Against the “digital chatter” – for more differentiation in the analysis of new business models.

Unfortunately, not a day goes by when I don’t read or hear somewhere that some company or business model is set to become the Amazon, Airbnb, Google, Apple, Tesla or Uber of an industry. I’m no longer really annoyed by such slogans. What I find strange, however, is that these statements still come from many consultants and “workers” in the digital sector. You would think that it is precisely these exponents who should be able to make the difference.

(Reading time: 5 minutes)

Amazon is an age-old business model

When I saw a tweet a few weeks ago that directly equated Amazon’s business model in the books sector with that of libraries and laconically paraphrased that libraries had been doing what Amazon was doing for centuries, I commented in exasperation:

“Neither understood what a library is nor what Amazon is. Maybe a business model too. The main thing is digital gibberish.

”
Not really my style. The tweeting lady didn’t take this very well and explained to me that she must have gotten out of it because she was trained in literature.

I used to think that people like that could tell the difference between cabbage and turnips.

Because no, what Amazon does is not the same as a library. They have not simply digitized the lending business. On the contrary. They have completely transformed part of the market and used the new technology to establish various new (partial) business models around the consumption of literature. They are constantly doing their homework and changing all the time.

But that’s exactly what you can’t say about libraries. At least, I am not aware of a single example where a library has made fundamental progress with the help of new technologies.

But never mind. Amazon and libraries both have to do with books. You can “consume” books at both for a flat fee. This minimum amount of agreement is enough for most people to simply “chew the fat”. So that there are retweets and attention.

Airbnb

When I meet older people who are not so well versed in the digital economy, there’s always that one moment when the person I’m talking to tells me it’s insane that Airbnb doesn’t have a single hotel room and yet it’s the biggest provider of overnight stays.

This metaphor also sounds good at first. In reality, however, Airbnb brings together supply and demand. And is not a hotel itself.

Most of the providers on Airbnb are not even close to being able to keep up with the performance of a hotel. You will notice this at the latest when you try to order a croque-monsieur to your room at 1 a.m. from a private provider organized by Airbnb. In the vast majority of cases, this will fail because there are no telephones in the rooms.

If you differentiate, it gets interesting

Well, as I mentioned, if you say things like that as someone from outside the industry, à la bonheur. However, I experience all too often that even people who work in digitalization make no differentiation whatsoever. I am often unable to judge whether this is intentional or not.

This is very unfortunate, because it is precisely when you take a closer look and try to clearly structure and identify things that things become exciting.

To stay with the example of Airbnb: The exciting question is how Airbnb has managed to identify a previously unrecognized new private provider community and enable it to connect with a large demand audience.

And how cleverly they have organized it – driven by the need of many people to earn a few euros on the side with existing infrastructure – to establish an extremely tightly meshed offer. How Airbnb has recognized that traditional hotel services are actually overkill for many consumers. That it is enough for many people to simply have a good place to sleep and do without all the trappings.

And that private, social contact is a very important component of the user experience for many people. In an industry where, apart from friendliness, people are more concerned with privacy.

If we analyze these facts and differentiate accordingly, we can learn a lot for our own business. Taking Airbnb as an example, we can see that new ground-breaking business models can also be based largely on social factors. And that they actually have very little to do with technology.

Technology as an enabler of new business models

Of course, Airbnb would not be possible in this form without internet technology. But the purely technical part is not particularly interesting. Platforms that connect supply and demand in a more or less intelligent and elegant way have been around for 17 years or more. However, Airbnb has no breakthrough technology that has enabled a completely new business model.

Rather, it is a kind of social engineering that has led to this new business model. In my opinion, that’s the exciting thing about Airbnb.

And you can learn from this for the development of your own new or adapted models. Are there parallels in my market? What are the social factors that influence my business? What technology is available to capture new, previously unrecognized and/or generally unknown potential?

Of course, doing this is much more time-consuming and difficult than simply making a flippant remark about Airbnb. But I think that as people who work in digitalization, we simply owe our stakeholders, colleagues and, above all, customers this differentiated debate. Because only this kind of debate will help us move forward.