Digital Growth Depends More on Business Models than Technology

In 2009, 20-plus start-ups, including Uber, Slack, Pinterest, WeWork, and Blue Apron, achieved $1 billion-plus valuations. Given that those companies were all venture-financed and emerged from Silicon Valley, you might assume that the key ingredients that ensured their success were cutting-edge technologies, digital platforms, and customer bases that were chiefly made up of digital natives. You would be wrong.

Yes, those companies had great technologies, platforms, and demographics, but the secret of their success turns out to be much more prosaic. Each was able to satisfy real customers who needed real jobs done. In other words, they had great business models.

Dominos’ recent transformation, for example, was enabled by its online storefront, but it worked because it successfully attracted and retained new customers while turning occasional customers into dedicated fans, at the same time that it extracted more value from each transaction.  More than that, it changed its branding and its relationship to its customers by making the experience of ordering pizza fun.