Great networks don’t simply connect people and things. They organize them and orchestrate them.
Airbnb plans to go public this year; valued between $53 and $65 billion near the end of last year by Morningstar, it hasn’t been in any hurry to list shares, given that their “network effect” business model is quite lean because unlike some of their competitors, they don’t need to own or operate physical properties. In fact, at $47 billion, their market cap would be larger than Marriott (around $43 billion), Hilton (around $27 billion) and International Hotels Group (around $12 billion).
Online travel agency Expedia’s market cap is around $19 billion and TripAdvisor’s is around $8 billion, while Booking.com comes in at a cool $100 billion; like Airbnb, these companies don’t own properties, cars, airplanes or other assets; they simply do a good job matching the assets out there already with buyers.
Uber was one of the hottest IPOs last year, having gone public in May on the NYSE. Their offering allowed general investors, rather than just wealthy people and institutions, to purchase shares in the ride-hailing company – one which, like Airbnb, only organized assets other people owned. The stock dropped from $45 per share to $30 at the close of 2019, loses over $1 billion per quarter, and still maintained a market cap of $50 billion, dwarfing Hertz (at $2.2 billion), Avis, (at $2.4 billion), and Enterprise Holdings (privately owned, the largest rental car company in the world with reported annual revenues of over $25 billion). The incumbents are now experimenting with and rolling out ride share offerings, while Uber is driving forward with delivery and commercial freight divisions as they strategize their way to profitability.
At the same time, Uber lists as it’s competition autonomous-vehicle innovators including Google/Alphabet’s Waymo, Cruise Automation, Tesla, Apple, Zoox, Aptiv, May Mobility, Pronto.ai, Aurora, and Nuro, knowing the entire transportation industry is being disrupted again when the idea of the “network effect” applies beyond the Internet to physical networks including smart cities and entire highways, made more efficient themselves using IoT technologies.
There are other assets out there as well that can be organized and orchestrated using community, navigation and networking – including talented and highly skilled people.
Takl, TaskRabbit, Fivvr and Care.com are only a few of the “human” supply chain matching platforms supporting the rapidly growing gig economy. Tapping into growing pools of people who prefer to make a living as independent contractors rather than employees, these applications succeed when they deliver a simple and efficient experience, and have built-in incentives for workers to deliver what they promise, while those who hire those workers pay in real time, releasing funds as milestones are reached.
One of my sons interned for a very cool company based in NYC, Collaborizm, which brings together mechanical and software engineers to help each other build things, and in the process spot talent which is made available for hire. Their pool includes full stack, IoT, UI/UX, Node.js, Ruby, React developers, as well as hardware creators including roboticists.
No industry is immune to the disruption being within our increasingly physically and digitally connected world. In fact, now that 2020 is in full swing, we will start to see that the impact of community, navigation and networking to orchestrate getting work done, getting physical products from A to Z, moving people from place to place and to generally support the Exchange of Everything, will have even greater impact in disrupting entire industries and related industries.
None of this would be possible without the Internet, and on the cusp of Internet 5.0 (which communicates with us like we communicate with each other, already in play with the rise of personal assistants and super sophisticated bots), we’ll see a symbiosis some have called the “read-write-execution-concurrency” web, and others have called the “emotional” web, which can be controlled with changes in facial expressions and more.
Will such a hyper-sensitive overlay on the hyper-connected Internet of Anything and Everything make us more – or less – human? I’ve always been a relentless optimist and believe that improvements in supply chains today, and human services tomorrow (including therapeutic services that can improve minds and moods) will allow us to become more human.
When we get work done faster, we have more time to spend with our families.
When we hire other people or robots to relieve us of mundane tasks, we have more time to read, listen to music, and become life-long learners.
And when we master the ability to leverage the assets that are already out there, we won’t need to produce as many “things” as we share them, protecting natural resources and reducing harmful carbon emissions and other activities that could destroy the planet.
What is critical to this vision? Access to broadband and ultra-broadband, sound public policy and regulation that supports our freedoms while protecting us from harm, and above all, cybersecurity to ensure the systems, supply chains and people who will be pervasively connected can live in free and fair societies – within the new digital communities that we will look back on at the beginning of the next decade, amazed that we lived any other way.