Digital business models - Digital entity independent of traditional business

I am on a journey of discovery and seek your inputs through simple questions. We have now seen and continue to see the rise of pure-play Digital businesses who have either disintermediated the customers from traditional businesses or disrupted the business models enough to leave the traditional businesses in tatters. I believe I am a Digital evangelist and Digital dreamer enabling traditional companies to thrive in the age of digital and technology disruption. Despite the unparalleled growth of pure-play digital companies, we have also seen a number of traditional companies fight back with their own digital enabled business models. There are many business models that have been adopted. Here is the first one.

Setting up a digital business entity independent of the traditional business entity

In this business model, traditional businesses choose to set-up an independent entity to launch business products, capabilities and services without the encumbrances of the traditional organisation. The focus is on getting the business model working fast and the returns coming in sooner. They would start small and incrementally build on the capabilities on a weekly, fortnightly or monthly basis. Typically, this new organisation will have its own digital as well as underpinning physical capabilities or would leverage / partner with a host of other organisations physical capabilities.

The advantages are that this new entity can be modelled to be lean, digital, agile, competitive and fast right from the beginning in all facets of the business. This new entity need not fear failure instead learn from it and adapt to accelerate to success. The disadvantages are that the learnings from the parent organisation may not be available and every aspect of corporate governance will have to be learnt and incorporated as the organisation grows and evolves.

May I request you to provide your answers in the comments?

Question 1: Name the business entity you know of which adopted this business model and when did they start/

Question 2: Is this a successful digital enabled business model? Why do you consider it a success?

Question 3: Do you know of any failures? What are the causes of the failure?

Looking forward to continuous engagement...

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