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Lessons From The Shanzhai

Kris Gale
VP of Engineering — Yammer, Inc.
What is Disruption?
Competition                    Disruption


           Vs                              Vs




           Vs                              Vs




These Companies provide the   These Companies provide the
 same value the same way      same value in different ways
Attrition Warfare      Maneuver Warfare




• Centralization        • Decentralization
• Command and Control   • Delegation of initiative
• Careful Pace          • Speed
How are the Shanzhai demonstrating the
  advantages of maneuver warfare?
Companies are vulnerable to disruption
What if companies organized around the
          value they provide?




             Mailbox + DVD’s   Video Streaming
The Shanzhai aren’t a single company, so
    they’re necessarily decentralized.
Rules of the Shanzhai
Design nothing from scratch
      Make time for innovation
Innovate at small scale
   Allow everyone to innovate
Share as much as you can
   Work openly and break down silos
Sell it before you make it
Don’t build solutions in search of problems
Act Responsibly in the Network
       Assume and maintain trust
The Shanzhai provide a model for
    decentralized innovation.
Questions?

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Lessons From the Shanzhai