Tuesday, March 27, 2007
The Winning Business Model
It seems that the people that like advanced "techie" features most are the engineers actually creating the products. What made the iPod/iTunes platform successful is that it made it easy to get music online, legally, and then transfer it to a portable device. What made Google successful was the ease of searching and cataloging the internet. What made Microsoft successful was the ease of using the PC (e.g. Windows), and in later years the ease of connecting to the internet. The winning business model is one which delivers value to the players on both sides of the platform (2-sided networks) in a clear, easy to use, market driven fashion. Firms that will fail in this space are ones which think that creating competitive advantage is the same as adding "bells and whistles." Ultimately it will confuse the customer. AOL and Yahoo are examples of this approach, both of which are losing market share to Google. Too many firms want to be everthing to everyone. In this mass-customized web 2.0 world one must be the only thing to each person. This can only happen through advanced automation that enables firms to intimately know their customers.