A sector typically rises in revolt when a more modern or cheaper alternative to its product or service is offered. This is a familiar response in many sectors whenever digitization turns the market on its head. For instance take the worldwide commotion surrounding the Uber taxi app, or the housing rental site Airbnb. Innovative start-ups and relatively closed markets don’t appear to make a terribly good combination. But what if we were to regard services from start-ups as an opportunity, rather than a threat?
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Often start-ups 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 it often results in outrage. To members of the established sector (mainly the taxi industry, in this case), Uber is acting unlawfully, causing them to miss out on revenue. Uber drivers are even threatened by “real” taxi-drivers.
Think in opportunities
Described above is a short-sighted reaction. It’s better to ask 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. They are fulfilling a market need, making them hugely popular in one swoop. Because they focus on niche markets, start-ups often use a limited quantity of information, but with it they often come up with extremely clever applications, becoming a big player in that specific field.
So in fact start-ups actually serve as an eye-opener for existing players: instead of rising up in revolt, you’re better off thinking about how your own organization is put together, and where the opportunities lie for improving your own product or service.
Use existing data cleverlyI
t’s not always the case that start-ups have an advantage when they bring a new service to market. That’s because many large organizations are not actually aware of the huge volumes of data they store and the valuable information which could be extracted from it to improve their service further. Analyzing and 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. Large organizations do, in fact, have an advantage, because they can combine and analyze a lot of information from a variety of sources. If established companies would open their eyes to these opportunities, then start-ups will no longer be as threatening.
The solution is often simpler than you might think: if taxi companies were to join forces and exchange relevant data with each other, using it intelligently, then they might be able to offer a better alternative to Uber’s offering. The problem is that companies are often not aware of the power of (historic) data and the opportunities it presents. Expensive investments are not always needed to stay ahead of the competition.
You don’t have to reinvent the wheel, as long as you know how to drive the car. Then you don’t need a taxi at all...