Overview Of Global Disruptive Technologies
Could there be a better example of a disruptive technology, much less a company that is generally regarded as disruptive, than Amazon and its Kindle? For just about as long as books have been in print, in order for authors to get their written work to an audience, they had to go through publishers. Over time this process has gotten slightly more complicated with the introduction of various middlemen. These middlemen include a literary agent, who an author hires to sell their creation to a publisher. Others include editors, illustrators, copywriters and marketers.
What this all means is less money for the author. With each middleman comes cost, thus taking away profit from the author. Let’s say a standard Hardback book runs $25. 00. Of that $25. 00, the author can expect to see around $1. 00 after everyone has been paid to get that book to the bookshelves. Then here comes Amazon, and the Kindle. An e-book reader, that costs virtually nothing to distribute. Which in turn is bad for the publishers. Authors now have the ability to publish directly to a kindle, and by taking out the middlemen, are making twice as much per cheaper e-book, as they were when making hardbacks. An e-book costs let’s say around 3 bucks, authors are making $2 off each 3 dollar book. An author could produce around 8 e-books for the same price as 1 hardback and make $16. 00 off that $25. 00 vs the previous $1. 00 off $1. 00. That’s price efficiency that just cannot be matched by any publishers. Factor in, the cheap price of the kindle, the electronic books, and the ease of having whatever an individual wants to read, right now, without going to the bookstore, and you have a prime example of a disruptor. But what’s even scarier, is that it just isn’t stopping with books. It’s moving into all platforms of downloadable media. Speaking of Media, the next disruptor I would like to talk about is Netflix and its takedown of the Movie rental market as we knew it in the late 90’s/early 2000’s. Blockbuster and Hollywood Video were the two main retail chains when it came to the renting of theatre released movies. Renting was a significantly cheaper alternative to buying every movie you wanted to watch on DVD or going to theatre to see it.
The inherent problem with Blockbuster lied in having to make two trips to the store in a 24 hour period. Thus Netflix found its niche. You could order movies to rent and receive them in the mail which doubled in appeal to those not wanting to venture out to see the movie in the theatre or driving to the video rental store. Another factor that appealed to the lazy consumer, was the program Netflix used to find your interests, making recommendations based off those interests. Which in turn meant less time scanning the walls of Blockbuster looking for something that might interest you. It was the perfect platform for Netflix to take down the market, because of the extensive number of Blockbuster storefronts, it couldn’t start a mail service of its own, because it would just cannibalize in store sales, canceling one out for the other. Netflix has evolved greatly since then, and continues to innovate.
The final Disruptor I would like to discuss today is the ride sharing tech startup, Uber. All Uber did was take advantage of what most people carry around in their pocket, a cell phone with access to the internet. Granted it’s a bit more than that, but the basic gist is ease. And in this case the ease of catching a ride on Uber, coupled with the ease a person can become an Uber driver vs a taxi driver equates to easier to deal with fares. The licensing, testing and training that a taxi driver incurs means higher prices in fares. Somebody has to pay for it. It isn’t the taxi company. On top of that when you create an artificial demand by limiting the number of taxi licenses a city can have, you have a customer base that is more than willing to help usher in change. Uber is just another example of how technology, in this case an app, has helped drive a number of disruptive innovations to archaic markets.
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