COVID has provoked massive adoption of remote working and digital customer solutions. Many CxO have tried fruitlessly for years for their companies to dump paper and move from in-person meetings to conference calls and all of a sudden the impossible happened in months.
Many digital teams are sprinting to optimise existing processes. They move to cloud, mobile app and ecommerce. AI is used to predict what customers want and to recommend the right product to cross-sell. Road maps contain drone and robot taxi delivery, crypto currency payments,…
However, if Blockbuster would have used a mobile app, a cloud backend, AI, drone delivery and bitcoin; they would still have gone bankrupt. Netflix changed the business from generating $£€5/movie to $£€0.1/movie. All you can watch for 4 family members for $£€10/month. Not a single Blockbuster spreadsheet would have been able to create a credible business case that could convince the board with these revenue numbers. This is because Blockbuster’s modelling was 10M customers x 4 movies/month x $£€5/movie = $£€1.2B/year. They never understood that digital allows for 500M customers x $£€10/month = $£€60B/year.
In Digital you can make what used to be expensive, very cheap. You do not have to build thousands of hotels, buy tens of thousands of taxis, hire hundreds of thousands of sales and support people, have millions of terminals,…. Exponential organisations can grow exponentially without owning anything. Digital platforms can contain all products in the world without occupying any space, e.g. Kindle Book Store. Disruptive technologies like smart contracts, AI, cloud, gene editing, IoT, mobile,… allow for complete industries to be made irrelevant.
So before you start your next sprint and look what is next on the backlog, take a minute to evaluate if you are making a digital Blockbuster or if you are building the next exponential organisation with a platform business enabled by disruptive technology.
Maarten Ectors is a strategic innovator who exchanged working with the who is who of high tech to apply disruptive technology and business innovation from the inside in the top UK insurance and investment management company. In less than a year they won the best claim technology solution of the year award and that is just the start…
