Today’s digital disruptors are using technology to disintermediate entire industries and unseat corporate giants. New nomenclature has emerged to describe this transformational process. In the Internet Era, we talked about being “amazoned”. In the Digital Era, we are talking about being “ubered”.
Uber has:
- Tapped into labor at mass scale
- Ripped down a hundred year history of “medallion” value
- Exposed and cured the inadequacies and inefficiencies of a major incumbent
- Made employee and employer one (though Uber claims it has no employees, we will see)
- Demonstrated the most perfect example of matching supply to demand that I have ever seen
- Operated a business in which cash is not used
Every industry is vulnerable. Every incumbent is vulnerable. And burying your head in the sand won’t change the fact that disruption is all around us.
A common thread to digital disruption is that the middleman is gone, in every industry.
The average age of an Insurance Agent in the U.S. is 59. The middleman will be gone in Insurance over the next five years.
Movies are direct. Music is direct. Insurance is direct.
Logistics and supply chains are massively changing. Amazon is running algorithms on your buying behaviors. If you buy an outdoor table online, they are shipping an umbrella to a fulfillment center close by for same-day delivery.
Uber is ultimately a logistics business.
Salesforce redefined the partner ecosystem in software and services. Why do you need a middleman when you are selling a subscription service?
Simple answer: you do not.
Uber vs. the traditional taxi model, Netflix vs. Blockbuster… these are examples of how digital disruptors have unseated giants. Part of their success is due to the emergence of the Subscription Economy. In my next post in this series, I’ll explore how this model—pioneered by magazines and book-of-the-month clubs—has become a required part of business.
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