Are You
Ready for the Great Compression?
The
days of the standalone anything--app, phone, watch, garage door opener-- are
surely numbered. Now's the time to figure out how your business is going to fit
into the next paradigm.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
Many
years ago, in a seminal TED talk about education and creativity, Sir Ken
Robinson described a conversation with his daughter in which he tried to
explain why he stubbornly chose to continue to wear a wristwatch. She pointed out
that his watch did nothing more than tell the time--a ubiquitous piece of info
in the digital world. In his meager defense, he reminded her, with little
apparent success, that his watch also told the date. She wasn't
swayed. And, in polling the audience that evening, he discovered that virtually
no one under the age of 25 was wearing a watch.
The
point is that the next several generations of digital natives--as opposed to those
of us who think of ourselves as digital immigrants-- will assume and take so
many things for granted because they will have grown up in a world where they
never knew otherwise. In the next few years, we will all come to expect our
devices, digital assistants and other tools and technologies to become more
powerful, better at anticipating our requirements, and robust and accessible
sources of answers and solutions (as opposed to choices or alternatives) across
the entire spectrum of our mental and physical needs and desires.
In an
"always-on" mobile world where multi-tasking is increasingly
mandatory (although not necessarily effective) dedicated, single-purpose
devices will inevitably come to seem inefficient, pathetically limited, and so
yesterday. As time and space become ever more precious, we're in a constant
struggle to make sure that the sources and magical things that we attach to (or
implant in) our bodies or feature prominently on our screens, absolutely
deliver the most "bang for the buck" in terms of utility,
productivity, efficiency and cost.
We
don't have any interest or time to hunt for the right remote or correct
controller, to learn a new app or behavior, or spend a moment more than
necessary in getting to where we need to be. We're in a features and
functionality arms race; the competitive bar continues to rise whether you're talking
about apps, watches, phones, fitness or health trackers, ear buds, etc. And, above all, we want
them to be as seamlessly integrated into our day-to-day existence as possible.
I want exactly what I want - when and wherever I want it - and ideally without
asking.
This
race is all about ease, access, convenience and "one-stop" shopping
and this is why the battle to be the primary operating system in the home is
heating up so quickly. Right now, we average more than eight digital devices in
our homes, but that's not remotely (so to speak) sustainable. You might think
you want an Alexa-enabled device in every room, but Amazon and Lennar Homes are
betting that you'll want the system built in, right along with the
plumbing and electrical.
This is
also why there's so much competition and confusion around mobile and in-store
payment systems. Why waste time extracting and swiping a credit card to pay for
anything? Look at what's going on in China with WeChat: more than 900 million
daily users essentially live their entire lives on the system and send about 38
billion messages a day. Cash is increasingly a thing of the past.
Comprehensive,
integrated solutions and a few dominant platforms (social, shopping, financial
and maybe health) are the way the whole world is headed. Stand-alone anything is
going to be increasingly difficult to sustain. If it wasn't already tough
enough to be in the hardware business, it's likely that things
are going to be getting a lot worse. One significant indicator of this trend is
Amazon killing
its branded DASH buttons. Millions of these simple, in-home reordering devices were sold
and installed. What could be easier than walking into your pantry and pressing
a couple of little Tide and Windex buttons stuck to the wall to order your
favorite cleaning products and have them appear hours later on your doorstep? Instead,
Amazon concluded that voice ordering by consumers through Alexa-enabled
products -- Alexa is increasingly being built into refrigerators, microwaves,
portals, etc.-- is going to be even more compelling, and far less costly from a
production and distribution standpoint. Thus, the wave of the future.
So, if
you are in an industry predicated upon a dedicated device, you need to be
thinking a lot about where your business is headed. You know what happened to
the fax machine. But now we're talking about plugs, cords and other add-on
accessories in a wireless world, along with Wi-Fi hotspots, E-Z Pass
transponders, garage door openers, etc. Smarts, as in software,
continues to trump steel; any device whose utility can be folded into another
platform, vehicle or software system is history.
And
here's where a lot of the conventional startup wisdom is also getting stood on
its head. We used to emphasize that nothing was more important for a new
business than focus. Keep your head down, concentrate on doing a few things
really well, identify and double-down on your USP and sustainable competitive
advantage, etc. because you need to differentiate yourself from the pack of
competitors who will soon enough be on your tail.
Today,
fierce focus isn't enough because perspective -- seeing
the bigger picture and the way things are moving -- or, as my colleague
Rob Wolcott calls it, "foresight" is even more critical. It's not
enough to run away from the rabbits; you've got to find or create a protected
path forward that will let you grow into your own integrated solution or become
an important part of someone else's plan. Just as faxes, scanners and copiers
quickly merged into all-in-one machines and CD players disappeared in car
dashboards, the pressure to fold additional functions into existing forms --
especially in cars and phones -- is only going to grow.
These
days, part of your getting-started calculation needs to be "how can I
build my business to be bought by one of the big guys." Here are some
tips:
1)
Don't raise a crazy amount of money too soon; get the business to cash positive
ASAP so you're accretive in an acquisition.
2)
Don't plan to be the best "one-trick" pony in the pack because that's
an idea whose time has passed.
3)
Above all, focus and fall in love with, the ultimate solution. That means
solving the customers' ultimate needs as opposed to falling in love with your
present product.