The word tsunami keeps appearing in my conversations with senior leaders around innovation and the future. Why?
Because they like I believe disruption is now too weak a term to describe what is happening in business models in many markets and industries globally. Business model tsunami more appropriately describes the phenomenon as social media and the digital world emerge from the edge and enter mainstream business and our daily lives.
Indeed, a senior executive from one of Australia’s leading insurance companies in a conversation this week likened the eruption of digital to the discovery of electricity and the implications that had on the lives of those who lived at that time. It is fair to say it was electricity that sparked the Industrial Revolution decimating old values and creating new industries simultaneously without a moment’s hesitation. That analogy rings true for me.
So what evidence do I have supporting this statement and the parallels described I hear you ask?
There are so many examples and so much evidence it is difficult to know where to start. So I will exemplify services that affect my life personally.
Let’s start with the music industry.
Spotify - Here’s how Spotify describes itself.
“Think of Spotify as your new music collection. Your library. Only this time your collection is vast: millions of tracks and counting. Spotify comes in all shapes and sizes, available for your PC, Mac, home audio system and mobile phone. Wherever you go, your music follows you. And because the music plays live, there’s no need to wait for downloads and no big dent in your hard drive.”
The business model implications.
You don’t have to buy music from iTunes anymore. That business model is on the way out. Indeed you don’t have to buy music any longer full stop. Music just sits out in the cloud digitally and you access it on your desktop when you need it. Algorithms recognize what you like to listen to and introduce you to music styles and new artists that it sees you enjoy along with their biographies and complete discography. You just click and listen. Music is now completely digital, distributed to your desk top in real time!
Cost - free.
If you want your music advertisement free as opposed to an ad every second track and are prepared to pay US$12 per month, you can listen ad free.
The accounting industry
Freshbooks – Cloud Accounting For Small Business
“One busy afternoon in 2003, Mike (the Founder) accidentally saved over an invoice and lost his work. Then and there the inspiration for FreshBooks was born; there had to be a better way to bill clients. Eight years later and over five million users strong, FreshBooks has grown to be the leader in cloud accounting for small businesses around the world.”
Business model implications
The introduction this year by Freshbooks of an iPhone and iPad app allows you to have immediate access to your entire set of accounts anywhere any time. Your accounts are immediately updated in the cloud after each transaction and travel with you at all times. You can invoice on the spot electronically and receive payment directly into your bank account via a link in your invoice instantly. End of year, you send a link to your set of accounts on Freshbooks to fully qualified and Australian accredited accounting specialists in India who complete and file your tax return for you.
Accounting is now fully digital, mobile and accessible in real time from your desk.
Cost is US$19.00 per month
The Education Industry
At the beginning of October this year, Stanford University announced a 10 week on-line crash course in creativity. Stanford University Professor Tina Seelig in the preamble to the course outlined its philosophy and content.
“ a set of tools and conditions that we each control - our Innovation Engine - that allows us to increase our own creativity and that of our teams and organizations. (I will show you)...that just as the scientific method demystifies the process of discovery, there is a formal process for unlocking the pathway to invention.”
In the space of 4 weeks from the announcement of the course, 36,000 – that is right, 36,000 - enrolled globally. Even after the course had commenced enrollments grew. Thye now stand 4 weeks into the course at over 40,000. There are 7200 groups of 5 working globally on developing their knowledge and understanding of organizational creativity and creative skills. From my observation, this course is of fair level entry standard and if you complete it, you will have a good basic understanding of creativity and its application in the work place. At the end of the 10 weeks, you receive a certificate of completion from Stanford University.
Business Model Implication.
It is impossible to know what the full implications of this global education phenomenon will be.
However, we are witnessing the birth of free mass mobile digital education that has real meaning and application in markets and personal lives globally. Imagine being able to say in an emerging economy you have completed a Stanford University course in creativity!!
Cost – free....
The flow on affects of these savings is what is causing the tsunami. These industries and their traditional markets are being washed away as we sleep.
The big question is how will all those hundreds of thousands of people previously engaged in the music, accounting and education industries be gainfully employed as the business model tsunami driven by the technology eruption comes ashore.
The realty is capital will flow were it is perceived growth opportunities are in the future. The difficulty is the technology tsunami is still on its path of destruction and has not yet gathered full pace.
Innovation is the only answer to its power!
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