If you think of markets as living, breathing, dynamic entities (which is not so strange, given how rapidly markets on the Net are created and evolve) then understanding markets means thinking in evolutionary terms: Markets on the Web actually have more in common with ecosystems than they do with inanimate objects.
That’s exactly the perspective that Evan I. Schwartz brings to the Net in his most recent book, “Digital Darwinism: 7 Breakthrough Business Strategies for Surviving in the Cutthroat Web Economy.” “The Web is more than a new landscape for doing business, more than a digital terrain that leads to brand-new species of companies,” writes Schwartz. “The frenetic evolution we are undergoing will forever alter the way all business is conducted almost everywhere by almost everyone.”
In other words, when it comes to the emergence of dynamic, multiple markets, survival doesn’t necessarily go to fittest, but the “digital-est.” Here are some suggestions from Schwartz’s book on surviving in the age of “digital Darwinism.”
Supply no longer drives demand — demand drives supply.
“Dell has developed a trait that eventually will be necessary for all surviving species of manufacturers: the ability to replace inventory with information. The product is produced virtually on the network, before it is produced physically in the plant. . . .
“More and more, the future of all manufacturing … is about getting back to the notion of selling a customized version of a product and then manufacturing it…. If done right, network production yields efficient manufacturing and unique customer relationships at the same time.
Brokers, brokers, everywhere. “The most successful of the new species of cyber-mediaries, or digital middlemen, will be the ones that know their industry cold, the ones that understand not necessarily the bits and bytes of the technology but the particular habits of the business in which they are already a player.”
Buyers and sellers need to evolve together.
“Yes, the Web shifts massive power into the hands of the buyers. But in the world of dynamic pricing, neither the buyer nor the seller should dominate. For the overall system to work, both sides in the negotiation must be part of an overall equilibrium. Buyers get a valuable product at a great price, while sellers boost revenue and profits by unloading certain types of goods and services at an opportune moment. At its core, dynamic pricing is all about timing.”
If you want to survive, solve a consumer’s problem.
“The brands that stand the best chance of being relevant are the ones that offer overarching solutions, the ones that help people simplify their lives by organizing their time better. The lesson: Don’t offer a brand that’s focused on products … or technology…. Offer one that embraces consumers and tells them how much better their daily life will be. . . . That promise must be as large as the problem that you are trying to alleviate. And the companies that deliver on that bold promise will no doubt enjoy a long, prosperous existence.”
Coordinates: $25. “Digital Darwinism: 7 Breakthrough Business Strategies for Surviving in the Cutthroat Web Economy,” Broadway Books, www.broadwaybooks.com