“As with all decisions in life, strategic choices have pros and cons, and the more you are aware of both, the better you will be able to decide”, says Ksenia Podoynitsyna. She is convinced that the use of data and sophisticated data science and AI techniques, such as natural language processing, can improve these decisions. “There are tons of textual data out there. It’s frustrating to see its potential going untapped.” Recently appointed Professor of Digital Strategy and Innovation, Ksenia joins us from JADS, the Joint Graduate School of Tilburg University and Eindhoven University of Technology, where she was Professor of Data-Driven Entrepreneurship. She was also head of the master's programme in Data Science in Business and Entrepreneurship, which under her leadership, got the Bronze Medal award from Elsevier Beste Studies 2023.
Ksenia started her research career in entrepreneurship, moving on to general strategy and innovation. Her focus is at the intersection of data science and business strategy, in the context of digital transformation: “I study how data can help create and capture value through innovative business models, ecosystems and platforms.”
Digital technologies are transforming, or even disrupting, every industry. For Ksenia, the metaphor of the digital vortex perfectly describes the situation – the inevitable movement of industries, like a real vortex, towards a digital centre where business models, offerings and value chains are digitised as much as possible. “Imagine the digital technologies at the centre, with all the industries orbiting around it. Some are closer to the centre, like music, entertainment, travel and insurance, and some further away”, she explains. “One of the questions I’ve been exploring is the key patterns of digital transformation and disruption – what do they look like at the market level? How can you translate what has happened in music, travel and insurance, for example, to other contexts, such as healthcare. What can you learn from that?”
Another example of the issues she explores is what business model to choose for a given value proposition. And digital has radically changed the answer to that question. “Not so much because it offers new ways of creating value, but because it significantly expands the ways in which value can be captured”, says Ksenia. “Unlike the straightforward approach of most traditional business models, where you make something, sell it and be roughly done with it, digital offers a whole host of new options. Freemium, where basic features are free and users pay for premium features, is one such business model that has become extremely popular. Subscription is another. In my research and teaching, I look at when to go for a specific model and when to stay clear. What are the pros and cons? How do users perceive the model? How should companies navigate the pitfalls?”
The platform business model is also a big digital trend that Ksenia is researching. As well as analysing the pros and cons of running a platform, she is looking at how this can be done responsibly. “In the Netherlands, we’ve seen scandals involving food delivery platforms. These platforms initially charged low fees, but their fees escalated as they grew and gained market power. This has highlighted a fundamental difference with the classic pipeline economy, where antitrust legislation acts as a safeguard to ensure healthy competition. As consumers, we often benefit from lower prices when platforms enter the market, so we like to think there is no problem. But there is.”
At Vlerick, Ksenia teaches on our Executive, Masters and MBA programmes. Why did she decide to join us and what attracted her? “I have lived in the Netherlands for half my life and I felt it was a good time to change, to move to another country. Vlerick is a lively and international place that shares many of the values that I appreciated at JADS. Perhaps most importantly: Vlerick stands for high-quality research that is relevant to business and has an impact on society. I’m definitely not an ivory tower type of researcher, so that fits.” And she adds enthusiastically: “I’m looking forward to teaching and being able to focus much more on developing my research projects, something I wasn’t able to do as much as I would have liked in my previous role as programme director.”
She has several projects in the pipeline: “I will continue my research for the recently launched Responsible Media Lab (REM Lab), co-funded by NWO and DPG Media. This lab aims to explore the potential of AI-driven solutions for the media, taking into account professional values and the emerging regulatory framework.” A project I am preparing to launch has been funded by another prestigious NWO grant and explores the market implications of disintermediation due to platforms and the launch of new platforms. “One of the goals is to learn from different markets and apply these insights to a business model for “Freight Mobility as a Service”, a novel platform in the context of intermodal transport networks.”
It is when she talks about her research that Ksenia really shines. She is passionate about bridging the gap between research and business. “Too often, research and business work in isolation and I hate it when that happens”, she says emphatically. Her eyes twinkle as she continues: “I love connecting insights from the activities of a company with my research and vice versa. That’s why I focus on digital strategy and innovation because I’ve found that these areas bring together people from different backgrounds, such as data, business and psychology, who all understand the importance of these issues and of breaking out of your own silo. This multidisciplinary environment helps me get the inspiration I need for my research directions and collaborations.”
Her passion for relevant research is second only to her passion for data science and data-driven decision making. One of the projects she has worked on looks at the different revenue models used by app developers in the US Apple App Store – user-based revenue models such as freemium and subscription, or third-party-based models such as advertising. How do these revenue models affect the value captured? “To answer this question, we look at the number of downloads. The data shows that apps that generate revenue tend to have more downloads than completely free apps. This may seem counterintuitive, but apparently users see the revenue model as a sign of quality.” Ksenia points out that this doesn’t mean that app developers should combine all available revenue streams, as some may conflict with each other. “The data shows a drop in downloads when apps combine user-based and third-party-based revenue models. Users can see this and push back. It’s like they’re insisting you choose one or the other.”
The choice of a revenue model also influences other decisions, as Ksenia explains: “In another study based on data from the US App Store, we looked at how much companies need to differentiate their products for optimal performance. And we found that it depends on their revenue model. For paid products there is an optimal level of differentiation: you want to make your product different from what’s already out there, but not too different. Free products, on the other hand, should either be very similar to the competition, so that users feel comfortable and familiar, or very different, so that users are intrigued by the novelty. But here’s the interesting thing: our data also showed that this optimal strategy changes significantly if you are transparent about your revenue model by using a freemium model or by publishing a clear privacy statement. A moderate level of differentiation suddenly becomes the most interesting – suggesting that a different decision on R&D budget might be more appropriate.”
“Our study is one of the few that shows how transparency and ethical data usage impact company and product performance”, says Ksenia, brimming with excitement. “It’s not just about being GDPR compliant because it’s the right thing to do. There’s a business case for it: clear privacy policies change strategic outcomes. And I find that numbers and data are much more compelling than simply saying ‘we have to do this because we have to’.” After a thoughtful pause, she adds: “Actually, the same goes for sustainability, an area I’ve also researched. If you only focus on people’s sustainability drive, you will reach a small segment of the population. To engage the mainstream market beyond the niche of sustainability-minded individuals, there needs to be a clear financial incentive or benefit.” And smiling, she concludes: “Whether it’s sustainability or ethical data usage, the more insights on those incentives we can extract from data, the better it will be for society as a whole.”
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