How un-sexy things like Supply Chains and Infrastructure will rock your world
And where tech startups should be looking
We all know Uber is sexy.
AirBnB is sexy, as well as countless delivery apps that let us order food with one swipe. They represent innovation these days.
But in all our talks about disruption, we forget the industries that are slowest and most resistant to change. Ones that aren’t directly related to the end consumer, but dictate everything about supply and operations.
What happens when shop managers can arrange warehousing and inventory checks with a single swipe on the screen?
When shipping containers can automatically pass customs and confirm bills of lading because of clever use of sensors?
When trucks go electric or even driverless, and the need for countless refueling stops suddenly ends?
Let’s start with this last question:
There are around 110,000 gas stations in the United States alone. This number is going down every year as urbanization sets in. I’m not taking Europe or other developed countries into account, this is just the US.
Now think about all the mini-economies around these gas stations.
Some small towns have their entire economies built around travelers on state highways — truckers and the like spending money in there. We’re talking niches where thousands of people built businesses in and invested into.
They’ll be gone in our generation.
Replaced by ability to sleep in the car/truck while it gets you to where you need to be.
Ability to watch movies, work, or even exercise in your custom-built gym-car. Digital innovation and software will change the physical world (roads and landscapes) forever.
Infrastructure is the slowest to change, but it’s never reversed.
Why stop with the gas stations?
Uber already provides cars on demand. Wouldn’t it be cheaper to have a massive shared pool of cars sitting outside the city, scheduled to pick you up and drop you off at set intervals, then go back to base? We can already do that, and it will only get easier over time.
You thought gas stations are a big deal? Parking is a $100 Billion industry.
Lots of folks already prefer renting to buying, they’ll be on board with getting rid of it.
We never went back to narrow horse & buggy roads after the invention of cars.
By the same logic, we’re unlikely to have a reason to go back to personal or shared parking lots once the demand drops.
Those aren’t just my random musings.
I was reading the latest Deloitte review on Industry 4.0 earlier, and they’re talking about the potential infrastructure changes of self-driving cars. Evolution of mobility technology means our cities will look very different a few decades from now.
Driverless investments already surpassed 1,6 Billion at the beginning of this year. The industry is growing.
Here is how Deloitte puts it on page 97:
They're also talking about how Supply Chain executives are located out of the decision-making loop when it comes to digital innovation.
Corporate folks with highest exposure to logistics are less involved in the conversation than everyone else.
This means people have no idea what’s coming.
They’re only starting to wake up to possibilities.
If you thought big corporations were on the bleeding edge of everything, think again. According to Deloitte, half of the executives are only planning to introduce sensors, robotics, and robotic automation.
That is, technology we already have — not some unseen Wunderwaffe research.
Only 15% of these executives believe in the need to fundamentally change the skillsets in their workplace.
Yet the majority (90+%) are musing about digital innovation being one of the highest things on the priority list.
The concept of “Digital innovation” is seen in terms of “improving business processes” and “efficiency”. Not turning your entire operations on their head, which is what this tech actually does. You cannot keep the traditional “9/5 clock in-clock out” job mentality along with continually learning new software stacks and introducing new approaches.
Welcome to the Agile vs Waterfall problem of tech adoption.
Read Scott Brinker’s great post about this.
This applies to “sexy” industries today.
Software Development, emerging tech, and, thanks to folks like Scott, Marketing are at the forefront of digital innovation.
Think about what happens if we start applying these models to less sexy fields like Supply Chain management, though. When we start rapidly experimenting with various fleet management technologies, document automation, and so on.
Logistics and infrastructure are the most rooted in the physical world. Once we start greatly simplifying these processes, the prices of goods & services will plummet.
- Container shipping can be planned on one dashboard, without weeks of planning with a freight forwarder or line agent.
- Air shipments automatically picked up and managed by a logistics equivalent of Skyscanner.
- Billions of dollars in customs stops going to brokers and begin trickling into regulator-approved software solutions.
These are all things that are already possible. I’m not making up anything new.
We only need to apply the “sexy” consumer technologies to more traditional business-to-business managerial positions. Some are ahead of others here, but large, bureaucratized organizations in general are behind the curve.
They prefer to “optimize” processes instead of going as far as eliminating them entirely.
This is why lean startups are ahead when push comes to shove.
Most have already adopted Agile management, their workforces already consist of people trained to make lots of tiny experiments instead of a few big bets.
Look at this middle phrase here. “Lack of internal alignment about which strategies to follow”
This is a euphemism for “There are too many possibilities and we feel PARALYZED”
Dear startup founders, you (hopefully) don’t have this problem. You can rapidly adapt and experiment without the lag and latency issues that large organizations have. Use this to your advantage.
Back to where we started this exploration
Go to the un-sexy fields and help make them sexy. These organizations Deloitte was talking to? They’re your prime market, right there. Starved for clarity and adaptation capabilities in their weakest areas.
Which usually happen to be connected to logistics, hiring, and digital distribution. Think about how you can adapt your products and value propositions to help them.
The massive demand in these markets will only keep growing worldwide. This goes out to both founders and investors:
Don’t chase sexy consumer tech and “mass adoption”, whatever that means.
Instead, see if you can facilitate change where it’s least explored. There are b2b niches out there that have never even seen what a few software devs can do from their basement.
Give them a taste of it, will ya?
Alex Partin will be here if you want to scheme about the right approach to these markets.
