Skip to main content

I paid my barber online



It finally happened, I made an online reservation and saw a payment option for my barber. So I paid my barber before getting service. Of course you can ask yourself would I have done that had I not known the barber in question. But afterwards, I realized that we are doing this already. For example, sometimes we pay for our trips in advance without knowing the hotel. So we are used to buying service in advance under certain circumstances. Of course paying the hotel upfront guarantees a room this is not as crucial with the barber. However, paying upfront also limits your exposure to problems later, so you have a certain assurance that the payment will not be a challenge at the location of the service delivery. In other words, convenience outweighs trust.

But to me this has also revealed something else, namely the fact that even small and medium businesses are now cloud based and accessible through commercial platforms. If we take a step back here, I’ve made the argument in my previous article that incumbent financial service providers need to start working with Fintechs because both can benefit from a symbiotic relationship. But if we start to investigate what is really driving this, it’s largely two things: 1. Convenience and user experience and 2. Technological developments in cloud and mobile computing. These two things fuel each other – it’s also a form of symbiotic relationship. Customers today seek convenience on their mobile phones and this is evident in the rise of challenger banks, while at the same time, digital transformation enables these conveniences and new business models.

Which really brings me to the business of software platforms. The GAFAs, Tencent, Alibaba, Microsoft and VISA are now the 8th most valuable companies on the planet (in terms of market capital) and they all have a similar software platform business. In essence, they are driving software platforms as a new business model for the global economy. McKinsey thinks that we will see 30% of all global revenue come from these software platforms in 2025. If we take B2B and B2C commercial platforms into account then we have to realize that SMEs are in fact also undergoing a digital transformation indirectly by joining these platforms. Through the offerings from commercial platforms, they can get all their software- and service needs addressed, be it customer relationship (bookings, communication), accounting and resource planning or even payments. This reduces the administrative effort so they can focus on their value creation effort. But of course, it is not just SMEs, in fact, with SMEs we really just see the symptom of a much broader transformation – namely enterprise software systems and payment services providers are all transforming and move into the cloud from where they can bundle their offerings as software platforms.

The driving factor is opportunity and fear – Amazon and Omni-channel is driving Wal-Mart and Carrefour to undergo a digital transformation. But even the Banks are forced to undergo a digital transformation with open banking. To enable this transformation, APIs are the key because they define the contract in how we interact with cloud services and software platforms, they clearly define the data that is being exchanged and most important of all, they are absolutely free to connect to. It’s really the need of “free” connection that is so important for scalable, interconnected business models. For incumbent payment service providers, there is only one path and that is open up, become API first, join these platforms or even become one!
But it’s really API first that companies need to take serious if they want to continue to play a role in their respective economies because with APIs comes the capability that is required to compete in this new digital world.
Labels:

Comments

Post a Comment

Popular posts from this blog

Will smart phone cameras be better than digital mirrorless cameras?

  If you believe Terushi Shimizu or rather, the way the press is formulating it , then camera phones will have better image quality in 2024 than your trusty DSLR or mirrorless digital camera. He backs this up with sensor technology advancements and computational photography. He has a point.     However, as a digital camera enthusiast myself, I must strongly disagree with this point of view. The message might be interpreted in such way that its meaning reflects a view that we are no longer bound by physics to get the best image quality.     The thing is this, the bigger your camera sensor, the more photons it can capture. However, this comes at the realization that big sensors require big lenses which in turn makes the camera big and heavy. I’m simplifying of course, but that’s physics. For camera makers it is therefore always a question of tradeoffs: do you want better image quality or do you want a smaller and lighter camera. Camera phones or cameras in smartph...
Post a Comment
Read more

Apples Vision Pro Headset strategy is all about its Arm-chips.

  Apple has given us a vision of what their VR and AR future might entail. But as have others pointed out numerous times, the whole point of the showcase at the WWDC 23 was to let people experiment, I’ve heard others say that it’s like the launch of the Apple Watch when Apple didn’t really know what would become of it. This is similar and yet different.  Just like the Apple Watch (and the iPad before it), Apple sought to porting its whole ecosystem onto a watch – granted, the Apple Watch can’t live on its own and a better comparison would probably be the iPad. The iPad can live without any other Apple device and unlike the iPhone, never really had a clearly defined function other than to watch movies and browse the web. It was not until it gained the ability to be used with a pencil that artists and designers started to explore the potential.  I’m trying to point out that Apple took 5 years from the first iPad in 2010 to the iPad Pro with pencil in 2015 to find its “kille...
Post a Comment
Read more

The new shiny armor of AI

If we listen to the media, business leaders, and the press, we should be getting behind the AI wagon because of its potential to automate many of the processes everyday companies struggle with. I don’t dismiss this notion entirely because I think it’s true if you have the ability to integrate this technology in a meaningful way. For example, the startup company " scrambl " (full disclosure, I’m a minority investor) is making use of gen-AI by "understanding" CVs (curriculum vitae) from applicants and identifying the skills to match them to open positions. This works great – I have seen this in action, and while there are some misses, most of that "normalization of skills" works. There are other promising examples, such as Q&A systems to understand the documentation of a complex environment. When combined with RAG ( retrieval augmented generation ), this has the potential to significantly reduce the time it takes to make complexities understandable. But ...
Post a Comment
Read more