Is the interface the competitive advantage of the modern age?

Airbnb and Alibaba have one thing in common: They are billion dollar companies without any assets on their balance account. This goes against all the traditional laws of economics. Assets are necessary for creating value and thereby profit. In the industrial era, companies did this by turning raw materials into finished products. Machines and patents were our main assets. However, Uber and Airbnb hardly own those. They control an entirely new asset.

The interface as an asset

With this asset a new type of company has popped up: interface layer companies.

The internet & a new kind of product

Since the industrial revolution the world has produced some incredibly complex supply chains: from designers to importers, from wholesalers to retailers. This allows products from all corners of the world to be sold and used. After a hundred years of production, we live in an age in which every problem has a product that solves this problem.

Fast forward to the age of the internet. An age in which physical components have become less important and products more and more technologically related. Millions of apps can be found, all providing a solution to a specific problem. From tomorrow’s weather predictions to finding a hotel room quickly and easily, everything has an application. Today’s products are pieces of software that provide a point solutions for modern problems. This market is becoming saturated quickly.

The interface is the central place for “system experience”

A new generation of companies is rising up. Companies that do not quite provide a piece of software to deal with a problem, but provide access to a certain platform of products and services, digital and physical. These companies aren’t product focused, but system focused.

That interface is the central entry point to the system, and determines the unique service experience of that company. A system in which API’s of all kinds of platforms work in the background, but the user has no knowledge of. The only thing that matters, is the interface.

Some examples

ManagedByQ provides an interface with one can manage the entire office. From supplies to insurances that you need for your goods. Toon by Eneco is a Dutch example of an interface system by energy providers for your home. And next gen insurer Metromile does not only give you the interface for your car insurance, but also everything concerning “safe driving”. Finally, Belgian startup Cubigo provides an interface for health related issues for the elderly in Belgium.

What makes these companies unique?

That interface companies perform differently to traditional companies should be pretty clear by now. Since most of them do not have assets, their economy should perform differently.

The interface is the key to the whole system, not just a point solution

The interface offer access to a set of solutions related to a certain domain. This way the interface ‘health’ is built up by complex systems of solutions for monitoring, access to emergency services, access to doctors and information about how tob e healthy. Although the individual services matter, what matters most is the system experience.

A simple and powerful user experience as a competitive power.

With a little creative thinking one can come up with a lot of new system solutions. But turning them into simple user experiences is a whole different story. These kind of interfaces are made for the masses, not for a small group of specialists. And whoever has the most user friendly experience, wins.

The interface consolidates data.

No data, no interfaces. The power of interface companies is that they consolidate in a visually clear way to make the experience as personal as possible. This approach has some dire consequences.

A bank for example, is nothing more than a interface for a system of savings, investments and loans. An airliner is nothing more than an interface to available flights and the possibility to check in you luggage.

And finally, the most important question: which is more important: the interface or the products or services behind them? If the answer is the interface, is it very weird to imagine a startup starting an airline company? And Amazon starting a supermarket? Amazon is navigating in that direction with their Dash Button-project.

The importance of the interface is bigger than the thought behind it

This is an interesting point. Back in the days software developers were holding the strings. With the switch towards interfaces, a whole new discipline becomes the central focus: design. In an environment in which ‘The Interface” equals “The Company”, interface design will be a key business discipline in the future.

Success is defined by 24/7 value

The strength of interface-layer companies is the everlasting availability of its services, 24/7. An interface doesn’t take a holiday or a coffee break. But it goes even beyond that: an interface has to be dynamic and up-to-date, or it loses its relevance. You can not expect people to use your interface, if it doesn’t hold any added value.

And this is difficult, as traditional companies are busy selling products, not with being indispensable 24/7. You have to create value for this, every day, even outside office hours. So if you live off your interface, it is not enough to offer an insurance: this will have to be adaptable at any moment, provide proactive information about safety in the zone, and should be able to change to your customers personal preferences. Metromile is one of the top-notch interface companies in the insurance branch.

As interfaces create money, designers become invaluable

The interface is not just a byproduct. Whoever controls the interface controls the customers, and with it the margins. Design becomes a priority for companies, not just for technology related companies.

Recently atypical purchases underline this story even more. Capital One bought design- and usability firm Adaptive Path, the BBVA bank bought Simple and Google acquired Gecko Design.

Remember this rule for the future: all decisions will be made through interface. What does you interface look like? Still haven’t decided? You can send a mail to sven@ktcagency.com and get a free whitepaper on the subject!