Training held at the European Communication School (ECS) in London on 20 May 2019. ECS London: https://ecole-ecs.com/londres Connect LinkedIn : linkedin.com/in/dmlg SlideShare : slideshare.net/denysmalengreau Twitter : twitter.com/d_mlg Periscope : periscope.tv/d_mlg YouTube : bit.ly/d_mlg

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GAFANOMICS
20 May 2019
ECS, London

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1. GAFAnomics: from startups to behemoths
2. GAFA: infrastructure of a new economy
3. The network economy
4. Standing out in the network economy
5. Succeeding in GAFAnomics’ world
6. Digital sovereignty: GAFA and society
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GAFAnomics: from startups to
behemoths

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SOURCE: « HOW THE TECH GIANTS MAKE THEIR BILLIONS » (VISUALCAPITALIST.COM, 29/03/2019)

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SOURCE: « HOW THE TECH GIANTS MAKE THEIR BILLIONS » (VISUALCAPITALIST.COM, 29/03/2019)

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SOURCE: « HOW THE TECH GIANTS MAKE THEIR BILLIONS » (VISUALCAPITALIST.COM, 29/03/2019)

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SOURCE: « HOW THE TECH GIANTS MAKE THEIR BILLIONS » (VISUALCAPITALIST.COM, 29/03/2019)

8. 8
Amazon Anytime
Amazon Basics
Amazon Go
Amazon Prime
Amazon Rekognition
Amazon Robotics
Amazon Web Services
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Calico
DeepMind
Google Duplex
Google Glass
Google Lens
Loon
Waymo
Athena
Building 8
Internet.org
M assistant
Onavo
Portal
Project Libra
Apple Card
Apple Health Record
Apple News
Apple PAIL
Apple T288
Amazon Google (Alphabet) Facebook Apple
Workshop

9. 9
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SOURCE: « BUNDLE ME HARDER, MISHA FALCON » (MEDIUM, 09/04/2018)

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SOURCE: CASPER KLYNGE (TWITTER, 26/04/2019)

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GAFA, the Chinese way: BATX

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SOURCE: « HOW CHINA IS CHANGING YOUR INTERNET | THE NEW YORK TIMES » (YOUTUBE, 09/08/2016)

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SOURCE: « SILICON VALLEY POWERED AMERICAN TECH DOMINANCE—NOW IT HAS A CHALLENGER » (THE WALL STREET JOURNAL, 12/04/ 2018)

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GAFA: infrastructure of a new
economy

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Market cap of the world’s biggest Internet companies in May 2018
(in billion US dollars)
SOURCE: « MARKET CAPITALIZATION OF THE BIGGEST INTERNET COMPANIES WORLDWIDE AS OF MAY 2018 (IN BILLION U.S. DOLLARS) » (STATISTA.COM, 2019)

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Uber has built out its whole set of services by calling out on GAFA’s infrastructure.
Accessing users
App distribution via app stores and
interactions in messaging services.
Driver’s navigating system
Google Maps is used to both geolocalise
vehicules and users, and offer drivers a
navigating system.
Data and servers management
Data storage and management on
Amazon Web Services first.
Payment
Google Wallet and Apple Pay are used to
carry out transactions.
Example: swift development of Uber through GAFA’s infrastructure
SOURCE: FABERNOVEL

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The network economy

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, the example

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Information
Initially, Google has built out a network of connected information
through its indexing system of Web pages, images, books, places,
news, video, and so forth.
SOURCE: FABERNOVEL
Connecting information to information

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Information User
By creating its most used tools (Google Search, Google Images, Google News and
Google Maps) and by acquiring YouTube, Google has allowed all of its users to access this
goldmine of information by connecting them efficiently to websites, images, books, video
(you name it) corresponding to their search.
SOURCE: FABERNOVEL
Connecting users to information

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Information User
By creating Gmail, Google+ or Orkut at the time, Google has given users the ability to
connect with one another, and to interact though information sharing.
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SOURCE: FABERNOVEL
Connecting users to users

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Information User Business
By introducing Adwords, Google has given businesses the opportunity to precisely target
users likely to be interested in their products, and to get in touch with them. Through
AdSense, Google gives businesses the opportunity to connect with one another by
displaying they respective ads.
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SOURCE: FABERNOVEL
Connecting businesses to users

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Information User Business Device
Through Android, Play Store and Google Chrome, Google gives users appropriate means
to connect themselves to its ecosystem of information, users, places, businesses, services
and applications.
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SOURCE: FABERNOVEL
Connecting users to Google

