“Value Vampires” sounds quite frightening!! As a matter of fact, there is a good reason to be frightened of them. This is the new breed of digital companies that are sucking the profit pool dry of the incumbent’s companies, companies challenged by the digital economy. Often, the “value vampires” provide products and services cheaper than yours, their global reach is unmatched, and their consumer experience is better than yours.
“Value Vampires” is a term introduced by Prof. Michael Wade, an innovation and strategy professor at the IMD business school and the Director of the Global Center for Digital Business Transformation. He names “value vampires” companies like Uber, Airbnb, and Amazon, companies that have managed to be “winners of everything” due to their digital platforms. These companies scale quickly and almost without any limits; they expand their business from one area into new areas (e.g., Uber expanded from taxi hailing to food deliveries, Amazon from books selling to selling almost everything, to cloud computing, e-book readers, and much more).
The customer experiences and the prices they offer are unmatched, sometimes even free of charge, their service levels are better, they disrupt the markets in which they operate and drive down the profits of almost all the market leaders. Sometimes the market leaders surrender and close their business (e.g., Borders, Blockbuster, and others).
The “value vampires” wipe billions of dollars from the revenues of the incumbents in many industries. An example of a “value vampire” is WhatsApp – they sucked billions of dollars from the revenues of the mobile operators in a very short period. They use the platform business model that competitors can’t match; they have a global presence making it very easy for customers to reach them.
For “value vampires,” even the sky is not a limit!
As Prof. Wade says “Not only is Uber cheaper than most taxi companies they are competing with, but the quality is also better because the way you can hail them via an app, and their service is good. They also offer platform value in that you can hail an Uber almost anywhere in the world via the same app. They use their network to introduce other services.”
A link to the interview of Prof. Wade’s by the Norwegian business magazine Kapital: https://bit.ly/2GTJpeuProf.
Wade is also the author of “The Digital Vortex,” a book we have cited in Chapter 8 of our e-book “Doing Digital“. The book introduces the concept of the digital vortex, a tornado-like behavior of the digital force that is impacting all type of industries.
The combination of the tornado-like behavior and the arrival of the ‘value vampires’ is the perfect example of why companies must make their digital transformation a strategic move, and start their digital journey as soon as possible. This journey is challenging not just due to the need to transform the business employing digital technologies. It is challenging also because of the need to transform your organization into an innovative and agile business, that offers new value to its customers and can respond quickly to the new attackers.
To understand the challenge of becoming an agile organization, we invite you to download our article from Cutter Consortium’s web site (requires registration) at the following link: https://www.cutter.com/offer/agilifying-your-organization-6-steps-get-started
Don’t wait for the ‘value vampires’ to arrive at your market.
Start your digital and agility journey ASAP.
Their concept is exciting, and like a two years old company, the results are amazing. Their scooter is well-designed, colorful and electric and above all – smart. It is an emission-free scooter, targeted for the crowded, congested and polluted cities, the challenging reality of most modern big cities.
Together with the new battery, they have innovated a network of recharging stations used to swap empty batteries with fully charged ones quickly. Instead of plugging in your battery to recharge, you just quickly replace the battery. Riders are offered a monthly subscription fee for that service.
The charging station, like a vending machine, holds four rows of 10 batteries each. They already have 350 charging stations in Taipei (they claim that you can find a station less than every 1.3 km, and plan to add many more charging stations. Those compact stations, like gas stations, can be deployed anywhere. They already started to install the charging stations in many more cities and countries.
If we remember the popularity of this transportation mode in many Asian countries, we can understand the huge potential of Gogoro. They also have plans to extend the usage of their batteries. According to Gogoro, a charged battery at 50% to 75% capacity can power a house for an hour, a laptop for 25 hours, a home furnace for an evening, or server rack with 40 servers for 20 minutes.
Let’s focus shortly on the “smart” elements of Gogoro, the digital technologies they have used for their innovative scooter, a network of charging stations and mobile applications. In many ways, they are less a vehicle company and much more a technology company.
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