Silicon Valley ecosystems are disrupting entire industries
Categories: disruptive ecosystems
silicon valley is making a major shift from what we historically think of as the high tec capitol of the world to now the industry disruption capital of the world. Eco systems are forming there and they are disrupted entire industries.
20 years ago the argument was IT doesn’t understand the business and I actually believe that has flipped now – that in 2014 the business doesn’t understand IT.
So the old model is that silicon valley sold everybody a so called technology stack and now it is building businesses that compete with the very industries that once it was just a technology provider to, so the old model – kind of think of it as an arms merchant, Larry Elison sold everyone in the world the technology stack and he bought a lot of nice sail boats, the new model we think of more as a mercenary and a mercenary is very different than an arms merchant. What a mercenary does is he builds a professional army, gives them the best equipment and tools, they are well funded and they put them on the battle field and they say take land, take market share – very simple example is iTunes. When iTunes was created Steve Jobs didn’t go to EMI music and say would you like to license my music database that would have been the old model, the new model is he put it on the battle field and it is a 20 billion dollar business for Apple now in digital goods.
I am talking about both the IT function but I am talking about IT as a core building block for extraordinary destructive capability inside of an industry. Other research shows that 30 to 40% of retail bank is up for grabs because of its digitisation. We see, for instance in the UK, we saw a property developer raise 4 million Stirling on a crowdfunding platform – 4 million Stirling on a crowdfunding platform. Now if you went into a UK bank, you went into a Barclays or a Lloyds and you had a spreadsheet of all their small business loans, what percent of those loans are under 4 million Stirling? That essentially is all up for grabs now on an alternative none recumbent platform. It is not Lloyds worrying about Barclays, its Lloyds worrying about non entrants that are coming into their market from below that they would discount – they are not my competitor.