Want to keep learning?

This content is taken from the EIT InnoEnergy & EIT Digital's online course, Blockchain in the Energy Sector. Join the course to learn more.

Skip to 0 minutes and 17 seconds Markus, What is the basic idea behind this Share & Charge model? The idea behind Share & Charge is to act as middlemen between the electric car driver and the private owner of the charging station. And for that you need a business model. You need a business model for every company, but here for the specific case they decided to use the business model, which we refer to as platform business model. A platform business model creates value by facilitating exchange between two or more independent groups, usually between consumers and producers or, in the case of Share & Charge, between the electric car driver and this private person, the charge point operator.

Skip to 0 minutes and 59 seconds And to facilitate these exchanges, platform business models harness and create large scalable networks of users and resources.

Skip to 1 minute and 15 seconds Very often you can refer to, you can see these platform business models as a marketplace. You might, you properly know Uber, AirBnB, eBay or even the German company Flixbus. These are examples for platform marketplace business model. That kind of concept takes a very specific business model. - Yes. - What is so specific about it? Well the specific part of the platform business model is

Skip to 1 minute and 43 seconds that it creates, like I said it creates value by facilitating exchange and it’s doing this by reducing transaction costs and or by enabling externalized innovation. So if you compare it to the traditional linear business, for example, in general linear businesses they create value forms of goods and services and then they sell them somewhere downstream in their supply chain. They own the inventory and it shows up in the balance sheets, buts on a platform business model, the platform business model defers in that it is creating a community and markets based on network effects that allows users to transact and interact.

Skip to 2 minutes and 32 seconds Business like Uber for example, they don’t directly create or control inventory via supply chain, like in the way that linear business do, platforms don’t, to use a common phrase, they don’t own the means of production instead they create the means of connection. And the very special thing about platforms is that they are very easy to scale.

Skip to 2 minutes and 59 seconds In the linear model scale was a result of investing in and growing the businesses internal resources, but in the networked world where platform models come into play, scale comes from creating… external networks built on top of your business. And that’s basically the essence of how platform business models work. So the model has a name. It’s called Asset-Light. What’s behind this name? Asset-Light describes the relationship between the firm and the platform. There are three different categories where that that can be described. So we have the Asset Heavy, Asset Light and Mixed Enterprises.

Skip to 3 minutes and 47 seconds Many famous and successful platforms like the ones I mentioned before, Uber, AirBnb, they all use the Asset Light category of the Asset-Light model. The asset light is also referred to as Capital-Light, as it doesn’t require a lot of money upfront to start a venture. Be it the manpower, be it the infrastructure, be it R&D or even the network itself, instead of spending tons of money to own these resources, you just pay a certain amount of capital and share a profit. So in the example of Share & Charge, as a case example, Share & Charge provides a platform that brings the electric car driver and the public or privates charging point operator together.

Skip to 4 minutes and 34 seconds And then Share & Charge takes a cut from the revenue that is generated from the charging service, but Share & Charge owns the platform, but doesn’t own any electric cars or charging stations. That’s why it’s called Asset-Light. Do you have any idea to what extent this Share & Charge model is going to, or might influence economy? Well, the innovative thing about Share & Charge as a platform is that they also use the blockchain technology, which reduces transaction costs dramatically,

Skip to 5 minutes and 13 seconds and it also allows a very smooth operation of this platform. I think that the whole concept of Share & Charge will have a very big impact into this whole economy of charging infrastructure. Are there any tools that support start-ups in the process of the business modeling? We figured out that there is a gap between this importance of the value network and these business modelling tools. And that’s why we developed the value delivery architecture model or as we say the VDAM. This approach allows you to evaluate, to analyse, and also to design business models and their embeddedness in the value network, value creation network. There is one thing that still puzzles me.

Skip to 6 minutes and 6 seconds That is how many parties are involved in this Share & Charge model. You have the driver of the electric car, you have the person offering electricity… And then? You have several roles in this ecosystem, in this network. You mentioned the two, the electric car driver, and you have the person that owns the charging station. And then you have the person who gives the electricity, the electricity provider for example. But also you need to think about how the electric car driver will pay the private owner, for example. This is something that Share & Charge is using, so Share & Charge takes the role of the transactions, coordinating the transactions.

Skip to 6 minutes and 55 seconds But also you have to think about, let’s say if you have this the streets where every household has its private charging station, right? And all of a sudden 20 EV, 20 electric cars broke because the batteries are empty, and they want to charge their cars, reload cars in this street. You also have to take part of the whole electricity grid, the grid network into account and all the partners that are involved in the grid network. So we can expand this network as wide as you want to, and this shows the complexity behind it. You cannot only look at the car driver and the private person, and they do something in between, but you have to look at the whole ecosystem.

Skip to 7 minutes and 43 seconds And this gets complex very very easily, because… the more you expand your business model, the more complex ecosystem gets. That’s also something that you can use VDAM for, to lower this complexity and to increase transparency and also comparability of these different roles in such an ecosystem. - And reliability. - And reliability, definitely, yeah. - Ok, thank you very much, I think we have enough. - You are welcome.

Business model: Share & Charge

In this interview, you will meet Markus Lau, professor at the Karlsruhe University of Technology, who will give his impressions on the Share & Charge solution from a business model perspective.

He will be introducing the aspect of the creation of value based on scaling effects of the networks or ecosystems. This immediately leads to defining business models for blockchain applications and the VDAM methodology, especially created to analyse and structure these complex business models.

Share this video:

This video is from the free online course:

Blockchain in the Energy Sector

EIT InnoEnergy