The Importance of Embracing New Technology. Part Three: Examples From the Past
As developments over the past few years have shown, we are in a time of unprecedented technological growth which shows no signs of slowing down. This has caused upset and disruption on a huge scale as the impact of new, cutting-edge technology is beginning to be seen now in every industry. As with any technological revolution, in order to avoid being made obsolete, existing companies will need to ensure they take advantage of these new opportunities to improve their business, products and services. If they don’t, newer and more consumer friendly options will be chosen by the customer.
In this series of blogs, we will examine the impact that the introduction of a new technology has and the changes that are occurring with the arrival of blockchain and other disruptive technologies. As part of this investigation, the importance and the benefits of implementing new technology solutions will be discussed, along with the dangers of ignoring them. As well as this, the articles will look at a previous example of a disruptive new technology — the internet — and how it changed industries, along with the possible lessons that can be learned and applied to this new technological revolution. Additionally, some of the new technologies, and how industries can best prepare to adapt to their upcoming impact, will be discussed. Along the way, we’ll also explain how Blockpass fits into all of this.
For this third instalment we look at how and why an industry was transformed with the adoption of the internet, which fundamentally changed the way the industry worked, and how understanding of this historical example can help us prepare for current and future transformation.
Find the first part of the blog — The Importance of Embracing New Technology. Part One: Introduction, here.
Find the second part of the blog — The Importance of Embracing New Technology. Part Two: The Benefits and Dangers of Innovation, here.
•Case Study — The transformation of the gambling industry
Technological revolutions affect all industries in some regard and there are both success stories and failures that come out of the event. By studying some of these we can extrapolate salient points that all industries will undergo during the disruption from a new technology. When the last technological revolution — the internet — came, gambling was one industry which was disrupted to a high degree, and examples of how companies succeeded and failed in adapting to the then-new technology can clearly be seen in the history of iGaming.
With the advent of the internet, a whole new area was opened up to industries: the digital world. When the internet first came to general use, companies began to invest in websites to offer their services online. Initially, many companies only looked to offer essentially the same opportunities that traditional stores were offering, but with the benefit of being accessible from personal computers. Even though this may have seemed like the natural progression at the time, it missed out on the huge new possibilities that were on offer.
One example of a company leveraging the internet successfully can be seen in the area of online gambling with Bet365. Launched in March of 2001, Bet365 was, at the time, a new company which had the advantage of not being constrained by legacy technology that the incumbent competition was using. The company built the technology they needed in-house to capitalise on new developments that were being made. In doing this, Bet365 was able to answer a consumer desire they had identified for more immediate betting opportunities and a wider range of choice in betting options than were being offered by existing companies. This continued as the company expanded with versions being offered in different languages and using various currencies. When trying to catch up, many competitors initially experienced difficulties in building their own tech stacks and wasted money, eventually buying in outside solutions in order to remain competitive. The end result of these events is that Bet365 is now one of the dominant players in the gambling industry.
Now that new technology is once again coming in with the potential to revolutionise industries, it remains to be seen if start-ups across industries, unrestrained by legacy technology, will employ a similar approach and quickly carve out a place in the market.
On the other hand, an example of where some gaming companies made mistakes in attempting to adapt to the internet occurred when they attempted to implement online solutions just to to ‘jump on the bandwagon’ without identifying any real need or having proper focus.
This can be seen in the development of Bonza Gaming. Plumbee, a company that had created the hugely popular Mirrorball Slots app, underwent a Joint Venture with Sportingbet to capitalise on the much-hyped social-gambling scene but unfortunately the endeavour went ‘down under’ with the launch of Bonza Gaming. Jumping into the social-gambling sector, and investing significant funds into the company, there was a lack of focus in what the goal was, as well as a failure to anticipate what the consumer needed or wanted. Launching at the start of 2013, Bonza Slots was the initial offering; as of April 2015, Bonza Gaming’s social gambling applications Bonza Slots and Bonza Casino were closed.
