Any sector rises against a more modern or cheaper alternative to its product or service which is already offered. This is a familiar response in many sectors whenever digitalisation turns the market upside down. Take for instance the worldwide commotion surrounding the Uber taxi app, or home accommodation rental site Airbnb. Innovative start-ups and relatively closed markets don’t appear to be a terribly good combination. But what if we looked at innovations coming from start-ups as an opportunity rather than a threat?
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Often these are small players offering smart services based on new technology and data analysis. This poses difficulties for the established order. So many difficulties in fact, that they rise against them. To them, Uber is then acting unlawfully, and the above-mentioned players will miss out on revenue. Uber drivers are even threatened by ‘real’ taxi-drivers.
Focus on the opportunities
This is a narrow minded reaction. It’s better to ask yourself just how such an application can be successful even though a perfectly good taxi service already exists. Many innovative start-ups are in a niche market and are aimed at resolving one specific problem. This means that start-ups are fulfilling a market need, making them hugely popular. Start-ups often use a limited quantity of information, because they focus on a niche market, but with this limited quantity of information they often come up with extremely clever apps, which is why they become so largely used in that specific field.
They are actually an eye-opener for existing players: instead of being against them, you’d be better off considering just how your own organisation is put together, and where the opportunities lie for improving your own product or service.
Use existing data cleverly
In fact, it’s not always the case that start-ups have an advantage when they bring a new service to the market. Simply because many large organisations are not actually aware of the huge volumes of data they store and the valuable information which could be extracted from it (data analysis) to improve their service further. Deploying this data is what makes it possible to actually stay ahead of the competition.
The more intelligently you work with the data, the more valuable it is and the more you can achieve with it. So many large organisations have an advantage, because they can combine and analyse a lot of information from a variety of sources. If only established companies would open their eyes and see that potential, then start-ups would no longer be seen as threatening.
The solution is often simpler than you might think: imagine that taxi companies join forces and exchange relevant data with each other, using it intelligently, then they may be able to offer a better alternative to Uber. The problem is that companies are often not aware of the power of (historic) data and the opportunities available. Expensive investments are often not needed to stay ahead of the competition.
You don’t have to reinvent the wheel, as long as you know how to drive a car properly. Then you don’t need a taxi at all...