Dimitrije Trbović: You Will Not Defeat the Competition by Investing in Properties, but in New Platforms

We all need to think about new concepts of development and take advantage of the technological waves that are emerging.

It is actually intriguing to write an article in which you address readers with an idea that most declaratively agree with, and there are even those who swear by it, but in reality, very few are truly successful at it.
It is not surprising that most new platform ventures actually originate from garages because the old must obviously die for the new to emerge, primarily where there are ideas and where there is a deep belief in new concepts.
In conversations with colleagues in the economy, I often start the discussion on this topic with a question about the amount of the last investment and what it specifically related to. Of course, you will guess that the investment was primarily in solid properties, that there was no investment in online business. In this context, please, I really do not mean the creation of a website, which is a minor investment (at least in terms of amount). I actually wonder what would happen if a traditional industry in Croatia, say retail, instead of investing in the construction of a shopping center (let’s assume it is an investment of around 40 million kuna) invested the same amount in the development of a new online business platform?

It is the moment of the calm of the day.

Interestingly, at that moment, I get the first distance from colleagues on that question, an unconscious step back, crossed arms because they know they cannot publicly express how risky that is. Let’s be realistic, online is sexy and such projects do not collapse in principle discussions, they actually cannot even be built simply in the traditional concept of business management.

In fact, it is about generational differences in management. This phenomenon is interesting because, to be clear, it is not about one or two generations of management structures, but about several of them that manage the economy in Croatia. This is even present in my generation of managers in their forties, which has probably now completely dominated the market. Even the generations of younger managers, those in their thirties, are strongly influenced by the previous generation and poorly and/or not at all understand what it means to develop an online platform, that it is not the task of the IT department in the company, that it does not relate to the creation of the company’s website and that it is not done by the kids on the third floor of the company that we call the department for business development and improvement (we must have it because all the big ones have it) and how it is not the future.

I particularly emphasize this part because I am not actually a lay futurist and I think that if I were to engage in such a form of prediction, I probably would not be particularly successful because this business concept I am talking about today, and I am actually talking about today and the moment, which we can poetically call ‘in the calm of the day’.
The only seriously successful and, I must say, dominant direction of development in today’s global economy is actually new platforms behind which lie complete turns in business strategies. This does not mean that someone necessarily designed an entirely new segment of business or that they independently changed consumer habits. It usually means exactly the opposite. It means that they took advantage of the technological wave that emerged in some area of business.

To explain this more concretely, we can analyze Uber, which is an excellent example of such models because on one hand it applies high technological foundations, and on the other hand it enters the rudimentary part of the service transportation activity, namely taxi driving. It is clear that every Uber driver anywhere in the world will tell you that they are not a taxi, but a completely different platform, but let’s be realistic, I am not talking about linguistic semantics, that is, I am not talking about what the service is called, but about how Uber is essentially a service for transporting passengers on short urban routes, right? But what is different here? Here lies the key to a new way of thinking about business. The experience of transportation is different, the relationship with service users is different because those who offer transportation, so to speak, are ‘enlightened’ by the possibility of criticism available to everyone.
Actually, everything is different or nothing. Nothing because you are still driven by someone in a car that irresistibly resembles a taxi (only in most cases it does not have such a designation), still drives on the same roads as a taxi, still sit in the back seat of the vehicle, still pay for the ride.

So what is different? Actually everything because you order the vehicle via an app, at any moment you see how many vehicles are available in your vicinity, you see the vehicle as it approaches you, you can cancel it if you do not like it for some reason; when you enter the exact address of the destination you want to reach, you receive information about the exact amount of the ride on the requested route. The experience I have from large world cities is mostly the rule, and that is that the driver will offer you a bottle of fresh water, and in the case of Paris, candies and hand sanitizer, chargers for all types of phones, and finally that you can listen to your favorite music from your mobile phone!? You are probably now wondering how it is possible that a service that is essentially cheaper than traditional is better and more innovative than anything seen on the market.

The platform is important.

Here we come to the key moment in this article, and the answer to that question is – the platform. Namely, only the platform and the new way of thinking in providing the entire service have led to that level of development. You, with the help of the app and driver ratings (it is worth mentioning that Uber drivers also rate you, so try to be intoxicated, rude, or impolite in Uber and expect the next ride – never).
Actually, you are live rating the entire business model, which can thus change almost daily. The amount of information that comes from users thus shapes a special expert system that somehow self-upgrades and improves daily. This is a true example of an excellent platform.
Want to go further? WhatsApp? Did they design a new way of communication? Probably not because they took advantage of the traditional telecommunications industry (you see what I am talking about because it is actually an oxymoron in one sentence – traditional and telecommunications) and offered a slightly different experience of communicating with another person. And finally, in the concept of WhatsApp and Uber, what is brilliant is that they leaned on existing infrastructure, they did not build their own. They are building a virtual expert system that ‘self-upgrades’ in the background and that is the key to success.

Do you know when it became a serious question of the true reach of the Airbnb platform? When the directors of large hotels in Paris first protested against the app that takes away their bread, and that is the directors of the Four Seasons and Ritz Carlton hotels, which are the flagship of the hotel industry in the world. Imagine an app that threatened such chains. And what does it do? It simply connects people, people who need accommodation and those who offer it. It is a company only a few years old (seriously appearing on the global market since 2012) and which has managed to dominate a new market in a short time.

Well, maybe now is the time to explain why I have written so much on this topic. First of all, most people who are currently engaged in management in Croatia do not consider this part important. Of course, they know about the model, but only superficially or, to put it better, only in principle.

Maybe it is also unimportant at this moment to further engage in the success or failure of Uber and similar companies, but I consider it important that we all think about how we can think globally because for us globally usually ends up on what we call the region, and that is not global.

Of course, I am not crazy to think that there is any economic entity in Croatia that could become a global player in traditional industry (maybe in some niche). And that is precisely the key because the companies I am talking about emerged only a few years ago and became global players, all literally from a garage. The advantage that not everyone in traditional business is taking advantage of is specific knowledge about consumer needs. That is the advantage we have now and maybe for a short time longer. Use it because otherwise, a new platform player will come to your industry that will permanently change the rules of the game; not necessarily the game, but its rules.
I wish you much success in 2016, but also much courage to think about new concepts of development.