Tsinghua University
School of Economics and Management
Spring 2008
Tsinghua INSEAD Executive MBA program (TIEMBA)

The Digital Networked Economy

Course Description

The course “The Digital Networked Economy” discusses the impact of the communication and data revolution on individuals, business, and society. With the quantitative and qualitative data sources now available, companies have the potential to create unprecedented internal transparency and value for their customers. What are the implications for old and new business models, products and services? Applications range from personalization, recommendations and online marketing to collective intelligence, peer-production and enterprise 2.0.

Course Structure

1) Enablers of the Digital Networked Economy

  • Overview
  • Themes of the course
  • Enterprise software and IT Strategy
We will discuss the mechanics and principles behind communication platforms, social networks and marketplaces of the digital networked economy, explaining how and why they have fundamentally shifted the dynamics of business. We will focus on the evolving role of enterprise software and IT strategy in the context of these new information possibilities, including collective intelligence and enterprise 2.0.

2) Quantifying the business: Creating transparency

  • Data and Metrics
  • Experiments and Actions
  • Getting it done in your organization
“Don’t call me Jack Ma, call me Data Ma!” the CEO of Alibaba proclaimed at the 2004 Anniversary of the company, to emphasize the impact of quantifying and instrumenting the organization, as opposed to basing business decisions on beliefs and opinions. We will present the underlying principle: first establish a set of metrics that reflect business goals, then create an experimental framework to evaluation innovative ideas with low risk. We will also discuss some implications on the structure of the organization.

3) Pricing and Scarcity in the Digital Networked Economy

  • Pricing information goods
  • Markets
  • Attention Economy
After reviewing traditional pricing approaches and the properties of information goods, we will discuss pricing strategies for products and services with network effects and switching costs. We will then discuss Chris Anderson's March 2008 article: If in the future everything on the web is free, how will companies make money? We will show that it is not the economics of pricing that has changed, but that the initial concept of placing an artificial scarcity on digital goods was flawed. What will be the marketplaces of the attention economy with new monetization models.

4) Feedback Marketing: Truly engaging users

  • From push advertising to serendipitous discovery
  • Search engine optimization
  • The New Consumer Data Revolution
The traditionally high development costs and long intrinsic time scales of research and testing lead to the four P’s of marketing (product, placement, pricing and promotion). The new ways of collecting consumer feedback and opinions are dramatically reducing cost while increasing effectiveness of marketing. This lead to the shift from traditional marketers pushing advertising, to modern consumers wanting to discover items they are genuinely interested in, often via other individuals.

Group exercise:

  • We are witnessing the Social Data Revolution with widespread implications for established companies, startups, individuals, and society. We will end the course by designing concrete first steps towards leveraging this revolution for your company.
Topics for reflection paper (choose one):
  • Should your company create an outward facing blog? Should you open up your website such that anybody can discuss your product and service?
  • Is it true that according to Chris Anderson’s March 2008 WIRED article everything will be free? If that is the case, how will people make money?

Pre Course Preparation

Every student is expected to have read all papers before the first class.

Hardcopies: Two Harvard papers for the first half day have been provided as hardcopies (no online version available due to copyright)
  • Carr: IT Doesn't Matter
  • Ross & Weill: Six IT Decisions Your IT People Shouldn't Make
Online: In addition, the following five papers (available here) are for the remaining three half days:
  • AndersonWIRED2008.doc (8 pages)
  • DeightonKornfeldHBS2007.pdf (HBS)
  • MaEconomist2008.doc (1 page)
  • OReillyWeb2DesignPatterns.doc (1 page)
  • WeigendFOCUS2004-en.pdf (5 pages)
A softcopy of the syllabus and some of the instructor's blog posts handed out as readings two months before class is also available there.
  • WeigendTIEMBA2009-10.doc (18 pages)

Please come prepared with questions and ideas triggered by these readings.

Furthermore, facebook.com/socialdatarevolution is a good place for additional information.


Dr. Andreas Weigend was the chief scientist of Amazon.com where he helped create a customer-centric, measurement-focused culture. He now helps exciting startups and visionary multinationals leverage the principles of the new consumer data revolution for innovative products and business models. Examples include include Alibaba (coaching the company towards a data-focused organization), MySpace (leveraging the social graph for marketing and advertising), Lufthansa (designing key innovative features for their new frequent flier program), and Nokia (helping the company navigate this new world of unprecedented data).

Being highly passionate about innovation in the digital networked economy, Dr. Weigend works with innovative startups. Recent successful exits include Agoda (hotel reservations, acquired by Priceline) and Cleverset (recommendation technology, acquired by ATG). Dr. Weigend is a limited partner in San Francisco-based Founders Fund, helping the venture capital firm with deal flow and investment decisions.

Dr. Weigend started as a physicist (Stanford PhD) analyzing and explaining the traces of elementary particles. He then turned to the traces of traders on Wall Street (as Associate Professor at NYU's Stern School of Business), and subsequently to the traces of users on the web. He has published more than 100 scientific papers, and shares his insights at Berkeley (Marketing in Web2.0), Stanford (Data Mining and Electronic Business) and at Tsinghua/INSEAD (The Digital Networked Economy).

Dr. Weigend lives in San Francisco, Shanghai and on weigend.com.