One thing unites all leading modern technology companies: they are platforms. From Google to Facebook, platforms drive competitiveness through near-zero marginal cost which practically triggers the winner-takes-all outcome, as I noted recently in Harvard Business Review. Platforms create moats which ensure these ICT utilities are not easily disrupted because once a platform takes off, its inherent mutability makes it better, through a positive continuum in an amazing digital virtuoso circle. Yes, once that platform gets a separation, it attracts more users, and more people join, and that process makes it even better that after many circles, it conquers its territory as the undisputed category-king.
Uber’s $120 billion
Uber is projected to hit the market at $120 billion valuation, WSJ reports. That is more than the total market values of Ford, GM and Fiat Chrysler.
Uber Technologies Inc. recently received proposals from Wall Street banks valuing the ride-hailing company at as much as $120 billion in an initial public offering that could take place early next year, according to people familiar with the matter.
That eye-popping figure is nearly double Uber’s valuation in a fundraising round two months ago and more than General Motors Co. , Ford Motor Co. and Fiat Chrysler Automobiles NV are worth combined.
Uber’s plans now set up a race with rival Lyft Inc., which is also eyeing a debut in the first half of the year, The Wall Street Journal separately reported Tuesday. Lyft’s valuation is expected to top the $15.1 billion it sold shares at privately this year.
The business model which Uber has deployed in the logistics sector is called Aggregation – a key component of that platform business system. It is the winning business model of the 21st century in the technology space where Internet has enabled the scaling of many things through an unconstrained distribution, enabling near-zero marginal cost. Nearly all companies in the top 20 digital technology companies have some elements of this business model. If your business model cannot incorporate this, it is possible you are missing something strategically, as a technology company.
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You cannot talk about user centred design, which is at the heart/epicentre of new products and services offerings, without incorporating digital platform model. Even traditional businesses are expected to transform into tech companies, while offering those everyday products and services.
It’s the new normal, because where the greatest value is created has shifted overtime, making aggregators super beneficiaries of hard work done by traditional firms.
To remain relevant, you have to incorporate platform model, and then rethink your original business model, to be able to fit in and get a better cut from the pie.
Yes indeed – it is the new normal in the world of technology. You have the best line “making aggregators super beneficiaries of hard work done by traditional firms”. The aggregators will feed on everyone and that is going to transform markets and industrial sectors.