Yes, I do mean the ‘Battle of Waterloo’ when Napoleon was defeated. But let’s make it more contemporary - let’s talk about the Waterloo station - Britain’s largest and busiest station. If you haven’t been there during rush hour on a weekday, you have probably not seen the sea of humanity with coffee, newspaper and a smartphone racing away to their destination from or to the trains. And a bevy of businesses has built their existence around these harried officegoers catering to their palette, intellect, and beauty (hey - it is all in the mind). Bear with me while I explain where I am going with this. Now let’s say all of a sudden, the frequency of the trains is halved while the capacity of each train remains the same. Obviously, there are going to be fewer passengers alighting from each train when it arrives every morning. Consequently, the businesses are going to take a hit almost immediately attributing it to an external event that they had no control over. And the longer a business has been in operation at Waterloo, (if it is well run) the larger the business impact is going to be. And for many of these businesses, they may not have ever realized how dependent their businesses may have become on Waterloo train schedules and its passengers. And one schedule change can wreak havoc on their livelihood. But wait, there is more. Let’s say that the London and South Western Railway (the operating authority for Waterloo) offered the tenants an option for increasing the lease rates in exchange for the train schedule readjustment for additional passengers. Sounds morbidly fictional right?
Now let’s replace the Waterloo station schedule gurus with the Big 7 of the world - Amazon, Google, Facebook, Microsoft, Baidu, Ali and Tencent. And transpose the small businesses at Waterloo with tech and software vendors who have built their livelihood on top of one of these ‘hub economies’. Getting the drift? Let me explain. With the public cloud economies taking over the world, there is a negative incentive for any new or existing business to build their own data center or even software infrastructure. Why? Because the cloud offers an on-demand, sophisticated and ridiculously inexpensive way to build your business. Think of how many businesses are relying on the Facebook platform to reach their target audience and the laser precision of prospect targeting based on the what the audience sees, likes, follows, posts. Much like the restaurant at Waterloo. Except that Mark Zuckerberg decided that the algorithm needs to change favoring ‘friends and family’ feeds instead of businesses (I won’t go into the rationale behind that but one driver was the fake Russian propaganda influencing US voters in the last presidential election). And just like that the businesses, lots of small ones, are now not able to connect with their customers anymore. They just met their ‘Waterloo’. But it gets even more interesting. A local newspaper - San Francisco Chronicle - has apparently managed to convince Mark Zuckerberg that ‘local news’ is important and needs to be prioritized along with ‘friends and family’ feed.
This is unchartered territory. It feels like the dark ages where a few - 7 to be precise - Feudal landowners with absolute power doing exactly what they please while the rest of us tenants either pay up to survive or fade into extinction. And the rules could change anytime. Just like what happened with me and LinkedIn recently. While the 7 rulers of the universe command absolute power, other monopolistic platforms are not far behind. LinkedIn - the default professional platform - changed the ‘profile views’ feature from a free feature to a ‘Premium’ feature overnight. Pay up or give up your data to advertisers to see this information.
So, what is a business or a consumer to do in this age? Diversify. Do not put all your eggs in one basket. Whilst it may be cost prohibitive for a café owner at Waterloo to open another shop at Paddington to capture the newly rerouted train routes and recover his customers, not so in the virtual world. In Cyberspace, the cost of diversification is not prohibitively high. Yes, these monopolistic platforms can and will become bigger. But unless as consumers and businesses we start recognizing that the price is too high and take our share of pain now to diversify we will be at their mercy. Do not rely on Facebook alone to reach your customers. Seek out other avenues - Medium, Google etc. And I am not preaching without practicing. As a blogger, I realized my over-reliance on LinkedIn a few months ago and have since started using Medium and ThriveGlobal to balance out my writing. I do not want to hit my ‘blogging Waterloo’ and be rudely surprised. Do you ?