Knowledge has since emerged as the most powerful factor of production, and a man or a woman with knowledge is a FACTOR. Industrial age business is about controlling Supply to shape prices. Manufacturers work to provide supply, but dominance actually comes through distribution. Dangote Group’s most important competitive weapon is that it controls more than 40% of all active trucks in Nigeria, in a nation where goods are mainly shipped via roads.
In the 19th century, railroads played a pivotal role in shaping the American economy, with intense competition and financial struggles characterizing the industry. However, this era also saw the rise of monopolies like Standard Oil, which revolutionized the oil industry through efficient production and transportation methods. In response to concerns about monopolistic practices, the Sherman Antitrust Act was introduced in 1890.
For Rockefeller’s Standard Oil, the real antitrust issue was not about crude oil. The problem was asymmetric unfair positioning on DISTRIBUTION via bulk discounts which other oil producers could not get. The government stepped in and broke the oil giant into pieces.
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The implication is clear in industrial age business: winning in markets becomes managing and controlling distribution as most businesses are bounded and constrained by geography, creating advantages which are largely localized.
But today, the game has shifted from control of supply to control of DEMAND for online firms. And only companies with capabilities to control demand are going to win big. If you check, most of the greatest internet companies are simply controlling demand, and that means controlling how supplies reach users and consumers.
It comes down to aggregation: if the suppliers of local news are many, the challenge moves from the scarcity of the news to sorting out the supplier that adds value, since no person can technically visit all the individual websites before arriving at the most valuable one. Welcome Google which now becomes a gatekeeper, helping to make sense of the whole thing by guiding users to the right contents once they search. This is an evolution, shifting power from the old suppliers to a new set of entities which control access to demand
What does that tell us? Winning today begins by connecting with People (like social media followers) and nurturing Audience, not by just coding, especially if you have a limited budget as a small business owner. If you have the People and can influence, your chance of success goes up in online business. Watch some videos I made to explain.
Comment on Feed
Comment: Ndubuisi Ekekwe you’re describing with plain words the so-called platform economy. Thank you for bringing these concepts into the simplicity realm.
My Response: Actually, it is not entirely platform-economy. My focus here is how to use CONNECTING with people to build small online companies. If I do not write here on LinkedIn, Tekedia Mini-MBA will not be enrolling hundreds of people every 4 months. Tekedia may not be a platform, but Ndubuisi is connecting with people and influencing demand. Sure, I pay a price for this since I may never get a LinkedIn checkmark as my posts have outside links, but I am happy for the growing revenue over checkmarks.
Business Model Wins Empires; Demand Wins Over Supply In Digital and why Microsoft is ChatGPT’s Best Feature
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