Tuesday, August 25, 2009

What will be disrupted next?

Here's a rather interesting question I like to pose. The question is: what industry or business will be disrupted next? There are a couple of leading indicators that I think bear watching.

The first is what I call the Branson effect. Like him or not, Richard Branson is trying to change the way we do business, and has been fairly successful at changing the travel industry, airline industry and bridal industry, and has just established a toehold in the cellular phone industry. Now, it appears Virgin has set it's sights on the financial services industry. Branson seems to target industries that are rigid, locked into bloody competition with little comparative differentiation. He brings in a different customer experience and, as far as I can tell, some magic pixy dust. Want to know which industries may be disrupted or at least feel a significant pressure to change? Watch what Richard Branson and Virgin do. His organization does not appear to care about industry verticals or expertise - he thinks he can hire that.

Second, watch the societal and demographic trends. Lately I've been reading a lot about people who are gardening in their back yards, or on rooftops in cities. This is the immediate result of the costs of food and the growing organic movement - eating locally grown, organic food. But it eventually could change the way we think about farming and food consumption. Can we rely on an ever dwindling fragment of our population to grow our food in the hinterlands when the rest of us migrate to the coasts and big cities? Also, bet your life there will be a lot of new products and services for the retiring baby boom population. There probably aren't enough golf courses, casinos and adventure travel companies to keep the retirees busy. These individuals won't sit at home watching TV. They will be involved in their community and in travel and leisure. Look for new products, services and solutions for people over 65 to continue their favorite activities at a very high level of competence.

Third, keep an eye on the management of personal information. Think the "Data cloud" for corporate America is interesting, given all the data that every company generates? Think about how much content and data any specific individual creates, uses and manages on a given day. Music, video, chat streams, photos and more. Individually we need methods to capture and manage our own proprietary content and protect it, share it and distribute it. While we have a number of tools based on the medium (Twitter for chat, Skype for Voice, Flickr for photos, etc) there is no one organizing medium, product or service to help capture, manage, store, recall and publish all of our personal content. There's a huge opportunity here, as we migrate away from large monolithic publishing houses like TV Networks or book publishers and each of us become our own publishers.

What industries can you ignore? Any industry that Congress has in its legislative sights. We can argue about the costs of health care, but a 1000 page bill clamps a significant number of limits on innovation in health care and insurance. Likewise with the automobile industry in the US. Even under the cover of federal ownership, GM and Chrysler lag behind the foreign manufacturers in terms of innovation. This goes for financial services as well. Many of the new rules in financial services, like stricter rules on over limit fees or interest rates will have the perverse result of limiting credit that people can receive and costing those of us with good credit even more. In these cases, watch for disruptive innovation on the margin, as nimble players carve up the health care and financial services spaces the way Toyota and Honda carved up the auto market in the US in the 70s and 80s.

These are just a few suggestions to watch for to see the next disruptions in action. I'd be interested in your thoughts. What are you watching? What disruptions do you expect?
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posted by Jeffrey Phillips at 6:00 AM


Anonymous Steve Todd said...

You are right on in your prediction about the importance of personal information management. There is a huge amount of innovation about to happen in that field. My company (EMC) just held an innovation lecture on the topic for anyone that wishes to here more: http://tinyurl.com/n2hgvz

7:46 AM  
Blogger Dixie Darr said...

I vote for higher education, which is simultaneously more needed and less affordable than ever. The infrastructure for a brand new model of lifelong learning is already being built by individuals and organizations on the fringes of the industry.

6:11 AM  
Blogger Unknown said...

You mention the lack of innovation by US car manufacturers. Ten years ago I was shocked by the build and design quality of an American car I hired in Boston. It wasn't even made in the US, it was made in Canada. Last year I again hired a car in Boston. The design had gone backwards closer to a 1950s truck than a family saloon. It had a blind spot at the front where a Volvo Estate managed to hide until my wife shouted a warning that I was turning into it. The Chevy HHR almost made it onto British roads, it was advertised here shortly after my return from the US but thankfully nobody seems inclined to buy it with its 10" front door pillars.
I told my American friends it would be better if the government let the whole US car industry go bust. Then they wouldn't be forced to buy the Ford Panhandler or the GM Bumsrush in a misplaced fit of patriotic ferver/fear. A new innovative car industry would have arisen but now it won't because the US government fell for the line Ford and GM used to peddle in Europe, "if you don't give us a handout we will die on your doorstep and it will be your fault!" In the UK we are begining to take Ayn Rand's warnings about beggers seriously

6:13 AM  
Blogger Renee Hopkins said...

I wouldn't rule out healthcare. In that 1000-page bill there will be all kinds of possible disruptions by people smart enough to wade in there, figure out what infrastructure that legislation makes possible, and come up with a business model that capitalizes on it. :)

8:01 AM  
Anonymous Anonymous said...

Having worked in the automotive industry, I think their issues are entirely to do with them getting used to being too comfortable and very little to do with government regulation. No one I talked to EVER said we want to do X and it woudl be great for everyone but the government won't let us. It was always "that will cost more" or "that isn't our style" or "we've never done that" or "that is not what the VP wants".

Don't confuse corporate inertia and arrogance with government interference.

10:42 AM  
Blogger Chief Mind Unzipper said...

I agree totally with you that the financial services is due foor disruption. Richard Branson will be the right person to do it as he has the resources and track record. The present financial system is in a total mess and it's time for a total disruption and cleansing. I hope that besides Branson, others will the creativity and resources will do something about it.

Dr.YKK (Yew Kam Keong)

5:45 PM  
Anonymous Anonymous said...

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2:02 AM  
Anonymous Graham Horton said...

the lancet suggests it might be psychotherapy:http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2809%2961415-X/fulltext


6:15 AM  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

3:09 AM  
Anonymous Tor said...

Agree, there is often a general confusion when considering what are the technologies that enable disruption vs. what are the industry that exploit change by business model design.

I'd put my pennies on open source and "the cloud" as continuous and infrastructural drivers for disrupting industries. As seen in "Class" and "Prescription" by Christensen. However, while Education and Healthcare are governmental sectors in many countries, I wonder whether these are seemingly disruptive.

Considering that governments are adopting open source software by policy, my guess is that disruption will come to fore in governmental sectors.

1:08 AM  
Blogger Erik de Bruijn said...

On thingiverse lot's of people, including myself are designing their own products and sharing them. We also share designs and knowhow for creating tools that produce these products for us. Now, my fabricator, or 3D printer, has printed about half the parts to assemble another one (updated version)!
I guess applying open source principles in physical design and bypassing manufacturers is disruptive...
More info, read my blog


1:55 AM  
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7:10 PM  

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