IMD-OWPLIVE22-PostEvent-Report

Business Insights

Businesses that conquered the 20th century economy owned the means of production. In the digital era, the dominant business models are those which create connections. Some of the most valuable companies today are platform businesses, such as Google, Apple, Amazon, and Uber, which link consumers with producers to facilitate the exchange of goods, services, and information.

In fact, platform companies have become so enormously powerful that they’re taking huge commissions from their suppliers, squeezing their profit margins. And this is eroding trust in platform businesses. Uber and Lyft have been sued by their drivers for engaging in anticompetitive practices, setting prices customers pay and denying them employment benefits. Because of this problem, these modern monopolies are particularly vulnerable to disruption by a new wave of companies that are putting trust

at the center of their business models. ‘Web3’ companies are revamping how the internet works, using blockchain (distributed ledger) technology and digital tokens to mediate interactions between parties. And because users are in control, there are no digital gatekeepers to set the rules and reap most of the profits. New models of trust are built, with the spoils shared by all parties. This means Web3 firms could disintermediate platform businesses.

BRACE YOURSELF: WEB3WILL UNLEASHCREATIVE DESTRUCTION

The next iteration of the internet is coming, with trust at its core. Companies will need to rethink their business models and build new capabilities to see off the threat.

GOUTAM CHALLAGALLA Professor of Strategy and Marketing

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