The other day I was lecturing at the University of Buckingham on the potential for new technology to disrupt business. The students are studying for a degree in entrepreneurship, and they are all running “live” companies as part of their studies. They were keen to discover how they could predict the likelihood of technologies being disruptive for their firms. But as we discussed various ideas, I was able to talk about several examples of disruption to business that appear to have overtaken traditional firms, when there was no need.
One example I spoke about was, inevitably, Uber. This upstart has massively disrupted the minicab and taxi business worldwide. The company transports more than 1m people every day and since its launch in 2010 has grown from nothing to a value of $69bn. Its annual revenue is around $6.5bn, which is almost ten times higher than its nearest rival, Lyft. In the USA, Uber now has 87% of the taxi ride market. Yet, it was entirely predictable. All you had to ask yourself was “how do people book minicabs?” and then follow that up with the next question “in which case, will they want to use their mobile phone to do it?” Bingo.
So, how come traditional taxi firms did not come up with the idea for the app? Similarly, how come the hotel industry has been stymied by Airbnb? More accommodation is now booked through this 11-year-old company than all the hotel websites added together. But again, it was entirely predictable. People using the Internet have sleeping space. Others want to use that space. All you need is an app to join them together. Bingo. Yet, once again, the traditional accommodation industry of hotels failed to spot this possibility.
The fact is, throughout business history, the landscape is littered with upstarts that change old traditions. People within those traditional sectors tend not to opt for radical change. They do what their customers want. You have probably heard the story that is supposedly about Henry Ford saying that if he had asked what people wanted they would have said “a faster horse”, and that would mean the car would not have been popularised. Sadly, Henry Ford never said it; a business professor said that it was the kind of thing he might have said. The sentiment is true enough, though.
If you ask your customers about the future, they won’t help you. The innovation expert, Paul Sloane, says if spectacle manufacturers asked their customers what they wanted, they’d have been told about fancy frames. But if the company had gone to their customers and said we’re not going to bother with frames, but instead we’ll put plastic lenses directly onto your eyeballs they would have been told to get lost. In which case the multi-billion-pound contact lens industry would not have got off the ground.
Getting customers to guide you towards the future for your business is useless. They will only tell you about the “baby steps” you can take.
However, if you don’t make attempts to predict the future for your sector, your business could significantly suffer. Ask hotels. Ask taxi firms.
One thing is for sure: your business area will be disrupted. Technology is advancing at a rapid pace. Collaboration between potential disruptive competitors is easier than ever thanks to new technologies. That also means there is an increased chance of your world being turned on its head. It’s no good sitting back saying there is little you can do about it. That’s the attitude of the taxi firms outsmarted by Uber or the hotels seething at Airbnb. If these traditional industries had bothered to think, they could have been the disruptors, rather than being disrupted.
The world’s financial sector was caught napping with the invention of PayPal. The banks have stayed asleep because they didn’t come up with Bitcoin and the “blockchain” technology behind it. Yet, both of these things are straightforward. In fact, most disruptions appear to be relatively simple developments in technology – not significant changes.
So, you don’t have to be “clever” to predict the future. Neither would you require specialised technical knowledge. You just need to be well-informed and have an open mind.
A good starting place for being well-informed is Google Trends. That will tell you what people are increasing or decreasing their interest in. You can also look at specialist and detailed information on the Google Public Data site. These two tools tell you a great deal about what is happening in the world and can trigger your thinking into possible new developments.
Research has also shown that you can improve your ability to predict the future with appropriate training. And what does that training focus on? Well, it gets people to stop having fixed views and instead to have an open mind.
You can predict the future for your business sector, thereby protecting your company for the years ahead. You just have to accept that the future will change, that your business will be disrupted and be open to new ideas. Do that in conjunction with online tools from Google, and you’ll be better than Mystic Meg.