Month: December 2017

Uber is held up as an example of of how to disrupt an entire industry, in this case the taxi industry. But sooner or later disruptive ways of doing things butt horns with the establishment. Industries like taxis are regulated by the government, the government makes the laws, and the government doesn’t like it when those laws aren’t adhered to. That’s when companies like Uber find their ‘disruptive’ ways such as not considering their drivers employees challenged and disrupted by the establishment, which decides that those drivers are employees. In this way the establishment takes away any disruptive advantage, and eventually consumes the disrupted into the mainstream of the industry. 

The government’s own digital team proved this when they looked at ways to disrupt and digitise the process of buying road tax. They were faced by a law that prevented what they wanted to do. Of course, the solution was to change the law, which they did, but something disruptive companies can’t do. 

Crypto-currency, the application of block-chain technology to financial transactions, will go through the same cycle. It’s still too new a technology to have developed a useful application, but it will. And when a disruptive company comes along that can commercialise that application successfully they will be eventually be faced with a government that says ‘play by the rules or don’t play at all’. This is the cycle of innovation in regulated industries. It starts with the birth of the technology, then the application of the tech to disrupt an industry, then the legal challenge by the establishment, and finally the disbandment or consumption of the industry. 

A retailer puts a new product in a store. It doesn’t sell very well so they reduce the price. It sells a little better but they still have plenty in stock so they reduce the price even further. It sells at a more usual rate so they keep it at that price until the stock sells through. 

Value is a subjective thing. A product is only worth what someone will pay for it, so progressively reducing the price of the product until it matches the customers perceived value is a surer means of hitting the right price point. It’s more customer-focused than pricing a product by margin targets. 

For businesses where space is at a premium and the cost of holding on to non-selling products is as important as the margins achieved by selling the products, progressive markdowns are a great way of letting the customers tell the business how much the business should be charging them. 

There I was sitting in my car minding my own business and quietly tapping away on my laptop when I noticed a man in his fifties standing near my car with a mobile phone in his hand. 
A couple of seconds later a car pulled up and out got another man with a mobile phone. Then a young couple joined them also holding mobile phones. In less than a minute I was surrounded by about fifteen mobile phone wielding maniacs. 

A woman in her fifties drove up and parked her car in front of mine, blocking me in. She leaned out of the window and called to the group, “Is he one of us?”. For a moment I considered leaning out of my window to reply, but as they outnumbered the normal people I thought better of it. Then she yelled again to the group, “Are we going in?”, like they were about to launch a military strike. “50 seconds!” came the reply from the leader of the group. Then, in unison they all began taping furiously on their phones. I glanced nervously at the woman-in-the-car’s screen and saw an orange dragon-looking creature getting punished by her finger tip. 

Ah, I thought, as it suddenly all made sense. Pokemon Go. A group of grown adults were meeting up on a cold, dark night to collect imaginary creatures on their phones. Then the woman-in-the-car said, “We’re going to the pub.”, and as quickly as they had arrived, they were gone.