From a Sunday morning curled up with the laptop and the cacophony of the web…

• The operating leverage of web businesses is rooted in the power of capability leverage.

  Fred Wilson, When Talking About Business Models, Remember That Profits Equal Revenues Minus Costs:

  The web can create incredibly high operating margin businesses.

  … if [these companies in our portfolio] continue to do a lot with a little, their business models will be built on operating margins that are very high and can create a lot of value without a lot of revenue.

  I think that’s an important part of the economics of the web that are left out of most discussions of Internet business models. Yes, we are turning analog dollars into digital pennies in many cases. But we are also doing the same thing on the cost side, maybe even more so. And I think that “operating leverage” is going to create a lot of value.

  How are these small businesses able to create “operating leverage”?

  The high margins of small web companies are rooted in the idea of “capability leverage”. John Hagel, Exploring New Forms of Economic Leverage:

  Capability leverage—the ability to access and mobilize the resources of other companies to add more value to customers—is a powerful force for creating value in markets. Rather than one company trying to do everything, it can mobilize a broader network of participants to deliver highly specialized and flexibly tailored value to individual customers.

  (Thanks to Aaron Chua for the reminder of the power of “capability leverage”)

• “It’s open to the mainstream on their terms.”

  Jan Chipchase, Stickier, Less Complicated Relationships:

  There are a number of factors that suggest that (some form of) [businesses using Twitter] will become mainstream: it’s opt in and easy to unsubscribe should you decide it’s not for you; there’s an element of ‘personal’ yet it’s not intrusive; its delivered in formats appropriate to the customer … ; there is very little friction … ; it leverages existing infrastructure – no new hardware or software required. If not the next neighbourhood flyer then a useful additional to. It’s open to the mainstream on their terms.

  Taking it one step forward, how can we start to think about integrating all the tools? Hutch Carpenter, How to Integrate Social Media into Product Marketing.

• How do we build “capability leverage” into our lives?

  Related: a look into the history behind Twitter: Dom Sagolla, How Twitter Was Born (via Noah Brier).

  As I noted in a comment to Noah:

  Amazing how simple insights can lead to something far grander, all by being open to human ingenuity.

  Taking the idea further, how can we create better structures (technological, organizational, cultural and legal) to empower human ingenuity in a constantly disruptive world?

  I’ve got a couple of ideas; peer-production, the social venture commons and VenTwits are starts towards creating the open, flexible and transparent platforms to:

  Enable us to develop the funding and organizational models…
  … to incubate and “scale our lives” by creating personal ecosystems…
  … to power our personal “freemium” life models…
  … by enabling us to create and “exchange” social capital…
  … and lower our inter-personal transaction costs…
  … and create cheaper context behind our value-creating actions…
  … to create our own hubs on the edges of value creation.

  But as you know, it’s less about what exists and more about how we use them. Let’s try and find out what’s possible.