“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”
Social media users have grown accustomed to seeing this paragraph over the last few months. It originally appeared in an article for TechCrunch by Tom Goodwin of Havas Media, but his passage has been shared, cited and repurposed many times since. These few sentences are so popular because they encapsulate a general sense that ‘things are changing’ in business, and because they demonstrate how some of the world’s biggest organisations have succeeded by completely breaking away from accepted models of working.
So what is happening exactly? Goodwin’s original point was about how these new, rapidly growing and wildly successful companies are actually “interface owners” – they occupy an extremely thin layer between huge supply systems and vast numbers of people. However, this interface is what provides the value and can therefore generate huge profits.
But there is something else each of these companies share: each one has driven growth – and continues to do so – through agile working. Although they are now multi-billion dollar companies, they retain the operational speed, flexibility and responsiveness of start-ups. The precise nature of agile working in each organisation may be different, but each rejected the rigid structures and propensity for sluggish decision-making normally associated with large enterprises (and for these reasons, the response to companies like Uber in some quarters has not been entirely positive).
Uber and Airbnb
The Uber story reads almost like a case study in agility. The company placed a flexible workforce at its core – independent drivers who respond to taxi requests submitted by customers (known as a ‘sharing economy’). It uses an algorithm based on a concept known as ‘surge pricing’ to respond rapidly to changes in supply and demand. When demand from customers is higher, prices go up to encourage more drivers to go online and get on the road.
However, Uber also practises agility in the way it tests and rolls out new services. In August last year it unveiled Corner Store (since rebranded and expanded as uberESSENTIALS), an on-demand delivery service for essential items such as toiletries and medicine. Uber launched the service to a select group of users in Washington DC and placed a strong emphasis on customer feedback from the outset – users were asked to suggest products to add to the inventory and register their interest. This meant the service could be revised and improved iteratively in the context of customer experiences.
Airbnb has disrupted the hotels and accommodation business in the same way that Uber challenged the status quo in the taxi industry. The company’s agility is particularly apparent in its approach to marketing – as evidenced by the way it turned a tweet from an American tourist locked inside a Waterstones book shop in London into a highly successful PR exercise. Airbnb’s response to a live, developing scenario was immediate, despite a high level of planning and strategy taking place behind the scenes.
Lessons in agile working
These examples show how young, innovative businesses are using the always-on, constantly changing nature of today’s world to their advantage by embracing speed and flexibility in their own structures and lines of business. However, agile working is not the preserve of new organisations. Established businesses can learn lessons from these organisations and apply them in their own environments.
The success enjoyed by Uber and Airbnb would have been impossible without the cloud. In June 2014, Airbnb’s vice-president of engineering Mike Curtis told a conference that relying on cloud resources instead of worrying about in-house servers means the company can “concentrate more of our energy to solving problems unique to Airbnb”.
However, the benefits are not purely technological. The cloud is a key enabler of agile working strategies because it facilitates the kind of dynamic, collaborative environment these companies need to thrive. Data is always available and decisions are made quickly; new products and services can be created iteratively because everyone is using the same online workspace. Uber and Airbnb may still be upstarts at the moment, but they’re creating a blueprint for success that all organisations will soon aspire to.
