Four letters can sometimes be enough to describe supposedly complicated phenomena of the digital transformation: for example, Uber. Almost everyone is familiar with the taxi service provider, which is a good illustration of a business model that only the internet makes possible: earning money with data.
“Uber’s business idea is based on efficiently brokering rides and the associated data between drivers and passengers and charging a transaction fee for it. They do not perform the real service of the actual ride, as the drivers are not part of the company but self-employed,” says Philipp Mosch, who as an economist therefore calls Uber a “data-driven start-up”.
Established companies under pressure
Professor Robert Obermaier relies on a juxtaposition to describe the approach of start-ups like Uber: Traditional industrial companies are based on assets in the form of machinery, equipment and buildings with which they create value. Data-based business models do not have these physical assets in the first place. They establish their business model on the analysis and use of data.
This is also shown by the comparison of the holiday apartment broker airbnb with a hotel group. “airbnb has no hotels, no beds, no employees – but by means of an internet platform, it has access to the data of people who are looking for accommodation, and at the same time to the providers. Due to the spreading digitalisation, we are experiencing that such business models are becoming established. As a result, the classic players who operate with physical assets are coming under pressure and feel ‘attacked’,” says the holder of a chair in business administration and head of the Centre for Digital Business Transformation at the University of Passau. But Robert Obermaier asks at the same time:
Is the narrative of the attack coming from digital startups the right description for what we are seeing in the digital economy?Prof. Dr. Robert Obermaier To the profile
Where in the value chain of established companies do data-driven start-ups come in?
To find out, Robert Obermaier and Jan H. Schumann, Chair of Business Administration with a focus on marketing and innovation at the University of Passau, have launched a research project funded by bidt. The team, which also includes Curd-Georg Eggert, Philipp Mosch and Corinna Winkler, is investigating where in the value chain of established companies data-driven start-ups come in. It also analyses the differences between data-driven and traditional business models. The initial results have surprised the researcher and the researchers.
“The narrative of the attacker, according to which data-driven business models fundamentally attack and disrupt markets, shapes the news according to our perception,” she says.
It is often companies with access to end customers that develop disruptive forces.Prof. Dr. Jan H. Schumann To the profile
“However, our initial observations show that this is not a representative picture of data-driven start-ups at all. We very often find start-ups that operate in the business-to-business sector,” says Jan H. Schumann. The first results of the project indicate that attack does not seem to be the only possible or even the right strategy per se in this area.
Inquired about by founders
“There are different approaches. They are by no means all just ‘attackers’. Many start-ups integrate themselves into value creation systems and are supportive there,” says Robert Obermaier. To find out how start-ups position themselves and arrive at their strategy, the team conducts qualitative interviews with selected founders.
The personal mentality certainly plays a role, as well as access to capital and the technical possibilities.Curd-Georg Eggert To the profile
According to Corinna Winkler, a successful start-up that does not at all correspond to the image of the attacker is the German software company Celonis. “They use algorithms to offer data analyses for established companies, which they can use to identify potential in the company. So they support instead of taking away market share.” Jan H. Schumann cites the Passau-based company Onelogic, which offers data analyses for industry, as another example.
When does the decision for attack or cooperation come?
On the other hand, there are founders with dollar signs in their eyes who have understood how the digital world works. They specifically want to build platforms and grow quickly in order to disrupt certain markets. “And then there are completely different founders who are excited because they have found a technical solution that they want to bring into application,” says Robert Obermaier. “Ultimately, a founder has to make the decision whether and when to go on the attack. We want to understand how and why this decision is made,” adds the professor. In this way, the project will also contribute to broadening the hitherto too narrow view of the approach and strategies of start-ups and enable a more realistic perception.
The two teams of professors complement each other in the interdisciplinary approach to the project. Robert Obermaier’s team represents the controlling perspective, the view from the inside. “I come from a more industry-oriented perspective and was confronted with data-based start-ups years ago. That’s when my traditional world started to shake. But at the same time, a new branch of research has emerged under the keyword Industry 4.0.” Jan H. Schumann’s team has an eye on marketing and a focus on innovations and novel technologies. “A central entrepreneurial challenge today is to bring both perspectives together by means of digital technologies,” says Obermaier.
The Corona crisis in recent weeks and months has shown how crucial it is to take on this challenge. Data-driven start-ups therefore see the crisis more as an opportunity, Philipp Mosch reports from the first interviews. They coincided precisely with the start of the pandemic. It could be the moment when established companies wake up and want to make more use of digital opportunities. “Many companies now realise that they are more resilient in times of crisis if they stabilise their business model technologically,” says Obermaier.