Tag: disruption

Questions established companies must ask themselves

Posted on by Steve Sammartino

future

“How could our customers do this thing without us?”

“What can be removed from the process and still solve this problem?”

“How could this problem be solved without using a physical product?”

“What technology is likely to be introduced into our things?

“What will happen to prices of the thing we sell when more technology is introduced.?”

“What would a new entrant into this market likely do to meet customers needs?”

Once these questions are answered sufficiently and honestly, they ought go ahead and do these things. They are going to happen anyway aren’t they?

Follow me on SnapChat – search ‘Sammartron’ for more business insight. Click here if on mobile to add now.

Tesla Model 3 & the start of the end of petrol cars

Posted on by Steve Sammartino

The hype of the new Tesla model 3 is understated as far as I can tell. While it is true Tesla hasn’t actually sold any of the cars – they haven’t made any yet – it is also true that there has never been a car in history (any product?) which achieved $8.86B in pre-order sales. Yes, 253,000 on order at the time of publishing.

Tesla Model 3 Launch

The hype is understated for a simple reason: most people are yet to discover their annual fuel bill costs will cover a $35,000 car repayments. So it will be a curve jump transition to electric cars, not a phase in.  I refer you to this earlier vitally important post I’ve written on the subject. 

The interesting bit is how it impacts the industry beyond Tesla. We are about to go through a war time like reconfiguration of manufacturing facilities as the world rapidly moves to electric cars. Every auto player in the world will need to fast track and maybe even scramble to have relevant cars on the market. A shift the likes of which we’ve not seen in any industry since World War 2. It’s gonna be big.

Giddy up.

Follow me on SnapChat – search ‘Sammartron’ for more business insight.

The 2 simple questions all successful startups have answered

Posted on by Steve Sammartino

Here’s two great questions to ask when starting a business endeavour:

  1. Is there a gap in the market?
  2. Is there a market in the gap?

Question 1 is about needs being unmet or not fully satisfied. In the realm of disruptive technology, you may be able to solve customers problems a better way. The gap in the market could even live at the emotional level – $200k Hermes handbag anyone?

Question 2 is about whether we can make money filling it. Until we have real revenue and real costs, outside of a VC funding cycle the question remains unanswered. Users alone, do not a market make – just ask Fab.com. The cool thing about being small is that previously unprofitable segments for big players can now become a super efficient money spinners. Legacy infrastructure is the enemy of today.

These questions are not new, but we’ve got new tools to ask them with. We can know about the market gaps quicker, and maybe even change what they answers are.

You should totally read my book – The Great Fragmentation.

Worried your job might disappear? This taxi driver isn't.

Posted on by Steve Sammartino

taxi driver - travis

I spend my fair share of time in taxis and Ubers in order to get to the airport. One of the topics I find interesting is to ask the drivers what they think about changes in the taxi / private driver industry. Sometimes I ask them, but I’m also finding they bring up the topic before I do. So here is the tale of 3 drivers in the same industry.

Driver 1 – A taxi driver

A driver in a taxi told me that allowing Uber on the road was a travesty given he had paid so much money for his taxi license plate. One taxi licence plate currently sells for over $200,000, but has declined in value recently. It is unfair in many ways, but technology often does that – it creates change without notice. He thought the government should protect taxi drivers and that Uber should not be allowed to operate. I agree that Uber should be regulated for safety reasons, but I also think innovations should not be stifled by them. His final statement was that he thought he’d go broke or leave the industry. He said that very soon no one will be able to make a living driving a car.

Driver 2 – An Uber & limo driver

This gentleman, who drives his car for both Uber and a limousine company, said that Uber was good to provide extra revenue between jobs. But he then went onto say that he thought Uber, on the whole was good for now, but in the next few years, self-drive cars would put every driver out of business and that he would just make as much money as he could until that next coming disruption put him out of business.

Driver 3 – An Uber & limo driver

This gentleman was enthusiastic about life. Within 10 minutes in the car, he’d really been positive about everything we were talking about regarding life and business. As usual we got onto the topic of the taxi / private car industry. He told me that Uber was really working for him, but then he mentioned something I didn’t expect. He went on to say that the biggest opportunity for drivers was just around the corner, he said;  “I can’t wait for self-drive cars to arrive!” So I asked him what that excited him and this is what he told me:

“For the first time in my working life as a driver, I’ll be able to make money when I’m not in the car. I’ll buy a number of self drive cars as quick as I can. I’ll invest my time in generating business and serving loyal customers. Instead of me just driving, I’ll be at the airport every morning to great my best customers, I’ll have their favourite coffee ready, and an umbrella if it is raining. I’ll be able to build a business around the edges of the new self drive technology. I’ll be a millionaire within a year.”

Three drivers, same industry, challenges and opportunities – one very different attitude.

You should totally read my book – The Great Fragmentation.

Why petrol cars will not exist in 10 years

Posted on by Steve Sammartino

tesla charging

If you haven’t already realised, cars are no longer machines, but rolling computers. This also means that cars will move from being powered by fossil fuel engines to electric motors. It’s already started, and it is going to happen much more quickly than we anticipate. I’d go as far to predict that there will hardly be a petrol car on the road in 10 years. Here’s why:

When cars transition to rolling computers, the Law of Accelerating Returns applies. Innovation goes from incremental and factory-based to curve-jumping and technology-driven. You’ve probably heard of Moore’s Law – the maxim that states that computing power will double roughly every 18 months while prices halve. This maxim and many other accelerating technology laws will apply to the production of cars, laws which make the end product better and cheaper by significant degrees. The revolution which transformed smart phones, cameras, laptops, solar panels and flat screen TVs is about impact the auto industry.  Let’s take the pricing example of the Tesla Electric car range:

1st car – Tesla Roadster:  $109,000 (released 2006)

2nd car – Tesla Model S: $75,000 (released 2012)

3rd car – Tesla Model 3: $35,000 (projected – release due 2016)

Not only has each model been progressively cheaper, but also far better in terms of range (distance per battery charge), safety and features.