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GAFAnomics companies build open networks
Network: system linking multiple individuals, objects and information with one another.
By taking leadership at a broad scale, GAFA become infrastructures to which
other companies want to connect to create value.
SOURCE: FABERNOVEL

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Distributed economyCentralised economy
● Access via connexions
● Distributed work
● Unit-based production
● Shared value
● Abundance management
● Proprietary assets
● Localised work
● Mass production
● Exclusive value
● Scarcity control
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The network economy: from centralisation to distribution
SOURCE: FABERNOVEL

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Selling products to distributorsPurchasing materials from suppliers
In a centralisation model, the value flows along a value chain. Value is created and
captured in a linear way, from suppliers to end customers, through traditional
buying and selling mechanisms.
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From value chain...
SOURCE: FABERNOVEL

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VALUE
CREATION
CAPTURING
VALUE
3
4
1
2
Companies use
Google AdWords to
engage end users.
Companies index
content: Google
search grows in
value.
Google’s search
engine is a value tool:
access to any piece
of information in one
click.
Collecting user data
allows to optimise
Google’s search
engine.
In a distribution model, value circulates within the value loop. Value is captured and created
continuously by both companies and end users. Value flowing through the network can take
different forms: service, time, money or data.
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...to value loop
SOURCE: FABERNOVEL

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SOURCE: « THE FOUR: THE HIDDEN DNA OF AMAZON, APPLE, FACEBOOK, AND GOOGLE » (SCOTT GALLOWAY, 2017)
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*In reference to the film « The Curious Case of Benjamin Button » which features a man who is born old
and rejuvenates over the years, as well as Daisy, who lives a love story with him throughout his life.
The « Benjamin Button » economy*
Your new pair of shoes loses value when you have it on your foot.
But publishing on Instagram that you wear your shoes adds value
to the social network.

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SOURCE: « THE FOUR: THE HIDDEN DNA OF AMAZON, APPLE, FACEBOOK, AND GOOGLE » (SCOTT GALLOWAY, 2017)
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1. Product differentiation – You must have a differentiated product in today’s world.
2. Visionary capital – Your business must have a bold vision that attracts cheap
capital.
3. Global reach – The business must have a global reach for bigger numbers and
diversity of the market.
4. Likability – Image matters and a business must be loved to excel.
5. Vertical integration – The business must control their destiny. They don’t have to
own all aspects of the vertical but they must control it.
6. AI – To be relevant in today’s business world, you must collect, algorithmically
analyse, and leverage consumer data.
7. Accelerant – Your business must attract and retain top talent.
8. Geography – Your business must be in close proximity to world class technical or
an engineering teaching university. You must also be located in a progressive city
that supports technology-based companies and has the economic foundation to
support growth.
The T algorithm, recipe to GAFA’s success

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Standing out in the
network economy

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● Magnetic company: grouping and managing very small
units of value
● Real-time company: instantly adapt the value
● Infinite company: target the customer base to achieve a
100% profit margin
● Intimate company: the quality of the welcome is the norm
Four approaches to stand out in the network economy
SOURCE: FABERNOVEL
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Grouping and managing very small units of value
Network companies are able to detect, organise and host very small
units of value. They leverage excedentary capacities and value
creation for users to capture and propose micro-transactions.
Competitive advantage: efficiently deal with billions of small
transactions.
SOURCE: FABERNOVEL
Magnetic company
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Traditional economy Network economy
Companies use raw materials to produce finished
products sold to customers.
Companies identify the available value,
however small, and capture it. They transform
this value and redistribute it to consumers and
producers while taking some of it.
SOURCE: FABERNOVEL
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Magnetic company: functioning

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A room or an apartment is not leveraged to its full capacity. Airbnb identifies these excedentary
capacities and meets the demand for places to rent by offering them to renting. By leveraging
excedentary capacities to a broad scale, Airbnb can today offer twice as many rooms as Hilton
Worldwide can to a zero marginal cost.
(2015) (2014)
Leveraging excedentary capacities
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Magnetic company: use case (Airbnb)
SOURCE: FABERNOVEL

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Instantly adapt the value
Network companies leverage user feedback in real time to instantly
optimise their offering on the market and improve the value of their
products. They always work with beta versions to meet user needs
in real time.
Competitive advantage: adapting instantly to the market.
SOURCE: FABERNOVEL
Real-time company

