News like YouTube sold for 1.6 billion USD to Google, eBay acquired Skype for 2.6 billion often get all of us so excited and usually make us start to wonder about how we too can start something similar. Incidentally, AirAsia with their online booking system, grew their flight business continuously in the last 5 years.
AirAsia outsourced their booking engine to a third party solution provider, but we’ve never heard Larry of Google or Steve Chen of YouTube engaged similar strategy to develop the online business for them. Instead, their solution is “home-brewed”.
This is because AirAsia’s core business is to provide affordable flight (Everyone Can Fly!) and the booking engine is just a medium for the public to book their tickets. No matter how well they design the entire booking system, it is more important to have a well managed airline system. Outsourcing the ticket booking system can allow Tony to concentrate more on the airline business itself.
So, let’s look at a scenario here where Ah Beng wants to build a second eBay.
He proposed to us that he wants to build a platform like eBay and then asked us for a full-fledge proposal of the entire system. These people either do not understand what it cost to build a successful online business and instead of them providing us the specifications, they are asking us to do it for them. It’s like asking the architect to find me a good location for my next restaurant.
You might ask then, what kind of services we provide, since we don’t help people build their second eBay?
After Ah Beng realized how a second ebay wouldn’t work as he’d planned, he then started his own restaurant business in Klang Valley. Business grew by leaps and bounds. Reservations of table through the receptionist became a bottleneck with the increment of business volume. He then came to us again after realizing how an online reservation system can help him clear the bottleneck and at the same time how he can use the online medium to expand his market reach.
After outsourcing his entire online presence to us, Ah Beng can then continue to concentrate on his restaurant business, where his expertise lies in. From this experience, Ah Beng realized that a successful online strategy is very much like a good restaurant, where the owner must himself understand how the restaurant business works.
Great article! That’s why there’s only one eBay (or Lelong in Malaysia when there used to be so many eBay-like auction sites back then), one Amazon (none similar in Malaysia so far, and many Amazon copycats folded during dotcom bust years), and one Digg (still is even after an attempt by a local to copy the business, but later changed its name) etc…
IT is not a get-rich-quick scheme/tool. It’s just another enablement tool like telephone (including SMS & fax), radio/tv, transportation etc. that connects people – buyer and seller, writer and readers, producers and viewers/listeners…
IT solution providers provide some solutions (including some extent of ICT-centric marketing strategies) for business, not the entire business. Business owners should come up with business models themselves (or pay some business/marketing consultants to assist in formulation of some elements for such models).
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