Still, all this focus on small-time podcasters didn’t stop Spotify from luring big stars. It lets podcasters offer subscription podcasts without taking any revenue cut. To encourage people further still, Spotify’s Anchor supports monetization and automatically inserts ads into participating shows. It wants any micro-celebrity, no matter how niche their audience is, to start recording episodes by, start turning on a button over their laptop. It’s not only big networks like NPR, The New York Times, and Wondery that Spotify is courting. Then Spotify acquired the podcast software company Anchor for about $100 million in 2020. It lets them see data like listeners’ music taste, age, gender, location, and how long they listen to a particular episode. With that in mind, it grants access to data to creators early on. The more podcast creators there are on the platform, the more attractive Spotify becomes for listeners. Spotify needs to endear itself to podcasters. It’s all out of necessity, as indicated by the X-axis. They exploit more often than they explore. That’s why capital-intensive companies tend to be cautious and more conservative. But the digital magic stops where the physical atom begins. If you launch something in the market that doesn’t work, all you do is an update over the air. Why? If you write a code wrong, you can roll it back the next hour. In contrast, software-driven companies like Google and Spotify can lean further towards exploration. Even at Amazon, its network of fulfillment centers demands discipline and rigid standards. Letting your factory run wild is a sure way to bankrupt the company. If your operation carries a huge factory, like that of Intel who makes semiconductors, you need to have a strong dose of discipline. You have to strike a balance unique to you. You must have both.Īnd, yet, success still depends on who you are and the nature of your business. Explore and exploit are not mutually exclusive choices. Exploration like research and development, invention, and creative thinking are critical to a company’s long-term survival. Some effort must be spent in exploring new areas. But if you only focus on the near term, then the future will be grim. You have to be good at maximizing your current advantage. On the X-axis, we capture the construct of “exploit” versus “explore.” A company must be able to exploit near-term opportunity in order to pay today’s bill. The technology involved must operate silently in the background. Mainstream users only care about a seamless experience that’s all. Any consumer brand that succeeds in the technology sector has to make its technology disappear. The same is not true for consumer brands. Tech Companies Digital: Eplore/Exploit Chart 1, compiled by the authors
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