Digital 4 Africa- Web Design, UX Design & Data Analytics > Business  > The new business idea is in creating platforms, not products

The new business idea is in creating platforms, not products

Just like it happened with Nokia, HP and Microsoft, Samsung is now being disrupted. The new business idea in town is not around product innovation but in business model innovation. Samsung has great products: The Galaxy S6 and S6 Edge. But they are pricey, which is a bad thing for consumers in Africa and Asia. But Samsung is not doing well as we speak.  Their profit numbers are tanking. Samsung has now seen its net profit decline for five straight quarters year-on-year, mainly due to heightened competition in an increasingly saturated smartphone market that it had dominated for years. Samsung has faced a double challenge from US arch-rival Apple in the high-end smartphone market and rising Chinese firms like Xiaomi in the mid- and low-end market.

Compare the above scenario with that of Uber, Facebook, and Airbnb. Uber does not own cars, Airbnb does not own hotels and Facebook does not produce any content, despite being one of the largest content platforms in the world.  The disruption here is how Uber, Facebook, and Airbnb have designed their business models. This is a new form of on-demand economy powered by mobile phone Apps. The same can be argued about Safaricom. Its most powerful and successful business idea is around Mpesa, which is a platform that allows people to share money.

Conclusion

The new business idea in town is about creating platforms that connect people and allow them to share content or services at a large scale, then you charge a small fee for the service and get lots of cash from volumes.

 

Do you agree?  Leave your comments here

By Francis Waithaka – CEO and Founder, Digital4Africa