How Can Enterprises Stay Ahead of Industry Disruption by Software?
Nov 25, 2019
Companies that don't build strong software engineering and operations departments can be disrupted by smaller, more software-based competitors if they don't evolve. To remain relevant, enterprises must develop engineering that can build net-new systems of engagement quickly with scalability, security, and stability.
The notion of speed being important for application delivery has always been true, and I think as the world has gotten more connected, it's become more pronounced. No company wants to be the taxi industry in the face of Uber or the hotel industry in the face of Airbnb.
I think of the taxi industry as a good example. What would have happened if 4 or 5 years ago, the taxi industry in response to Uber had pivoted quickly to build net-new taxi booking applications that allowed them to leverage their innate advantage of distribution to be able to allow people to interface with them differently? If they had not waited the amount of time that it took—and some people are doing it now—to build those new applications to interface to their customers, Uber probably would never have existed.
I think that is an example in the micro-sense of what everyone is struggling with: “How do I get good at delivering net-new applications quickly?” Because in this digital world, the ability to propagate information about some—net-new application—is so instantaneous that the time to market advantage is massive.
The companies that can essentially map their distribution and product advantages to new ways of interfacing are the ones that are going to be able to navigate this transition to this newer world. Speed has always been important, but I think as the world has gotten more connected, the economics accrue largely to that person who owns the category. There's an interesting book about this topic called Play Bigger, which I think a lot of the digital native companies are familiar with.
You need to be able to define the application category early because once the application category is defined, digital signals all accrue so disproportionately to the category leader that the category leader tends to be the ultimate winner. I think Uber is a great example of that. That's largely because they were able to build that distribution channel first.