Public service announcement: you’re never done innovating
Years ago I was bemoaning to a friend about how I had missed the opportunity to invest in BlackBerry maker Research in Motion (RIM). They were on top of the world. Now app developers are leaving them, and everyone believes they are dead.
This shouldn’t be shocking, especially to those people that study and specialize in innovation and disruption. It happens all the time, in every industry. And yet… it still is a little shocking. Even for disciples of books like How the Might Fall and Innovator’s Dilemma that show scientifically why it happens, we’re always at least a little surprised by the failures of established companies. Think about what is happening to some big names and big industries:
- Microsoft dominated the personal computer years of the 90′s, began to struggle with the emergence of the Internet and is now fighting to be the third wheel of the mobile explosion. Apple on the other hand was left in a ditch and is now the most valuable technology company in the world.
- Google was once considered unbeatable, but their stock is down 22% this year, they are facing an antitrust investigation, there is increased competition in their core search market, and alternatives to full-web search (like Do@) are gaining user interest.
- MySpace was once the biggest social network but they’ve become an also-ran to Facebook, and News Corp can barely give MySpace away.
- Blockbuster followed the growth of DVD-by-mail provider Netflix. They even decided to give Netflix a run for their money in 2004 – after Netflix had hit $500 million in annual revenues. Too little too late.
- 8-year-old blogging powerhouse WordPress, a dominant household name in self-publishing, was just passed by 4-year-old upstart Tumblr, which now hosts more blogs than the incumbent.
- Any list like this is required to mention the newspaper industry, who once controlled local news delivery and paid for it by controlling local print advertising and classifieds. Now it controls nothing.
So with history as our guide, can we make the correct predictions for two newer disruptive startups: Airbnb and Getaround? Airbnb allows anyone to rent out their home, or apartment, or vacation home, or spare bedroom, or even an air mattress (hence the name). Similarly, Getaround lets anyone rent out their car. Most people would say that these two businesses pose no threat to the incumbent hotels, or vacation rental booking companies, or car rental companies. Why? Because they are just too different from how today’s businesses work. We go to a Marriott, or rent a car from Alamo. We don’t stay in a stranger’s extra room, or rent a 2002 Honda from some guy named Phil. Investors had the same reaction, outright dismissing Airbnb a few years ago when it was starting out, only to now come back hat in hand trying to invest at their new $1 billion valuation.
The point here is that it’s called “disruption” for a reason – it is different from what we’re used to, and because almost everyone resists change they are predisposed to just dismiss these ideas. Today these businesses don’t seem a threat. (Then ten years from now, with the benefit of hindsight we’ll surely be saying “I always knew they’d be successful!”)
It is hard for us to try and imagine a future that we can’t experience today. As humans we look for short-term satisfaction – trying to picture what 10 years from now will be like is hard for us to do because we won’t know if we’re right for 10 more years, which isn’t very satisfying to us today. But you need to spend at least part of your day thinking about what the big picture is for your industry, and what the future will bring. It won’t guarantee that you’ll lead your company past the disruptors, but it will at least make you more open to ideas that everyone else is dismissing today.