Embracing technology will set your business up for long-term success.
The internet is instrumental to our lives. We use it for entertainment, education, shopping, dating and more. Millions of people depend on it to make a living.
However, try looking up articles from 15 years ago and you’ll see that not only we were oblivious to how the internet worked, but we also angrily spewed skepticism as to the forecasts about technology's impact on business and the world in general. In 1996, Clifford Stoll, a renowned astronomer and a Ph.D. wrote the following in his Newsweek article: “The truth [is] no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.” He deemed the concept of online business laughable as, according to him, it lacked the essential element of capitalism: salespeople.
Clifford couldn’t have been more wrong, but really there is nothing to blame him for. All of us, even scientists, often look suspiciously at the emerging technologies. And this ingrained skepticism, though common, can hurt those running a business greatly when digital disruptions actually happen.
Kodak, a photography titan that ignored the rise of digital imaging – or rather failed to embrace new business models that the disruptive change had opened up – ended up filing for bankruptcy. Circuit City, an iconic retailer of electronics, neglected to enhance its online presence and thus gave way to the Best Buys and Costcos of the world; it, too, was pushed out of the market as a result. Examples like this are endless and yet us business folks always to seem to miss the lesson. New technologies, no matter how nascent, are not to be underestimated.
Right now there is big data and blockchain, which, I believe, most firms should be experimenting with, yet don’t seem to take seriously.
The promise of big data
Big data already has an impressive track record.
It helped Netflix produce one of the most binge-worthy shows of all times, it helped Obama win the 2012 election, and, in 2017, it helped India drive strategic ties with Japan.
But can progressive analytics and large dataset mining be useful for a small retailer that, for example, sells aquariums online? I know you may be skeptical, but the answer is “yes.”
From my experience working with e-commerce companies both large and small, most of them are already sitting on goldmines of data, which they fail to analyze and act upon. The first step, therefore, should be making sense of these records. If we’re talking about online stores, identify which combinations of products your clients often buy together and bundle them to create tempting offers, study demographics on customers that leave your business and look into what can be done to retain them.
The best strategy a business might have in terms of preparing for the future is creating a department of people trained in data science (statisticians, machine learners) and implementing advanced data mining technologies such as topological data analysis.
As more tech giants throw their multimillion-dollar hats into the big data ring, new, unprecedently efficient data mining software is being created. And when it gets adopted widely, it will become impossible for a small online store to thrive without forming a hyper-personalized view on each customer and curating hyper-personalized content and goods.
What’s all the fuss about blockchain?
The hype around decentralized ledgers is excessive and, for those actually who understand the tech, maddening.
The best known application of Blockchain is Bitcoin – the first cryptocurrency. It has been around for over eight years and yet most people are still confused over how it functions and whether it’s safe to use. Entrepreneurs cannot afford to be that unaware of blockchain's possible implications.
The blockchain technology, if stripped of all the hype, is very similar to the web. It, too, is a protocol that sits on top of the internet and can be used to build applications – native (separate from the web) and hybrid (rooted in both protocols). Blockchain is still in its very early days – we have millions of developers writing web apps in Java while there are just about 5,000 programmers who are blockchain experts. However, it is not to be ignored. Tech experts from around the world agree almost unanimously that the technology is on its way up.
The banks, as you might recall, didn’t do a whole lot with the web for the first 10 years of its existence. They introduced online banking and brokerage, allowed us to pay bills from home and that’s about it. This lack of innovation on their side caused a rise of fintech startups such as Paypal, Alipay and Prosper who found ways to exploit the Internet to deliver cheaper, faster and more convenient financial services.
The same thing is going to happen with blockchain. Innovative entrepreneurs and software engineers will utilize the elements of the technology that banks and large companies neglect and present either completely new services to people or provide more convenient and safe alternatives to the existing ones.
There are projects such as OpenBazaar, a peer-to-peer online marketplace without fees and restrictions, that provides an alternative to eBay and does not rely on any third-parties. There are also blockchain-powered rideshare startups (Chasyr, Lazooz) that aim to disrupt the industry Uber is now dominating. And there are about 400 blockchain companies out there that offer new-age financial services.
Most of these startups will fail but some will blow up. And the implications will be huge.
My advice to small companies is this: Be closer to the blockchain technology. If there are elements of your business that rely on an intermediary, consider creating a consortium blockchain to exchange information and data across it with your partners. Look into utilizing blockchain-powered smart contracts which replicate legally-binding agreements through code and, again, try to eliminate the trust component using distributed ledgers. Experiment!
The blockchain technology will not necessarily eliminate intermediaries from every kind of transactions, but it will surely change their roles. You ought to be ready.