Digital Capital: Harnessing the Power of Business Webs [Hardcover]

Don Tapscott (Author), Alex Lowy (Author), David Ticoll (Author)

Book Description

Series: Harvard Business School | Publication Date: May 2000

The industrial-age corporation is crumbling. The new form of wealth creation is the business web,and the new basis of wealth is digital capital. Schwab, eBay, Cisco, MP3, Linux, and dozens of other companies have transformed the rules of competition in their industries, seemingly overnight. They hijacked long-entrenched industry leaders with revolutionary offerings that surprised and delighted customers. These transformers could not and did not act alone: partners enabled them to move with stealth, speed, agility, and force. Such teams of innovators pioneered the business web, or "b-web" - the new platform for competition in the twenty-first century. B-webs - partner networks of producers, service providers, suppliers, infrastructure companies, and customers linked via digital channels - are destroying the firm as we have known it and generating wealth in entirely new ways. In "Digital Capital", information-age visionaries Don Tapscott, David Ticoll, and Alex Lowy describe and explain the b-web phenomenon and the forces behind its emergence. Drawing on three years of multimillion-dollar research into hundreds of b-webs as diverse as the Microsoft alliance and the automotive industry, the authors illuminate the five distinct types of b-web now in play: Agoras, Aggregations, Value Chains, Alliances, and Distributive Networks. Punctuating their analysis with a rich set of case studies, they provide the definitive guide to business model innovation in the digital economy.The book includes: the untold real story behind the story on successes like eBay, Cisco, Linux, Schwab, and Priceline; positioning and analysis of emergent e-businesses like Webvan, OptiMark, AT&T Solutions, and Enron; a step-by-step process for b-web strategy design; a new approach to maximizing organizational effectiveness in a multi-enterprise environment; the "ABCDEs" of marketing - heir to the "four P's" of the industrial age; guidelines for deciding whether to hire, buy, or partner a needed capability; a new set of lenses for viewing the stock market. The authors warn that participation in b-webs is not optional. To encounter and satisfy the digital customer, firms must lead or partner in one or more of these new business networks. While no single path leads to b-web success, businesses will adopt effective b-web strategies-or they will simply fade away. Sustaining advantage in the digital economy demands more than superficial actions like attracting "eyeballs," launching a hot IPO, following "new rules", building a cool Web site, or even just focusing on customers. In "Digital Capital" we finally have a book that gets beyond whiz-bang cliches to today's central issues of competitive strategy.

Editorial Reviews

Amazon.com Review

God forbid that doing business and making money on the Internet should bear any resemblance whatsoever to the past millennium of bricks-and-mortar capitalism--that would be too easy. Nope, it's a whole different ball game now, and the new rule is: adapt or die. At least that's the message behind Digital Capital. From the three principal cyberconsultants at the Alliance for Converging Technologies (one of whom, Don Tapscott, authored the bestsellers The Digital Economy and Growing Up Digital), comes a paradigm for global takeover: the business web, or "b-web" for short. In their words, b-webs are "strategically aligned, multi-enterprise partner networks of producers, suppliers, service providers, infrastructure companies, and customers that conduct business communication and transactions via digital channels." Some examples are eBay, Cisco, Dell, MP3.com... in short, any enterprise that a) knows how to form lateral partnerships with other goods-or-service providers, and b) eliminates the role of planes, trains, and automobiles--not to mention lots of time, money, and human energy--by doing almost everything over the Internet. Not only do the authors provide a wealth of b-web case studies (including Charles Schwab, Priceline.com, Webvan, AT&T Solutions, and OptiMark in addition to those mentioned above), they outline a step by-step process for weaving a b-web of one's own.

Too often, Digital Capital's sound ideas come marinated in think-tank jargon so alienated from plain English as to be nearly impenetrable. Consider: "Disaggregation leads to 'disintermediation' and 'reintermediation'," which, believe it or not, isn't a line that French film theorists use in pick-up bars, but the simple statement that business webs manage to cut out a lot of the traditional steps between producers and customers. Now why couldn't they just have said that? No matter. After you nibble through the self-important MBA-speak, you'll find a smart look at how online shops are rewiring early 21st-century capitalism. --Timothy Murphy