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Traditional economy Network economy
Companies manufacture and roll out new
products on the market every two years.
For months, they stay without
information about how their products
are used.
Companies create a first reliable basic version of
their products and constantly improve it by
iterative development. They closely monitor how
their products are used to meet their users’
needs in real time.
SOURCE: FABERNOVEL
Real-time company: functioning

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Google leverages its network to identify clients’ emerging needs and create
products accordingly.
In 2000, search queries monitoring showed that users were looking for a photograph of
Jennifer Lopez at Grammy Awards. To meet users’ expectations, Google came up with
the idea of an image search engine. This is how Google Images was born.
Real-time company: use case (Google)
Beta version serving by chance
SOURCE: FABERNOVEL

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Target the customer base to achieve a 100% profit margin
Network companies use softwares and services highly scalable in
order to reach near-zero delivery costs when a critical user based is
reached. Thanks to network effects and zero marginal cost, these
companies can grow indefinitely in terms of revenue, with a low
impact on costs.
Competitive advantage: ability to evolve and be profitable quickly.
SOURCE: FABERNOVEL
Infinite company

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Traditional economy Network economy
Companies must provide additional production
to address a different customer. Their growth is
limited by their production capacity and by the
marginal cost of production.
Companies distribute non-competitive goods and can
reach different consumers for virtually no additional
cost, providing them with an opportunity for infinite
growth. In addition, they benefit from network effects and
see the perceived value of their products increase with
the number of users. This mechanism is easier to apply
with intangible assets.
SOURCE: FABERNOVEL
Infinite company: functioning

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Uber uses highly scalable software and services to achieve
near-zero delivery costs when a critical mass of users is reached.
The company does not own any of the vehicles it deploys, thereby
eliminating many of the expenses incurred by traditional taxi
companies (plate, vehicle, etc.). In addition, it has automated all
stages of the service experience, outside the race itself. Uber can
evolve and grow indefinitely for virtually no additional cost.
Infinite company: use case (Uber)
Evolution at zero marginal cost
SOURCE: FABERNOVEL

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The quality of the welcome is the norm
Networked companies use their knowledge of users to refine and
personalise the experiences they offer to each customer. Large-scale
customisation is at the heart of their products. By targeting and
customising their products to each user, these companies create an
intimate and long-term relationship.
Competitive advantage: customer reception and comfort.
SOURCE: FABERNOVEL
Intimate company

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Traditional economy Network economy
Companies produce in mass an identical
product that they sell to all their
customers.
Companies offer customised products and
customisation options to each of their
customers, creating an intimate and long-term
experience.
SOURCE: FABERNOVEL
Intimate company: functioning

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75% of the content consumed on Netflix comes from targeted recommendations, which
make it possible to create a unique catalogue of films for each user.
Netflix is based on the analysis of its subscribers' behaviour and, thanks to powerful
algorithms, defines a specific profile for each of them. Based on their tastes, habits, apparent
state of mind and time of day, Netflix offers a tailor-made experience each time.
SOURCE: FABERNOVEL
Intimate company: use case (Netflix)
Targeted information to address the audience concerned

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Intimate company
Magnetic company Real-time company
Infinite company
Networked company
Leveraging networks to excel in the network economy
By structuring themselves into networks, companies can automatically benefit from
these four dimensions and play in the network economy.
SOURCE: FABERNOVEL
= +

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Succeeding in GAFAnomics’ world

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In a world dominated by GAFAnomics, traditional companies can either connect to
existing networks or create their own networks.
SOURCE: FABERNOVEL
Creating
own networks
Connecting
to existing
networks

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Using of GAFAnomics as distribution channels
The wide range of services created
by GAFAnomics can be used to
create new user experiences.
The WAM (« The World Around
Me ») augmented reality app is
connected to the Google Maps
API.
Using GAFAnomics features
to improve your services
Plug in to
SOURCE: FABERNOVEL, PLAY.GOOGLE.COM/STORE/APPS/DETAILS?ID=APP.WTINFOTECH.WORLDAROUNDMELITE&HL=FR
« Plug-in » strategy: plug in to GAFAnomics
Take advantage of the gigantic networks of GAFAnomics, the infrastructures of the 21st century
meet demand and sell to
customers
reach and retain
customer
design products and
services
develop products and
services
recruit and manage
talent
streamlined operations

