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The winners of tomorrow are called Uber, Airbnb and Alibaba. They have no factories, no history, hardly any staff. Traditional firms are now emulating this model. Even the 150-year-old Deutsche Bank.

Something’s up when there is no longer a classic industrial concern or a bank that can claim a spot in the rankings of the five most valuable companies in the world. "We are experiencing a revolution, both in the way of thinking and in the business of the corporations," says Geoffrey Parker, an American professor and researcher at [Dartmouth and] the Massachusetts Institute of Technology (MIT) — and he is pushing the evidence over the sales counter: the figures that prove how very young companies with minimal staff and a thin capital base are preying on the minds of traditional firms accustomed to success.

Professor Geoffrey Parker

Ride-sharing service Uber is worth more than BMW — and it doesn’t build a single car. Room-letting agency Airbnb is more valuable than the Marriott hotel group — and it doesn’t own a single bed. The largest IPO of all times was the flotation of Alibaba in 2014, where founder Jack Ma doesn’t own a single shop or a single warehouse — all he provides is a virtual marketplace on which strangers can barter their goods. The stock markets’ favourites today are called Google, Amazon and Facebook. In the list of most valuable companies, there is far and wide nothing more to be seen of General Electric, the industrial giant, of Exxon, the oil group, or Citibank, which still occupied top rank just 15 years ago.

It cannot be denied: the rules of the economy are changing, customers are pleased to see new services and cheaper prices, conventional business models are tottering. That is Geoffrey Parker’s theory. Platform Revolution is the title of his bestseller, and he is touring the world with his theses. In Germany, too, CEOs are listening spellbound, word has finally got around that unidentified assailants dismantled whole industries yesterday. 'Disruption' is the magic word, and it is now rolling faultlessly off the tongue of even the most staid managers. Whether it's in the car, chemicals or health sector, in trading or banks — everyone is having to look around to see how they can earn money tomorrow. "German corporations are taking up the challenge," reports Parker from his meetings with top managers at prominent addresses. From Bosch and BMW, through SAP, to Siemens and Deutsche Bank, all of them have already invited him in or are working together with him on a long-term basis.

Parker warns them all: traditional corporations cannot sit around on their factories and fat balance sheets doing nothing. The quicker they understand who the new players are that they are dealing with in the digital world, the better. The recipe that the American recommends sounds simple: "Create a marketplace where customers and service providers can meet in order to generate added value for both sides." Easier said than done, however. For the majority of companies work to a different beat, conventional business follows different rules: a factory purchases raw materials, from which its workers produce goods, which it then supplies to a customer, who pays for them. Parker calls that the ‘pipeline economy’, in contrast to his ‘platform economy’. The poster companies for the new economy, Uber and Airbnb, are conquering the world without owning any major assets. "They have succeeded in bringing previously unused capacity to the market, in reducing the transaction costs and thus in linking customers to what’s on offer on more favourable terms."

It’s certainly true that selling a physical product such as a car and earning one’s money through mobility services in the digital world are quite different things. You don’t need any factories, a history, a complete value added chain for the latter. "Everyone can start up as a service provider. We are living in incredibly revolutionary times," says Parker. The question is just: who will emerge from this as victors? And who will explain to the BMW engineer that his ideas may not even be required any more, because success is not decided by the model of the car, but only by the relationship with the customer? And what is the consequence of that for a company’s strategy? Where is attention, where are resources directed? Debates of this kind are currently being played out in every company, as painful as they might be.

In Germany, one of the first representatives of the Old Economy to discover the platform for themselves was Gisbert Rühl, the head of Klöckner, Europe’s largest steel trader and a 100-year-old trading house based in Duisburg. When Rühl took over, the company had its back to the wall: no one thought it stood any chance against the Chinese. So, from the ailing tradition he started to nurture a digital stall. Because he got there earlier than everyone else and because he additionally understood how to organise chaos properly, it earned him a degree of fame. On Tuesday, the federal chancellor Angela Merkel will even pay him a personal visit to have a look at the new premises of the ‘Klöckner.i’ digital offshoot in Berlin, a platform on which it is not only Klöckner itself that sells steel, but on which the company’s competitors will also soon be able to do so as well. "Only someone who gets the competition on to their own platform has a chance," says Rühl. "If we don’t provide the platform, someone else will come along and we will be redundant. We prefer to cannibalise our own business."

Klöckner’s boss dreams of a digital multi-metal shop, of a gigantic, open industry portal. The man has learned his lesson in the platform economy. "What is key is the traffic on the platform," lectures Geoffrey Parker, the [Dartmouth/]MIT professor — even if not every user pays directly: "Its value for the service provider is that they are present there for others in the network, who then remunerate the platform provider." The money does not necessarily come from the consumer, as has been common for centuries, but may also come from the competitor who shares the use of the platform and shells out a fee for that. "That is difficult for traditional managers to accept," says Parker. "We have to teach them: you are already being paid, just in another place."

They are also chewing over questions like this at Deutsche Bank. That is why the corporation agreed a strategic partnership with MIT nine months ago. "We regularly conduct workshops here in Frankfurt and overseas with the MIT professors on the future of platform banking," reports Markus Pertlwieser, a former consultant at McKinsey and today a digital strategist of the institution, who works outside the gates of the city in Sossenheim, in the bank’s laboratory of the future.

Now the financial industry has never had physical goods to offer. Loans and savings accounts are abstract products, profit lies in the interest rate spread. But here, too, the fundamental question is: what will pay in future? The individual product or the customer contact? "We as Deutsche Bank are focusing fully on the relationship with the customer," replies Pertlwieser the strategist — meaning on the platform. Simple financial products such as loans and deposits would become increasingly interchangeable, he continued. "The key factor is who has the link to the customer? That is what will differentiate the banks in the future. Day in, day out, we have more than a million contacts with customers outside the branches, on smartphones and PCs." The bank has to become a technology company, Pertlwieser quotes his chief executive officer John Cryan.

Specifically, Pertlwieser and his people are building the bank’s own app store, on which customers can get bank products, but also services that have nothing to do with the classic banking business. And who pays for that? "The partner or the customer or both, depending," he says. A pilot project is being launched at the end of June, a ‘curated marketplace for deposits’, as the bank describes the platform, the name of which is still a secret. This is where the bank intends to offer its own products, but also products of third parties. If there is any doubt, Deutsche Bank will thus push the money of its customers to the competition, which is something actually new. In future, the platform will offer time deposits of selected foreign competitors, just one to begin with, but with two more foreign banks added by the end of the year. The customer can thus earn higher interest, the competitor bank gets refinancing from German savers — and Deutsche Bank pockets a fee for brokering the deal. The main attraction: once a customer has registered, they can shift their money to and fro between the banks without any fuss. Switching between accounts has never been easier.

Market research has shown that customers who have accounts at four, five or six banks would prefer to have just one digital point of contact. One bank where they go through the identification process, which they then don’t want to repeat laboriously elsewhere.

The game-changing question now is: who do citizens entrust their digital identity to? Do they store their bank account and personal identity documents with an anonymous cloud provider — or do they prefer to do that with their principal bank? That is what Markus Pertlwieser, the manager at Deutsche Bank, is counting on: "People have a lot more trust in us than in social media networks or purely online companies." If you want to come out on top, he believes, you need a strong brand and brisk customer traffic. "We have more of both than any newcomer," says Pertlwieser. "The really powerful competitors for us banks are not fintech start-ups, but the major IT corporations in California." A handful of young companies from the financial sector at most will become relevant at some time, predicts [Dartmouth/]MIT researcher Geoffrey Parker as well. "Their classic fate is to be bought up by established players."

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