In a recent Forbes article that discussed the trends affecting global business in 2016, the so-called ‘connection economy’ topped the list. The connection economy rejects the notion of building assets by industrialism, instead rewarding value created by building relationships and connections.
The idea is not a new phenomenon, but it has grown substantially in recent years due to the success of its poster children: Uber, Facebook and AirBnB. But what is behind the success of these international business giants?
The connection economy facilitates connections
An influential article in the connection economy debate, published in March 2015, put it best:
“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. And AirBnB, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”
Rather than attempting to provide what customers are seeking, intelligent companies are instead connecting them to the individual who can fulfil their needs. This shift in thinking is one that many companies will likely adopt in the future, as it’s proven to be effective in almost every industry that has jumped on the bandwagon.
Look, listen and learn
Something that connects AirBnB, Facebook and Uber is that they took the time to listen to what people wanted – to what was missing from the status quo.
Marketing guru Seth Godin gave a talk on the connection economy as far back as 2013, connecting the idea to his ‘permission marketing’ approach:
“[Permission marketing] is the idea of creating anticipated, personal, and relevant messages to people who want to get them. Here’s the simple definition: that email that you’re going to send next week – if you didn’t send it, how many people would complain and wonder where it is? Because if they’re not complaining when you don’t show up you don’t really have permission.”
Ascertaining exactly what people want, and providing it, is the fastest and most direct route to a successful business. This idea might seem obvious, but in business it can often be obscured or buried by financial concerns or lack of innovation.
The lesson for business leaders is to make less assumptions about customers and clients, instead taking the time to understand what they might be able to offer.
The road most travelled
“We’ve always done it that way” is sometimes maligned as one of the most dangerous phrases in modern business. This might sound melodramatic, but it’s hard to deny the frustration of being confronted with old dogs unwilling to learn new tricks.
It is, however, important to remember that just because an idea is old it doesn’t mean that it’s necessarily wrong. Rather than completely upending a popular business practice, it can be far more effective to find a way to identify ways to adapt and improve it.
Uber has succeeded, not because there was something fundamentally wrong with the system of exchanging money for a lift to your destination, but because the idea needed to be updated. This can be seen in almost every sector; there have been explosions in everything from online food delivery, with Deliveroo likely to hit a revenue of 130M this year, and serviced offices, with providers like i2Office expanding to 18 locations in London alone, to the day to day challenge of finding your way from A to B.
The lesson for business leaders is to understand the industry in which they operate; which aspects make it valuable to its customers and which are beginning to fall by the wayside.
The modern way of doing business is inextricably related to the connection economy; seamless technological integration functioning alongside widespread online social networks. What business leaders have to do now, is try and stay ahead of the curve.
To paraphrase the 2003 film Pirates of the Caribbean: “any business that falls behind, is left behind”.
