What Networks will change the way we do business?
We’re seeing a shift in the way people transact with market makers. Today’s Saas companies are shifting the way they’re going to market or bringing people to market with market networks. These market networks act as the hub for various nodes of goods makers and service providers.
Think about a wedding. What does a wedding reception require? A venue. A church. Music & a DJ. Flowers. Food & Beverage and the people to serve it and clean up. Cake. Officiators. Limo service. Security. Hotel / lodging for out of town guests. Historically, anyone who’s gotten married has had to go out and find all these various services on their own. It’s stressful — ask any bride to be. With the market network, the nodes of the network connect all these various goods and service providers to the person in the market getting married. The usual way many of these service providers go to market is simply advertising and/or word of mouth referral of their services. Now, they have a place to go to be recruited and/or recommended by other service providers or by the customer herself. It is a one-stop shopping market for the bride-to-be and her man vs. them seeking out each good and service provider within the market themselves. With the market network, merchants go to them through the hub.
Think about building a house. Look at all the players and service providers that go into designing and building a house. The house builder. The painters. The concrete guys to pour the foundation and driveway and garage. The electricians. The framers and carpenters. The window guys. The plumbers. The tile guys and the carpet guys. Usually, it is up to the home builder general contractor to organize these guys and to keep them on the same page. Now, with a market network, these guys are all organized according to the hub software and CRM. They are marketing to the homeowner and/or homebuilder. The market network houses the trades and is responsible for their transactions with the builder and/or the homeowner. The market network acts as the commerce facilitator, making it easier on all parties.
Who will win in such a setup? Ideally, the customer will win big. Depending upon the market network owner, wedding reception service providers may have to bid for the work like they usually do. Or, if the market network owner is exclusive with the service providers themselves, they align the client to one service provider for each vertical for their wedding day. The main idea for the customer is that she saves lots of time in planning her wedding, with the market network software acting as the hub / CRM for all of her planning and transacting needs.
Now, look at what the market network owner gets: control over the market. They’re bringing buyers and sellers together and controlling all transactions via their hub software / CRM. They’re taking a piece of all the market action because they’re making it easy on all parties to transact. They’re bringing efficiencies, trust and peace-of-mind to the game. They handle the marketing for the service providers because they’re within the market network. They can market direct to the prospect on behalf of the goods and service providers. They handle the advertising to the customer or client because they want them to enter their market to do business with the goods and services providers connected to them. Ideally, this market network makes it a win-win for all parties involved. Market network owners are bringing people to them to do business and then keeping them within the network until the customer no longer has a need, leaves the market, and can recommend the service to others.
Market networks will further prove that whoever owns the market is the winner. The market makers will rule the future. There is great power in bring buyers and sellers together and taking a piece of the transaction and making commerce efficient.
Making commerce more efficient is a winning, go-to strategy for business. The easier we make it for customers to do business with us, the better it is for all parties involved. Amazon’s One-Click purchase changed the way we buy from them. No longer did you need to fill out web forms each time you wanted to make a purchase. You could simply fill in your account info one time, along with your credit card number, and then Amazon engineers made it very simple to buy with one click. Amazon Prime and its subscriptions have made it even easier for its best customers to do business with not only Amazon, but with other merchant partners. The subscription business model makes commerce even more efficient between parties, enabling automatic transactions and shipments for consumable products.
PayPal made it easy for collectors, hobbyists, and service providers to get paid and accept credit cards as merchants for those who could not afford to get traditional merchant accounts. Few remember, but it used to be that getting set up as a merchant with the credit card processing companies was an ordeal. PayPal made it relatively simple in comparison to get set up and transact fast. They made it so simple, in fact, that Ebay, another market maker, purchased them because so many of its customers were using the PayPal service to send money to one another. Why shouldn’t Ebay get a piece of that action, too?
Then, Square came along. Square makes it even easier for anyone — individuals — to process credit card transactions for goods and services. Now, all you need is a smart phone, the Square app, and an Internet connection and you’re able to transact. The old, stodgy way of the merchant account has been disrupted by modern tech. Commerce has become much more efficient and easier. And we all win.
Let’s not forget about Apple Pay and Google Pay (and now Walmart Pay). These software services allow us to pay for goods and services using only our smart phones. We don’t even need to pull out our wallets any more. Many people don’t even carry cash any more. The wallet is merging with the phone. Might seem like a small thing, not having to pull out your wallet to pay for things. But it is a big thing when it comes to more efficient commerce. Mobile payments perpetuate easy and speedy transactions between parties with bank and credit card processor involvement happening completely behind the scenes. Tech is at its best when it is nearly invisible and very simple to use.
Look at the former barriers to commerce that have been completely destroyed or rendered moot: difficult to set up merchant accounts; waiting for days for payments to process; filling out forms each time you wish to make a purchase or to transfer funds; individuals and nonprofits unable to accept credit cards for payment; checks; money orders. Now, with easier commerce, markets from local to international are far more efficient. The more efficient the market, the more productive it is. It is also more useful to its participants, creating a virtuous circle.
While the tech of the future will certainly involve market networks and bringing together buyers and sellers, startups and large firms that seek to make commerce easier and more simple will win. Apple has always prided itself on not shipping a user manual with its products because they are so easy to use. This is the strategy that others should emulate: make it so easy to use that there’s no need to write the user manual. People understand it intuitively.
