Most of us know the story of Kodak. The company was a powerhouse. It was founded in 1888, and for about 100 years, was THE company you thought of when you thought of cameras, or film, or photography. I still have my grandfather’s Brownie camera (that’s it in the photo). My brother has my dad’s, the one he used to take pictures during the Korean War.
Most of us also know about Kodak’s downfall. Starting in the 1980s, people started using less film. It didn’t happen all at once. Digital cameras – which Kodak largely invented – were pricey at first and the image quality wasn’t that great. Storage space was an issue, since hard drives were small and image files were big.
But storage got cheaper and images got crisper. All the while, Kodak insisted that “real” photographers would never stop using film. But the convenience of digital technology, where images could be reviewed instantly, was too much for professional photographers to ignore. When Kodak finally had to sell off their patent portfolio, Apple, Samsung, Facebook, Amazon, and Microsoft all lined up to buy the intellectual property.
It’s not hard to look back and wonder “what were they thinking?” It seems more than a little short-sighted to ignore this kind of business threat. But history is littered with examples: buggy makers vs automobiles, metal/wood/glass vs plastic, buttons vs Velcro, Sony Betamax vs VHS, VHS vs DVD, cathode ray tube (CRT) vs liquid crystal display (LCD), email vs letters.
Businesses are disrupted every day. A few important ones are happening right now. Landlines vs cell phones. Calls vs texts. Broadcast TV vs broadband TV. Local storage vs the cloud. Network cabling vs wireless. Minute-clinics vs doctor’s offices. The entire publishing world vs Kindle. Even digital cameras are seeing disruption from photo-capable smartphones.
So here’s the question: What technology is going to eat your lunch? Don’t ask IF there’s a technology that’s going to eat your lunch. Assume that there is one and identify what it is. Then ask yourself, what am I going to do about it?
Smart companies figure it out early, and disrupt their own business model. Amazon saw that digital tech was going to change the way people buy and read books. Instead of waiting for a competitor, they developed their own disruption with the Kindle series. Intel – originally a manufacturer of computer memory – saw that the money in technology was moving toward microprocessors. Foreign manufacturers were driving a price war in memory, Intel’s core business. They made the multi-billion decision to exit the memory business and move into semiconductors, where they introduced market-dominating technologies. Each of Intel’s earlier microprocessors disrupted the previous one, rending them nearly obsolete in rapid succession.
Every business is susceptible. Brainstorm your way through the Fortune 500. Energy companies like ExxonMobil, Chevron, and Phillips 66 can be disrupted by alternative energy technology. Boeing’s core business could be disrupted by changes in transportation, like technologies that eliminate the need for business travel, or global manufacturing or supply chain changes that significantly reduce the need to ship goods. The big chemical and pharmaceutical companies – DuPont, Dow, Merck, Abbott – never stop inventing to stay ahead of disruptions coming from competitors.
Small businesses are even more susceptible. They are less likely to be diversified, so a single disruption can eliminate their business. Travel agencies formed in the days before ubiquitous Internet access, saw their business fall away so quickly that they weren’t able to adjust. Independent bookstores lost business to Amazon. Small retailers lost out to Wal-Mart.
So today is the day to ask yourself this question: “What technology is going to eat our lunch?” And then follow up with, “…and what are we going to do about it?”