As technology provides deeper insights to make it possible for demand and supply to attain a more optimal equilibrium, reducing information asymmetry, business models are evolving. From brokerage firms to commodities middlemen, we are seeing huge disintermediation in markets. While serving the rich still has a promise, the biggest opportunity now is for those who figure out how to serve a huge number of people at the lowest marginal cost.
That is why with $1,000, you can have an EFT account with Goldman Sachs because the bank is adjusting to a new world, by going retail, with credit cards and mainstreet checking accounts . Indeed, that playbook is working as since it opened it, it has added billions of dollars in its valuation.
That takes me to Nigeria where Transcorp Hotels Plc, Nigeria’s most elite hotel chain, is going for the people. Yes, Transcorp Hotels Plc has announced the launch of Aura, a new digital platform through which people can book accommodation, restaurants, and experiences”. Read carefully – “The new brand, Transcorp’s first in the alternative accommodation segment, is part of the company’s asset-light model, leveraging technology to deliver true hospitality, exciting experiences, and drive shareholder value.” Yes, alternative accommodation, check; asset-light, check; leveraging technology, check. That is a new redesign.
Aura is Africa’s best platform for connecting travellers with great accommodation, good food, and memorable experiences. The platform is also an avenue for people with unoccupied homes, hotels, restaurants, or different skill sets that may interest others can earn an income by becoming hosts.
Simply, Transcorp is executing an Airbnb playbook. That playbook is called aggregation construct. And it is the most potent business model of the 21st century. More than 80% of the top 20 technology companies have an element of it. Yes, from Facebook to Google, Apple to Alibaba, Tencent to Microsoft, aggregation construct powers a critical element of their business systems.
Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.
Transcorp wants to join that party. But it might have scored an own-goal by putting Aura inside transcorphotels.com for aura.transcorphotels.com. Whenever that happens, incentives change – and that is not always a winning formula.
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