Draw back the curtain of hype from many so-called "digital innovators" such as Uber and you reveal familiar pyramid shaped organisations that share many negative characteristics with the heyday of the railway and oil tycoons. Even claimed innovations such as "dynamic pricing" are merely shallow re-brandings of the economics of the barrow boy – putting up prices when something's in high demand, reducing prices when it's not. Yeah, very original. And, just like those earlier tycoons, these new businesses operate in a largely unregulated environment - beneficiaries, for now, of governments' habitual failure to keep up with the times.
Yet these new businesses, built around digital platforms that connect two or more parties, look vulnerable. Far from being the trailblazers of new economic models, the long-term value of these niche platform players appears increasingly transient. The core of their operations – two- and multi-sided platforms – are rapidly becoming a commodity with a low entry point. The underlying utility infrastructure is becoming ever more ubiquitous, a trend further boosted by the creation of services such as Amazon's API Gateway.
It's relatively simple and inexpensive now to create a service that can connect two or more parties. Compared to the verbose API protocols of the past (remember the pain of SOAP and XML-RPC?), microservice development is increasingly lightweight and simple. Added into this mix is the growing ability to tap into existing API-based services such as Google Maps, Twilio, SendGrid and Box. By drawing upon such utilities, new services can be built quickly and cheaply, and adapted on the fly.
Vacuous misnomers such as "no stack" or "full stack" miss the point. This is more accurately about the composable stack - using existing services wherever possible (for commodity components) and only developing niche (bespoke) elements where required (another practical example of the value of Wardley mapping). To these composable services, facilitating the connection of multiple players, can be added granular logic that provides the specific value required. Combine all this with the simplicity and low pricing of cloud-based models (both isolated and multi-tenanted), and it becomes relatively easy for new players to provide a range of high-value connections at a low price point.
Given these capabilities and the low cost of use of digital platforms, it's disappointing that we haven't yet seen the rise of a flourishing, sharing economy of John Lewis-like service providers that obsoletes the out-dated tycoon pyramid model. Where are the service-providers run as mutuals or co-operatives – a true sharing economy of not-for-profits or community interest companies that provide SaaS with high value microservices? At the end of each year the parties involved - taxi drivers, room renters, frequent customers, whatever - could share the dividends, with a core of funding reinvested back into the platform ecosystem to further refine and improve it.
Two factors are likely to catalyse such change: governments finally catching up and levelling the playing field, and the commoditisation of platform ecosystems. As this happens, it will challenge the out-dated pyramid models of the current wave of digital tycoons and help encourage an economic and social disruption genuinely worthy of the term "digital innovator".