Taxi drivers weren’t particularly worried that “digital taxis” would take their jobs. But now that Uber and Lyft are at scale, the taxi business is in freefall. In 2013, a license to own a NYC yellow cab (called a medallion) could be sold for as much as $1.3 million. Today, the price has dropped to as low as $160,000, a decline of 88%.`
Staying with the theme of vehicles, how important is “digital” to manufacturers of cars—a clearly tangible “real world” product? Accenture conducted a consumer study that revealed that the “digital” elements of a vehicle such as its GPS and entertainment systems now rank higher in the decision-making process of new car buyers than the driving performance and handling of the vehicle.
We can play this game for any industry—insurance, lawnmowers, construction. I just bought a garbage can that has an app that reorders custom-fitting garbage bags when I need them. It’s great, and it creates recurring revenue for the manufacturer. They can sell the garbage can at a lower price because they know a good percentage of customers will subscribe for garbage bag delivery.
BARRIERS TO ENTRY FOR INNOVATIVE COMPETITORS ARE DROPPING
Most likely, someone else is already disrupting your industry with a digitally driven approach. If, miraculously, they aren’t yet, get ready; it’s coming soon.
There was a time when it was difficult to compete with large legacy businesses because they had scale, they had mindshare, and they had expensive equipment or facilities that required a substantial capital investment that small companies couldn’t match. But these barriers to entry largely no longer exist. The reason is digital.