Digital disruption requires putting the last mile first in many industries and services. Networks are truly disrupted in their last mile, search and mobile services are impacted from real-time mobility and store contexts, digital media are reshaped by personalized and quantified experiences, manufacturing and retail are increasingly focused on last mile marketing practices. So what does it take to truly disrupt?
16. So what does it take to
truly disrupt?
Own the
Relationship
Graph
Data-First
Experience
Design
Capitalize on
Untapped/
Expensive
Utility
Speed of
Execution
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36 months ago, a series of profound DISRUPTIVE motions were kicked off across the most fundamental industries   brings an entirely new meaning to the term the last mile and how owning the last mile will yield the power to disrupt entire supply and demand chains.
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And whether you are a disruptor yourself, or a service provider helping your customers capitalize from disruptive opportunities, this is both an extremely exciting and daunting opportunity to time to re-shape modern commerce as we know it.Â
The word âdisruptionâ is over used.
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- level set on what Disruption really means because one of the most overused terms.Â
- We will move the submit and cancel button to the right by two pixels and call it a disruptive revolution.Â
- past sat 50 years, most of the impact we have seen since the establishment of foundational industries  - steel, financial services, retail, for and hospitality has been largely evolutionary.Â
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- we have seen pockets of disruption for sure - the mobile phone is definitely one and the web has shook up the media business. The web completely changed the print publishing business.Â
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But aside from those that went head on with technology innovation, most of the foundational industries have seen only incremental changes -
Steel has gotten more malleable but its still steel,
Hotel rooms have gotten better, I love the Marriott, they are a flagship customer of my products , Â but its still the same concept of a room
The first restaurant was invented in 1765 and whilst i recommend that the French Laundry be on everyones bucket list, its exquisite, the concept of a Restaurants is still the same to this very day.Â
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thats evolutionary, in some cases even transformation. But not disruptive.Â
Professor Clay Christensen from Harvard Business School coined the concept of digital disruption.
- a plausible definition of disruption.
Clay Christianson offers up a clean definition that we will use as a basis here:Â Â
- sets a much higher bar for whats truly disruptive and gives organizations like youâre a framework to think evaluate strategic moves.Â
But to me it a good starting point but misses one significant element:
- disruption means you dont make tweaks to how you distribute, or how you serve customers or how you add other bells and whistles.
In industry after industry, the very notion of the product we all is changing right in front us our eyes.Â
True disruption
And if you look at the common thread across these disrupters, you see that have re-framed what the list mile is in the change of value added services and wield incredible power needed to un hinge business that has been in place for 100s of years.
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lets look at a fewâŠ.
n requires putting The Last Mile first.
Cisco rebranded itself as âThe Human Networkâ to own the hardware and the software elements. As users create, share, and consume content, network traffic volume goes up, growing an average of 30-50 per cent annually. Facebook has been able to âownâ the network of relationships via its social networking platform. Link to article: http://www.itproportal.com/2014/12/01/8-ways-cloud-made-network-traffic-unpredictable/.
 - the very notion of networks was invented by companies who created switches and routes to move packets of data that you and i created.
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Fundamentally it was this industry that enabled Facebook to be Facebook and as a result Facebook has over a billion individuals connects. The network is now not packs moving but our thoughts, interests and emotions moving.Â
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Facebook own the real last mile and it calling the shots and chasing the dynamics of the entire networking industry. Today only a billon people are on Facebook and to get the other 6billon, it needs to open up the technology and protocols that make it easier for more open to connectÂ
And so its offering up a new design called the the Wedge, which pushed Facebook into the $23 billion Ethernet switch market, currently dominated by Cisco.Â
This new switch wasn't an actual product. It was a design for a new product, one that Facebook gives away for free through its Open Compute Project (OCP).
The last mile in the networking business isnât the router. its the network of connected people.Â
Thats a glimpse into how the networking industry will see radical change in the next decade from a competitor that did not exist a decade ago. Thats disruption, at the last mile.Â
The days are quickly going where our Internet browsers provided several options for search. With the advent of mobile devices, whatever is shipped with your product often becomes the de facto standard for your search activities.
Apple Pay digital wallet is embedded into its operating system. Statistic is from Gartner.
Link to article: http://mobilefomo.com/2014/08/2014-global-mobile-payment-statistics/.
Payments and Commerce - arguably the most revolutionary and most ruthless win by the last mile.Â
After different attempts to control digital payments by Telcos / MNOs (by storing payment information in its SIM card),
Or by payment processors such as Paypal or Starbucks (by storing information in the cloud), and even the Banks who have carried the float,Â
Apple jumped the gun and is embedding the digital wallet into the bowels of the operating system thereby threatening to remove any intimate connection anyone else might have with any single 2nd, 3rd, 4th mile vendor in the current payment supply chain.Â
Again, by controlling the payment device - the last mile in this chain before you make a purchase,, Apple now gets to controls the Point of Sale.Â
But the veracity of Apples reach goes far beyond this.Â
Poll any random sample of retail bank CEOs and youâll find that this control that Apple has is the #1 threat that they mention. With Apples strong hold on the last mile, the digital PoS and over $190b in cash and short term secirities, who is to say that they cant become a bank that now have over 50% of the US population in its control.Â
Own the final interaction with the consumer, and you dictate the terms. Thats the last mile at play again.
