Dion Chang is one of those deep thinkers who doesn’t say much in a crowd. But put him in front of an audience (or a keyboard) and the ideas flow non-stop. He is plugged into the way the world is changing, focusing his attention on identifying trends before they hit Malcolm Gladwell’s now famous tipping point (Chang’s business, after all, is called fluxtrends). In this piece, first published in Sawubona magazine, Chang writes about the world’s transition to the technological age, and how it is changing the rules of business. – AH
By Dion Chang*
Technology is undoubtedly the fastest driver of change, and as we enter the second decade of the 21st century, we are also discovering that it is proving to be the grim reaper for many businesses who don’t keep up with it’s fast pace: just ask Kodak who were, in essence, destroyed by their own invention, the digital camera.
The roll call to extinction for many companies has started, and in the last two years the rate of extinction has accelerated.
Borders bookstores in America lost the digital battle, as did Jessops camera stores and the Blockbuster video chain in the UK, and while not quite extinct yet, publications like Newsweek have decided to become “prisoners of war” and embrace digital, rather than lose the war completely.
Forward thinking companies are now looking ahead to find ways and means to side-step technological extinction and in the process many have found new business opportunities with rather strange bedfellows: their digital competitors.
Take the cigarette industry. If you thought that digitization would not be a threat for tobacco companies, think again. The e-cigarette is a curve ball no one could have foreseen. [For the non-smokers, e-cigarettes are purported to be a “healthier” option to smoking. Instead of burning tobacco and inhaling the smoke, an e-cigarette vaporizes nicotine, providing smokers with a fix without having to incinerate their lungs.]
The sales of e-cigarettes are still relatively small: projected sales of $1billion in 2013 compared to the total market of tobacco sales, which stands at around $80 billion globally. However, unlike video outlets and CD stores, tobacco companies have seen the writing on the wall, and have acknowledged that, like e-books and downloadable music, e-cigarettes will most likely surpass tobacco sales in the next decade. So instead of fighting the digital revolution, many companies have embraced the inevitability of change, and have embarked on an unusual counter offensive: buying up the e-cigarette manufacturing companies. It simply means that in the years to come, whether your addiction is traditional or digital, they still own your addiction.
Companies that own competing brands within their own stable is nothing new, but it does seen to have much more relevance in the digital era. In retail – another war zone – the same principles are being used. Bricks and mortar stores are scrabbling to launch online services in a bid to entice, or simply retain, a hybrid customer that operates both on and off line.
Similarly, car-sharing schemes are fast becoming a red flag for car manufacturers. The new, and fast growing, eco trend of collective consumption is posing the same threat to the motor industry as e-cigarettes are to the tobacco industries. In America, just over 800 000 people now belong to car sharing services – a 44% increase from 2011: that’s a lot of cars NOT being bought. In January this year, Avis Budget Group bought Zipcar (a highly successful global, car sharing system) for $500million, while Daimler launched it’s own car sharing service, Car2go.
The lesson for businesses is that it is no longer about big versus small, but fast versus slow. At the turn of the last century, the world switched from an agricultural to an industrial era. Now are we experiencing a similar transition: from an industrial to a technological age, and as a business, you now need to straddle both worlds. Resist change and you could simply drop into the abyss of irrelevance.
First published in Sawubona, SAA’s award winning in-flight magazine.
* Dion Chang is the founder of Flux Trends. For more trends visit: www.fluxtrends.com
