We have been hearing a lot about disruption lately, Business Insider recently wrote about the affect of AirBnB on a major hotel chain in United States of America. Deloitte wrote a paper as part of it’s Building the Lucky Country series on digital disruption and identified 13 industries facing disruption in Australia. Uber are the poster boys for changing the way the taxi industry operates and it’s not all about the technical breakthrough but more about answering the needs of the consumer as outlined in this article from the Sydney Morning Herald.
What does it really mean? Should businesses be lobbying for new laws to protect them? Taxi companies and unions are calling for changes here in Australia. The NSW Government has made it illegal for the public to provide the Uber service. Hotel industry is calling for AirBnB users to pay more taxes and declare earnings from their guests (many do and manage their property as well or better than hotel equivalents.)
The main benefit Uber has is that users know where their driver is and how long they will be, the user gets a picture of them and knows the make, model and colour of the car. The car is clean and users can rate the drive and driver for other users. It’s not the service of a driver taking you from A to B – it the way the service is delivered, it’s reliability and how the user interacts with the service. It’s only here at the pointy end that the App becomes a facilitator and not the driver of the disruption.
The same is true of AirBnB, it created a way for anyone with a spare mattress or room to answer a need for accommodation. Users can chat with the owner (host) and they with them. Users stay in a house, home, apartment, spare room or flat out the back, not a tiny four walled airless room with hard pillows and nowhere to sit and relax. User curation within the networked community means that the AirBnB offer is improved over the hotel experience. The inventory that, while not owned by AirBnB, is larger than any hotel chain, it’s diverse and caters to multiple consumer needs and budgets, the community provides assurance on quality and expectations while the brand of AirBnB provides the solid, safe back bone to the experience. The image above clearly show that AirBnB value the accommodation providers and the variation they offer.
Disruption is not about designing a new App or digital tool, instead it is about changing the focus of goods or services to meet the needs of the consumer. It’s about looking at current delivery or services, identifying the faults and re-thinking the whole shebang. Digital tools are simply the solution that seems to work the fastest, easiest and they certainly are the most responsive to change.
Electric cars like Tesla wouldn’t be around if it wasn’t for a demand from consumers. On demand or streaming services for television won’t be so popular if it wasn’t for the demand from consumers. Old models need to adapt or die, and why they adapt they need to answer the needs of the consumer – both the current one and the new ones they want to attract.
Should your business try to disrupt? I would suggest that business, and in particular small business, take a look at what you are currently doing and ask yourself “is this really the best way to serve the needs of my consumer?” Ask your customers what they wish could be done better. Then look to the best solution to deliver that change.
Example: A computer repair company that changes it’s offering to include cloud solutions, helping customers move away from desktop based software to cloud alternatives opens new opportunities and creates locked-in contracts to manage software packages.
Example: A coffee shop that attaches iPad to tables for customers to order from the table, reducing stress in busy times and allowing diners to customise orders and reduce wait times or get mixed up in the takeaway customer line.
What examples do you have? What disruption have you seen in your business and what did you or are you doing about it?
Platform Thinking has a great article on AirBnB
The Guardian‘s Tom Hogkinson thinks we should be more creative, less disruptive
Deloitte’s Building the Lucky Country series is well worth a read – Part 5 has just been released.
Feature image from the home page of AirBnB