Jeremiah Owyang on What Turns New Technology into New Business Models
The thought leader shares his insights on the adjustments happening in the collaborative economy and what tech-innovators are focusing on next.
Jeremiah is a trusted friend and partner of WDHB for many years on topics ranging from social trends to corporate innovation. He is one of the most prolific thought-leaders and industry analyst who helps his clients solve how new technology connects companies to their customers. We interviewed Jeremiah as part of our series on Business Model Change.
WDHB: The term « business model » and the concept of business model reinvention has come into our vocabulary only in recent decades. As an analyst, how would you describe the utility of the term and how do you explain its appearance at this point in time?
Jeremiah Owyang: The utility of the term “Business Model” as an outcome of digitization is well recognized within private corporations. They understand, having felt how digital startups have changed the flow of revenues and customer experience, that the expectations have changed from the market.
In most cases, the “Digital Business Models” are often in three flavors:
- On-demand models where goods and services are quickly brought to customers,
- a business model based on data (ads, insights, market intelligence or re-selling of data),
- or a marketplace model, where economic efficiency is gained from a single platform that aggregates buyers and sellers on both sides of a market.
You have been observing the evolution of business models as triggered by new technologies and behaviors for the past decades. Based on your research, what were the key drivers allowing for truly disruptive innovations in models and what contextual factors accelerated this transition?
We often see significant market changes when three market factors combine at the same time: 1) Economic triggers 2) Social trends and 3) Technological enablers. When all three of these align, we often see a Cambrian explosion of a new market, where thousands of new startups emerge to take on common problems in every market niche.
My area of focus is that of Technological enablers. In the last ten years, smartphones have become prolific, giving regular citizens and consumers incredible power, like “technological superheroes” to use smart apps, endless information, instant information, location-based data and beyond. Even more so, they are connected to each other, which shifted the power to the crowd of enabled consumers.
Especially the Collaborative Economy has resulted in many novel business types and models. What are some of their main characteristics and what are the most crucial internal and external success factors for organizations to leverage business model innovation in these new ecosystems?
The Collaborative Economy is going through a market reckoning right now, their business models are being challenged, their economies of scale and ethics are being challenged by government leaders, which is the natural phase of market adoption, as we see in other markets like e-commerce and social networks. What’s important is that traditional companies are using these same strategies to reduce inefficiencies by hiring on-demand staff, sharing unused assets and crowd-sourcing ideas from the crowd.
Allowing ourselves a view into the future, what do you anticipate will the business model landscape morph into? Do you see further differentiation, consolidation, clusterization, polarization on the horizon? And are there any trends or new models that are only just nascent?
We are receiving a significant market response around our recent area of research — what we call “Tech Wellness”. In past markets, the physical world has become digitized, now it’s entering our inner space: minds, bodies, communities and physical spaces. We’ve identified a number of sensors, devices, apps, AI systems that are enabling top tech companies from Google, Apple, Amazon and hundreds of tech startups to start to predict how our bodies will react, change, and can improve.
Find more on this topic and a video talk by Jeremiah here.
Through your work, you get in touch with leaders from a huge array of companies — from all industries and of all sizes. What can we learn from each other when it comes to business models? Do you have any favourite stories of organizations that have managed to shift their business model?
One leader is BMW, who is morphing from the tag line of the “Ultimate Driving Machine” to figuring out how to shift to a service-based model when cars become self-driving. The other is Walmart, who is now looking at stores where cashiers aren’t required, and they’re using blockchain-based technologies to identify the source of food products. Another is Dominos who has redefined their entire customer experience as a digital experience, from food selection, food quality assurance, digital delivery, and beyond. We have a body of case studies that we’re building around the topic of “Digital Transformation” as companies continue to integrate technology into their company DNA.
Thank you, Jeremiah!
About Jeremiah Owyang
Jeremiah is an industry analyst who helps his clients solve how new technology connects companies to their customers.
He is well recognized by both the tech industry and the media for his grounded approach to deriving insights through rigorous research. From corporate innovation, autonomous technology or modern wellbeing, he views every aspect of emerging technologies through the lens of growth, opportunity and constantly shifting consumer behaviors and expectations.
Forever at the forefront, Jeremiah identifies trends and advises major companies to adapt their business models to better connect with customers.
His clients include Adobe, Cisco, Wells Fargo, Nestlé, Esurance, Johnson & Johnson, Visa and Colgate, among others. An acknowledged thought leader and widely read publisher, Jeremiah has appeared in such publications as The Wall Street Journal, The New York Times, USA Today and Fast Company.