Conversely, competitor King.com enjoyed much greater success with its games. With a focus on social gaming rather than gambling, and a ‘freemium’ model, King developed highly addictive mobile games that also provided a social experience. It developed over 200 titles, and offered games worldwide including Candy Crush, Farm Heroes, Pet Rescue and Bubble Witch. Compared to Bonza Gaming, they had identified the consumer’s desires and catered for them.
This perfectly highlights the issue that happens when a start-up or company decides to use new technology for new technology’s sake, rather than to solve an existing issue or to provide a better service.
One further pitfall of technological revolution that the gambling industry can highlight well is when a company comes to the market to soon, resulting in it needing too many resources to keep running until the consumer market catches up.
mFuse in an excellent example of where this has occurred in the past. An early entrant to the market with mobile technology, the mFuse NOVO product was used to provide a wide range of mobile services including casino games, skill games, poker, bingo and sports betting. The company also created its own range of mobile casino games. However, its entry to the market came too soon and mFuse required too much in funding to maintain as consumer adoption caught up to the level that was required.
Another gambling industry example of this can be seen in William Hill Labs’ development. A lack of focus on consumer need, adoption timelines and other factors led to the development of, and investment in, solutions that were not suitable for use at the time. A balance between innovative new technology and producing marketable products needed to be reached, which was not achieved.
When a new technology comes along, proper planning on when to invest in a technology in order to deliver a workable solution to a ready audience is required. A focus on consumer need, adoption timelines and producing marketable products or services needs to be implement a new technology successfully.
A final aspect to consider with the introduction of a new technology such as the internet is how the market is opened up to increased competition. New companies can establish a business to leverage new opportunities, often with the associated efficiency savings that come with a technological revolution.
The effect of the internet in opening the doors to many more companies that wanted to start in the gambling business cannot be understated. No longer did start-ups need to have costly physical premises and a world-wide-web gave a huge potential customer base. Procedures previously undertaken by staff could be carried out faster, cheaper and more efficiently, and related processes such as payments could likewise be made from the comfort of the consumer’s own home. The barriers to entry for the gambling industry, as in many other industries, dropped dramatically, and more companies were able to carve out a domain. It also provided the opportunity for websites to become ‘one-stop-shots’ for punters, offering more options for bets than were previously available in any physical outlet. Opening the door to so many start-ups and brands also saw many small businesses fail; however, for many, the cost of failure was not too high as the low costs to attempt it could be recovered from.
Betfair is a company, like Bet365, that did not exist twenty years ago. Rising from nothing, it became the largest online betting exchange in the world, eventually merging with Paddy Power for even greater results. Some of the most successful players in the gambling business only came about through possibilities enabled by the internet and its invention has led to better opportunities and profits for all operators who made it through the transition from disruptive new technology to embedded technology.
With a new technology, companies should be ready to accept that the entire way they do business may well change, and that if they don’t identify this possibility and react to it soon enough, other companies will come in and do it instead. Brand loyalty and familiarity will take a company to a point but it has its limits.
Since the application of the internet to the gambling industry and its subsequent widespread adoption, one key overarching change that can be seen is the general acceptance of gambling. Prior to this period, gambling often had negative connotations associated with it, but it has become more mainstream and has increasingly become an accepted and normal part of life. No longer a seedy business, sports betting is far more commonplace and, enabled by the internet, gambling on the whole is more accessible and more social. Betting has now become an standard form of entertainment.
A consumer trend towards more immediate gratification — instant pay-outs and rewards — was also enabled with the advent of the internet and companies leveraging online gambling. In the modern world, customers are increasingly expecting to get what they want without any delay; patience for purchases, deliveries and services is lower than it has ever been before so any method of speeding up payments or providing faster options are highly desirable.
