There is no question that we are going through a radical transformation in businesses around the world. I recently picked up a copy (actually downloaded) of The Fourth Industrial Revolution by Klaus Schwab, Executive Chairman of the World Economic Forum. His premise is that innovations in artificial intelligence, genetic engineering, nanotechnologies, and biology combined will drive a fourth industrial revolution that will fundamentally alter how we live and work after the Digital Age. He highlights a few astonishing facts:
Uber, the largest taxi company in the world owns no vehicles. Facebook, the world’s largest media company produces no content. Alibaba, the most valuable retailer in the world has no inventory. Airbnb, the world’s largest accommodation provider, owns no real estate whatsoever. The function of capital and assets as fundamental business drivers is being challenged.
Back in 1990, the biggest companies in Detroit, icons of the American Industry, had a combined market cap of $36 billion dollars, revenues of around $250 billion dollars, and employed near 1.2 million people. In contrast, by 2014 the three largest companies in Silicon Valley, icons of the Digital Era, had a combined market cap of around 1.1 trillion dollars (with a “T”), generated roughly the same $250 billion dollars in revenue, and employed around 137,000 people. That is the same revenue and 33 times more market cap with 9 times less people! Shocking isn’t it?
The biggest private employer in the world, the retail industry, continues to close stores while revenues and margins keep declining. Technology continues to drive the business world. For example, supply chain giants like FedEx, DHL, or UPS are really technology companies. Their innovation rivals that of companies considered “pure” technology, like Microsoft, Cisco, or Apple. The most competitive retailers around the globe are, in fact, very innovative, technology driven supply chain experts. Technology is driving a huge disruption to the supply chain industry with automated warehouses, self-guided drones, self-driven cars, 3D printing, and materials that can grow and heal themselves.
What business model will work in this post-digital era where few employees are needed, capital investments are less relevant in driving business growth, and disruption occurs at a faster pace than ever? Well, I will not be cocky enough to predict it here, but it is safe to say that innovation, fast adaptation, specialization, and smart use of technology will be at the center of future successful businesses.
Technology disruption is helping product entrepreneurs realize their product ideas much easier. They have access to their customers a lot earlier in the process. Companies like Kickstarter or Indiegogo have disrupted funding strategies, marketing plans and user research. Amazon and eBay are disrupting go-to-market and channel strategies, and Facebook and Alphabet (company formerly known as Google) have disrupted marketing strategies. Economies of scale are now available to small companies that serve very specialized markets. Segmentation is extreme and niches within niches are being served in a profitable way. More product innovations are being born than in any other time in history. Product entrepreneurship is thriving all over the world.
Most product ideas do not need to be pipe dreams any longer. They can be brought to market with manageable investments. But, that doesn’t mean they will all be successful. More often than not, product ideas are incompletely defined, inappropriately priced, incorrectly developed, or delivered to market without considering all the needed details. But they can be built, marketed, sold, and distributed. You don’t need to own anything but your idea. You just have to make sure you realize it the right way.
Take the plunge! Mature your idea, find your niche, look for help, and drive it. It can be done!