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Gone are the days of actually having to show up to shop for your luxury wares at Bergdorf Goodman. Amazon has all but abolished physical storefronts and become the third-largest retailer in the world in the process.
And you can forget about paying Manhattan prices at the Waldorf Astoria. Because Airbnb has managed to turn the hospitality industry upside down by facilitating the rental of properties it doesn’t even own.
What made any of this possible?
These are not your mad men, your brick-and-mortar retailers, or your real estate tycoons of yesteryear.
These are your software companies of today.
When Marc Andreessen predicted in 2011 that software would eat the world, these companies didn’t hold back in fear of another dot-com bubble bursting. They didn’t shake their heads at the ridiculousness of investing in software.
They pulled their chairs up to the table and dived right in.
Looking back now, it doesn’t seem like such a radical statement to make. Especially considering the Netscape co-founder certainly knew his way around technology. I mean, the iPhone had already been around for a few years and Facebook was going strong. Who couldn’t have seen that software was on its way up?
But the way Andreessen understood the extent to which software would change industry and the world as we knew it was something of a prophecy.
Back then, Uber was just coming online. Today, every other startup wants to be the Uber for their industry.
Andreessen was right. Software ate the world.
Here’s what you can do about it.
Your first instinct might be to rethink your business model, replace your entire staff with “code monkeys” (a fitting throwback to a bygone era in programming), and burn down your warehouse. Anything to spare yourself from the hungry software monster, right?
Not so fast.
Throwing random tech solutions at your company and then sticking your head in the sand won't get you far. It's akin to putting a bandaid on a leaking pipe. Sure, you may stop the issue momentarily, but damned if that pipe isn't going to burst eventually. If you want to bite back in this day and age you must understand one thing, and only one thing: digital must become a part of your company's DNA. Digital can't be something you slap onto your business plan "just because."
Luckily for you, we live in an age where everything we need to be digital is quite literally right in front of us. We have APIs that let us integrate sophisticated functionality into our own websites. We have digital tools that allow us to automate our business processes across the globe.
All you have to do is identify areas in your business where software can streamline operational, onboarding, or other processes; deliver products and services; and perform other tasks in a way that people in this decade can appreciate.
Just look at Netflix. With a budget of $16 billion, it plans to become the biggest entertainment producer in the world.
Today, it rivals century-old production studios. Back in the late 90s, Netflix was only trying to beat out Blockbuster. And it did in large part because it was willing to master a service its competitor wasn’t: the post office.
Netflix was founded upon improving the movie rental model. First, it removed traveling to the store from the equation. Then, when the right tools came around, it was easy for them to make the logical leap to deliver entertainment in a whole new way again. This time, it got rid of the store altogether with the help of software and the internet.
When we built HelloSign, we knew we wanted to simplify modern enterprise. It started with improving the flow of important documents with easy eSignatures and online faxing. Now, we’re able to build upon our existing technology with state-of-the-art document automation software.
We’re not satisfied with solving one challenge then resting on our laurels. We want to change the way the world works.
Where can your business use software to take its offerings to the next level or jump on opportunities that haven’t previously been available?
There’s still plenty of room at the table—if you grab your seat now.
It’s easy to look at an example like Netflix and get disheartened. The software revolution is decades old now. They got in at the ground floor and established dominance well before the entertainment industry got wise and the software space sprouted millions of self-taught hackers.
But when you look at the facts, industries on average are still only 37% digitized.
There’s still plenty of space for your business to make an impact through smart investments in digital transformation.
And when we say “grab,” we mean just that. Disruption happens in the blink of an eye. Waiting to react until you see software companies step into your space is far too late.
When was the last time you heard the phrase “Kodak moment?” Exactly.
History has shown that an ounce of prevention is worth a pound of cure—even in the business world—time and time again.
Stanford economist Paul Romer explained the value of urgency best with his now-famous 2004 utterance: “A crisis is a terrible thing to waste.”
If you’ve yet to developed a pressured-yet-controlled strategy to make organization-wide changes with a quickness, it’s time to adopt a crisis mindset now to catch up with digital transformation.
Learn from your competitor’s mistakes.
Transforming aspects of your business to keep up in a software-savvy world is an investment of time and money. Like any investment, making it in the wrong place isn’t going to do you any favors.
Many companies that were eager to be perceived as early adopters jumped off the digitization precipice with little forethought. Now, some are finding their ill-planned investments void of return—a fact that puts you ahead.
Knowing there is space for your digital transformation, look beyond just your products and services at processes where you might be able to make the most positive impact.
Predictive modeling shows that the biggest impact on revenue is likely to come via the digitization of supply chains. Yet, a miniscule number of companies are actually taking advantage of this opportunity.
Which labor-intensive or time-sucking workflows can you adjust to get to profit faster? These may be the areas that will benefit the core of your business and potentially, the business model itself.
Where most companies are investing in digital transformation are marketing and distribution, which makes sense given the relative accessibility of pre-made software.
There’s nothing wrong with following this trend if it makes sense for your business.
There’s also nothing wrong with breaking the mold to do what works for you.
The important part is that you digitize at all.
Companies that choose to remain idle in the face of digital transformation can expect to see a 12 percent decrease in revenue. Those that disrupt? A 16 percent bump.
Since 2000, 52 percent of companies listed on the Fortune 500 have disappeared due to being acquired, claiming bankruptcy, or plain closing up shop.
The belief is that this rapid shuffling is due to the rapidity of change itself since the dawn of digital. The wheels of progress that used to move slowly are spinning at break-neck speeds. Business models that can’t be disrupted will crack under the seismic shift to software.
Disruption abhors middle ground. In order for it to transform a company, everyone from the C-Suite to the production line must be bought in.
Digitization is a massive undertaking. And it should be, given its power to transform a company’s entire workflow—not to mention its bottom line.
It has become clear that digital transformation is a case of when, not if.
That gives you the unique opportunity to become the changemaker your company needs. Digital transformation could all start with you.
The cost of burying your head in the sand?
It’s hard to say with certainty. But I bet we can all think of at least one industry whose disruption and ensuing collapse is particularly painful to ponder.
After decades of being the most popular on-demand ride service available, the taxi industry has weathered several tough breaks recently as technology-enabled ride-sharing services flood their space.
Unfortunately, taxi companies didn’t foresee the rise of ride sharing that mobile technology would make possible.
Uber, however, did. That’s why they entered the ride space, but not as a taxi company.
Uber is a software company that took a big bite out of the taxi industry.
In Los Angeles alone, it only took three years after Uber moved in for the number of taxi trips to drop 30 percent. One can only imagine how that will continue to play out in the years to come. It’s not looking pretty for cabbies.
But while full-time taxi drivers lose an average of 10 percent of their income, the number of self-employed drivers rises 50 percent in cities with Uber. Their software is building a rising tide that lifts all, erm, cars.
Uber drivers also tend to earn more money because the app’s software automatically matches riders with drivers, thus improving efficiency and reducing time spent driving around with an empty back seat.
In the few short years since Andreessen’s prediction, software has eaten the world. But that doesn’t mean you have to get chewed up and spit out.
Embracing digital transformative and software in your offerings, internal processes, and supply chains can position you as a modern enterprise leader and even bump your revenue by a whopping 16 percent.
Now that’s a big bite.