Tesla controls the digital delivery of gadgets, OEM software, and has become almost a portal for technology within its automobiles. The average car has 100 million lines of computer code.
Link to article: http://www.welivesecurity.com/2014/06/02/hacking-cars-road-wirelessly-easy-claims-expert/
This might be controversial but I truly believe that when its all said and done, 10 years out when we think of the disruption tesla is causing, they will be revered more for creating a software-first car and not the electronic battery. The battery can be copied by other manufacturers. The software first DNA is much harder to emulate.
We look at Telsa as a car but in may ways, is ultimately the last mile in the assembly line of hundreds of hardware components and hundreds of thousands of software apps. Once youâre in the driverâs seat of this software-first car, Tesla controls the immediate digital delivery of gadgets, of OEMâed software and prioritization of future enhancements to your driving and travel experience.
In that sense, Teslaâs position in itsâ industry is no less lucrative than my 21 year olds iPad â his portal into the world wide web that can prioritize what results that the driver seeâs whilst in the car. Remember, the last mile calls all the shots.
Broadcasting is undergoing a sea change. The growth of IP technology and new consumer power to pick and choose what and how they watch is being felt across the value chain from the creation of content, to its management and distribution. Meaning broadcasters are having to redefine how they run their businesses and, importantly, how do they remain relevant in an increasingly fragmented media worldâŠ.
Netflix built its business on the backs of the movie studios by renting their products in a way that was more convenient to the consumer.Â
They used a better customer delivery model to distribute With a huge customer base in its back pocket and 7 Emmys to boast about just in 2014, Netflix threatens to dis-intermediate the movie studio altogether.
With massive amounts of Data on what you watch, when and how, they have insight into your desires and viewing habits unlike anyone else, and once you have that much insight you can then deliver exactly what your customers will watchÂ
Netflix and Amazon are replacing traditional movie studios with their own original programming, and are receiving critical acclaim. For example, Netflixâs show, âOrange is the New Blackâ, is award-winning, garnering Emmy and Screen Actorsâ Guild awards in the US. Their âHouse of Cardsâ program, based on a BBC program, became the first original online-only web television series to receive major nominations. Amazon Studios levels the playing field by soliciting project ideas directly from its homepage.
In the US, there was a 5% decrease in movie theatre attendance from 2013 to 2014. It is the lowest year-to-year decline in nearly a decade. Just 1.26 billion cinema tickets were purchased in 2014 âitâs the lowest number since 1995.
Thatâs the kind of ruthless power and control the last mile can have. Look at the fight going on with Pandora, Spotify and even Apple in getting music producers to embrace the digital world.
Source: THR. http://www.slashfilm.com/box-office-attendance-hits-lowest-level-five-years/
Old Designer Bag, Sell it, Buy a New oneâŠ
Ok - most of these you use but there is disruption happening in many many other places.Â
The big Uber and Tesla type ones are far more sexy but I like this one a lot because its more within reach for existing businesses.Â
How many of you have really expensive things in your closet that you just dont wear? Or donât fit anymoreâŠ..!!
Enter Poshmark - here is the idea:
There are already 200Million shoppers on line in the US. Combine that with a market for used products at $18B
$18B is the size of the marketplace for selling these used goods â thatâs as big as CRM!!
Targeting only women at this time, this and the company takes  20%...
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And add to that a giant vacuum created by old structures that results in a closet  - the retail store is the bottle next and when you remove that you push through another $18B of very fragmented  commoners today.
Posh Mark has 700k items to sell and already makes over 100M in revenue this year.Â
Even Dinner is being disrupted!
Restaurants make over $700B a year. But here how every dollar spent on food breaks up:
For a typical dollar spent in 2013 by U.S. consumers on domestically produced food, including both grocery store and eating out purchases, 31.5 cents went to pay for services provided by foodservice establishments, 15.5 cents to food processors, and 13.1 cents to food retailers. At 5.2 cents, energy costs per food dollar are up 18 percent since 2009, but still below the 6.8 cents that energy costs contributed in 2008.  Â
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Enter Munchery or La Belle Assiette, The European leader in the Private Chef industry, helps you discover private Chefs in the Uk and five other countries and book the experiences their offer. It is, in essence, a restaurant in the cloud with today over 580 Chefs.
and here is the thing - theres 100x more chefs out there who want to cook for you and a million x of us how like to eat good, tasty healthy food. So what stops us, Our wallets and the the number of good restaurants our there.
Re arranging the demand and supply of dinner you could maybe afford to eat great food every night
Increasingly in urban areas and even metropolitan areas like Berlin, San Francisco etc. were seeing this. And they way you use digital capabilities to change the game is not a one off activityâŠ.
Traditionally, you visit stores or online retailers to purchase goods or services. Earlier this year, Carrefour turned this on its head and brought the items to the people. As many of you probably witnessed first-hand, the retailer opened up a pop-up shop in Milanâs Loreto metro station. It is an example of a virtual store, with over 1,000 products of the best mass distribution brands, which can be ordered simply by scanning the products with your own mobile phone.
