A few Digital Alley workers are already craning to see which food trucks will serve their lunch at San Francisco’s SOMA StrEAT Food Park when the French bistro truck, France Delices, pulls into the gravel lot by a highway overpass and shoehorns between Kung Fu Tacos and Bacon! Bacon! A tweet broadcasts the day’s roster. Fans all across town are receiving tweets and text alerts about favorite trucks’ locations and daily specials.
Meanwhile, high in the Andean mountains, a supplier to San Francisco chocolate maker TCHO pulls a tray of cacao beans from a toaster oven, examines and smells them, then mashes a bean to sample its flavor. He is one of a few select farmers in South America, Central America, and Africa who work with TCHO. Before TCHO’s training, he had never tasted his own beans, known their unique flavor profile, or understood the value of his product, which now graces high-end groceries and eateries across North America.
Food trucks and family farms aren’t the most obvious businesses benefiting from rapid advances in core digital technologies. But in both the highest-tech new industries and traditional hands-on small businesses, advances in social software, cloud computing, and other technologies are reducing the cost of identifying and managing a large number of participants in a diverse ecosystem. The result: decentralized participation, creation, and innovation are combining with centralized orchestration, infrastructure, and marketing to create value for consumers, suppliers, and distributors alike.
The most exciting implications stem not from any one piece of hardware or software, but from the way technology enables many more players to participate in markets and in innovation. Organizations can now tap into vastly more talent, capabilities, and resources, including very small scale or sole proprietors’ businesses. Smaller players have greater agency than ever, yet they depend on functioning platforms to connect with each other and potential customers and collaborators.
As the examples above typify, integration of virtual with physical platforms is key to enabling scale and broader reach. At StrEAT Foods, the physical platform is the parking lot, sheltered seating, Wi-Fi, and bathrooms, which attract a large and constant customer pool for food entrepreneurs who are still tweaking their concepts. The market benefits from each truck’s loyal following and legions of Twitter fans. Long-time restaurateur Carlos Muela, the park’s owner, hosts after-work parties and movie nights, and maintains a daily StrEAT Food presence on Facebook, Twitter, and Instagram, where he posts gorgeous, easily shareable images to feed the foodie photo trend.
There is no one-size-fits-all solution for integrating physical and virtual platforms. StrEAT Food’s vendors largely own their customer relationships, but for the chocolate, TCHO is the face to the customer and the conduit to market for its farmer-participants. TCHO’s technology includes low-end, easy-to-maintain Flavor Labs—including modified hairdryers and slow cookers— installed at suppliers’ facilities that level the playing field and put taste and quality information in the hands of the growers. But TCHO also uses software to connect and communicate with farmers .
Skype provides easy and cheap communications, and the cloud-based software tool Cropster tracks cocoa beans from the tree and farm to the port. The tool lets TCHO determine exactly which Peruvian farmer supplied one fruity chocolate bar. But TCHO still must maintain a physical presence with suppliers: the chocolate maker works with Equal Exchange, an organization that helps promote fair trade standards and connect high-quality food producers in developing countries to develop supplier co-ops and host live events that bring farmers and cocoa experts together in working groups to improve crop quality and farming productivity.
These examples also highlight an interesting dichotomy: virtual and physical platforms playing off each other can be effective at a hyper-local and a global level. With his portfolio of 70-plus food trucks, food park owner Muela brokers event catering and other special services, matches specific demands with unique suppliers, and provides opportunities–such as the night shift at the city’s public hospital–for trucks hungry for exposure.
Meanwhile, virtual platforms like Roaming Hunger and Mobi Munch connect vendors and consumers across the country. Maps and an app let customers track, rate, and receive alerts from their favorite trucks. Other services connect advertisers to trucks for vehicle wraps, business planning support, permitting, and compliance support, as well as truck and equipment purchasing and rental.
The interactions and relationships these platforms facilitate are becoming more important for value creation. For instance, just as FlavorLabs and sensory training allow farmers to collect timely feedback on their beans, a TCHOPro program enables chocolate-lovers and pastry chefs to give their input in product development. TCHO does not use additives to derive its fruity, nutty, and other flavors, but rather relies on unique terroir, fermentation, and roasts. Consistent flavor profiles is key for quality, and consumer feedback contributes to shorter product release cycles and spurs experimentation and innovation without high costs.
TCHO and StEAT Food’s stories should inspire other organizations to consider how new technologies and business practices can be combined to create models that invite participation from beyond the organization’s walls. The platform owner incurs the expense of building and maintaining core infrastructure, but third parties participate in growth and become stakeholders. Shared interest is ever more important when a business must rely on signals from multiple sources and act on them across multiple organizations, such as when a branded company is trying to meet demand in a new country.
Questions for organizations:
- What platforms can I provide that are currently inaccessible, but might be invaluable to my partners and potential partners?
- What platforms are already out there that I may be able to participate in?
- How can I extend this platform to create even more value in either physical or virtual space? What do potential participants have to offer? Are they the physical presence, the quality promise, the innovation, the marketing, the customer?
- How can I use these platforms to access feedback loops and accelerate learning?
John Hagel III, director in Deloitte Consulting LLP, is the co-chairman of the Deloitte Center for the Edge based in Silicon Valley. John Seely Brown is the independent co-chairman of the Deloitte Center for the Edge.