From Publishers Weekly

Building on concepts that have been around for more than a decade, the authors argue convincingly that the age of the trillion-dollar enterprise, where two or more companies come together to complete one project, and then go their separate ways, competing against one another for the next, may finally be at hand. Managers who are grappling with ways to expand rapidly with limited resourcesAa description that fits just about every managerAare bound to be intrigued by the argument that Tapscott (The Digital Economy), Ticoll and LowyApartners at the Alliance for Converging Technologies consulting firmAput forth. As they see it, the Internet eliminates almost all of the transaction problems that have plagued alliances up until now. Alliance partners no longer have to be in the same location, since the Web makes communication instantaneous, which in turn makes managing enterprises easier. Continuous market feedback is possible, since customers can be plugged into the network, along with suppliers and subcontractors. That's intriguing enough, but the authors go further and outline how five possible types of alliances, or "business webs," can be tailored to suit virtually any company. While the authors give relatively short shrift to the "how to" component of constructing these webs and they don't spend as much time as they might on exactly where employees fit into them, those shortcomings don't distract too much from their otherwise trenchant and absorbing presentation. While the future may evolve differently than the authors envision it, they have provided a workable interim blueprint for getting from here to there. (July)
Copyright 2000 Reed Business Information, Inc.

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Product Details

• Hardcover: 320 pages
• Publisher: Harvard Business Review Press (May 2000)
• Language: English
• ISBN-10: 1578511933
• ISBN-13: 978-1578511938
• Product Dimensions: 9.4 x 6.4 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (41 customer reviews)
• Amazon Best Sellers Rank: #1,630,356 in Books (See Top 100 in Books)
  • #43 in Books > Computers & Technology > Business & Culture > Careers

Customer Reviews

Most Helpful Customer Reviews

56 of 57 people found the following review helpful:

5.0 out of 5 stars Digital Capital delivers: Smart and Practical, May 18, 2000

By 

Larry (British Columbia, Canada) - See all my reviews

This review is from: Digital Capital: Harnessing the Power of Business Webs (Hardcover)

Over the past three or four years I've probably read a dozen books and countless articles on the 'dot.com' world. Almost without exception, these books and articles are exciting while you read them and unsatisfying afterwards: they tend to be full of heady prognostications and promises (we're all going to be instant millionaires if we just "get online") but they don't deliver any concrete advice or action. So I was very pleasantly surprised by Digital Capital. These guys get it: doing business on the Internet means rethinking your business model and throwing out your old assumptions about relationships with competitors, suppliers, and customers. Best of all, they include sections on "key success factors" and "leader's guides" for each of their business models. This book is definitely smarter AND more practical than most others in the field.

57 of 59 people found the following review helpful:

5.0 out of 5 stars Establishing Improved Business Models in a Connected Age, June 20, 2000

By 

Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
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This review is from: Digital Capital: Harnessing the Power of Business Webs (Hardcover)

This is one of the few business books that dare address the central issue for most companies today: How to establish competitively-advantaged business models for serving customers that capture the power of the Internet to work with others. Anyone who doesn't know what they want to do for an Internet-based business model or doesn't like the one they have will get great benefit from this book.

Like Blown to Bits, Digital Capital looks squarely at the economic impact of the Internet on existing business models. But Digital Capital goes further in laying out the necessary steps to build on five business models that have been working that involve creating business networks that are Internet enabled (b-webs in the parlance of this book).

You will instantly recognize the five business model types, because the authors provide lots of examples (at least some of which will be familiar to you) and lists of characteristics of each type.

You will also know how to go from where you are to reaching one of these archetypes by the strategy directions the authors provide. The only drawback of this section is that the language gets a little b-schoolish (and full of very long words).

The conceptual basis of the work is sound. The only two points that were not discussed were (1) how these models might evolve into more powerful models in the future, and (2) how they might merge with each other.

Where the book is at its best is in helping you think through how to add other companies into a related web of interests to get more done -- thinking that goes well beyond the well-known outsourcing mindset.

Good luck with improving your Internet-based business model! Keep in mind that technology will evolve rapidly and enable some new business models that can only be dreamed about today in just 3-5 years. So be sure to look at the irresistible forces of technology development in thinking ahead.

25 of 25 people found the following review helpful:

5.0 out of 5 stars Platinum Pot Roast, August 29, 2000

By 

Robert Morris (Dallas, Texas) - See all my reviews
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This review is from: Digital Capital: Harnessing the Power of Business Webs (Hardcover)

Who should read this book? Those who need answers to the following questions:

* What are the driving forces of the digital economy?

* How can my organization manage those forces to its maximum advantage?

* What are the new models of wealth creation? Which is most appropriate for my organization? Why?

* What are the most effective strategies for establishing and then developing value chains, alliances, and distributive networks?

* What are the most important human and relationship elements of digital capital?

* What are the various steps to "weaving" a Business Web?

* What are the best strategies for "harvesting" digital capital?

Given the importance of harnessing the power of Business Webs, if you and others in your organization are struggling to answer questions such as these or if you and they don't even know which questions to ask, I strongly recommend this book. To derive greatest value from it, make it required reading for all key people and then go off-site for 3-5 days and discuss it. Stay wherever you are until you have a game plan...then come back and make it work!