Many in our community have asked for more insights and perspectives on Platforms after I ran the piece where Uber commanded more market cap than GM, Ford and Fiat Chrysler combined. I had noted a new business model that would rule the 21st century, anchored on the unbounded and unconstrained distribution channel of the internet, delivering near-zero marginal costs with territorial conquering scalable advantages.
In this piece, I present the elemental relationship with a video, on Aggregation-Integration Construct, explaining at a deeper level what is going on. The empires of the future will be anchored on this Construct.
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Business model innovation has endless variations, and those who see beyond the ordinary know where the greatest value is created, and make their ‘home’ there.
You can sit in your house and run a multimillion dollar company, with no need for security men and cleaners, you only open a physical office just for administrative sake, not that it has anything to do with how the revenue is generated.
If you do not know how to do the ‘hard part’ of the job, you can always think deeper and see where the larger part of value creation is located, and then go ahead to sit there; keeping everything ticking, with all the glory, accolade and fat cheque coming your way.
That’s what digital platform brings, any business that fails to close all the flanks and LOCK in the customers, the super aggregators will obviously make more money than it, along the value chain.
It’s for humans to think, they always do it better than machines…
It is a new game plan for the new digital economy – the man who bakes the digital cake may not necessarily be the person who enjoys it the most. Super-aggregators can come in and exploit value on any digital raw material. This line makes that evident “That’s what digital platform brings, any business that fails to close all the flanks and LOCK in the customers, the super aggregators will obviously make more money than it, along the value chain.”