Rethinking the business model of the Internet age

Absrtact: In the existing commercial background, the network has become more and more important. Consumers are no longer just a mere recipient of services and products, and they are beginning to become more involved in value creation. An online platform that allows external participants to collaborate to create value

In the current business context, the network has become more and more important. Consumers are no longer just a mere recipient of services and products, and they are beginning to become more involved in value creation. The online platform, which allows external participants to collaborate to create value, is rewriting competition rules. The IPhone has broken the carrier business model and has shown that companies either accept the platform model or risk being subverted by new players.

In order to better use the Internet to provide a strong competitive advantage, the company's leaders and managers, should rethink their business model, the appropriate adjustment of operational methods.

Rethinking the business model of the Internet age

The industrial age makes us accustomed to linear thinking patterns. The company that engages in manufacturing makes money by purchasing and processing raw materials, and finally putting the formed products into the sales channels. The service industry ensures supply by employing more people. The traditional model is to create new inventory in the industry to address the needs of users.

The internet has made it possible for us to create online platforms that allow businesses to create new resources from the outside. While the traditional industrial approach is tightening supply and commercial operations, the platform approach is gradually becoming an ecosystem with an external synergy provider.

Traditionally, we solve people's travel problems by producing and selling more vehicles, or by organizing teams. A platform-based solution like Lyft is to establish a direct link between consumers and owners who want to make some extra money. In this way, a new resource supply system was created, and it is the fact that platform based solutions are becoming more and more important, Avis acquired Zipcar.

The hotel solves the problem of tourist accommodation by deploying new stores around the world. Airbnb, without making any investment in the industry, solves the problem by turning an individual with empty beds or vacant rooms into a BNB owner, which also benefits the world's travellers.

Platform mode is difficult to launch, because these platform-based enterprises do not have a direct and controllable source of supply. Even if they are technically likely to have a large amount of investment, eventually will be due to lack of stable supply and failure. However, as long as the platform can develop to a certain scale, they will often subvert the traditional enterprises and create a new consumer market.

Rethinking the "work" of the internet age

In the traditional sense, "work" contains the meaning of creating value activities within the system. This view of "work" is based on the fact that the cost of communicating and collaborating on these workflows is much lower when everyone is working in the same individual system. However, with the advent of the Internet and cloud technology, the cost of obtaining value from outside the system is lower than in the system.

There are two ways to rethink "work" for your business reference:

Use of Third-party platforms: Elance/odesk, and recently gigwalk such platforms in the service market rise, and further accelerate the growth of the free vocational economy. The recent acquisition of Behance by Adobe has once again demonstrated the importance of a freelance economic platform. The pattern of labor that comes with the cloud is gaining increasing attention, and the core and supporting functions of any industry may be affected. With such a decentralized workforce, the company can complete its work without increasing internal friction.

Building a producer's ecosystem: a disruptive way to use the Internet (albeit hard) is to rebuild your business into a platform that connects producers and consumers directly. The mobile apps industry is regrouping around this new standard. Traditional application developers used to work for a company like Nokia. The rise of the IPhone and the Android App Store and the decline of Nokia have also reshaped the concept of "work" in this area. The in-house developers who used to develop apps for Noika are now in the arms of the IPhone and Android.

Enterprises that use such strategies should be rewarded to external producers. Apple's IPhone App Store, for example, was successful because it offered a better revenue-sharing model than operators. Threadless and YouTube have redefined the role of suppliers and the way they do work in a industry that has been subverted.

The form of platform allows enterprises to use external talent to create products, compared to the system can create products, more rich and diverse. The advantage of using an external producer ecosystem is that insiders cannot replicate it, as the example in the mobile apps industry shows.

This platform model may well be applied to other industries as a blueprint for subversion. With the rise of 3D printing, even industries closely linked to manufacturing are likely to be subverted by various platforms. Through the platform, you can buy the design online, and then print the material in the home, which will reshape the remodeling by company design and product shipping way

Rethinking marketing in the internet age

A product needs to be advertised, and advertising plays the most important role. However, advertising is not a sustainable and scalable growth strategy. The deployment of advertising requires additional input, and in fact will in some ways lead to a reduction in the amount of revenue.

Advertising works with traditional media because advertising itself is ideal for channels such as television, advertising and printing. The internet, especially social media, often moves the channels of advertising past to the web to create new opportunities and develop long-term and expansionary growth strategies. The rise of viral marketing has made consumers the center of your growth strategy, and each consumer has become a potential communications partner. Viral marketing provides a model for organic growth that can be scaled up to a large extent.

However, in the use of new media, must not be careless. Some companies that misuse/abuse viral marketing have tasted the bitter fruit and damaged the user's viscosity.

Viral marketing can bring a very high return on investment, which is well known. But at the executive level, viral marketing is often mistakenly simplified to adding a share button to a page. Companies that successfully grow through viral marketing use at least one or two of the following strategies.

Create content that can be shared with third party platforms: businesses are widely disseminated by leveraging games, offers, and other content that can be shared. The media itself is also growing by creating content that can be shared. All the operations of the BuzzFeed company revolve around manufacturing optimized and shared content. All of BuzzFeed's business revolves around creating content that is optimized for sharing. BuzzFeed's editors, after discovering content that already has virus-spreading features on websites such as Reddit, repackage them--drawing on their past research and practical experience to create viral content.

Provide users with a platform to create shared content: whenever there is a widely disseminated video or project on YouTube or Kickstarter, the platform that hosts them is also exposed and attracts more users. Social networking companies use similar strategies to allow users to create wish lists or collect content and share them with their friends.

Rethinking Human resource management in the Internet age

In the knowledge economy, how to manage the talents within the company has become one of the more important issues. However, in an era when users start creating value on online platforms, and "work" is being redefined, the concept of human resources management needs to be further expanded and the framework for thinking beyond the company.

The way companies focus on user management needs to be aligned with the way employees are managed. After becoming a community manager, the enterprise also began to apply the principles of HR to the user.

Incentives: Employees within a company need to be motivated and, similarly, external content makers need to be motivated to participate in the process.

Tools: As with in-house employees, content manufacturers outside the company also need the necessary tools and infrastructure to carry out the action.

Fairness: As with employees inside the company, external content-producing people also need a fair working environment. Therefore, when dealing with the content of user contribution, this platform should have a democratic equivalence mode in treating the value created by all users.

Compared with the traditional clothing production line, by the company's in-house designers to provide design, threadless is through the external designers to design new T-shirt styles and patterns, these designer's works, not only because of the company's internal recognition, and get the corresponding remuneration, while, Once their design is finally adopted, designers can also get T-shirt sales commissions. The designer's work rating system must be fair. The rewards, tools, and fairness that threadless provide to outside designers are the same as any traditional clothing company can offer to in-house designers.

The criteria for judging the company's competitive edge are also changing. The traditional industry sees the size of the company as an important indicator of scale, and the new standard of scale is the size of the ecosystem based on the company's platform for Creation. YouTube is smaller than traditional media company entities, and Airbnb does not have a holiday hotel entity, but it can serve more visitors from around the world every day. In this era of the Internet, a company's competitiveness will depend on, you can very successful use of these factors, and to create a user to create a value ecosystem.