In the recent Harvard Business Review, an excellent article, "Managing the Hub Economy ," centers on the rise of a few digital superpowers which are now commanding a disproportionate share of the economic rewards and creating a winner takes all world. It explicitly calls out Alibaba, Alphabet/Google, Amazon, Apple, Google, Facebook, Microsoft and we should also add the likes of Uber and AirBnB to the list. These corporations have leveraged the virtuous cycle of network effects to create huge ecosystems around their platforms, command meteoric valuations and build user bases ranging in the billions.
Some of these hub economy organizations masquerade under the banner of the ‘Sharing Economy’ or the ‘Collaborative Consumption’ but their reality has been anything but ‘sharing’. These organizations have rather been aggregators. They have helped deliver tangible net positive outcomes for the lot of us but the overall outcomes has been far skewed. These organizations capture a disproportionate value of the overall gains by leveraging our data as a strategic asset. They have propagated and may even be accentuating the inequity issue.
The world stands captivated and allured with these hub economy firms which now hold sway over our every walk of our personal and professional lives. These hub organizations have meticulously captured the value creation and self- accretion process by building a thriving ecosystem around their core value proposition and have leveraged network effects to amplify their impact in the global economy.
So what does the future behold for us? Will we continue to live our lives in thrall of these behemoths commanding the hub economy where we do gain singular benefits while these organizations gain exponentially or is the world order of the hub economy at the cusp of a change?
Enter Blockchain! What implications does this revolutionary technology with its origins as an immutable distributed ledger of sorts aimed at furthering transparency and improving efficiencies hold for the hub economy?
Blockchain will disrupt the disrupters of today. The hub economy which consolidated power and achieved immense competitive advantage through aggregation is under siege. The hub economy organizations which grew exponentially through pseudo disintermediation (i.e. replacing intermediation with aggregation) now stand delicately perched on the cusp of disruption fueled by the rise of the Blockchain technology.
The hub economy organization has excelled in its role as an arbiter for all transactions that flow through its platform and it’s ever enlarging ecosystem. Blockchain through its basic philosophy of an open, secure, transparent and peer-to-peer network is the exact antithesis of these hub organizations. Blockchain is set to revolutionize the world and will create true disintermediation. As the founder of the prominent Blockchain organization Ethereum, Vitalik Buterin states ‘Instead of putting the taxi driver out of a job, Blockchain puts Uber out of a job and lets the taxi driver works with the customer directly’!
Although not quite the death knell yet for the hub economy organizations, the early signs are definitely ominous for them and the future portends that we will soon enter an era marked by the liberation of us, the individual from the clutches of these power wielding hub organizations and create a future vision driven by a true peer to peer networked economy.
The investments of billions of dollars and its profound implications for industries (e.g. financial services being the most notable and publicized one) and functions (e.g. supply chain is ripe for huge leaps in efficiency & transparency) get all the public attention. The most transformative role for Blockchain however will be in changing the world economic order from a skewed capitalistic model to truly open capitalism where we as individuals and peers play an increasingly active and crucial role in the economy and commerce.
“We believe that the economy works best when it works for everyone" Blockchain Revolution - Don & Alex Tapscott