Back in the day when the Web was transforming business channels to market the concept of White Space was often quoted. In a 2010 article, (see link in following paragraph), on the subject Harvard Business Review stated; As a metaphor, white space is at once ubiquitous and frustratingly ambiguous. There may be as many definitions circulating, as there are business thinkers. Some people define it as a place where there’s no competition. Others as an entirely new market. Still others use it, to refer to gaps in existing markets or product lines.
The author Mark W Johnson developed the theme around a number of points, all of which are relevant to the changes, or opportunities, that Digital Business is introducing today. His comments are well worth reading, or even rereading, again. If you don’t have the time then in his concluding paragraph Mark Johnson states; but ultimately what this definition (of white space) allows you to do is map a new opportunity or impending threat against your company’s current ability to meet it.
Digital Business certainly meets this criterion as initially startups, unhindered by any existing business activities, can see and are gaining customers, in a range of new business activities. These really are White Spaces not serviced by existing Enterprises and their current Internet Web offerings, but based on Digital Business Internet connectivity to real time Services.
The easy comparison is the difference between booking a Cab through a Cab Company online using their Web service, and Uber, a real time Digital Business model. Less obvious is Amazon offering real time finance to small Enterprises trading through its online business linked to their ‘events’ that might require financing. Like Uber the real time event embeds the business activity making the ‘buy’ decision obvious, and excluding traditional Enterprises from any possibility to be involved.
If those moves make you think, then the question is do you really understand what Digital Business really is, how Digital Business models work, and what a Smart Services economy really transforms? Maybe time to check out Understanding Digital Business and Distributed Business models.
In defining White Space in terms that relate to Digital Business the phrase from HBR; “market opportunities your company may wish — or need — to pursue that it cannot address unless it develops a new business model” rings true. The threat of the Digital Economy model on current business models is becoming real, simply because the volume of new players and offers means some have to hit their industry sector sweet spot and gain impetuous.
It is easy to dismiss startups and wait until one becomes big enough to start to be a real competitor, but by then its likely to be too late as the momentum in the market will favor the new with first mover advantage. Its hard to fight back in Digital Business as the whole point is to be embedded in the event/activity in a manner that does not allow a competitor to even be aware of the opportunity. Even when forced to react the time frame to organize a traditional Enterprise into a Digital Enterprise winning in a new way, in new markets, with new business offers, is likely to be too long for a real competitive response.
The simple, and least painful, answer is to make a positive change in market and competition monitoring and assessing. An established Enterprise should start by assessing at least three startups that are aiming to enter and disrupt some element of their current market. Use Market intelligence, plus using the specialized listing companies that maintain records of Venture Capital investments and success rates for startups on an industry sector basis to decide on the three.
A likely surprise at this point is to find how many there are in your market sector, and that some are very directly targeting aspects of your current business, often the lost profitable service related elements. It was widely reported a year ago that Honeywell had thirty-two startups targeting various aspects of its business; in response Honeywell formed a new division focused on using IoT to drive its Digital Business.
The individual startups across your industry sector are shaping the new market even of they are not substantial enough to have direct impacts on your existing customers and revenues. Collectively they are educating customers to understand a wholly new business value proposition, and create a whole new market segment. A true example of white space!
An investment in rethinking competitive and market monitoring brings focus and fact to the Enterprise management when considering if they should react and how. A combination strategy starting with internal enterprise deployment of Digital Business to improve operating capabilities using IoT with AI builds knowledge and required capabilities, as well as improving the current financial bottom line. Followed by a determined set of moves to build a sophisticated Digital Business around Services and a Market ecosystem based on learning from the startup community success provides a route to mastering the necessary transformation to the Digital Services economy.
