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Opinion: Canadian companies must prepare for disruptors to come knocking
July 26, 2019 | The Globe and Mail | by JOHN RUFFOLO.

In August, 2011, technology legend Marc Andreessen wrote his seminal article titled Why Software Is Eating the World, which became the central investment thesis behind his venture capital firm Andreessen Horowitz. Andreessen’s prognostication has since followed Amara’s Law on the effect of technology, which aptly states: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” [JCK: See also Andy Kessler's definition of S-Curves "Technology develops in S curves: Things start slow, go into hyperbolic growth, and then roll over. "] The feast has really just begun.

We are in the midst of the Fourth Industrial Revolution – or as some call it, the Information Revolution.....the Information Revolution really began to take shape in 2008, catalyzed by three incredibly powerful and converging forces – mobility-first, cloud computing and social media. All three forces collided together with full impact in 2008, spawning a wave of new technology companies.......The next phase of the Fourth Industrial Revolution will see the rise of a new species of company – the “disruptors.” While technology companies will continue to grow, we are witnessing the enablement of those technologies across all economic sectors as the leading weapon used by new entrants to disrupt the traditional incumbents in their respective industries. The massive influx of venture capital to support the building and growth of technology companies over the past 10 years has produced these tools, such as artificial intelligence, machine learning, and the internet of things, which are now being leveraged across all industries......Those companies that can harness these new technologies to operate better and faster, and to gain unmatched insights into their customers, will prosper. Although these disruptors are not technology companies in the conventional sense, their tight focus on value creation through innovation further blurs the lines between a technology company and a traditional company.

The incumbents, however, are not asleep at the wheel. To ward off the disruptors, they know they must embrace technology. It is this battleground that I believe will generate the greatest wealth creation and transfer opportunities over the next decade. The disruptors, naturally, are particularly active in those industries where they perceive the incumbents to be burdened by outdated technological infrastructure or business models, and hard-pressed to counterattack.

Yesterday, the disruptors focused primarily on consumer sectors such as the music industry, travel booking, newspapers, magazines and book publishing. Today, it’s groceries, entertainment and personal transportation, thanks to Amazon, Netflix and Uber, respectively.

But consumer-focused sectors were just the start for the disruptors. Before long, I believe we will see them try to disrupt varied industries such as banking, insurance, health care, real estate and even agriculture and mining; no industry will be immune. These sectors all represent emblematic Canadian brands, and yes, each will in turn will go through the same jarring disruption as so many others.
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See [Why It’s Not Enough Just to Be Disruptive - The New York Times
By JEREMY G. PHILIPS AUG. 10, 2016] Creating enormous value over the long term requires turning a tactical edge into some form of durable advantage....Superior tactical execution can still create real value, particularly where it provides ammunition for a bigger war (like Walmart’s battle with Amazon). And in the long term, value is created not by disruption, but by weaving together advantages (as both Amazon and Walmart have done in different ways) that together create a barrier that is hard to storm.
Amara's_Law  artificial_intelligence  cloud_computing  digital_savvy  disruption  incumbents  insurgents  investment_thesis  John_Ruffolo  legacy_tech  Marc_Andreessen  mobility_first  overestimation  S-curves  social_media  software_is_eating_the_world  start_ups  technology  underestimation  venture_capital 
july 2019 by jerryking
Prepare for a New Supercycle of Innovation - WSJ
By John Michaelson
May 9, 2017

Things are about to change. Consider information technology. Today’s enterprise IT systems are built on platforms dating from the 1970s to the 1990s. These systems are now horrendously expensive to operate, prone to catastrophic crashes, and unable to ensure data security. The cloud only made this worse by increasing complexity.

Corporate CEOs complain that they are unable to get the data they need. These rickety systems cannot easily accommodate data mining and artificial intelligence. Evidence of their deficiencies is seen daily. The New York Stock Exchange stops trading for hours. Yahoo acknowledges the compromise of one billion user accounts. Airline reservation systems go down repeatedly. The pain level for users is becoming intolerable.

