At Good Rebels, we’ve been talking about the need of putting people in the middle as the key to success for operating in an entirely global, digitized environment for years. There are startups, taking off from this premise, which has turned them into massive corporate projects. They have flipped traditional business models, transforming sectors like tourism, transportation, and the media in some of the economy’s most disruptive enterprises like Airbnb, BlaBlaCar, Hailo, Mytaxi, Car2Go, and all social media and messaging services.
On a large scale, we could say that the giant Google, Apple, Facebook, and Amazon are those companies, that in a few years, have given the traditional economy a 180°-degree turn, established new business strategy norms that have up to now everyone knew, have become giants. Apple and Google are the world’s most valued brands, above Coca-Cola, which tops Amazon and Facebook. Besides that, Google is the world’s largest media intermediary with advertising earnings that surpass the three biggest advertising networks WPP, Omnicom, and Publicis combined.
What do Google, Apple, Amazon, and Facebook have in common? The FABERNOVEL, GAFAnomics®, November 2014 study (very much in line with the Good Rebels vision regarding the Digital Transformation in this whitepaper), it dissects these digital champions’ factors for success, analyzing from their business models up to their value chain.
These big four share the following values:
- A customer culture that redefined their core business
- Internal talent management
- A shared vision of a market without borders
In line with Good Rebels’s efforts in divulging the keys to the Digital Transformation, this post’s objective is to identify the new rules of the game Google, Apple, Facebook, and Amazon created, provide a combined reading of these companies’ growth models, and keep giving keys for helping companies digitally transform.
The study analyzes the big four (in detail) that have redefined a new economy, that requires a change in norms:
- The free customer: These companies have defined the concept of the client.They’re willing to make themselves essential to as many people as possible. They focus on saving time and effort in customers’ daily life and offering everyone the best experience to gain their attention. Their value chain includes and treats visitors (anyone who expresses interest), friends (those who provide data or any information), and customers that make a purchase.
- The utility value model: They have redefined value creation. First, they think regarding customer commitment instead of monetary values. Handing sustainable value to the client prevails over long-term profitability.
- Pirate management: They’ve also redefined talent management. They’ve created an environment and workspaces conducive to innovation to propel performance potential and accelerate the future.
In the second part of the study, Fabernovel puts together how this mindset, along with the other functions offered, has let other giants like Uber, Netflix, Tesla, or Airbnb create their models along the same line, with the plus of being supported on their platforms to operate.
For example, the graphic below shows how, according to the study, Uber would have structured all their services using infrastructures these companies made available:
In this new environment, in which it’s vital to get the most out of the economies online, they provide four additional keys to success:
- The Magnet Enterprise: Companies should be composed of small units that, when put together, result in a high potential for value generation. Like the iPhone, a product that becomes unique for the user to store many apps that are useful and are the result of millions of developers’ co-creation. Or the Airbnb model, that identifies available “stock” and puts it on the market on a global scale, as the depicted in the following graphic:
- The Infinite Enterprise: the profitability objective is based on the model’s scalability, so software and service development costs per customer reach zero (100% profitability for each one). An example would be Waze, the app that uses real-time traffic information coming in from users worldwide in a cocreation model, at zero cost, and using social media to make the information viral. Or Facebook, that with a constant increase in users since 2002 (but not stratospheric: it’s under 2,000,000 million daily users since its founding), is now close to $14 billion in ad earnings. As the graphic demonstrates, a growth that is indeed exponential.
- The Real-Time Enterprise: it involves getting and applying real-time learning (Real Time Data Feedback) like Amazon does when it gathers and analyzes massive data sources that let it optimize its product offer, price, and quantity throughout the entire lifecycle.
- The Intimate Enterprise: Personalized hospitality is the norm. Optimizing the customer experience on a broad and individualized scale is at the core of this class of corporations. Netflix or Spotify are the best examples of this type of focus, where they use algorithms to offer content consumption recommendations based on the insights they’ve gathered about declared interests, recommendations from other users, and consolidated habits.
If you still don’t know where to start after Reading this post and the studies, don’t miss the Digital Transformation roadmap we’ve created at Good Rebels.