Don’t just buy a new video game, make one. Don’t just download the latest app, help design it. Don’t just play on your phone, program it.
Barack Obama – President
“Disruption is a predictable pattern across many industries in which fledgling companies use new tech to offer cheaper and inferior alternatives to products sold by established players” said the New York Times a few years ago.[i] Startups don’t compete based on high quality products or cheaper services. They compete with killer apps, tech platforms, and new business models.
Think Toyota taking on Detroit decades ago with higher quality vehicles. Autonomous self-driving vehicles are doing the same to self-driven vehicles. It all started with an app.
An opportunity over the past few years is creating apps and other services that match labor demand with service or product supply. These simple inventions changed entire industry sectors. In this sharing economy, VUCANs and companies have underutilized services, products, and spaces. For example Airbnb sells underutilized housing space and Uber sells underutilized vehicle space as part of the sharing economy. The obvious example is Uber, the car sharing service that was founded in San Francisco 2009. The traveler just clicks an app to find an available car and negotiates the flat fee with the drive.
Work Lesson Earned: Airbnb initially called itself “a social website that connects people who have space to share with those who are looking for a place to stay.” These peer-to-peer platforms have scaled because there’s no middle VUCAN to add friction between the buyer and seller. These platforms have 0 marginal cost for adding, distributing, and scaling services. In other words, they can add a room or add a new person to a ride at almost no overhead in terms of VUCAN, power, and brick-and-mortar overhead. In other words, fewer core VUCANs are required to start and scale a business using tech to balance supply and demand at ever shorter time frames. What’s your idea for a killer app?
[i] ‘The Disruption Machine’, New York Times, June 23, 2014.