Last Tuesday, I had the pleasure of presenting some of my new research to a delegation from Yonsei University. During a break in my lecture, “The Internet of Things and Mass Collaboration,” I overheard an American professors ask, “What do you think of Ron’s talk?” A Korean professor, referring to my assertion that new technologies are chipping away at the fundamental pillars of post industrial age businesses models said, ”He’s scaring the hell out of me.”
Although that’s not the reaction that I was going for, I understood his fear.
The problem arises from the fact that businesses are built upon the relative scarcity of a product or service. If you can solve my problem for the right terms (price, quality, quantity, etc…), then I will exchange money with you for that scarce solution.
But, what happens to your business model when those same solutions are offered abundantly in the marketplace–either for free, or at such low margins that it negates your ability to compete?
This concept isn’t new. Unskilled labor has been threatened by automation for almost two centuries. Businesses built upon physical media (ink, paper,vinyl, magnetic tape, radio waves, laser disc, film, etc…) have seen their business models marginalized by digitization. And today, the critical mass formed through access to ubiquitous networks is forcing abundance upon the most traditional of brick & mortar businesses–perhaps even yours.
If economic abundance has arrived at your doorstep, it’s important not to panic. Historically, threatened companies tend to create artificial scarcity through featherbedding. However, history has shown that customers rebel against artificial scarcity. Just take a look at the firestorms that have emerged from things such as Digital Rights Management (DRM) and Network Neutrality.
Rather than looking inwardly to protect the status quo, the best way to address abundance is to look outwardly. Consider addressing problems that your company has always wanted to tackle, but couldn’t because of the scarcity of the day (cost, quality, quantity, etc…). Perhaps, while abundance has eroded the value of your old products and services, it has also made new ones viable. Question old assumptions. Find new problems to solve. The process will lead to new value that your customers will gladly exchange their dollars for…well, at least until abundance comes calling again.