Monday, September 15, 2014
Disruption and the Uberization of Business
Uber is great example of the business disruption of an established industry. The way we hire rides and get around may soon be transformed forever. The taxicab industry is none too happy. What has happened overnight for paid ride services, is another sign that this is just the beginning of the age of business disruption and the transformation of relevance. The essential way that certain industries operate are being completely altered so they will never be the same. It may be time to Uberize your business.
THERE IS NO TURNING BACK
There are certain innovations that, once they arrive, make it hard to imagine ever doing something any other way. Recently, my son was hysterical because he thought he lost his school paper on his laptop. The idea of having to re-type the paper threw him into a near catatonic state. When I tried to explain that there was once a time when revising a paper meant putting a fresh sheet of paper in the typewriter and starting from the beginning, he was in total disbelief.
Once exposed to disruptive innovations, there is no turning back. They just work better. Though they may take some adjustment to catch on, that is just part of the change cycle. Everyone was intimidated by ATMs at first, and there were people who refused to trust a machine with money. Now that I am used to depositing checks on my phone, it seems outdated to even drop it in the ATM, let alone stand in line and fill out a deposit slip.
WHY UBER WORKS
Hailing a cab is a ritual that intimidates most people. It conjures images of getting in a broken down cab, that smells like a locker room, and often feels like Mr. Toad's Wild Ride. I hate having to book a cab the night before an early morning flight. I am always worried that I will be left standing in the dark in front of my house, hoping a cab will show up that never arrives. This has happened to me too many times and causes added stress. Then there is paying; what to tip, the groans or arguments over paying with a credit card, or the disputes over the fare. Though there are certainly pleasant cab experiences and great, informative cab drivers who give you a sense of safety and ease while driving, close your eyes and see if this is the image that comes to mind for you.
Uber changed all that. No more standing on a street corner hoping a cab will come by or trying to call a dispatcher. You simply click on the app. You see how soon a car will arrive and the cost to take you to your destination. There is no mystery as to whether it is coming, because you can track its progress until it arrives. It is clean and looks like the car you normally drive or better. There is no money or tipping involved. It is hardly an experience at all, it just gets you where you want to go without any additional stress.
WHY IT IS MORE THAN JUST UBER
Uberization is gaining traction and spreading. Chipotle made fast food simple and more healthy. It feels like Henry Ford decided to open a Mexican restaurant. I am not sure you even call it Mexican food, because it is broken down into its component parts and stripped of all unnecessary elements. There are new companies that are disrupting existing businesses, by not just improving them, but by replacing them with a more efficient model. This summer I took the kids to a movie and we ate at a new fast food pizza place. You stand in a queue and order your pizza toppings and by the time you pay and sit down, the brick oven pizza is delivered. The kids immediately branded it as the Chipotle pizza place. It was no use talking about the old pizza parlor, with straw hats and games because you pizza took forever, only to burn the roof of your anxious mouth. Someone figured out how to do Chipotle for pizza and Uberize fast food.
WHAT IT MEANS TO YOU AND YOUR BUSINESS
As a society, and maybe even as humans, we get used to doing things a certain way. We accept that this is how it should be and we become ingrained in a process. There may be small changes, but we are conditioned to maintain the status quo and accept the norm. We are fearful of risk and change.
As businesses and economies, we are similarly ingrained. We build businesses around needs and expectations and there is a tendency to stick with what works. But, there are new companies that are disrupting the existing models. They are not just improving, they are replacing. They prove that there is a better way and suddenly that becomes the new norm. We are living in an age of disruption, which is both exciting and unsettling. Get ready for more Uberization and maybe create some yourself.
About: Kurt Thies is a visionary executive who has developed software solutions for the Fortune 500. He helps companies develop and execute innovative strategies.
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