photo by Octavian Rosca
If you are ever having trouble sleeping, pick up an article on Digital Disruption. Instead of counting sheep you can count the jargon crammed into every sentence. Sentences with four or more nonsense words get a score of 2. Sentences earn an extra point when every single word is easily understood, but combine into gibberish. The points mean nothing and you don’t have to keep score; you will be asleep by the third sentence.
Here’s a jargon laden jewel from the Gartner IT Glossary: “Digital disruption is an effect that changes the fundamental expectations and behaviors in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.” Yikes. In that mumbo-jumbo there is a nugget of wisdom. The broad concept of Digital Disruption is helpful for describing something we all inherently understand. Let’s translate that Gartner definition: Digital Disruption is when technology changes the way consumers buy things or do stuff.
• People bought books at bookstores. Now they buy them on-line. Amazon used technology to change (disrupt) the way people buy books (and now pretty much everything else).
• People watched their favorite TV shows when they were scheduled. Networks owned the programing and some people planned their days around the network schedule. Now people expect to watch TV when they want to.
• People carried cash. It was the default for commerce when nothing else worked. Now, an entire generation of consumers grew up without cash. Credit and debit cards are being replaced with phone and watch payments. It won’t be long before cash will only be used to pay babysitters and drug dealers, but both are probably taking payments on their phones with Square. Easy, secure payments have disrupted the world of currency.
There is nothing complicated about Digital Disruption. You don’t need a consultant to tell you that any enterprise dependent on limited customer choice or a captive audience will falter when technology opens access. If your business relies on a protected market, or restricted consumer knowledge, your days are numbered.
Lead or Perish
Following digital trends is chasing your tail. You can’t just keep up, and it’s not enough to innovate, for innovations sake. Innovation has to improve your customers’ experience and access. Many small business were built on social media. It was the emerging technology and some people who jumped on quickly had success. But the same social media strategy that worked to sell housewives* yoga pants is not a model that will sell sandpaper to machine shops. Social Media is yesterday’s news, and is now the norm, not disruptive. By the time a market disruption is observed, it’s too late for anything but a me-too position.
The key to digital disruption is creating your own — your own disruption, not your own technology. Again, Gartner is the authority here if you can make sense of their MBAspeak. “Understanding the potential for disruption related to customer outcomes requires an understanding of the value chains within intended customer markets/segments.” Wait, what? Let’s translate: When you know what your customers want, and where they struggle, you can find technology to give them more of what they need, and less of what gets in the way.
Back to the example of network TV: People love episodic entertainment, but they had to make network broadcasts fit their schedules. Networks exploited the very thing people disliked the most, scheduling. They tried to own a night, as with NBC’s “Must See Thursdays” when Seinfeld ruled. The first technology to disrupt this was the VCR, and its refinement, TiVo. People could record and watch shows later, and on their schedules. It took away some of the scheduling problem, but shows were still portioned out in tiny bits like carrots leading the mule.
Streaming technology ended network television (it’s over, they just haven’t figured it out yet). Netflix delivered the deathblow when they released entire seasons of shows in one day. Viewers aren’t going to wait six months to find out what happens when they can find another show that gives them the whole story at their own pace. Not to pick on Network Television, but they are the perfect example of what happens when an industry fights or ignores disruption. When it became clear that owning a night of television was over, networks tried a new strategy, randomly moving favorite shows to different nights to draw an audience to specific day. It didn’t work. Rather than moving viewership, they alienated their customers who expected a specific show in a specific time slot. When their favorite show wasn’t where they expected, they didn’t go looking for it, they turned to Netflix to find something new.
Learn from Netflix
Netflix didn’t disrupt the television industry by creating technology. They used developing technology to give their subscribers what they always wanted, television on their schedules. Netflix didn’t invent the Internet, they didn’t wire it to houses, and they didn’t increase bandwidth. Instead Netflix identified a growing technology and started using it before it was even widely adopted. As more people had increasing bandwidth coming into their homes, Netflix gave them something to do with it.
You do not disrupt your market by creating technology. Creating your own market disruption requires fully understanding what your customers need from your products or services. It requires knowing what aspects of the buying process your customers dislike, but tolerate to get to the good parts. Once you have identified where your customer struggles, you have to find, modify, and exploit technology to reduce or eliminate that pain.
Digital Disruption is a new term for an old concept. In the 19th century the key to success was building a better mousetrap. Digital Disruption is identifying existing technology that gets rid of the mice without a trap at all.
Frontier can help you find the tools you need to disrupt your market.
*Housewives still exist, and businesses ignore them at their own peril.