Each decade for the past 60 years, we have seen a thousand-fold increase in world-wide processing power, bandwidth and storage. At the same time, costs have fallen by a factor of 10,000. Advances in these platforms, in themselves, do not produce innovation. But they facilitate the development and deployment of entirely new applications that take advantage of these advances. [jk: The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap] Amazing new applications are almost never predictable. They come from human creativity (jk: human ingenuity). That is one reason they almost never come from incumbent companies. But once barriers to innovation are lowered, new applications follow.
10x  artificial_intelligence  CEOs  creativity  cyber_security  data_mining  economic_downturn  flash_crashes  George_Gilder  Gilder's  Law  innovation  history  human_ingenuity  incumbents  IT  legacy_tech  Moore's_Law  NYSE 
may 2017 by jerryking
Apple’s drive for world auto dominance spooks the industry - The Globe and Mail
GREG KEENAN, BRIAN MILNER AND OMAR EL AKKAD
The Globe and Mail
Published Friday, Mar. 20 2015,

Apple’s big advantage over traditional car makers is simple, yet hard to overcome, and it lies in the cloud.

The cloud consists of remote servers that store vast amounts of data and run applications, giving everyone on the planet with a connected device access to unlimited computing power essentially for free. It is also revolutionizing the way companies do business by instantly providing them with vast amounts of customer data. And it means Apple would not need to acquire car manufacturing capacity or build assembly and distribution networks in order to create chaos in the club.

It’s an advantage few traditional manufacturers, including auto makers, fully grasp, let alone have the ability to exploit.....“Apple thinks from the cloud out,” says Mr. McInerney, who would definitely line up for an Apple vehicle. At least then, he says, he would be assured of a better communications interface than the clunky one in his new upscale German model.

“If you’re an Apple or a Google, it allows you to use the same power to manage your supply chain that you use to manage your customers,” he says.

“That’s a revolution in thinking that allows you to identify all the cash-wait states [where money sits idle] and to collect a stunning amount of customer information in real time. Put the two together and you’re turning that information into cash at an accelerated rate. Car companies don’t think like that.”
automotive_industry  automobile  Apple  batteries  autonomous_vehicles  cloud_computing  connected_devices  layer_mastery  digital_first  data_coordination  incumbents  monetization  cash  customer_data  idle_funds  SMAC_stack  connected_cars 
march 2015 by jerryking
The Fallacy of ‘Disruptive Innovation’ - The Experts - WSJ
Nov 6, 2014 | WSJ | by Karl Ulrich,vice dean of innovation and CIBC professor of entrepreneurship and e-commerce at the University of Pennsylvania’s Wharton School.

Disrupt is perhaps the most misused term in entrepreneurship.

Successful new companies can indeed disrupt an industry. Amazon disrupted book retailing. Its ascent caused the failure of the incumbent Borders.

Two conditions are required for disruption.

First, a substantial fraction of the market must prefer the product or service of the new company.

Second, the incumbents must be unable to respond and replicate. When those conditions are met, a new entrant can gain sufficient market share that existing firms fade into irrelevance.

But disruption is rare, and it’s not required for entrepreneurial success....listen to the elevator pitch of essentially any startup in a business plan competition and the template is mind-numbingly standard: [ new company ] will disrupt the [ established industry ] by [ new company technology or business model ].

Yet, most of them will not.

If they are successful, they will find an underserved market segment, deliver a great product, garner some share, and achieve positive cash flow.

That’s a great outcome that will result in the creation of value. It is not disruption.
disruption  innovation  start_ups  Amazon  cash_flows  underserved  booksellers  incumbents  fallacies_follies 
november 2014 by jerryking
Marc Andreessen on Why Software Is Eating the World - WSJ.com
My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense......Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. In today's cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite and GPS networks. The days when a car aficionado could repair his or her own car are long past, due primarily to the high software content. The trend toward hybrid and electric vehicles will only accelerate the software shift—electric cars are completely computer controlled. And the creation of software-powered driverless cars is already under way at Google and the major car companies.....Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).

In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. [the great game] Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud.....Finally, the new companies need to prove their worth. They need to build strong cultures, delight their customers, establish their own competitive advantages and, yes, justify their rising valuations. No one should expect building a new high-growth, software-powered company in an established industry to be easy. It's brutally difficult.
Marc_Andreessen  Andreessen_Horowitz  software  physical_economy  creative_destruction  Joseph_Schumpeter  software_is_eating_the_world  delighting_customers  physical_world  high-growth  Silicon_Valley  competitive_advantage  incumbents  the_great_game  electric_cars  cyberphysical 
august 2011 by jerryking

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