Few days back, I was in a really random but engaging conversation with an individual who shall go unnamed. We started talking the state of business today and wondered if there is a playbook for how digital disruption works and how can executives get ahead of it. We then started talking about all the big unicorns and examples and began to boil it down to the following things:
- Disaggregation of value-chain norms: Almost every big disruption began with some sort of disruptive changes to the existing value-chain. A value-chain refers to activities that add value to a final product. Facebook for connecting people, iPhone for photos, Airbnb for hotels, eCommerce across all businesses, Instacart for groceries, so on and so forth are all disruptive examples. Look at the next big industry or ecosystem and see if the value-chain is either starting or yet to get disrupted.
- Tech-enabled connection of demand and supply: Once the value-chain begins to disaggregate, new tech-enabled solutions began to change how demand and supply connect. The earliest form of this frictionless connection may be Paypal, then the one-click buy button on Amazon, and more recently Uber and Lyft. All transactions on your iPhone, product discovery on Google, shoppable pins on Pinterest, direct access to shopping from influencers via Instagram are all examples of that connection.
- Data-Driven hyper segmentation and personalization: Given these are tech first disruptions, data is amassed from get go. One of the most disrupted segments is food. If the current generation of food was built around reaching masses in a safe scalable way, the future is about reaching every individual in a safe yet personal way. We are soon emerging to a possibility where likes, dislikes, convenience, time, health, lifestyle, DNA/Stool and any other vital marker can be used to personalize and deliver food.
- Convergence or Creation of new ecosystems: As the hyper segmentation and personalization begins to happen as well as advancements in technology continues, new ecosystems begins to emerge. Driverless cars is a potential future shining example. The Uber economy will merge the driverless cars to create a whole new ecosystem of driverless taxis. The last mile challenge solvers like electric bikes, scooters, are all creating a new ecosystem that didn’t exist months ago. The convergence of Internet and Apps has created a new ecosystem of Home entertainment solutions such as Netflix. Similarly in the food, convergence of agriculture, food, and tech is continuing to create a new ecosystem of food.
The cruel thing about this entire cycle is that it is neither predictable nor sequential. The breakthrough can happen at any point and begin to first slowly and steadily permeate, and then just scale rapidly. Even worse, each of the above aspects begins to feed the other and create a ferocious flywheel that can blow away existing and established businesses (read Kodak as an example).
Once we settled on the above four things, then we started discussing what can businesses and executives do to stay ahead. The answer isn’t simple or easy. I will get a bit more specific in future posts.
Are there other themes or suggestions on how to spot a disruption?
P.S. All opinions/views in this post are my own. You can also find me at www.digitallymani.com