With an initial surge of growth as new opportunities were presented, the expansion of the gambling industry has levelled off as it hit a ceiling. Once market saturation is attained, a new focus or direction is needed to draw new players in from different areas. Currently, as the target audiences have been reached, many gambling companies are engaged in a competition with each other to draw customers from their competitors. Each operator looks to add new value — either through free bonuses, different themed games or other incentives — to differentiate themselves from other options. This is costly and inefficient and will reach a point where it no longer makes money. This puts the focus on the potential for new technology to add real value that goes above what is currently being offered.
Another area to be impacted when the internet came was regulation. In many countries, the knee-jerk reaction was that new technology was a threat and was something to be feared. This is perhaps a natural reaction to the unknown and in some cases can turn out to be justified but it has the unfortunate side-effect of stifling innovation and slowing development. This same reaction can be seen with both newer technology that is coming through and past technologies that have become commonplace.
On the other hand, in other places, such as in the UK, technology was more accepted and regulation started off lightly. An open approach, leading to the creation of a framework for safety, has enabled gambling technology to thrive in the UK. Many regulators recognise that ultimately consumer behaviour will not be altered and restrictions will simply cause black markets or work-arounds to spring up. Whilst some countries are very strict on regulation, gambling operators in countries such as the UK enjoyed the benefits of a more ‘hands-off’ approach to make rapid developments with possibilities the internet enabled.
It is safe to say that the internet revolutionised betting — providing an excellent solution to what eventually comes down to a financial transaction; however, other opportunities may arise with new technology that have the same revolutionary potential.
Looking at the change that the gambling industry went through there are a number of key learning points that can be drawn and applied to industries generally when a new technology comes:
-A more widespread and accessible market leads to increased acceptance and adoption.
-Reducing barriers to entry and increasing competition can cause significant and rapid growth with the potential for failures, although lower barriers to entry means that failure is more forgiving.
-Ways of providing more instant gratification to consumers will be welcomed by customers and accelerate adoption.
-New technologies have the potential to set a company apart from its competition, but require thorough planning and research to be implemented in a positive manner.
-Simply creating things with a promising new technology does not guarantee success. Customer adoption must be at the forefront of development.
-The potential of new technology reaches beyond just making processes more efficient: amongst other things, finding new markets and opportunities are key to successfully development.
-Companies located in countries with a light approach to regulation have the best opportunity to quickly leverage new developments for huge gains.
•How does Blockpass fit into this?
Blockpass is utilising blockchain technology to solve issues that have been identified in the regulation and compliance landscape. Two key benefits it looks to solve in the immediate future are the time consuming nature of KYC and lack of privacy and security of consumer data in KYC procedures. In doing this, it is not only putting the needs and wants of the user (for security, privacy and convenience) first, but also satisfying the desire for faster processes and more instant results that are so important in society today. Blockpass has come about from an understanding that a simpler, faster, more efficient KYC process is needed for companies and customers, particularly in the blockchain world.
By providing a global, reusable KYC solution, Blockpass is also reducing the barriers to entry further for new companies that need to comply with KYC regulations as Blockpass provides a cheaper alternative to traditional verification means. Partnering with Blockpass will also provide companies with access to an increasingly large pool of pre-verified users which can then be on-boarded quickly and simply, helping new companies get up-and-running that much more quickly, or allowing existing companies to expand at a greater rate. In addition, it opens up a wider user-base to companies which otherwise may have had to concentrate on particular geographical areas — an important capability as the world becomes more decentralised and connected.
Finally, as mentioned in part two of this series, being a start-up that is looking to partner with both new and established companies, partnership with Blockpass is a way for other companies to benefit from the benefits of this new technology without the time and costs it takes to develop solutions in-house, and without risk.
Next week, in the fourth part of this series, we will be looking at how to best adapt a business to the introduction of a new technology, along with some of the key developments that are taking place at the moment: blockchain, AI and IoT. Providing new possibilities for companies, we will identify some of the key benefits they bring and how they might evolve in the near future.