Digital vs. industrial economy

Hmm…, the digital economy is different…

In the classical industrial economy, the process is as follows:

  1. The manufacturer looks and pays for funding. He makes the product considering the end users’ needs. In the end, the manufacturer recovers his costs and makes a profit selling the product.
  2. The end-customer buys and pays for the product. He is now the owner and he will pass it to his heirs at the end of his life.

By contrast, in the digital economy:

The end-user does not pay for the service (www.google.com, etc.). The manufacturer can get free funding (www.verkami.com, etc.) and their workers do the work without asking for money and with no contract (www.wikipedia.org, etc.). In addition, the manufacturer does not care about customers’ needs, but manages to sell them something they have always needed without knowing it! (Apple, etc.). Finally, the customer carries the product ownership with him to his grave (iTunes, etc..); his heirs have nothing to do.

Now that’s a real paradigm shift!

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Digital Economy: From brand image to personal trust

[Versión en castellano]

In a session at ESADE, I heard  Marc Cortés   saying that in the digital economy customers become members. He meant that the relationship between supplier and customer become bidirectional, instead of being one way, as it is in the industrial economy. Before the Internet, the vendor offered the customer his product (one way model: from supplier to customer), and all the client could then do was to decide whether to buy or not. After the Internet, the client expands its action scope considerably and now he can tell the producer how the products he likes must be and what conditions and characteristics they must meet if the vendor wants him to buy them (bidirectional model). Read more of this post