Mar 05
2003

[ Business ]
Fortune has an article on Stelios Haji-Ioannou and his various "Easy" companies that form the EasyGroup conglomerate. Stelio has started a number of companies that range from rental cars, airlines, to internet cafes, based on the idea of eliminating middlemen using technology. Apparently, his companies are all doing very well, including EasyJet which is a public company that generated $765M in revenue last year.

As I was reading through the article, I noticed that EasyGroup has a similar business model to companies like FreshDirect and Dell. All of these companies are using technology to eliminate the middlemen to deliver lower cost and higher value to customers. These companies are not internet companies per se, but they are examples of how internet technology and general information technology can become a competitive advantage, if applied correctly to support a rational business model. Also, it was interesting to note the similarities between EasyCar/Easy InternetCafe and JetBlue. All of these companies offer the same class of service (but with dynamic pricing) using standardized components, whether it's one type of plane or one type of car model. This model obviously reduces operational complexity and maintenance costs, which allows them to undercut their competition. It also reminded me of Dell in some ways because Dell is obssessed with maximizing their margins by minimizing their cost of inventory with just-in-time assembly of PC's. These are all sensible business principles and practices that more companies should really adopt to stay competitive.



The interesting thought for me is that companies such as EasyGroup, FreshDirect, Dell, and even EBay could not exist and thrive to the same extent if there was no such as thing as the Internet. However, the real focus shouldn't be on the innovation in technology that enables such companies to exist and thrive. It really should be on how advances in technology lead to innovation in business models and practices that have real impact in people's lives. Now that's a much more interesting topic than arguing why Linux is better than Windows.