New technologies continue to launch in the blink of an eye meaning it isn’t always easy for business leaders to discern which will and won’t advantage their organisation. To help you identify the best tech bets for 2017, here are five guiding principles.
1. Spot the exponential curves and work out the customer value proposition within them
Disruption by low-cost competitors has gained a lot of attention. But Moore’s Law (which shows how both the cost and capacity of computing continue to improve exponentially over time) means that the opposite approach can be just as powerful. For example, Tesla is disrupting the car industry with technology that is expensive today but which will quickly get cheaper and better at the same time. In 2017, you’ll get six times as much processing speed from an X-Box than you got from a $50M super-computer in the year 2000!
A massive opportunity is to spot anywhere that this is occurring and then work out the customer value proposition opportunity. To put it simply, what could this technology create that people would like to buy? It might be terribly expensive today, but if you’ve found the right cost curve it can go down rapidly. You won’t make your money from it in 2017, but it could be massive by 2020.
2. Go off the grid (sort of)
The most likely industries to be changed by exponential technology curves (both the cost and size curves going down and the performance curves going up) are energy, finance, manufacturing, construction and healthcare. This has to be said with a huge caveat: sometimes the industries that are most disrupted are the ones that look least likely to be – that’s why the disruption is so profound there. The legal profession and universities were two great examples in the last decade. Agriculture is also ripe for disruption – its lack of sexiness has meant that tech geeks haven’t flooded the industry – yet.
What these industries have in common is the ability to use exponential technology changes to go from large, lumbering and costly ways of doing things to small, nimble solutions. In some cases, they could involve replacing a huge piece of capital equipment or a visit to an expert with something on your phone. Concerned your child might have an ear infection? No need to visit a GP, stick a tiny attachment to your phone and use an app. Need energy to power your home? Don’t use the grid; use the electric car battery that’s sitting in your garage.
3. Find two technology trends and combine them
You know you could be onto something special when you come up with a solution that brings together two major technology advances. Drones and robotics are both powerful trends but what might you do with them together? Similarly, how might you combine 3D printing and much smaller, more powerful batteries? Or machine learning and virtual reality. Take a list of the ten most important exponential curves and you can combine them into 45 pairs and 120 triplets. That’s 165 different ways of innovating (without even looking at how you might combine 4 or 5 or even more of them).
4. Follow the six-fold path
If those trends seem a little overwhelming, ask yourself a simpler question: what would it look like if one of your current products or services was completely…
- Connected to the rest of the world
- Driven by intelligent use of data
- And using those five elements to create something a customer would love?
Technology to enable the first five elements is leaping ahead at great speed – but not all products and services have been updated to incorporate the opportunities. However, it’s only a matter of a very small amount of time before they all are. The sixth one is up to you.
5. Innovate business models to make the most of the technology jump
How can you create, deliver or capture value in a new way? More than anything, disruption represents business model innovation. If you’ve brought new technology into an industry, that also might give you an opportunity to create, deliver or capture value in a new way. An obvious example is Uber. They didn’t simply introduce the use of an app to the taxi service – that wouldn’t achieve much. Rather, they recognised that an app could be used as a lever to fundamentally change the relationship between buyers and sellers (and the intermediary sitting between them).
It’s all about changing the rules of engagement with ‘freemium’, ‘clicks and mortar’ and Blockchain’, because that’s where new business advantage is coming from. If you can pair a new business model with ‘old’ products in a way that works economically for customers, you could have a game-changer.
About the author
Anthony Mitchell is Chairman of strategic leadership advisors Bendelta. He previously wrote Where leadership is blossoming in Australia and Donald Trump won. What does this mean for business leaders across Australia?. He also shared his thoughts on leadership with Dynamic Business in Follow the leader: a dangerous game when mediocrity prevails.