Last night was the concluding conference of this years Leadership Perspective Series, organised by Trinity’s own Student Managed Fund, the first of its kind in Europe. The speakers invited to this conference were, for a lack of a different expression, very diverse. Declan Curry, a Northern Irish journalist, moderated the discussion between panelists Heather Melville (Director and Head of Client Experience for PwC UK), Brian O’Sullivan (CEO of Fulfil Nutrition), Cecil Martin (Sky Sports Broadcaster, Motivational Speaker and Former NFL Fullback) and Amanda Pullinger (CEO of 100 Women in Finance). Between the many questions asked by audience members and the former NFL player Cecil Martin asking everyone to stand up and stretch, the conference was an incredibly insightful experience into how leaders look at diversity and how they have been affected by it.

1. Diversity of Thought

This was probably the most talked about topic of the night. Each speaker offered a unique perspective into what they believed was the most vital type of diversity: thought. Overall, the panelists agreed that diversity of thought implies the breaking of the fundamental barrier of following the easiest path and rejecting challenges to one’s own ideas. O’Sullivan mentioned that at the start of his time with Fulfil Nutrition, he noticed the company had, unlike industry giants with very rigid structures, a culture that incentivised openness to learning and challenging ideas, which in turn led to the creation of an extremely diverse team. Cecil Martin also added to this in that his recommendation was to ‘strengthen as many “muscles” as you can’, in the sense that one should be involved in as many things outside their own skillset as possible. In other words, in order to grow as a leader within business, one needs to grow in other areas which will then feed unique ideas into an organisation. Pullinger approached this idea by accepting that as leaders, business people need to acknowledge the fact they don’t know everything, and that for a team to be successful, being diverse in terms of age, gender and specially ethnicity is essential, as research has already shown.

2. The Power of Visibility

During the discussion, it was stressed how important it is to have role models, who give visibility to minorities across a range of senior positions. Melville mentioned how not being able to see people like yourself in these positions makes it almost impossible to see yourself up there, and that the path you would need to take is practically invisible. Organisations should be, in theory, fishing in diverse talent pools for new positions but directorial boards of most large corporations still tell a story of inequality that is becoming less and less antiquated as new generations enter the workforce demanding diversity as a basic pillar of organisational culture. Pullinger’s 100 Women in Finance launched an initiative to put some of the world’s very few fund managers, who make up for an alarmingly small proportion of total fund managers across the world (around 7% and numbers haven’t changed much for 30 years), in the frontline of the media, in their website and even supporting a handful of these fund managers to pitch at American news channels. Pullinger said that the results were clear from the get-go: the women brought diversity to these panels on television, and with that came new ideas and discussions. Being exposed to the general public allows these women to become role-models, and inspire a younger generation of soon-to-be female leaders.

3. Authenticity

Another recurring theme throughout the night was authenticity. The panelists agreed that believing in oneself and being confident in the skills one acquired during college and with extracurricular activities are what can set apart a successful candidate when it comes to job hunting. The best talent comes in the form of diverse candidates that have been able to gather skills in a wide range of specialties, which makes them able to reach a level of problem solving that will be hard to replace with AI. Furthermore, Melville commented that knowing one’s self-worth is extremely important as you rise through the ranks of the organisation. It’s important to be grateful , she says, but it’s even more important to know that you’ve worked hard and that you deserve to be where you are and that it was your skills and competence that are leading you through the corporate ladder. This becomes especially relevant when the discussion turns to diversity policies and quotas that may not necessarily pick candidates based on their skills, but rather as a tool for image improvement.

Finally, it appears that organisations have realised that diversity is something that has to be rooted in their cultures for them to remain relevant for the generations to come, which will continue to demand more diversity at the bottom as well as at the highest ranks. Without this diversity, any company will face the risk of becoming obsolete and inefficient when compared to those who have truly embraced it. These will be the companies that will head into the future with an enormous advantage, as their leaders finally begin to realise the power of diversity.

By Jan Keim

Maybe you have heard the following statement by Tom Goodwin already: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”. Clearly, when looking at the many examples of platforms disrupting industries, there is something interesting going on. Let’s dive deeper into the logic behind the so-called platform economy.

