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Data, Analytics, andInternet of Things:
Be Disrupted or Disrupt
Dr. Natalie Petouhoff
VP and Principal Analyst
52% of the fortune 500 firms since
2000 are gone52%
Will this be you in 2020?
Digital Disruption Has a Blind Spot
Kodak: An interesting example of how the Blind Spot works
George Eastman’s Journey1878 – George Eastman began experimenting to make photography a more practical endeavor
George Eastman’s Journey• 1880- Invented dry plates & prep machine• 1884- Invented roll film• 1888- Invented camera for the rolled film
George Eastman’s Journey1892- Named the Company Eastman Kodak
What was Kodak’s Business Model?
Chemical supplier
Paper supplier
George Eastman’s Journey• 1973- Steven Sasson experimented with CCD
1975- Created 1st digital cameraThe camera• Weighed 8 pounds• Recorded black and white images • Onto a cassette tape• Resolution was .01 megapixels (10,000 pixels) • 23 seconds to capture it’s first image
December 1975
Question’s Steven Sasson Got:
He thought they would ask him:• How did you do this?• How did you make it work?
What he was asked:• When would it be ready for commercial use?• When would it be realistic to use?• Why would anyone want to look at their pictures
on an electronic screen?
What Happened?
The Blind Spot in Digital Disruption
What is that?
What was Kodak’s Business Model?
Kodak wasn’t just making photography more convenient• Photography was just the medium of expression• What was being expressed was the “Kodak Moment”• Our desire to document our lives & memories• Kodak was in the business of making memories last
What better device to do this?The Digital Camera
BUT that’s not what Kodak did
Kodak buried the digital camera• They thought it would undercut their
chemical and paper business• And make the company compete with
itself
The Blind Spot• They didn’t explore how the low resolution .01 megapixel image could utilized the exponential growth curve (Moore’s Law) to eventually provide high resolution images
• Instead of using their invention to corner the market, the market cornered them
The first part of the blind spot: Moore’s
When Sasson first demonstrated the digital camera• He was asked for an estimate for prime time use• Frightened executives asked: “How long before the new invention posed a threat?”• Sasson estimated 15-20 years
• Kodak didn’t understand the disruptionsoon to be wrought by exponentials• Moore’s law is unusually deceptive• The number of integrated circuits on atransistor was doubling every 12-24 mos
Businesses: Take Data, Analytics & IOT
Going forward, expect disruptive (exponential innovation )
Let’s Look at Kodak’s Journey
$28B market cap140,000 employees
1996
2007
Stopped turning a profit
Filed for Chapter 1117,000 employees
2012
Forgetting their Mission & Moore’s Law is the
That’s exponential growth in action
CPU, computer operator's console, and peripherals of an IBM System/360 Model 50 in use at Volkswagen
Exponential Business Growth Models
• Are deceptive• Changes seem minuscule• They seem almost linear
• Kodak’s first digital camera went from.01 mega pixels to .02. to .04 to .08
• Once the doubling breaks the whole number-barrier• A twenty doublings away from a million-fold improvement• A thirty doubling away from a billion-fold improvement
• This is when exponential growth becomes visibly disruptive
Source: www.evolutionpartners.com
Deception is Followed by Disruption In Business Growth Models
Sasson’s 1st camera didn’t initially offer what Kodak prided themselves on• Convenience• Image fidelity
• Kodak’s executive’s figured that camera was no real threat• Remain a toy for many years • Focus was on quarterly profits of chemicals & paper business
• The decision to not compete against themselves • A decision to put themselves out of business
1976, Kodak controlled 85% of the camera business
By 2008, one year after the intro of the 1st iPhone, Kodak’s market disappeared
What businesses need to pay attention to is the knee of the curveThat’s where the opportunity is –You want to take advantage of this opportunity
The Internet of Things is following this exponential business growth model
www.evolutionpartners.com
Exponential Business Growth Models
Filed for Chapter 1117,000 employees
2012
Instagram $1B market cap13 employees
Ex: InstagramIn 2010, a couple of young Stanford grads founded an exponential org:
Instagram, which demonetized, dematerialized and democratized the capturing and sharing of memories:
Something Kodak had started and lost
How did a 1996, $28B market cap companyFail to take advantage of the digital camera?
Instagram is an exponential growth model
This is where the exponential forcePuts linear brands out business
And this is the opportunity for youto think differently about your business
Business Growth Models
LinearExponential
www.evolutionpartners.com
Examples of Disruptive Innovation
• The Telephone: (IP Telephony: Vonage, Skype)• Hotel Industry: (Airbnb, KeyFlip, HomeAway, Roomorama)
• Taxi / Cab Industry: (Uber, Lyft, Curb, Hailo, Sidecar)
• Classified advertising: (Craig’s List, Angie’s List)• Records: Downloadable music: (iTunes, Napster, The Filter)• Books: (iBooks, Kindle, Audible)• Search and advertising: (Google, Bing)• Financial transactions: (PayPal, e-Trade, Venmo, Vertcoin,Znap)• Personal communications and networks: (Facebook, Twitter)• Business communications: (Gmail, Skype)• Electronic commerce: (Amazon, Alibaba)
Filed for Chapter 1117,000 employees
Instagram $1B market cap13 employees
Let’s look at how innovative companies are using data, analytics and IoT to transform their business models and revenue streams
• Also emanates early warning signals for tornados, earthquakes, floods• Provides spoken alerts• Delivers alerts via a range of colored halos depending on the issue at hand• In the future, may be used to help customers know there is a leak in their basement or…
The device is connected to the National Weather Service via an IOT platform
Smoke Detector that:
Examples: Software-based Maintenance Business Models
Rather than having thetiresome task of an unplanned trip to the dealer put upon them, Tesla owners can go about their day while the car “fixes itself.”
Examples: Products Become Services
Instead of a company purchasing and owning an asset —whether it’s a printer, an elevator or a jet engine —
Instead of investing capital to buy the asset and being responsible for ongoing maintenance, the customer just pays for the service as it is consumed.
Instead of selling jet engines with a separate fixed yearly maintenance contract, Rolls-Royce provides the engines and services them for an all-inclusive price for each hour of flight —which is directly linked to the airline’s revenue.
Examples: Customer Play a Role in Design
http://www.wareable.com/footwear/volvorii-smart-shoe-has-customisable-e-paper-panels-and-wireless-charging-944
Examples: Digital Twin Engines
Digitally-Oriented Companies hold the overall market share and percentage of profits
Disrupt or be disrupted?How will you transform your business?
Thank youAny questions?
Thank you. Any questions? Dr. Natalie Petouhoff
+1 310 919 8467
@drnatalie
www.drnatalienews.com
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