What Is A Network-Service-Based Business?

by Wayne Willis on April 26, 2010

Please permit me to be a bit academic, in order to get the boundaries and definitions clear:  We define a "network service" is a "service" reached or provided by a network.  We say "reached" by a network if a human node on the network provides the service.  We say "provided" by a network if some equipmental node (e.g., server, database) on the network delivers the service.

A "service" is simply work performed by a human or by equipment, most often a computer.   Human services are well understood to include the skills, knowledge, context, tools, and time that are normally provided by people working.   Equipmental services are provided by an algorithm, an API to an exogenous network, a SaaS service, a bot or some other manifestation of machine processing.

In the 20th century, the world was divided into "products" and "services," the former being tangible items  and the latter being intangible.  But that doesn't describe the reality now -- where some "products" are intangible (like music or a computer program), some services are treated as products (e.g., a "banking product" like a credit card or certificate of deposit), some products only have value when embedded in a service (e.g., a telephone), and information permeates the value creation of everything.

The focus of Nodal Partners are businesses that are network-service-based. By definition, the user or customer of these businesses is getting a service.  They might get the service from a human being, but that human is likely relying on a network service to support the delivery of service to the customer or end user.

Example:  a front-desk clerk at a hotel provides check-in services but relies on the reservation system (for customer information), the credit card system (for pre-clearing the creditworthiness of the customer), the property management system (for seeing which room is ready and re-encoding the key-code) and communicating with other hotel staff for any special needs (e.g., calling housekeeping for a crib setup).

Sometimes, the customer interface is a machine (aka terminal, kiosk, device, etc.) but it is connected to human beings who are providing the service.

Example: the entrepreneur who uses an online marketplace like Logoworks.com, which captures the customer's preferences regarding the design of a new logo; farms it out to a few independent graphical designers; manages the feedback / iteration/ revision cycles between customer and designer; and finally delivers "camera ready artwork" of the logo in different sizes, formats and resolutions.

The nodes on these networks can be human or machine -- and sometimes "either" or even "both", as in the case of a "check-in kiosk" at many airline ticket counters.  There, you can use the kiosk OR the human to check in for the flight and get your boarding pass.   Or you can use both, in a blended service, as is the case with bags being checked, or responding to some special need or question.

We like businesses that use network-based services to provide most or all of the value delivered to the customer.  We know about marketing and operations of such service companies.  We know about managing people at the point of service.  We know about the technologies and economics of internet and telecommunications networks.  And we know about the applications and nodes in between them.

Our motivating belief is based on our view that the current trend of migrating more and more of business and social life onto digital platforms and interconnected services will only accelerate.  We want to help those companies which are leading, enabling and benefiting from that trend.

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