For some time, it has been clear to see that digital will play an enormous part in the future of any successful enterprise. Physical-only businesses are becoming rarer by the day, and even those often have an online presence in the form of a website if nothing else. Any new business setting itself up now needs to have an extensive digital footprint regardless of what it is selling, be that services or products. Even the smallest entrepreneurial start-up requires a social media presence on LinkedIn or Instagram, at least, and an ability to take digital payments.
What will be interesting to see is how many of the future business successes will be the pure digital-only platforms and how many will be a combination of old and new. These businesses essentially aggregate other businesses’ products and services and act as a storefront to the world while taking a healthy slice of the turnover.
There have been some remarkable success stories in these ecosystems, including Airbnb, Uber, and Deliveroo. None of these companies own the products and services that they are providing. Instead, they used their digital muscle to dominate a market and make their name the go-to website or app.
For Airbnb, this was the quirkier end of the holiday market where individual property owners could advertise their accommodation to a worldwide audience. However, over the years, it has changed to include businesses that use it to promote their entire portfolio. By 2022, the number of users is forecast to reach over 45 million.
Uber changed how we hailed a ride and provided a platform for mini-cab drivers to compete with taxis effectively. The Uber platform has 93 million monthly customers and 3.5 million drivers and is showing no signs of slowing down. Deliveroo is another innovative app that changed our relationship with take-away food and watched many other companies battle to compete in the same market.
However, not all these tech-driven platforms have been so successful. Rather like at the beginning of the e-commerce boom, investors did not always make wise choices about where they placed their capital.WeWork oversold its concept of access to fully equipped global workspaces, and even the takeover by its largest investor could not affect a rescue. It was overvalued and underutilized and lost vast sums of money.
A mix of old and new
While investment in ‘air’ companies could be slowing down, plenty of other tech-enabled businesses are making huge strides, and old-world companies are having to constantly evolve if they are going to keep up with the rising stars.
The online gambling world is a prime example of a whole new industry that sprung up due to digital opportunities. A company like Bet365 came into existence from a chain of bricks and mortar betting shops. There are over 24 million adult gamblers in the UK, and online casinos are the most profitable sector of this market. It is the tech-based companies with the best online slots that will continue to succeed. Playson was established in 2012 but is one of the fastest growing providers in the sector with its portfolio of popular titles.
The rise of 5G and improved universal broadband connectivity means consumers demand a seamless transition between desktop and mobile-based activities. This means that the development of apps will be crucial to success in the year ahead. Consumers now expect that the business they interact with will have an app, and if it does not, they are likely to find a competitor who does have one. Thunkable is a business that allows entrepreneurs to create native apps without having any coding experience. They have recently raised $30 million in a Series B round of funding. With three million registered users on their platform and six million apps created, it would appear that tech services to support businesses without tech acumen is a successful formula.
Whether you will need to take your business into the Metaverse is still up for debate. Its future will depend on how and if consumers go there. Nike believes there will be a market for virtual products for our virtual lives and makes NFT shoes. There is something beautifully ironic about this when Metaverse avatars do not have legs, let alone feet.