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Is Technology Changing Your Business Model? A Tip From Amazon’s Playbook
Posted September 28, 2017 in Technology
By Andrew Gowing
“The revolution was going to happen, I didn’t know when, and I didn’t know how effective it would be. In the end result, the fundamental business model of Kodak was undermined by the new technology.” — Steve Sasson – Inventor of the Digital Camera
In 1974, Steve Sasson engineered the first ever digital camera. That digital camera was .01 megapixels by today’s standards. He accomplished this while working for Kodak, one of the largest players in the film industry at that time. He knew that his invention was very raw and would take years of development. At the time, what he may not have known is that this new technology would require a change in Kodak’s business model in order to remain relevant.
This was a change that Kodak would resist making.
Kodak spent billions in further development of the digital camera. In the end, it was to difficult for Kodak as an organization to shift their business model. What they knew was a profit model for film and paper. This failure to adapt and shift the way they did business is ultimately what destroyed Kodak. To add insult to injury, it was their own technology that ended up leading to their ultimate demise.
Kodak filed for bankruptcy in 2012.
You could argue that ultimately the digital camera was overtaken by smart phones so their industry was doomed anyway, and you would probably, most likely, be definitely right. But without the digital camera, do we have the same camera technology and picture quality in smart phones that we have today? The point here is to be adaptive, embrace technology and change, think outside the box, and do what you can to control your own destiny.
A more successful example of technology changing a company’s business model would be with Jeff Bezos, CEO of Amazon, and their development of the Kindle. Prior to the Kindle’s release in 2007, Bezos set out to eliminate the need to sell hard copies of books. This came as a shock to people within Amazon because books were the very thing their business model was built on. Amazon’s development of new technology made this change possible.
Bezos thought it better to self-cannibalize rather than be destroyed by somebody else. He was adapting, embracing technology, thinking outside the box, and doing what he could to control his own destiny.
In 2010, eBook sales for the Kindle overtook Amazon’s sales of physical books. Technology forever changed the way Amazon sold books, and the way books are now sold by everybody. Yes, you can still find a vintage bookstore, typically with the name “Last Bookstore on Earth”, but I would argue they exist more as a novelty. The fact remains that books, for the most part, are now purchased and consumed differently because of technology.
Could This Pertain To eFiling?
To go back to Steve Sasson’s quote at the beginning, it almost sounds as though he is describing eFiling. To change his words a bit and make them relevant to our industry…eFiling is going to happen, we don’t know when (it is happening now), and we don’t know how effective it will be (still waiting to see in Los Angeles County). In the end, our fundamental business models will be undermined by technology (eFiling).
We may need to examine our current business models. Do we do it the way we do it because we have always done it that way? Is technology forcing a change on us that we are not comfortable with? Are we positioning our business to be relevant for decades to come?
I hope this has challenged you and encouraged you to be adaptive, embrace technology and change, think outside the box, and do what you can to control your own destiny. CLICK IMAGE FOR VIDEO.
As the Conference Chairman it was amazing to see members, vendors, sponsors all having an amazing evening on Friday night. The weather was perfect and so was the view. We had live music, good food and the drinks were flowing.
As we moved along, Saturday afternoon brought us even more education. Michael Kern and Lance Randall gave us a NAPPS update. John Perez and Tony Klein presented Foreign Depo. Subpoenas. Tom Alkema led a special breakout session for photocopiers. Bob Musser did exactly what I asked him to do which was to explain to CALSPro members why, “Stand your ground” is relevant to process servers in California.
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Efiling