It’s the same pricing pattern we saw during the personal computing revolution. Here is where we get an entire curve jump. The Tesla model 3 is so cheap that an electric car is no longer a plaything for Silicon Valley types, but a viable new car option for everyone. This is because the switching costs get very close to zero. Why? Because the running costs of having a Tesla Electric car does not include the cost of petrol. (Tesla already have 453 free super charging stations and the cost to fully charge the battery at home is around $3). This means the average consumer can use their saved petrol money towards acquiring a brand new car without increasing their weekly expenditure. For example:

Model 3 Tesla

  • Cost to buy = $35,000
  • Avg petrol p.a. = $3,120
  • New funds available = 8.9% of purchase price.
  • Avg Cost new car finance = 6-7% unsecured interest rate.

When the Model 3 arrives, it only takes some creative financiers to change the landscape of the auto industry virtually overnight.

Want a new car at no cost?*

*Just give us your weekly petrol bill and drive away in a sexy new high tech Tesla!

It’s when this happens that we transition to an all-electric car world. The transition will be as swift as the smart phone – in a few short years, non-electric cars will be a lot like feature phones.

This is exactly how disruption happens. It’s not the product itself, but often the change in the business model around it which leaves industry incumbents blindsided. When there’s an opportunity for consumers to get into a superior product with low or no switching costs, they will always take it.

Buckle your seat belt.

Australia's top rated TV show – Do you know it?

Posted on by Steve Sammartino

Screen Shot 2015-06-29 at 1.40.31 pm

This is Troye. He is the host of Australia’s top rated TV show. He gets more than a million viewers every week. He has been around for a few years now and yet I never see him featured in the Nielsen ratings. I find it curious.

Sure Troye isn’t on channel 7, 9, 10, ABC, SBS or even on Foxtel. He’s on Youtube. But tell his 4.3 million subscribers that he isn’t on TV and you’ll get a dumbfounded look. They might even tell you they already watch it in their lounge room, stream it from their phone to the family flat screen, watch it on their laptop or on any audio visual enabled device. And that’s exactly the point, what is TV? A screen in a lounge room, or something which serves up audio visual content?

The easiest way for any company to get disrupted is to define the market by traditional infrastructure instead of how needs get met.

New Book – The Great Fragmentation – out now.

Yes, the robots will take your job, but…

Posted on by Steve Sammartino

Bison Hunter

…there are not that many bison hunters any more.

This is a very short way of saying that all jobs eventually get replaced by technology. Technology will take the role of many white collar jobs, just like machines have taken away many blue collar jobs, just like the plough took away many farming jobs. Technological Unemployment will always be a fixture in human existence – and always has been. It just so happens that it doesn’t sell newspapers (or provide click bait) to tell the truth that new jobs will be created. But it seems like a week doesn’t go past without a new report flagging the end of millions of jobs. So here’s a counter mind jam of some new jobs recently created that no one is writing economic reports on:

UX Designer, App developer, Drone Pilot, Crowd Funding Advisor, Smart Phone Game Developer, Blogger, Podcaster, Social Media Specialist, Wikipedia Moderator, Content Curator, Community Manager, Uber Driver, Airbnb Host, Web Videographer, Youtube Content Creator, Vine Artist, e-Book Publisher, Bitcoin Trader, Bitcoin Miner, E-Commerce Consultant, SEO Specialist, Genetics Counsellor, Sustainability Advisor, Citizen Journalist, MOOCs tutor, Big Data Analyst, Cloud Services Specialist…

And this list is just small sample set from my perspective. I’m sure your industry or worldview could make the list much larger. In fact, there are currently more than 500,000 app developers in the USA alone. A job that didn’t exist pre smart phone.

A simple economic fact is that if a person has $100 in their wallet, it still gets spent. In 1995 $10 of that $100 might have went into getting filmed developed. Now it goes elsewhere, maybe towards the cost of a smart phone monthly fee. The money always gets spent, saved or invested. The allocation just changes. And so do the jobs around those expenditure allocations. If you want to be future proof, I suggest you pay close attention to what your friends are spending their time and money on. It’s always where tomorrows jobs and startup opportunities lie.

The crazy thing about all those ‘new jobs’ above is this: They are all learnable, and mostly for free. All you need is these two assets: (1) The ability to read. (2) A connection to the internet (I’m guessing you have these). But yes, they all take effort. And no, the Government or your Boss won’t save you, or pay you to learn any of them. No one can do your push ups for you. But if you’ll make the effort, the rewards are there. The new jobs, and more importantly ‘business opportunities’ around them are ripe in these realms and they often pay more than job X did yesterday. Guess who earns more: A small screen UX Designer, or a Graphic Designer doing page layouts for a print magazine? Same realm, but a different iteration and attitude to learning. It’s really just a choice between taking advantage of the opportunities, or wishing the world was like yesterday.

Yes, the pace of change is scary. Yes, things are changing at a rapid pace, but it’s never been more possible to up-skill, re-skill or new-skill in the history of humanity. So next time you read a report on the impending doom of your industry, job or financial future, just remember that it is your decision on how it will affect you.

New Book – The Great Fragmentation – out now.