If you follow technology news at event the shallowest level you will hear tell of every doing of Uber and Airbnb. They are considered the quintessence of the new World – and there’s much to be said for the way they have disrupted industries and changed our views of the economy. But what makes them more technology news than what the Commonwealth Bank or Woolworths is doing?
I was driving on the weekend and listening to the BBC’s tech report. And it was all abut Uber and the impact it is having on taxi driver’s incomes (overall traditional taxi drivers are earning less, but more people are earning more than they were). I couldn’t help but contemplate that this was about economics, business, and management – it had vanishingly little to do with technology.
It wasn’t that long ago that simply using technology of any sort was news-worthy. A company had a computer – wow. It was using the Internet – how novel. But surely we have reached the stage where technology, and the Internet in particular, are so ubiquitous that they’re not newsworthy in themselves? Maybe not.
Airbnb uses technology and through the use of that technology has changed the way hotel and apartment rentals work. Similarly Uber has turned the taxi industry on its head by leveraging the ubiquitous internet and, it must be said, the availability of oceans of start-up capital. There’s no question they are using technology and can’t exist without it.
But so are the banks. So are the big resource companies. So are supermarkets. The focus on the technology instead of the disruptive business model is facile. And it’s a reduction to over-simplification that serves everyone ill in the long-term because it’s entirely missing what the impact of technology really is.
Uber’s disruptive effect is not really about people becoming freelance taxi drivers. Sure, that’s providing opportunities for some and hurting others, but is it really changing things fundamentally? No.
No, the real change will come with driverless cars completely doing away with drivers and tossing whole rafts of people, taxi drivers and Uber drivers both, out of work. It wasn’t that long ago there were rows upon rows of people keeping track of bank accounts on paper – they are all gone. People manning checkout stations are a dieing breed. First-line customer service staff are being replaced by bots. That’s where the real changes are, it’s not about someone using technology that is increasingly base-line to fiddle round the edges of a business model – it’s simply businesses doing what they do, with added technology sauce.
Uber is not a technology company, at least not yet. It’s a company with a clever idea about leveraging the connectivity of the Internet to disrupt a monopolistic and conservative industry. Then it uses technology to make that happen. Had the taxi companies had half a brain they’d have created Uber themselves.
And that’s what’s interesting about the banks and insurance companies and supermarkets that are using the technology to consolidate their position, lest some new fast-mover takes them out. They’re the ones we should be looking at with interest and envy because they are in the incredibly fortunate position of having an established customer base and revenue stream to leverage. If they can disrupt themselves the rivers of gold continue to flow.
The lesson from Uber and the like is not that they are technology companies. it’s just that they are clever. By characterising them as technology companies we miss the point. If they saw themselves that way they’d probably be incredibly vulnerable; but I have the feeling that most of these high-profile disruptive companies have a far clearer vision about their fundamentals than do the people reporting on them.
By characterising these companies as technology companies, and as technology news, we give the impression that what they’ve done is just all about throwing some bits and bytes at a problem. The reality is that it’s more about understanding a business, understanding the customer dynamics, understanding the barriers to entry than it is about technology. Technology is an enabler for a business plan (which is in contrast to the true technology company behemoths like Google and Facebook which were all about technology desperately seeking a business plan.
All of this leads to us making the mistake of focusing on start-ups as if they the only way forward simply because there is a computer involved somewhere. Some industries, as the taxi industry and newspapers have shown so far, will be unable to make the required changes to compete. But others, and the banks are great examples here, are moving to leverage their existing positions in incredibly lucrative ways.
Regardless, there has to come a time soon when we stop filling the technology pages with new business models; and stop ignoring new business in the business pages just because it involves coding. It’s not just technology and business that’s changing – the way we think about, and report on, new business has to change too.