Innovating with Social Media: Facebook, Flash, Blogs and Wikipedia


Hybrid Organizations from the Starfish and the Spider

Key Points

From Chapters 6-9 of The Starfish and the Spider

•    Strategies for centralized organizations “taking on” decentralized ones:

Changing ideology, centralizing (“cow” strategy), decentralization

•    Two forms of hybrid organizations (the “combo special”)

Centralized company with decentralized customer experience
Centralized company with parts of internal business decentralized

•    Major examples of hybrid organizations

The Sweet Spot (Chapter 8)

•    Rules of “The New World” (Chapter 9)

1.    Diseconomies of Scale (the small rule)
2.    Network Effects
3.    Power of Chaos (creativity)
4.    Knowledge at the Edge
5.    Everyone wants to contribute (self-expression)
6.    Beware of the Hydra response (starfish)
7.    Catalysts Rule (through inspiration)
8.    The Values are the Organization (ideology)
9.    Measure, Monitor, Manage
10.    Flatten or be Flattened

Additional Viewing

What is open source? (basic introduction)

Network effects as a competitive advantage (content starts at 0:24)

IBM Linux commercial (advertisement for open source)

Democratization of entertainment

Five Legs of Decentralized Organizations and The Catalyst

Chapter 4 of The Starfish and The Spider describes 5 legs of a successful decentralized organization:

  1. Circles
  2. The catalyst
  3. Ideology
  4. The preexisting network
  5. The champion

Chapter 5 talks in more detail about catalysts.


1. You can describe a person or thing that causes a change or event to happen as a catalyst.

2. In chemistry, a catalyst is a substance that causes a chemical reaction to take place more quickly.

Do you agree that catalysts are important to decentralization initiatives? Why or why not?

President of the Internet, Principles and Examples of Decentralization

Today we will discuss Chapters 2 and 3 of The Starfish and the Spider.

Chapter 2:  The Spider, the Starfish and the President of the Internet

In Chapter 2 we learn the origin of the books title and also meet the President of the Internet!

President of the Internet

We also learn more principles of decentralization:

  • it’s easy to mistake starfish for spiders.
  • an open system doesn’t have central 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 profits decrease.

How to recognize starfish…

  1. Is there a person in charge?
  2. Are there headquarters?
  3. If you thump it on the head, will it die?
  4. Is there a clear division of roles?
  5. If you take out a unit, is the organization harmed?
  6. Are knowledge and power concentrated or distributed?
  7. Is the organization flexible or rigid?
  8. Can you count the employees or participants?
  9. Are working groups funded by the organization or are they self-funding?
  10. Do working groups communicate directly or through intermediaries?

Chapter Three:  A Sea of Starfish

Examples of decentralized organizations: AA, Skype, Craigslist, Apache (web development), Wikipedia, Burning Man

Seventh principle of decentralization:  put people into an open system and they’ll automatically want to contribute.