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Audi x Amazon Walmart x Google Goldman Sachs x Apple
Audi has entered into a partnership with
Amazon to install residential charging
stations for future owners of the Audi
e-tron SUV.
Walmart and Google are teaming up
to compete with Amazon on voice
commerce. With this partnership,
Walmart customers will now be able
to order and have their orders
delivered to their homes via Google
Assistant.
Both companies want to launch
a credit card that is compatible
with the Apple Pay payment
solution. This will first be tested
by Apple employees before a
more global roll-out.
SOURCE: FABERNOVEL, « AVEC LA E-TRON, AUDI ENTAME SON OFFENSIVE ÉLECTRIQUE » (LES ECHOS, 18/09/2018), « WALMART PARTNERS WITH GOOGLE FOR VOICE-ASSISTED GROCERY SHOPPING »
(CNN.COM, 02/04/2019), « APPLE, GOLDMAN SACHS TEAM UP ON CREDIT CARD PAIRED WITH IPHONE » (WSJ, 21/02/2019)
« Partner » strategy: partner with GAFAnomics
Establish exclusive partnerships to create a competitive advantage

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SOURCE: FABERNOVEL, « SNAPCHAT WILL PROBABLY BE GLAD IT TURNED DOWN FACEBOOK'S $3 BILLION — BUT IT WAS DEFINITELY A BOLD BET! » (14/11/2013, BUSINESSINSIDER.COM)
Unless you can radically and beneficially transform an existing value proposition, competing with the
entrenched effects of GAFAnomics networks and data is too resource-intensive.
By refusing Facebook's acquisition offers,
Snapchat came to compete head-on with the
social network, which ended up simply
copying the now famous « Story » format.
If Snapchat remains a popular application,
Instagram has largely taken over and
surpassed Snapchat in popularity on Stories.
« Compete head-on » strategy: directly compete with GAFAnomics
Facing GAFAs on their playground

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This strategy requires a large initial investment in technology to achieve critical mass,
but it can pay off.
SOURCE: FABERNOVEL, « THE CHINESE TAKEOVER OF INDIAN APP ECOSYSTEM » (02/01/2019, FACTORDAILY.COM), « HOW TIKTOK IS REWRITING THE WORLD » (NYT, 10/03/2019), « ALIPAY SIGNS
LONG-TERM DEAL TO BECOME UEFA NATIONAL TEAM FOOTBALL SPONSOR » (UEFA.COM, 09/11/2018)
By acquiring the famous Musical.ly application (200M
users), the Chinese company ByteDance has enabled its
domestic social network TikTok (Douyin in China) to
benefit from a unique traction force to establish itself in
new markets such as India —39% of the 500M active
monthly users are Indian— with an innovative social
network offer.
By signing an agreement with UEFA, the Chinese giant
Alibaba is hunting on the Western lands of the GAFAs
to showcase its innovation capacities and experience
(900M users), positioning itself as a direct competitor
of Google (Android Pay), Apple (Apple Pay), Facebook
(FaceCoin) and Amazon (Amazon Coin) on payments.
TikTok Alipay
« Differentiate » strategy: differentiate yourself from GAFAnomics
Compete by addressing virgin territories

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Traditional companies will get the best return on investment by working with
GAFAnomics to seek new business opportunities.
Volvo x Uber Apple x IBM Google x Levi’s
Volvo Cars has partnered with Uber to
develop and market autonomous vehicle
services in the future.
Partners in the enterprise market
since 2014, Apple and IBM
continue their collaboration by
bringing their respective AI
technologies closer together.
With the Jacquard project,
Google and Levi's have worked
together to bring innovative
textiles with tactile detection
features to the market.
SOURCE: FABERNOVEL, « VOLVO CARS FOURNIRA À UBER DES DIZAINES DE MILLIERS DE VÉHICULES COMPATIBLES AVEC LA CONDUITE AUTONOME » (VOLVOCARS.COM, 20/11/2017),
DEVELOPER.APPLE.COM/IBM, ATAP.GOOGLE.COM/JACQUARD
« Co-innovate » strategy: co-innovate with GAFAnomics
Act hand in hand with GAFAnomics

