EVERYBODY WANTS TO RULE THE WORLD – SURVIVING AND THRIVING IN A WORLD OF DIGITAL GIANTS - A Book Review

When well-known author of a widely read book, ‘Disrupting Digital Business’, Ray R Wang, the Founder & Principal Analyst of Constellation Research Inc., a sought after research & advisory firm based in Silicon Valley California began writing his second book, his thoughts must have been on the 1985 top of the chart song, “everybody wants to rule the world” by the band, ‘Tears for Fears’! The song depicted people’s desire for control and power. Of course, much of Ray’s new book published by Harper Collins, ‘Everybody wants to rule the world – surviving and thriving in a world of digital giants”,  is about controlling the trillion dollar market out there, by constructing it through the means of data driven digital networks (DDDN).

The book tells the reader the power of DDDNs to drive the most successful companies of our times. The book cites the trends in business where big time consolidation is changing the global landscape and shows what this means for businesses of all types and sizes to fit into the value chain. It offers insights about the actions taken by innovative companies to position themselves in the new dynamic market place and it advises businesses to move from status-quo to market leadership.

This exceptional new guide shows you the ways to adapt your business to thrive among digital giants like Google, Facebook, Apple & Amazon. Drawing on sizeable original analysis and case-studies from his own research firm, the author directs you on the way to bridge business leadership & technology adoption, to create a future-proof company of your own. 

Everybody wants to rule the world’ is published very recently (July 2021) and therefore is cites even the latest developments & trends.  For e.g., Ray Wang says in the book, “It’s true that between March 2020 and August 2020, what would have taken five years to accelerate to digital, happened in 5 months of COVID”

The book reiterates that data is the foundation and uppermost priority of each Digital Network that wishes to grow. Therefore, it is necessary to know how the data is shared, monetized, and controlled. So, it is important to identify quality data from the huge cesspool of data available and to understand how it is consumed by the user. Data supremacy is not about having huge quantity of data but having well-curated, high context data. If you can find out how the data interacts with each other and develop the patterns, you are certain to succeed in business, using the same. Winning DDDNs are those that identify the patterns that emerge from the interactions. These patterns result in ‘precision decisions’, like how to price a product and what product / service should be suggested to which customer groups.

Digital giants like Facebook, Amazon, Apple, Netflix, Google & Microsoft have shown the ability in dominating markets and moving on the far side of digital transformation. Upcoming digital giants, the types of AirBnB, Disney, Grubhub, Lyft, Spotify, Uber & Walmart have shown significant growth in the post-pandemic markets. Some of the Indian successful examples are Byjus, Zomato, Ola, Paytm etc. All these giants have applied digital business models, engineered distinctive digital monetization models, and improved their business channels.  The rising digital giants mirror the characteristics mentioned below for creating protracted and sustainable data driven digital network (DDDN) platforms:

• Build-up the biggest business network of active member community, say, greater than 50 million registrations, in case you want to be a global player.
• Take ownership of the relationship with your customer by cutting the intermediaries and taking control of customer account, and by delivering the best customer experience directly through continuous engagement.
• Have data dominance by designing superior data driven digital networks to derive decision speed and to create competitive advantage.
• Deploy more than one digital monetization model, may be to have a multimode revenue channels like advt., search, goods, services, memberships, and subscriptions.
• Have a strategic growth mind-set by trading profits for market share growth and immediate gains for long term investments that allows you to dominate the value chain

Reading Ray Wang’s book took me to memory lane of reading a similarly titled book by Prof. Jagdish Sheth and Prof. Rajendra Sisodia, “The rule of three, surviving and thriving in competitive markets” published in 2002. Based on extensive research of the market forces, the authors argued that natural competitive forces shape the vast majority of companies under “the rule of three” where 3 strongest, most efficient companies control 70-80 percent of the market, be it globally, nationally or regionally. The book had cited many examples such as Nike, Adidas & Reebok; American, United & Delta Airlines; McDonald, Burger King & Wendy’s etc. On an Indian context, a good example is; Reliance Jio, Airtel & Vodafone-Idea triumvirate on the mobile telephony market.