The Fundamentals

Traditional business models are designed around buying some sort of raw material, manufacturing a product and selling it to customers, or gathering people to deliver services. When looking at digital business models, this logic does not apply. Multisided platforms, or “matchmakers” as they are sometimes called, provide one or multiple groups of people with access to other groups of people and facilitate the interaction. At least one group of people perceives the facilitation of the interaction with another group as value they are willing to pay for. For example, Uber drivers can earn money by getting connected to riders via a platform, a service both groups value. Drivers benefit from the frequency of rides, and riders benefit from availability, transparent pricing, and transparent quality due to the rating mechanism.

The interdependence of demands has long been ignored in business, until Geoffrey Parker and Marshall Van Alstyne published the first peer-reviewed article on this topic in 2000. Since then, many platforms have emerged and pushed the boundaries of different industries, including hospitality, retail and transportation. But what exactly makes such platforms better than traditional businesses?

Network Effects, Curation and Excess Value

As middlemen, platforms benefit from the value created by letting groups of people with specific needs interact with each other to satisfy those needs. This means that platforms facilitate the exchange of goods, services or social currency (e.g. “likes”). For multisided platforms, network effects are crucial to their business models. There are two types of network effects that either can be positive or negative: same-side or cross-side network effects.

• Positive same-side network effects come into play if an increase in participants on one side creates additional value for the same side. An example of this is WhatsApp, where users benefit from more people they can chat with.
• Negative same-side network effects happen if additional players on the same side have a negative impact on the others, e.g. on a marketplace like eBay where people try to sell substitute goods to the same customer group.
• Positive cross-side network effects happen when one group benefits from an increase of participants on the other side. Marketplaces such as Amazon create value for customers not only because of the delivery of goods, but also because the selection of goods is much bigger compared to traditional retailers.
• Negative cross-side network effects, while rather rare, refer to a decrease in value for the opposite side should an additional player enter the other group. An example of negative cross-side network effects is advertisement, where more advertisers may have a negative impact on the user experience.

Network effects, in fact, are so important to a platform business that some companies are willing to pay one side to attract the other side. For example, companies like Sony (PlayStation) or Microsoft (Xbox) sell their gaming consoles at a loss. However, the more people own a certain console, the more attractive game development for those consoles becomes, which represents a main revenue stream for Sony’s and Microsoft’s gaming divisions.

Because effective matchmaking is the key to generating value, curation is a core competency in the platform economy. Curation refers to a mechanism that ensures successful matchmaking. Such mechanisms may consist of rating systems, filters or algorithms. Curation ensures that a customer on one side finds the right partner on the other side. If a platform business fails to ensure effective matchmaking, chances are high that the business fails. Imagine what would happen if Airbnb keeps failing at showing you available rooms that match your budget and location preferences, or if Amazon kept showing you irrelevant products without the possibility to filter based on what you are looking for.

Multisided platforms rely on technology for value creation. The technology enables platforms to deliver four sources of value that would not exist without them, so-called “excess value”. Customers benefit from access to value created on the platform (e.g. videos on YouTube), producers benefit from access to a community (e.g. Airbnb), and both sides benefit from tools and services that facilitate their interaction (e.g. Kickstarter) as well as from the curation mechanism that enhances the quality of their interactions.

The Chicken-and-Egg Problem

When deciding on building a multisided platform, there is one key challenge that many start-ups fail to overcome: the chicken-and-egg problem. Each group on a multisided platform depends on the presence of the other group(s). Without both groups on the platform at the same time, the value proposition cannot be delivered. Therefore, when starting off, a platform business needs a strategy on how to attract all relevant sides so that effective matchmaking can take place. There are different strategies a platform business can use to overcome this dilemma, for example:

• The Micro-Market Strategy: By making the platform accessible to Harvard students only, Facebook overcame the chicken-and-egg problem by targeting a tiny market of members that already interacted with each other on campus.
• The Big Bang Adoption Strategy: Tinder launched at a frat party at the University of Southern California. Within a short period of time, the company was able to attract a high volume of sign-ups immediately.
• The Follow-the-Rabbit Strategy: Amazon started off as an online retailer to build a database of users and producers. Later, the company pivoted into a platform that helped producers and consumers match with each other.

What the Future Holds

Looking at the success stories of platform businesses, it is not far-fetched to assume that further disruption of industries will take place in the future. Traditional businesses should ask themselves how they can react and possibly benefit from platforms in order to avoid being pushed out of the market. In fact, some big and traditional brands have already started implementing platforms to create additional value for their customers, such as Nike with its NikePlus platform, or Under Armour with MyFitnessPal and Endomondo.

