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Freeman Cebu Business

Platform for skilled workers

FULL DISCLOSURE - Fidel Abalos - The Freeman

Through the years, we saw and witnessed successes and failures of multitudes of businesses.  Pan Am and Polaroid closed decades ago. In a not so distant past, it is quite unbelievable that the very popular Toys R Us will be missed by kids and Kodak ceases to grace important events like weddings, graduations and birthday celebrations. Notably, except for Pan Am, these companies are manufacturers or traders. They folded up because they failed to innovate. As they are heavily capitalized, the disruptions just became so unbearable. 

On the other hand, two of the most successful business models today are totally different. These are the subscription business model and the platform business model. For the laymen, Netflix is a good representation of a subscription business model. Though it produces its own film sometimes, majority of what they are showing are not their own production. To the business people, “QuickBooks” online is a good example. Remarkably, not only are these two companies still here, they are growing tremendously.

Likewise, the platform business model is so dominating. However, make no mistake. The platform business model is not about the technology or the software. A platform business model is all about value creation. The software is just the underlying technology that propels it. The value is created by facilitating exchanges between two interdependent individuals or groups, usually the producers and the consumers. In order to make frequent exchanges happen and consequently create a huge network of both providers or producers and consumers, big platform companies are using technology or software.  Simply put, platforms create a place where users (both consumers and producers) can connect, interact and transact. 

Today, these platforms are household names. In fact, to some, they could hardly live without them. Notably, Google, Apple, Facebook, Amazon and Alibaba are easy recall. Other successful platforms and startups include eBay, Instagram, YouTube, Twitch, Snapchat, Slack, WhatsApp, Waze, Uber, Lyft, Airbnb, Pinterest, Square, Social Finance, GitHub, Kickstarter and ZocDoc.

As a testament to this business model’s domination, in just ten years, the composition of the top five global companies changed dramatically. In 2008, the top five were PetroChina, Exxon, General Electric, China Mobile and ICBC.  In 2018, the top five were Apple, Google, Microsoft, Amazon and Facebook. Markedly, these companies are all based on the platform model.

However, if you are keen enough, most of these platforms cater to the moneyed people or corporations on one side and affluent individuals or companies or professionals on the other. Simply put, on one side, a manufacturer or dropshipper deals with the platform and a moneyed person or entity or consumer is engaging on the other. That a platform where a poor but skilled person (like barbers, carpenters, gardeners, mechanics, etc.) on one side and a moneyed person (in need of those services) on the other side can engage in seems non-existent.

To some extent, it does exists here in the country but so unorganized. More often through, referrals from friends or relatives. It is good to know, however, that a techno-powered platform of this kind exists. Actually, it originated in India. Called Urban Company (formerly known as UrbanClap), it is a “gig marketplace that offers home installation, maintenance and repair services, and home beauty and wellness services.” This platform is the place to go if your air-con, refrigerator and washing machine are not working. Or when you need wall repainting or have your water pipes fixed. Similarly too, if you need a massage or a haircut, this is the platform to go to. 

Co-founded by three individuals in 2014, it is now a unicorn and operates in “35 cities in India, Singapore, Australia, the UAE and the Kingdom of Saudi Arabia.” According to its Chief Technology Officer, today, there are more than 35,000 service partners that are active on the platform. Notably, through their “technology-enabled platform and keen focus on providing high-quality, trained service partners, it has been able to achieve the very difficult task of productizing services.”

This platform isn’t difficult to replicate in the country. On one side, the population of young and earning professionals is growing. Same is true with our middle class. Needless to say, our old rich families are also badly in need of quality home services. On the other side, we are awash with skilled workers. Some of whom, in fact, have to work abroad because of the lack of opportunities here. More importantly, with our senior high school (where we can train students) in place, this is highly sustainable and might even be the panacea for our lingering unemployment woes.

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