Welcome to a world of accelerated technology disruption
Look around — technology disruption is accelerating. We’re in 4th gear, heading to 5th. Stable and profitable industries are being put out of business by innovative technologies and determined entrepreneurs.
Remember the days when Microsoft was the evil empire, squashing new software companies? Flash forward 20 years later to today and the evil empire is complacency.
A blockbuster movie experience
In the 1990s, Blockbuster had a winning business model. I remember visiting Key West and stopping at a Blockbuster to get a few movies to watch at a beachfront condo. On Sunday nights in many US cities and towns, Blockbuster was a “community center” where you met and mingled with your neighbors.
By the late 1990’s, it was obvious where things were going, but Blockbuster executives were convinced that people loved going to their stores and that it would never end. Within a few years, they were disrupted by Netflix, YouTube and other video streaming services.
Today, there are only 11 Blockbuster branches in the US, 7 of which are in Alaska, where broadband internet is expensive.
What could Blockbuster have done? The chain should have redefined itself as a “content distributor” and let go of the a “brick and mortar content distributor” model. Like many failed businesses in the past decade, they didn’t take internet disruption seriously.
Looking back, it’s funny to think, “Oh yeah, at night when I want to watch a movie, I will get dressed, get in the car, and drive to a store to find out that the movie I really want to see is already rented out. And, if I don’t return the video on time, they fine me!”
Super Uber to the rescue!
When you hear the word “taxi”, you shrug. For decades, riders put up with awful service with no ability to fix things. When you called a dispatcher — whether in New York or London or anywhere else — complaining about a rude driver, you were ignored or given lip service.
Taxi drivers saved hundreds of thousands of dollars — or more — to get their coveted taxi license. At the same time, they invested $0 and zero time in improving how they treated customers and on efficiency. The taxi business was as grey and mediocre as they get. “Taxi” was the polar opposite of “innovation”.
Today, Uber is getting us to airports and meetings faster and with a much better “user experience” than the dinosaur yellow taxis. The Uber cars are light years ahead of New York City’s yellow taxis. Better yet, the drivers actually care that you have a pleasant experience.
Who wants to call a taxi phone number, or stand waiting in the rain, when you can just open an app? Did your previous taxi company ever ask you to rate the driver?
The fall of the traditional music industry
I remember going from vinyl and 8-tracks to cassettes and finally to cd’s. I spent a lot of my money on “upgrading to cd” in high school and in the years after. In those days, the music industry ran the show.
By 2002 mp3s and file sharing became huge and torrent sites were starting to flourish. Peak sales were down, and it was obvious something big was happening. The average person knew people who had music collections on their computer and the first wave of music store closings had begun.
What did the the music industry executives do? Nothing. They refused to see the writing on the wall and innovate, and remained in the tunnel vision of certainty. They took zero risks, expected the world to return to the way it once was, and they lost.
Toys-R-Us and the American Mall
The American Mall — may you rest in peace. Like Blockbuster, Toys-R-Us and many other large American retailers believed their own fables.
In 2000 Toys-R-Us signed a 10 year agreement with Amazon to be the exclusive vendor of toys on Amazon, Forbes reports. But ruthless Amazon allowed other toy vendors to sell on its site in spite of the deal, and Toys-R-Us sued Amazon to end the agreement in 2004.
Instead of reinventing themselves as the tech company, Toys-R-Us signed a contract that led to their demise. Toys-R-Us missed the opportunity to develop their own e-commerce presence early on and ultimately filed for Chapter 11 bankruptcy protection in the US and Canada.
Toys-R-Us assumed they can rely on consumers enjoying the “in-store experience” as a meetup place for moms and neglected the web. While Amazon, a small niche book store in those days, saw the future — “one click purchasing!”
Amazon sells “everything” — toys, games, movies, clothes, furniture — and now food, thanks to their buyout of Whole Foods. Software is now the top of the pyramid and retailers are under Amazon and eBay’s umbrella, like it or not.
An Era of Accelerated Disruption
The above examples — and many more — lead us to one conclusion: We are living in an era of accelerated technology disruption.
Nothing in business is sacred. What seems like a solid business model can be disrupted in a matter of months. Product managers and CTO’s don’t have the luxury of years to figure things out, it’s all about moving fast, very fast.
In a sense, time is accelerated. You might rest on your laurels briefly, but by the time you wake up, your business can be “Ubered” or “Amazoned”.
How Can You Avoid Technology Disruption?
When you’re riding high — be careful. Giants fall hard when they are at their peak of profits. Everything was fine for Blockbuster, Toys-R-Us and many other American retailers — until it wasn’t.
Disrupt your business. Don’t wait for a competitor to do the dirty work. Do it yourself. Consider this every day — “How can we disrupt our own business?” You may not be thinking this, but I guarantee your future competitors are.
In a dynamic world, the “safe path” might turn into a risky one. When was the last time you took risk and made a leap forward? What can you do today to secure your market for the long run?
Discover the power of uncertainty.
By reading The Other Ideas, you will learn how to harness uncertainty and transform it into creative power to successfully implement your innovation projects.