Analogical to the findings on ‘The rule of three’, in this book, Ray Wang takes us to the new trend of ‘digital duopoly’. A duopoly is a form of oligopoly, where only two companies dominate the market. The companies in a duopoly tend to compete each other, reducing the chance of monopolistic market power, only to the extent possible. Visa and Master card are examples of a duopoly that dominates the payment industry. Digital duopoly is all about using DDDN, thus, gravitating to become part of a duopoly. Wang writes in the book, “Can I choose to quietly run my business in my small niche, without the backing of a DDDN and without provoking the giants? The answer is no. If you want to survive for another decade, there is no other choice. Like it or not, the options are to build your own duopoly or join a coalition that can hold its own against the dominant DDDNs in your market, or give up and wait for the grim reaper.” That is a terse advice, but coming from his experience, it is better that we lend our ears.

Paul Daugherty, Group Chief Executive - Technology & CTO of Accenture says about the book: “Everybody wants to rule the world’ provides essential insights on the post-digital world. All leaders will need to understand the role of data and new monetization models and why networked organizations will compete on decision velocity and signal intelligence. Ray shows us why digital transformation alone is not enough.”

In time to come, globally, maybe we could expect 100 players in 50 distinct DDDNs representing more than 70% of global GDP.  In India too, we are seeing it. In the recently concluded IPO of Zomato, we had seen the valuation of the company skyrocketing, not because of higher revenue or profitability that it has achieved (in fact, it had none) but only thanks to its DDDN effect. In the coming decades, we could see at least two prominent players in each market where the first proactive player benefiting from a first mover advantage by taking more than 50% of the market.  Thus, we await the times of digital duopolies to dominate the markets in future.

CHINA-WATCH, FROM TWO THOUSAND FEET ABOVE

The names that come to mind when we think of leadership in modern China are Sun Yat-sen, Chiang Kaishek, Mao Zedong, Deng Xiaoping and Xi Jinping. 

Sun Yat-sen, the first president of the Republic of China is considered as the father of the nation and the forerunner of the ‘Revolution’. His political party Kuomintang (Nationalist) has the distinction of ending monarchy in China. He is widely respected both in the mainland China and Taiwan,

Chaing Kaishek has the distinction of being one of the longest serving non-royal heads of state in the 20th century. He created the National Revolutionary Army which had both Kuomintang and Communist Party (CCP) members in it and he became the Generalissimo of the army. Kaishek’s role in unifying China by defeating the northern warlords was significant. Later, he fell out with the CCP and went through tumultuous times, settling in Taiwan as it ruler, when the communists overran the mainland. 

Mao Zedong is credited with the creation of modern China. The ‘Long March’ and the creation of ‘People’s Liberation Army’ by him are legion. He ruled the nation brutally and closed his eyes to the sufferings of million of Chinese of famine and diseases. He was instrumental in making the party as the supreme being and declared that the people, army and the government must be unquestionably loyal to the party. In the latter half of his leadership, the nation and its people went through huge distress. 

Deng Xiaoping was considered by the world as a pragmatic leader who opened up Chinese economy by taking it through the principles of ‘state capitalism’. Without diluting the supremacy of the party, he steered China out of the huge mess created by Chairman Mao. His initiatives stabilised the economy and ensured its fast growth, year on year. He gave good attention to south China (the Cantonese region) and converted it as the manufacturing centre of the world. While all these progressive developments were happening, he advised the nation to ‘hide the strength and bide the time’ (and that is precisely what Xi is now doing - biding the time). The last  40 years of unprecedented economic growth of China is the result of Deng’s policies and the Chinese never had it so good and rightly so, he is called the ‘Architect of modern China’! In the same way the Chinese describe Chiarman Mao, Deng Xiaoping also came to be is called as the ‘Paramount leader’. 

