Type 1: These are “pure” information goods, where digital natives rule. An example would be Google in search, or Facebook in social networking. Their business models benefit from internet connectivity and they enjoy tremendous network effects.
Type 2: These are once-analog products that have now been converted into digital products, such as photography, books, and music. Here too, digital natives dominate. These products are typically sold as a service via digital distribution platforms (Audible.com for books, Spotify for music, Netflix for movies).
Type 3: Then there are products where input-output efficiency and reliability of the physical components are still critical but digital is becoming an integral part of the product itself (in effect, computers are being put inside products). This is the world of the Internet of Things (IOT) and the Industrial Internet.
“Sergey Brin and Larry Page, both brilliant computer scientists, founded their company on the conviction that only technologists can understand technology. Google originally set its hiring algorithms to sort for computer science students with top grades from elite science universities. In 2013, Google decided to test its hiring hypothesis by crunching every bit and byte of hiring, firing, and promotion data accumulated since the company’s incorporation in 1998. Project Oxygen shocked everyone by concluding that, among the eight most important qualities of Google’s top employees, STEM expertise comes in dead last. The seven top characteristics of success at Google are all soft skills: being a good coach; communicating and listening well; possessing insights into others (including others different values and points of view); having empathy toward and being supportive of one’s colleagues; being a good critical thinker and problem solver; and being able to make connections across complex ideas.”