Acknowledgement

This article is based on the content delivered by Conor Foley during the Digital Business Models module at Trinity Business School. Conor is studying for a PhD in the area of digital business models. His particular area of interest relates to multisided digital platforms and the way in which they achieve sustained competitive advantage and accelerated growth.

By Luke Gibbons

The judicial unease lamented in Keating v New Ireland Assurance [1990]2.I.R.383 surrounding “basis of contract” clauses is well founded.  However, it is contended, that this disapproval is frivolous, as notwithstanding such, these clauses are upheld by Irish courts. This allows insurers, often the more powerful contracting party, convert a pre-contractual representation into a warranty, and thus, gives the insurer a right of repudiation. It is argued, this consistently leaves the insured bearing the loss, and in so doing, undermines the premise on which insurance is based, that being, protecting against future losses. Furthermore, it is submitted, that the rationale used by the courts in upholding these clauses is flawed and in deeming such as valid, the courts are running the risk of ironically circumventing the materiality burden in misrepresentation and nondisclosure, as developed by said courts to protect the insured.

In Keating, the recognised rationale in validating these clauses was freedom of contract. Although, this seems infallible, as two legal entities are willingly entering an agreement. It is contended, that in the insurance context, such does not consider the idiosyncratic reality of these transactions, and ultimately, the inherent imbalance of power between the parties. One argues such, as every business, no matter how powerful, is required to have insurance in some respect. Therefore, it is submitted, as these entities must enter into contracts with insurers, often having no choice in so doing, and not being subject to the EC (Unfair Terms in Consumer Contracts) Regulations 1995; the courts in upholding “basis clauses”, on the grounds of freedom of contract, are failing to acknowledge this inherent imbalance in commercial insurance agreements. The insured is not free to enter into a contract at all, the insured must enter into a contract to avoid future losses and being in breach of relevant law.

As held in Keating, non-disclosure or misrepresentation can only render a contract void if such facts are deemed material, and it is proven that these were known to the insured during declaration. However, “basis clauses” differ, and as denoted from Keating, any undisclosed information, no matter how insignificant, if under a “basis clause” may lead to repudiation. Although post-Keating, “basis clauses” must be outlined in clear terms and if ambiguous the contra proferentem rule shall apply, such judicial intervention is inadequate. It is submitted, the holding, by confirming the validity of “basis clauses”, still arguably allows insurers use suchto circumvent the burden of proving materiality, and ultimately, undermine a threshold designed to protect the insured.

Thus, it is undisputed that reform is needed, however, the question still lies: should “basis clauses” be unlawful? There is some credence in the New Zealand approach, which incorporates a “materiality test” in accessing non-disclosure and misrepresentation under “basis clauses”; much like the approach to warranties in this jurisdiction and the guidelines promulgated in Irish self-regulations. It is argued, that on one hand, this would bring homogeneity to the treatment of warranties, and ultimately, ground “basis clauses” in their foundational origin, that being, as Foss states, “[use] …with…clauses permitting the insurer to avoid the policy… [due to] …material misstatement” (‘Good Faith and Insurance Contracts’ 2010). However, on the other hand, the plaguing question of what is material would still exist. Furthermore, is it contended, that if such is adopted, insurers would cease using “basis clauses” anyhow, as such would not have the “trap[ping]” effect they are designed to have, as described in Zurich General Insurance Co Ltd v Morrison [1942]2.K.B.53. However, reliance on insurers ceasing use and the unpredictability surrounding materiality is too uncertain a basis upon which insurance law should develop.

Therefore, in agreement with the Law Reform Commission, it is proffered, that the Australian approach be adopted, banning “basis clauses” entirely, as such is definitive, and in turn, champions certainty in commercial law. This is also advanced, as Buckley ((2005).12 Commercial Law Practitioner 10) laments, the current self-regulation is “inadequate”; a view solidified by CB Justice v St Paul Ireland (Circuit Court 25/11/2004).  Nevertheless, it remains to be seen whether the Oireachtas will stifle this unacceptable practice and remedy the unfortunate reality as described in Anderson v FitzGerald (1853)3.ICLR.475, that “basis clauses…[render the policy] not worth the paper upon which it is written”.