The man who is poised to become the greatest of the Chinese leadership is Xi Jinping. He had created the necessary regulatory ecosystem for him to let it happen. Coming into leadership in 2012, he maintained firm grip on the country and the party. In order to win the people’s empathy, he acted brutally on the corrupt people within the party and government. With policies such as ‘belt and road initiatives’ he ventured into the neighbourhood nations and other continents and in the process, made most of the developing nations economically dependent on China. China being the factory of the world, it also helped to maintain trade surplus with almost all nations. In about 10 years, he had put China almost on the top of the world both militarily and economically. His latest move is taking control of the emerging Chinese technology entrepreneurship that had made its mark globally, with a view to destroy monopolies and to create competition. 

It is actually on the strength of the economic foundations laid by Deng Xiaoping that Xi Jinping is riding the China wave. Xi has this unwavering ambition to establish Chinese supremacy over the world. He is unwilling to brook any inside resistance or competition to reach his aspirations. By doing all these, Xi is about to ensure his place in Chinese history, as the ‘Supreme leader’, above that of Mao. Towards this. there is also a move within the CCP to discredit Deng Xiaoping, the nation’s economic saviour. 

In a Covid world, many nations, including USA, have turned against China and realise Xi Jinping’s global designs. Leading countries now doubt that Corona Virus pandemic was a strategic initiative of Xi towards meeting China’s global supremacy. Energising alliances such as QUAD etc.by US is to counter any such move by Xi. 

Will Xi’s ambitions fructify? Only an internally stable China without dissent can let it happen. Xi also realises that and is trying his right earnest to keep it so. 

Let us continue our China watch……..

THE AMERICAN MISADVENTURE IN AFGHANISTAN, THE NATION OF WARLORDS

There is a Panchatantra story about a ‘mooshika’ (mouse) lady. It is about a sage converting a mouse into a lady (called Mooshika) and then trying to marry her off to the strongest man in the world and then going to sun and from sun to cloud to wind to mountain, requesting each to marry his daughter. Finally, the mountain tells him that the rat is more powerful than him. Thereafter, the sage marries her off to the rat after converting the lady back to a mouse. 

 Mooshika lady has now become an adage, used whenever anything gets converted back into its original form. 

 Isn’t this happening in Afghanistan? Taliban, a movement that began in 1994 in Quetta of Pakistan of Pashto madrasa students which becomes a militia to join Afghan civil war with the help of ISI, then confiscate power from the warlords to become the nation’s rulers. After being in control for five years, they were overthrown by the US led invaders as a reaction to the 9/11 episode, and thereafter trying to to bring democracy in the country. That was in 2001. Two decades later, the US, still not able to finish off the Taliban insurgency, gets tired of its responsibility of resurrecting democracy in a clannish warlord country and started vacating the troupes. Taliban is back with a vengeance, except for Kabul, it had taken control of almost the rest of Afghanistan. The fall of Kabul in imminent, it looks like. 

So, the mooshika lady becomes a mooshika again. 

 What could happen to Afghanistan is anybody’s guess. The killing fields will come back as Taliban will behave brutally to the enemies within. Pakistan’s control will goes up, China will come in there and the threat to India from that end will double up. Now, look at the United State of America. Wherever the big brother had gone militarily to overthrow governments, it had eventually failed. Vietnam, Cambodia, Iraq, Libya and now Afghanistan; all turned into big time misadventures. (It is another story that war is a big business for the American weapon industry) From Afghanistan, with a two timing ally such as Pakistan, America must have learnt a huge lesson. The US had been fighthing a nation without understanding its culture. To top it further, It is now challenged by the emerging world power, China which has the support of Russia & Pakistan. US must have realised that getting out of Afghanistan is the best thing to do. 

 Meanwhile, back to square one, the nation Afghanistan is going to bleed badly.