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Traditional companies can join forces to succeed in this new economy.
MAPS.ME x HOT BMW Group x Daimler AG
Disney x Fox x NBC
MAPS.ME and Humanitarian
OpenStreetMap Team (HOT) have
teamed up to create a new feature
that allows crowdsourcing of
local data critical to humanitarian
interventions.
BMW Group and Daimler AG have
announced an investment of more
than €1 billion in a mobility services
joint venture with a vision of electric,
automation and on-demand mobility.
In 2007, The Walt Disney Company,
Fox and NBC jointly launched Hulu, a
streaming service to compete with
existing networks. Hulu now has
more than 28 million subscribers.
SOURCE : FABERNOVEL, « MAPS.ME AND HUMANITARIAN OPENSTREETMAP TEAM PARTNER TO CROWDSOURCE DATA FOR HUMANITARIAN RESPONSE » (MEDIUM.COM/@DIMITRYOPHOTO, 06/09/2017), « HULU
SUBSCRIBER BASE GROWS TO 28 MILLION » (CNN.COM, 01/05/2019), « BMW GROUP ET DAIMLER AG INVESTISSENT PLUS D'UN MILLIARD D'EUROS DANS UNE COENTREPRISE DE SERVICES À LA MOBILITÉ. »
(PRESS.BMWGROUP.COM, 22/02/2019)
« Co-innovate » strategy: co-innover without GAFAnomics
Act hand in hand without GAFAnomics

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Digital sovereignty: GAFA
and society

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Governments
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CompaniesCitizens
Contract for the Web
SOURCE: CONTRACTFORTHEWEB.ORG

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● Ensure everyone can connect to
the Internet
SOURCE: CONTRACTFORTHEWEB.ORG
● Keep all of the Internet available,
all of the time
● Respect people’s fundamental
right to privacy
Governments
CompaniesCitizens

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« From what I’ve learned, I believe we need new
regulation in four areas: harmful content, election
integrity, privacy and data portability. »
~Mark Zuckerberg
SOURCE: « FOUR IDEAS TO REGULATE THE INTERNET » (FACEBOOK NEWSROOM, 30/03/2019)

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● Make the Internet affordable and
accessible to everyone
SOURCE: CONTRACTFORTHEWEB.ORG
● Respect consumers’ privacy and
personal data
● Develop technologies that support
the best in humanity and challenge
the worst
CompaniesCitizens
Governments

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SOURCE: « THE WEB CAN BE WEAPONISED – AND WE CAN'T COUNT ON BIG TECH TO STOP IT » (THE GUARDIAN, 12/03/2018)
« Two myths currently limit our collective imagination: the
myth that advertising is the only possible business model
for online companies, and the myth that it’s too late to
change the way platforms operate. On both points, we
need to be a little more creative. »
Tim Berners-Lee, World Wide Web founder

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● Oneweb.world (Softbank Group)
● Internet.org (Facebook)
● A̶q̶u̶i̶l̶a̶ ̶d̶r̶o̶n̶e̶, Athena satellite
● Loon.co (Google)
● Spacex.com (Starlink)
● Earthnow.com (Airbus, Softbank Group, Bill Gates, Greg
Wyler/OneWeb)
Connectivity projects

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SOURCE: PAVEL DUROV (TWITTER, 13/04/2018)

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SOURCE: SIGNAL.ORG

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SOURCE: HUMANETECH.COM

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● Be creators and collaborators on
the Web
SOURCE: CONTRACTFORTHEWEB.ORG
● Build strong communities that
respect civil discourse and human
dignity
● Fight for the Web
Companies
Governments
Citizens

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Value is shifting from knowledge stocks to knowledge
flows. As the world speeds up, stocks of knowledge
depreciate at a faster rate.
Abandon stocks, embrace flows
SOURCES: « THANK YOU FOR BEING LATE: AN OPTIMIST'S GUIDE TO THRIVING IN THE AGE OF ACCELERATIONS » (THOMAS FRIEDMAN, 2016), THE SKILLS REVOLUTION (MANPOWERGROUP, 2017)
The difference now is the life cycle of skills is shorter than
ever and change is happening at an unprecedented scale

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« But you can't just tap flows one time. You have to
contribute to them as well to really be "in the flow." "We
can't participate effectively in flows of knowledge—at least
not for long—without contributing knowledge of our own,"
the authors* note. "This occurs because participants in
these knowledge flows don't want free riding 'takers';
they want to develop relationships with people and
institutions that can contribute knowledge of their own." »
SOURCE: « THANK YOU FOR BEING LATE: AN OPTIMIST'S GUIDE TO THRIVING IN THE AGE OF ACCELERATIONS » (THOMAS FRIEDMAN, 2016)
*Authors Hagel, Seely Brown, and Davidson in a Harvard Business Review essay entitled "Abandon Stocks, Embrace Flows."

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« Content builds relationships. Relationships
are built on trust. Trust drives revenue. »
~Andrew Davis, marketing keynote speaker and best-selling author
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SOURCE: « BIGGER SUCCESS. LESS CONTENT » (ANDREW DAVIS, UBA TRENDS DAY 2017)

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