$3 billion may not be enough for Snapchat, the latest social-media craze. Those of you as socially challenged as I am may not know that Snapchat allows teens (mostly) to send photos that get erased after a few seconds. Certain politicians would have paid dearly for this feature. And now there are so many bad photos zipping around the Internet (my wife alone is responsible for thousands) that the Snapchat message service may have great social value.
No question, it is a popular site for young users and is grabbing Facebook’s teenagers. But valuations like this strike me as well – ridiculous. Sure Facebook will try to keep this from Google and the latter will be reluctant to see Facebook grab the possible next big social media thing. I get that.
But value continues to be a funny thing in technology. 7,671 miles from Silicon Valley is India. Looking over its shoulder at China, they finalized the deal to pick up a $2.3 billion aircraft carrier from Russia. A bit of a "fixer-upper" but it will now have two aircraft carriers. The Russian flag on the vessel was lowered, and the flag of the Indian Navy was raised. A coconut was then smashed against the ship’s side.
I have a hard time reconciling these two values. You can have a photo-sharing site with a clever algorithm and a fair number of eyeballs, for maybe 3 billion. Or you get a 45,000-ton vessel that can carry up to 30 aircraft and will have a crew of around 2,000 for a mere $2.3 billion, certainly an eye-popping conversation piece when tied up off the back dock.
It’s hard for me to imagine that the vast R&D teams at Facebook or Google couldn’t whip something like Snapchat up in a few months. But even if taking a bit longer, if rumors are true, how do you turn down a $3 billion offer? And the bigger question: Is it really worth anywhere near that?
Everyone is focused on getting the health exchanges working well (or criticizing those who failed to get them working). But the greater risk and opportunity long term is the ability to manage change. With software you often get one chance to get it right – that initial design and architecture needs to be well conceived. Adding features, patches, and fixes, particularly under pressure, often creates hard problems down the road.
So think of the vast number of changes that await. Modifications to various rating systems within hundreds of benefit and risk levels; revised procedures and laws that allow brokers to enroll – not to mention the small business health options (SHOP) programs; and improvements to back-end functions to support online and offline processing. And these are changes to the Act itself. Changing demographics, ramping customer experience demands, and advancing mobile opportunities also will drive change. My biggest fear, as we pull the bus out of the ditch, is whether hastily applied extensions to deal with the initial crisis will make it difficult to adapt going forward. Hence, the real challenge is whether healthcare.gov has been built to handle the incredible number of inevitable changes with this transformational law.
We just completed our second report on Business Agility Performance and looked at what factors can make the government more agile. Of our 10 dimensions, the most important dimensions for the exchange going forward are Process Architecture and Software Innovation.