Experience is important, but, you need to own it!
The world’s largest taxi firm, Uber, owns no cars. The world’s most popular media company, Facebook, creates no content. The world’s most valuable retailer, Alibaba, carries no stock. And the world’s largest accommodation provider, Airbnb, owns no property.
…The above is a popular observation spotted a few years ago by Tom Goodwin, an executive at the French media group Havas and in this article I’d like to challenge the thinking and demonstrate why it is not enough.
The business model these companies have adopted is in one word, incredible, but I believe it has it’s limitations. They have done a great job at taking old industries and adding a whole new millennial experience — a mobile experience. But for them to stay ahead and continue to innovate and excite their customers there is a necessary but unpopular word that will become important — CONTROL. They will need control to guarantee the user’s experience whilst using the service they have so brilliantly sold. This layers in a whole new challenge, to the business, investors and consumers.
Suddenly a low-cost operating model gets challenged and risk naturally rises. The biggest risk — investor confidence. How can these businesses convince their shareholders of the potential reward by flipping the model that will have made them all so much money. To put it in perspective this is what I think it’ll mean
For Uber to ensure the taxi experience is consistent they will need to own the taxis and have deeper control over the drivers — This is why they are investing so much in driverless vehicles.
True Fake news (not someone’s opinion or freedom of speech) is possibly one of Facebooks biggest concerns as it want to be seen as a trusted source. It either needs to find a way to distinguish it and get it off their platform or start creating content that they can ensure is valid and trustworthy.
You just have to read through some of Airbnb’s reviews to start seeing the issue. Sure they can remove content that doesn’t meet their standards but it’ll be a lot easier when they own the hotels.
All platform businesses are basically the same and need 4 key components to survive and continue to grow at the rate they and their shareholders have come to expect. Great and differentiated content, amazing self-optimising performance, intelligently powering activities and recommendations and lastly an insane experience. It’s just that where these business have up to now delivered a new unique buying/consuming experience they now need to move into guaranteeing the experience of using the service they have sold.
Netflix is a great example of how this can work perfectly, they have the same viewing platform they have always had but now they are starting to control the user’s experience with their original content, arguably it’s what Spotify will need to do to stay ahead of Apple music.
Take it to the travel industry
On the face of it you can see why the airlines see new personalisation technologies like IATAs NDC (New Distribution Capability) as such a big opportunity, but, they have never really succeeded in the critical element — Selling. Most airlines haven’t even got the flight experience right.
If we take a step back and think about the above models, ultimately, what did they get right first? This is why travel agents need to take back the narrative and adjust the new model.
Agencies have been an integral part of selling trips for decades. They know their customers, they know their markets and importantly they know how to sell, now, they must own the traveller experience.
Taking what they know of their customers and deliver to them not just the right compelling content, delivered through whatever device the traveller is on but a deep experiential trip that engages them before, during, throughout and after. An agency that cares and takes control will change the way travellers think about, consume and experience travel.
For an agency to guarantee the user’s experience they wont be able to own /control the airlines and travel services, so, they need to take ownership of the traveller. Meet them where they are at, engage with them and build the lifetime experience they want regardless of where they are going