The competition between today’s enterprises is not a competition between products, but a competition between business models. ——Peter Drucker
1 Huge business needs are often hidden behind contradictions
Each of us may have the experience of being killed by big data. For example, when you go shopping, you see a piece of clothing you like in the store, and after trying it on and bargaining, the deal was finally struck.
You walked out of the clothing store with your clothes full of joy. At this moment, you saw someone coming out of the store, buying the same style as you. You asked about the final price casually, and your originally happy heart suddenly became uncomfortable. The price of the same item sold to you and others is actually a few hundred yuan. At this time, the experience of the store manager is a set of big data.
The same situation also appears in scenarios such as hotel reservations and air tickets. When you frequently scan hotel and air ticket information, the system is also judging your purchasing power based on user behavior.
Once it is judged that you are an old customer and the same product, the price given to you is the more expensive price. What’s more, when you buy a ticket, the insurance fee of 20 yuan is automatically added by default.
When you cancel and want to buy again, you find that the purchase has been failed, reminding you that the ticket quantity is insufficient, and you change the platform to buy at the same time When I found that the purchase was successful once. You, who was originally a hardcore user, had to abandon it after seeing such price differences and indescribable differences many times. When conflicts occur, it often means that business needs are hidden behind them.
So, are there any companies doing the opposite?
For example, boldly hand over pricing power to users? Reconstruct the ecological value chain?
In fact, some companies really tried this strategy, invented brand-new and distinctive business models, and quickly received hundreds of millions of dollars in financing in a short period of time.
Among these early investors, there are even heavyweights like Microsoft’s co-founder Paul Allen. This company is Priceline.
2 The mutual game between value-creating enterprises is only for users
Priceline, is the largest online travel company in the United States. One day, the founder Jay Walker had a whim:
How can the price of accommodation be set by the hotel? Users should set the price!
So, he created a new business model: “Name your own price” system (self-price system).
This model allows consumers to quote the price they are willing to pay for a certain product or service.
For example, hotel prices in traditional sales channels are mostly fixed and known. But in the sales process, especially in the off-season, there will always be some rooms that cannot be sold. However, the daily expenditure and operating costs of the hotel are fixed, so the unsold rooms will lose a profit.
When the use value of a commodity is time-sensitive, Its value in use diminishes over time. In theory, when the term ends, it no longer has use value.
For example, after the plane takes off, or the room is empty until the early morning, it loses its use value. However, if the price is reduced in order to sell in time, from a long-term perspective, it is not conducive to the restoration of brand image and price.
The sales model provided by Priceline achieves profitability through the reintegration of idle resources, thereby increasing the sales of hotels and other suppliers while meeting the needs of all parties. For example, I flew to New York today to have dinner with my friends in Manhattan. A five-star hotel in Manhattan is supposed to cost $600 a night，
When I was eating, I took out my phone and opened Priceline, and bid $200 to stay in a five-star hotel.
At this time, the hotel probably won’t answer me, but it’s okay. I’ll wait while eating.
At nine o’clock, there may be a hotel taking care of me. If there is still no hotel taking care of me, I will continue to wait.
By ten o’clock, many hotels are more certain about whether they will be available tonight. The inventory of clothes cannot be sold out today and can be sold at a discount tomorrow and the day after tomorrow. The inventory of the hotel is not the same as the inventory of clothes. Once 12 o’clock in the evening, the inventory of the room will be completely cleared. So by ten o’clock in the evening, after it has basically determined that a room is available tonight, it may be possible to take an order for 200 USD for one night, which is at least better than the room being vacant.
This hotel decided to wait until ten o’clock in the evening to pick up such orders. The five-star hotel next to it thought, can I pick up such orders two minutes in advance?
In this way, the hotel that is ready to take orders at ten o’clock will have no orders available. When will I be sure that this room will be empty? Eventually it may take the order at 9:30. In order to compete for users, another hotel may take orders at nine o’clock…
In this way, Priceline allows value-creating companies to compete with each other and make companies loyal to users.
Priceline has changed from an agent of hotel channels to a guardian of users’ interests. As a result, Priceline has achieved great success. Its market value broke the $100 billion mark for the first time in 2017 and became a pivotal listed company.
3 Adapt to user needs to meet market needs
So, are there any examples of giving the right of choice to users proactively in China? Some, such as the taxi field. In the past, taxis drove on the road and picked up whoever saw them in the field of vision. This is the B2C world view of taxi drivers. After the ride-sharing software is available, you click “I want to use a car” on the APP, and all the taxis will appear in your sight and be selected by you.
This is the C2B worldview, which has revolutionized the industry.
Especially for private cars. After you get in the car, the driver tells you, do you feel cold? Do you want to drink water? There is WIFI in the car. Do you want to use it… Why is he so considerate? Because the passenger has an evaluation of him after getting off the bus, this evaluation is particularly important. If the evaluation is poor, it will become more difficult for him to take the order.
The fact that taxi-hailing software is so popular today is to take the right of choice from the driver and hand it to the user.
Similarly, Haier Zhang Ruimin also stated that the exploration of Internet model innovation has begun in 2005. At that time, Haier had just proposed the “people and orders become one” model. “People” are employees, and “orders” are not orders, but user needs. “people and orders become one” is to let every employee find his own users. Haier has no hierarchical relationship. There are only three types of people: platform owners, small and micro owners, and creators. These three types of people revolve around users. Similarly, Taobao, Dianping.com and other models are the same. If a buyer is not happy to give a bad review, the seller will be particularly painful. Use the business model to force the merchants to call the user first.
The times are always changing, and only by adapting to user needs can adapt to market needs.
4 It is often the wrong thinking pattern that blinds the eyes
In short, innovation is the recombination of production factors and does not mean the development of new products. More importantly, through the system hierarchy behind the data to get more insight and recombination.
Just as car-sharing reintegrates idle resources of social vehicles, Airbnb reuses idle resources for renting. Going back to Priceline’s self-pricing system mentioned at the beginning, the pricing power is given to users. It is an insight innovation of existing production factors.
The one who defeated the carriage must not be the faster carriage, but the faster means of transportation. It must not be the more delicious instant noodles that will defeat the instant noodles, but the new takeaway model. It must not be another WeChat social product that defeated WeChat, but the brutal invasion of a new species. It must not be the cars with better performance that will defeat the traditional cars, but the energy subversion and unmanned aerial driving.
It is often not ignorance that blinds the eyes, but the wrong mode of thinking.
To have the right mindset, you must first go back to the starting point and quickly and firmly press the start button to stop the error.
Really powerful people and business models with insight are often concise and elegant, simple to the point of a sword.
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