In most organizations, the competitive landscape is changing rapidly, and hence, businesses are moving past their life cycles at an unmatched pace. Indeed technology drives the present changes. It affects how customers act and how businesses capture and build value.
A lot of start-up companies use digital technology to create new services and business models that change how we do business.
For example, small but very modern and advanced companies like Airbnb and Uber have disrupted traditional business models. These companies make use of models that are ultra-responsive, super agile, and adaptive to market changes.
Yes, there has been a rapid change in the digital world. So if you must remain in the game, you need to change your strategies – you need to create value. To create value, there are factors to consider. These factors are different from the industrial age, and it's important you understand them else the digital age may seem somewhat confusing.
A product must be easy to sign up for, easy to learn, easy to drop (if you don't like it), easy to use, and easy to share with your friends.
Look for ways to simplify how your consumers can make use of your products and services. How can they use it without getting stuck halfway through? If you make it easy for them, you are automatically creating value.
A good user experience is the staple of the digital age. What this means is, a great user experience determines the success of a business. So you need to ensure that you're creating an experience. A lot of companies are now investing in their user experience to stay competitive against rivals and create value. Don’t just focus on selling a product or a service; focus on creating an experience for your customers.
Collaboration means when a business and a group of its consumers, collectively create value through new products and services.
For example, the LEGO Ideas platform allows anyone to post an idea for a new LEGO product. If the idea draws ample supporters and passes a thorough review process to become a reality, the company will share 1% of the revenue with the originator.
Practically all products designed to date in this fashion sells out. In the digital age, you must find ways to work together to create value. Find new people, new relationships, and create new products and new markets.
When you go online, you're not just one person; you're part of a group. And that group is in contact with one another, and ready to assist each other. If you give value, you will, in turn, create value for yourself.
Let's take a look at Uber, for example. When they first came out in San Francisco, the size of the taxi market was $130 million a year. A few years later, it was $390 million. Uber had, in effect, tripled the size of the market in San Francisco.
Guess how they did that?
They improved their user experience, which created more demand. Uber then brought in more drivers, which created more supply, and this flywheel effect, created more demand. That's the two-sided network effect. It's a staple of platforms in the digital age.
There you have it!
Keep these five factors in mind if you want to create value in the digital age. If you do so, things will make more sense.