again.” —Nicholas J. Nicholas Jr., former Co-CEO, Time Warner
“A must-read. Starfish are changing the face of business and society. This page-turner is provocative and compelling.” —David Martin, CEO, Young Presidents' Organization
“The Starfish and the Spider provides a powerful prism for understanding the patterns and potential of self-organizing systems.” —Steve Jurvetson, Partner, Draper Fisher Jurvetson
“The Starfish and the Spider lifts the lid on a massive revolution in the making, a revolution certain to reshape every organization on the planet from bridge clubs to global governments. Brafman and Beckstrom elegantly describe what is afoot and offer a wealth of insights that will be invaluable to anyone starting something new—or rescuing something old—amidst this vast shift.” —Paul Saffo, Director, Institute for the Future “The Starfish and the Spider is great reading. [It has] not only stimulated my thinking, but as a result of the reading, I proposed ten action points for my own organization."—Professor Klaus Schwab, Executive Chairman, World Economic Forum
Soundview Executive Book Summaries
This book is about what happens when there’s no one in charge. It’s about what happens when there’s no hierarchy. You’d think there would be disorder, even chaos. But in many arenas, a lack of traditional leadership is giving rise to powerful groups that are turning industry and society upside down.
Music Piracy and the Apache Mystery
Despite having won claims in court that music file-sharing services like Grokster, Napster and others reduced its revenues, the recording industry continues to face the problem of music piracy. Major labels like MGM, Columbia, Disney and others have found since the early part of this century that taking the file-sharing services and their users to court only adds fuel to the fire over music piracy. The harder the labels have fought, the stronger the opposition has grown.
The best explanation for these events comes from an unlikely source -- the story of Spanish explorer Cortes. It was Cortes who discovered and conquered the Aztec empire in Mexico by killing the Aztec leader, Montezuma II, starving its 240,000 inhabitants and stealing their gold. The same thing occurred when the Spanish encountered the Incas. But when they encountered the Apaches - a meeting that is crucially linked with the music industry’s fight - the Spanish lost.
Why was this loss crucial? The Apache defeat of the Spanish was all about the way the Apaches were organized as a society. The Apaches distributed political power and had very little centralization. They persevered because they were decentralized.
A centralized organization has a clear leader who’s in charge, and there’s a specific place where decisions are made. Rules need to be set and enforced, or the system collapses.
Decentralized systems, like the Apaches, are different. There’s no clear leader, no hierarchy, no headquarters. The power is distributed among all the people and across geographic regions.
Instead of a chief, the Apaches had a Nant’an -- a spiritual and cultural leader who led by example. On first impression, it may sound like the Apaches were disorganized. In reality, they were an advanced and sophisticated society that was immune to attacks.
Coercive Vs Open Systems
When a coercive system, like the Spanish, takes on an open system, like the Apaches, they start killing the leaders. But as soon as they killed a Nant’an, a new one would emerge. The strategy failed because no one person was essential to the overall well-being of Apache society.
The Spanish attacks served to make the Apaches even stronger. Similarly, Napster’s destruction didn’t quell people’s desire for free music. Along came a new program called Kazaa. It was different from Napster because there was no central server. Kazaa is like an Apache village. Unlike the record labels, there are no headquarters, and if you want to make a thousand copies of your favorite song, go right ahead.
Not only is the music industry unable to curb pirating, but every time the labels sue a Napster or a Kazaa, a new player comes onto the scene that’s even more decentralized and more difficult to battle.
The Spider, the Starfish and the President of the Internet
In 1995, the CEO of an early Internet service provider was raising money for the company. When he tried explaining the Internet to a group of French investors, they wanted to know who the president of the Internet was. They were unable to grasp the fact that no one was in charge. The French, like the Spanish 200 years before them, were used to seeing things in a particular way: Organizations have structures, rules, hierarchies, and, of course, a president. In this case, the French mistook a starfish for a spider.
A spider is a creature with eight legs coming out of a central body. It has a tiny head and eight eyes. If the French investors were to ask who was running the spider show, the answer is clearly the head.
But the French investors weren’t dealing with a spider. The Internet was actually a starfish. At first glance, a starfish is similar to a spider in appearance. But the starfish is decentralized. The starfish doesn’t have a head. The major organs are replicated throughout each arm. A starfish is basically a network of cells. Instead of having a head, like a spider, the starfish functions as a decentralized network.
Following are the major principles of decentralization:
- When attacked, a decentralized organization tends to become more open and decentralized.
- It’s easy to confuse starfish with spiders.
- An open system doesn’t have centralized intelligence; the intelligence is spread throughout the system.
- Open systems can easily mutate.
- The decentralized organization sneaks up on you.
- As industries become decentralized, overall revenues decrease.
- Put people into an open system and they’ll automatically want to contribute.
- When attacked, centralized organizations tend to become even more centralized.
A Sea of Starfish
There are many starfish-like operations - Skype, craigslist, Alcoholics Anonymous, even the Burning Man festival -all of which allow users to interact with each other directly without anybody telling anybody else what they can and cannot do.
In these systems, what matters most isn’t the CEO but whether the leadership is trusting enough of members to leave them alone. From the user perspective, people don’t notice or care whether they’re interacting with a spider or with a starfish.
The Combo Special: The Hybrid Organization
Companies like eBay are neither a pure starfish nor a pure spider, but a hybrid organization. They combine the best of both worlds -- the bottom-up approach of decentralization and the structure, control, and resulting profit potential of centralization. eBay is a centralized company that decentralizes the customer experience.
Decentralized organizations appear at first glance to be messy and chaotic. But when we begin to appreciate their full potential, what initially looked like entropy turns out to be one of the most powerful forces the world has seen. Copyright © 2007 Soundview Executive Book Summaries