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21st Century Business Model

7/20/2014

2 Comments

 
With the constant noise about entrepreneurship, creating new jobs, building technology into business models, it’s easy to miss out on some of the new products and services created under our noses.  We don’t think about them, but we do use them.

Part of the reason we don’t recognize these new businesses is they become ubiquitous without us evening knowing it.  Cell phones?  All of a sudden everybody has one.  Flat screen TVs?  Yeah, they’ve been around for over ten years now, they’re just another big yawn.  iPads?  Shoot, schools are practically mandating them.

I remember back around 2002-2003, sitting with my brothers outside Wrigley Field after a Cubs game, watching the street life.   People were starting to use cell phones more, but I couldn’t tell you what percentage of society actually owned one.

As we sat at an Italian café, munching on a fantastic mix of fresh garlic, parmesan cheese and olive oil mashed into bread, we started looking more closely and it was like ants coming out of their hole after you’ve kicked the sand in their pile.  People were crawling all over the place, and had small, hard plastic devices plastered to their ears and were talking as if an invisible human was next to them.

It was striking.  The tipping point had been reached.  Suddenly, it seemed like everyone was yacking away while they walked down the street, stood on tops of buildings observing the crowd or were sitting like us at the restaurant waiting for our orders.

The phones had been coming for years, but they made a visual debut that day.  We don’t think about what went into the product getting to that point.

Research, product testing, manufacturing, distribution, establishment of wireless networks – all of these things had to occur for the phone to hit the road and reach the masses.  But most of that was done behind the scenes.

We don’t see the research.  We’re not aware of the testing.  We don’t follow the manufacturing process or know what the distribution channels are.  And we don’t even know what a wireless network is, much less how it’s constructed.

All we know is phones started to materialize, and they worked.  The other day in my office a similar situation clobbered me in the face.

A coworker was pulling up images on iStock.  For the uninitiated, iStock has photos on just about any subject you can think of.  You type in some keywords, see what pops up, then purchase an image you like, and you can use it electronically.  Seemingly pretty simple stuff.

But it made me think about all the jobs and companies such a simple concept created.  They need models for the photos since humans are in many shots, so all those people got some form of employment through the iStock model.

Someone has to put the images online.  Some photographer has to take all the pictures. Another person has to reconcile the accounts receivable; bills must be paid.

Sure, some of the positions may be arcane, but something you don’t really think about has spawned this network of jobs in a viable business model in this new world of visual imagery that we inhabit.  It’s wild stuff when you think about it.

How many iStock-type companies are out there?  Who knows?  What I do know is that similar businesses spawn jobs.

New products and services are quietly insinuating themselves into our lives as we share photos, download music or order TV shows online.  Someone is behind the scenes doing “stuff” to make sure they are viable.

I just don’t know what the “stuff” is until I order something. Then it gets interesting to think about.

2 Comments
Jack
7/21/2014 10:49:42 pm

Yeah, it's the free market phenomenon described by Adam Smith over 200 years ago. And I'm sorry you are a Cubs fan.

Reply
Dave Simon link
7/21/2014 11:16:02 pm

Actually, I'm not a Cubs fan, but that's ok. We were just hanging out after the game.

Reply



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