We live in a world divided by two kinds of businesses. One is the physical avatar as we knew it in the old days, and the other is the digital and virtual businesses of today.
The physical business, for instance, is the one that grows coffee in the highlands of Coorg investing months of time, energy and effort, gets the produce processed at specialised coffee-curing works, roasts it to perfection under the keen eye of a roaster and is ground and packaged. This packaged coffee is then pushed from the gut of the growing and manufacturing area into the vast hinterland of the consumption market, through intermediaries of every kind. The product finally reaches retail shelves, and, you and I reach out and buy a pack to re-create that coffee-making experience at home. From the gut of the growing area to the gut of the consumer, this is a physical business that happens over time and consumes sheer labour.
Every business that focuses on the physical offering at hand is an intense one that uses the classical resources of land, labour and capital to produce what is an offer to cherish. This model is all we knew, and many of us called it the brick-and-mortar business. And then the times moved on. The click-and-mortar businesses happened with the entry of technologies of the computer and internet kind. Early businesses of these kinds were a cusp of the virtual and the physical. The click-and-mortar business has now given way to the click-and-click model of business, where everything is virtual and very little is physical.
A recent research exercise I carried out in 17 cities in urban India tells us that an average city dweller spends as much as one hour 29 minutes watching an OTT channel offering, 51 minutes on Zoom or web calls, 31 minutes on WhatsApp, 14 minutes on emails, six minutes on Instagram, two minutes on Twitter and eight minutes on Facebook. And that’s a whole lot of minutes for sure. Growing by the minute.
If you look back, in the beginning, it was 100% physical, and over the years, the composition of businesses and customer involvement has changed. The 50:50 cusp business of the acute click-and-mortar model is today progressively nudging the realm of the 100% virtual. There are business models that generate revenue with just no physical use or interaction, as we defined it in the past.
To be fair to the new business models that we often critique to be hollow, even in the old days gone by, there was a quotient of the virtual in conceptual services that we did not understand very well those days.
If I was selling coffee, it was a physical offering I bought and consumed, but if I was buying a life insurance policy, I was actually purchasing paper. And I was actually buying into the notion that I might die, sooner than later. I was also paying a hefty premium to keep comfort in the fact that I had a life cover if something happened to me; a life cover that could be endowed to my survivors. The life insurance policy was sure a virtual product or a service. Long before we called it that; and we lived with it.
Today, even as I type this article, the virtual business format is the one that rules in many ways. Valuations of companies that do the virtual business rule at dizzyingly high levels. The market capitalisation of the online and virtual companies astonish the boards and management of physical ones that make tyres and tampons alike. Consumer involvement with companies that offer the virtual is deep and abiding, as opposed to those that struggle in the physical market of goods and services with a disloyal, promiscuous and relatively shallow format of involvement.
The remunerative future ahead in the world of business seems to point the way to the virtual format altogether. The signs are all stacked in one direction: the virtual. We are approaching a time, with the metaverse and the multiverse ahead, when literally everything that you ever wanted to do can be done in the virtual format of living, thriving and dying. Everything you could do physically seems to have a mirror image possibility of being able to do virtually. And guess what, what you do in virtual space remains in virtual space. What happens in Vegas stays in Vegas!
My excitement of the online format has a frivolous caveat though, and that caveat is to say that all this will hold true if all the virtual frenzy we see around in our lives is not a bubble. A big bubble that just might burst, sometime or the other.
On a completely serious note though, I think it is time for us to do a quick audit of what we do physically and what we do virtually. Time to audit everything that does not require a physical presence, a physical piece of work, some degree of sweat, and possibly something totally tactile as we defined it to be in the yesteryears.
The world of work is today divided. How much of what are you? There are people who work physically in the field, in the factory, in sales and marketing, in the terrain of HR, logistics, manufacturing, and more. And then there are people who work with their minds and minds alone. There is very little bodywork to it. Every piece of work that can be handled through the remote telephone and internet lines, through virtual meetings and totally in cyberspace, metaverse-enabled, is already here.
Over a period of time, our world has learned to work less and enjoy itself more. Hard and repetitive work has been automated to date literally in every sphere, be it in modern agriculture, modern production, modern medicare or modern whatever. Man is today focusing more on the fun aspects, and the ways to escape the tiring and the tiresome. Boring and hard work is progressively being replaced by what I call “eEscapism”.
The electronic format of doing work is getting men to spend that much more time on business formats that are online, and entertainment formats that are about OTT, gaming, e-sports and more. Everything is “eEscapism”. Every form of this business format is doing well as of date. Investors are pouring big money into this format, and the pandemic pain of being locked in has fast-tracked market adoption of everything that is distant and virtual.
If I am to look at Apple to be one of the leading digital companies that has been at the cusp of the physical and digital in the beginning, and has progressively moved towards the virtual, the revenue numbers tell the story. The quarterly sales revenue of Apple ($124 billion) equals the revenue of India’s top 11 companies in terms of revenue from physical space, Reliance, Indian Oil Corporation, ONGC, Bharat Petroleum, SBI and six more included. Telling numbers. A telling tale!
Harish Bijoor
Brand Guru & Founder, Harish Bijoor Consults
(harishbijoor@hotmail.com)