The Digital Disruption – don’t believe the hype
There is an image going round, another viral ‘meme’ on LinkedIn that is particularly annoying:
The slide came from a presentation at an IBM for Entrepreneurs event by Sandy Carter (@sandy_carter), who is IBM’s leading executive for start-ups.
Whilst there is no doubt that there is some disruption in those industries, those examples are profoundly misleading
Lets unpack this balderdash as a simple consumer:
Worlds largest taxi company owns no taxis.
Who cares who owns the taxis? When you get into a ‘taxi’ (private hire vehicle, Hackney carriage, horse and cart, rickshaw, tuktuk etc) do you really care about who owns the vehicle?
No, because you have a bunch of new things to worry about. The Uber driver probably has no real taxi driver training, and the background checks are a bit rubbish and there are a ton of incidents that arguably you would not experience if you use a proper licenced taxi. Also if you give a crap, that the driver is at least earning above the minimum wage
There is nothing disrupting about losing $1 Billion a year to compete in China, that is just not competing at all. I bet that takes the sting out of the cost of a black cab.
Uber has ‘disrupted’ the ‘getting a ride’ industry. For everyone else who actually * wants a taxi * that premium industry will be fine. And that industry plays by the rules.
Largest accommodation provider (Airbnb) owns no real estate
Airbnb is not neither hotel, motel or holiday inn. Neither is it a bed and breakfast. Which industry is it actually disrupting? People stay in hotels for a multitude of needs, only one of which Airbnb takes care of, a room to sleep in. Zero customer service and you cant get a JD and Coke and a pack of 20 Marlboro lights sent to your room at 4am.
Again, as a visitor, you have a whole new set of things to worry about, that you dont get when you stay at a cheap hotel here are a bunch of other horror stories, or as a host, is my place going to get trashed in a drug induced orgy? which does not happen at a Premier Inn.
With no centralised local customer support and not a great deal of accountability, and no continental breakfast (I favour a nice sausage and cheese cob roll and a litre of strong coffee BTW) is just a cheap and easy way to stay somewhere. How is this really disrupting the industry?
Largest communications companies (Skype, WhatsApp, Facebook Messenger, Viber) own no infrastructure
Again who cares? Lets unpack this one:
Skype is rubbish, I have never had any decent quality, and always get dropped calls. I use FaceTime, and the humble telephone. None of these services are available without wireless internet, which is provided by the big communications companies who are supposed to be disrupted. WhatsApp does not work at all if you are out of 3G signal, which in the Cotswolds happens quite a bit. BT are doing great, the cable companies are fine.
World’s most valuable retailer (Alibaba) has no inventory
I dont live in China. I get my online crap from Amazon (who also don’t treat their workers very well. Having inventory has not hurt Amazon in any way, in fact Amazon are opening physical stores because irony.
You only have to look at the amount of fake goods on Alibaba, cheap Chinese knockoffs and wanton disragard for Intellectual Property (Hello Chinarello!) and other tat, to see a pattern here, all these ‘digital disruption’ are offering a cheaper, inferior service democratised by mobile apps and technology. They take the core service, fetishise it with minimal UX and apply big data and you get exactly what you want, but at a lower cost to yourself and society. I really don’t see John Lewis having an issue with this. Alibaba is not disrupting retailers. They are already the most valuable retailer so who are they disrupting?
Most popular media owner (Facebook) creates no content
Facebook is not a media owner, it is a social network, which users publish photos, links and other content to make their virtual life seem better than their actual life. Am sure Jean Baudrillard would regard Facebook or Twitter as the perfect example a completely imagined or ‘hyper’ reality which we percieve more important than reality.
Here comes the rub — most of Facebook has a quality control issue. Just like all the other disruptors. Thats why you pay money for actual media, an episode of Greys Anatomy or a copy of Monocle, whereas a video of a cat playing the piano is of course free.
The fastest-growing banks actually have no money
Would you put your money, property equity and investments in a bank that * actually * has no money? I don’t see any disruption in banking, just some startups like Mondo having a flutter.
What industry are Mondo actually disrupting? A current account with a mobile app does not a bank make. You need an iPhone for a start, and thats not very inclusive when 52% of people in the UK have Android (eurgh)
Start up banks dont have the scale required by millions of personal or business customers, nor the facilities that people still need to do some of their their bigger day to day banking, and they don’t offer loans, big overdrafts or mortgages, the reason you have a big UK retail bank take care of your cheddar is if something goes wrong you have a variety of ways to virtually and physically get customer support.
The world’s largest movie house (Netflix) owns no cinemas
Hold on, this is getting a bit thin. Netflix is not a movie house. Netflix is a content provider, and in the UK at least, does not have any films that you would normally go to the cinema to see, and apart for the astonishingly brilliant House of Cards (available of all good torrent sites), Netflix is not disrupting the cinema business. The only thing Netflix is hurting is everyones bandwidth, but I digress…
Neither is Netflix disrupting the television business, in the UK, BBC iPlayer accounts for more than half of all web traffic for streaming TV. iPlayer quality is much higher and in a lot of cases Netflix traffic can be quite slow
Has Sky seen a drop in customers? Nope They put their prices up because premium.
Netflix is giving you some highly compressed, older, cheaper televisual content, and the ability to use the word ‘chill’ as a euphemism for having sexual intercourse
The largest software vendors don’t write the apps (Apple, Google, Facebook)
This is daft. Apple and Google write the software OS that the all the apps run on, they don’t need to write the apps, although both write excellent first party apps, good ones like iTunes and Gmail (heard of them?)
How is Facebook a software vendor? A software vendor is defined as a ‘commercial organization that acquires or develops software to sell to the end user'. THe only thing they are selling is your soul to marketers.
And that was number 8, I think they were trying to get to 10, but as the last few examples were really tenuous I like to think they quit there.
Digital Disruption is just another buzzword, markets change, technology democratises cheaper access to services, but the core stuff stays the same. People pay for quality. The biggest disruptors will be the existing companies that change their culture and offer the same services at a massive scale but with the premium customer service and other analogue variables that we humans hold dear.
The only companies to benefit from the hype of digital disruption are the startups that rely on massive investment, based upon their value, which is based upon their ability to disrupt an industry.
Sorry for the disruption.