In recent years, technology has been the golden child of transformative business models. It has been a key driver for many startups and large enterprises alike.
Technology shapes industries. “Consider Airbnb, which upended the hotel industry. Founded in 2008, the company has experienced phenomenal growth: It now has more rooms than either InterContinental Hotels or Hilton Worldwide,” according to Harvard Business Review.
In fact, “Airbnb represents 19.5% of the hotel room supply in New York and operates in 192 countries, in which it accounts for 5.4% of room supply (up from 3.6% in 2015).”
But a change is coming. And technology won’t be at the helm.
Innovation and technology
Ever since Google was born in 1998, technology has enabled innovation for the juggernaut and others like it. Google changed the way we access information on the internet.
As technology improved, Google transformed email with Gmail’s infinite email storage, document collaboration with Google Docs and Google Maps to help us get from point A to B.
Other companies have famously innovated through technology, including: portable media players with Apple’s iPod, buying and selling goods online with eBay, contactless payment systems with Near Field Communication (NFC) technology, and many more.
However, a new breed of innovation is underway.
Innovation through disruption
Since the explosion of the sharing economy (e.g., Airbnb in 2008, Uber in 2009 and Lyft in 2012) online business models have shifted from innovation through technology to innovation through disruption.
New online business models are taking shape and they will disrupt industries. For example, once popular daily deal sites are now dead — many saw it coming.
The hands that hold the shovel are now upending industry with reverse auctions and online outsourcing marketplaces. Instead of buying a limited time offer online coupon only to choose from a narrow range of options, an attention shift has occurred.
Marketplaces like Upwork and Airtasker have taken the search for freelance talent and skilled labor to a new level. They represent a new breed —a disruption— of online classifieds.
Social networking has also evolved. Personalized chat, one-to-one communication, is making a comeback. Messaging apps are changing social media. Platforms like Signal, WhatsApp, WeChat, and Wire take off while people are sharing less personal content on Facebook, according to reports.
Out with the old
People are ready for something new. Consider disruption more seriously.
“In nearly every industry tried and tested business models are coming under attack at an unprecedented rate,” Thomas Bertels, founding partner of Valeocon Management Consulting explains.
“Pharmaceutical companies are searching for alternatives to the blockbuster model. Banks are looking for innovative ideas to make up for lost fees and revenues due to new regulations. A drop in advertising revenues and circulation pushes newspapers towards new sources of income. Traditional brick and mortar bookstores are losing out to online competitors that are not encumbered by pricey real estate. Software providers are being threatened by cloud computing.”
Business model innovation through disruption is the new path to sustainability. Create an isolated team to solely focus on innovation without disturbing your core business.
And remember Netflix. They are a great example of what it looks like to take a stale market and reinvent it with a new business model. When consumers wanted to rent DVDs Netflix said, “Why don’t you pay us a subscription and we’ll lease the video to you?”
Get on board with emerging business models. This is what it takes to win the game.
This article has been edited.
Fred Schedbesta is the co-founder and CEO of finder.com, a personal finance comparison site with revenue of $36 million and 53% year on year growth. He is also a money transfer expert, published author, award-winning digital marketer, public speaker, mentor and active member of the startup and small business community. Connect with @Schebesta on Twitter.
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