system two

system two
start-up thinking in the enterprise

Friday, 8 May 2009

an apple for the old world...

I'm making an (admittedly long) bet that the next broadside / revolution to hit the "old" economy is virtual businesses, cyber squatting on old skool business models. just like apple did with the record labels..

What do I mean....

Take builders merchants, insurance companies, healthcare providers - in fact pretty much any old world brand who hasn't embraced the web.

What is to stop well funded, agile startups, deploying cutting edge technology to offer the products of old world industries, forcing the brands whose patch they're squatting on, to play ball and supply them?

An agile startup raises a couple of mill and puts together a slick, lightweight site which offers everything the old world merchant does (or more likely just the higher margin stuff).
They take the trouble to integrate an enterprise level CMS, stock management and ecommerce system and then approach every brand in the sector to tell them they've solved their biggest IT headache - an all singing, all dancing online presence - no capital cost - they only want 30% of the net.

Board of old school company, faced with the prospect of their own pedestrian IT department coming up with the goods anytime soon (and in a bid to generate much needed revenues in the short term to help the shareprice and this years bonus...) agree - thinking they'll balance control issues with the upside of owning the offline relationship with their customers and by retaining their "brand values" (which of course mean s**t on the web).

Its happened once – it could happen again….

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