The creation of a display space like that of Loreto is a means of communicating to the customer that digital is breaking through traditional shopping patterns and even the most physical of spaces, like the sales outlet, can be de-materialised while guaranteeing the same level of service.
Link to article: http://www.carrefour.com/current-news/milan-shopping-can-also-be-ordered-metro.
And if you think your business is safe, and could not be affected, think againâŠ
Digital products have the ability to re-arrange the pecking order of the traditional demand and supply chain.
in the last 4 decades you have not seen such heightened levels of change coming to the most established industries
In the dot com era, what then looked like disruption turned out for the most part to be a new form of channel distribution. Aside from some industries such as books, the physical and online worlds have settled down into a happy co-existence. Walmart is still standing.
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But this time, every one of those examples screams decisive dismantling and rebuild of the entire supply and demand chain AND the product.
And as a result of natively digital business models, Not a single one of these examples I presented is re-using any and I mean any element of the older incarnation of systems.
Digital is already and will continue to have a profound impact on our lives:
Some â that will take an Industry Down⊠- Mobile Phones â killed Cameraâs, Conventional Music Sales, PaymentsâŠ. Taking Down
Some â that will extend the industry⊠- Could not have happened without Digital - AirBnB
Some â that are creating new industries⊠- Poshmark creating an industry
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Every single one of the examples I talked about has used digital advancements as a way to create an entirely new offering to extremely well established market demand that's been built over the last 500 years - the need for transportation, the need for a place to sleep when you travel, the need for produce and necessities and the desire for vanity products as postmark does.Â
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Thatâs disruption, and these are truly incredible times that we live in. truly truly truly.Â
So what do we do about this as enterprises - how do we thwart such upheaval and even capitalize around this. Whats common amongst these disruptive examples
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I will leave you with 4 elements to think about :Â
FirstlyâŠ.
1. Shatter any traditional notion of the last mile and look further down the pike. Look around you - every single dumb terminal in the office and at home is the last mile. If Munchery moved the last mile from the restaurant to your dinner table, what about the fridge, the fork, the spoon? If Apple wants to embed payment systems inside your phone, why not go further. embed it in the products you buy
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2. You have to move really really fast Once you find those last mile end points. Moving fast comes from knowing what to build and how to leverage headless technologies where you can. You need the agility to focus on your core competency and shed every thing else. And I mean be willing to shed everything else. Uber re-arrnged the taxi industry by changing the product from the cab to the idea of convenience. The fact that Uber doesnt own the cabs frees them up from mind share that can go into truly scaling its driver and use base. The good news is that there incredible technology out their you can leverage today, and that will help you to organize your talent, your customer relationships and relationships in the ecosystems needed to make this work
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You have to understand the commonalities amongst these disruptive businesses to draw out the core elements. And it starts with identifying that
Untapped  Utility - look around you and understand the debt built into existing models -Â
  - munchers or La Belle Assiette unleashes brilliant cooks who want to cook at a price that we are willing to pay for when we eat at home. Its not as cheap as boiling pasta but its less than the half the price of going to a restaurant. - that creates massive value
  - or posh mark - the idea that you buyers can become sellers almost kick starts a whole economy that's been hidden inside your closet
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2. Data driven decision making
  -  But seriously, do you think any of these businesses rely on the traditional CRM of old?
- The traditional monolithic applications of old are not going to make it easy to connect the dotsâŠ.
  -  every action you take when you drive your tesla is pushed into the cloud for understanding
  -  the Uber App on your phone is Ubers CRM. It knows every single preference you have - for me it knows I use Uber to the airport 90% of the time - therefore timing is super important to me, I need a quiet car because Iâm always on a call, I might need to return straight to the office rather than home, - thatâs my CRM facts you need to understand.
  -  Employees - there is zero latency between your CRM data and every employee at these companies. there is zero information latency or arbitrage between their employees - be that to understand your behaviour to build better products or to ensure customer success, Every supplier has 100% knowledge of the consumer - alwaysÂ
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3. Enable your people to be Engaged Employees, Customers and Partners
  Well I saved the best for almost the end - this is at the heart of every one of these business models.
  They are engaged and transparent to a fault - Uber lets not only customers rate drivers but drivers can rate customers too - zero transparency on both sides given birth to much more healthy economies on both sideâŠ
So many of our workforces are becoming contingent workers, at SAP we can leverage the power of SAP Jam, Ariba and Field glass to mean we are able to touch and enable everyone in our ecosystem.
4. And finally â Act today, before someone else beats you to it:
Business Networks, Applications, and Platform. You have to re-think how these elements can be used to drive adoption to achieve a networked economy, strong user experience, analytics, and a connected enterprise. Social Collaboration can be the last mile for enterprise applications â across your lines of business:
Capitalize on an untapped/expensive utility
Achieve a data-first experience in the design
Own the relationship graph
Achieve a speed of execution
So â I leave you with one more thought, Can the software you use today conform and support these new digital business requirements, or is it holding you backâŠâŠ