Why true disruption requires putting the last mile, first.
I have a deep aversion to the word disruption. Mostly because in the context of innovation in technology, it’s carelessly used to invoke sensationalism that just ends up blurring the lines between baby and bath water. We saw this movie before with Facebook-esq Social Business where the use of the term ‘disruptive’ by some in the media resulted in a hubristic overestimation of the movement’s real impact.
But some of the most foundational and meaningful digital transformation happening around us is in fact disruptive. And every of those disruptive instances are predicated on owning and designing the experience around the last mile, first.
Search: When my 14-year-old nephew wants to search the web, he says, “Let me Google it”. When my 8-year-old son who was born in the iPad era wants to search he says, “Let me check Safari”. My son could care less about what search engine is behind Safari. The last mile gets all the glory.
Networks: In 2006, Cisco rebranded itself as “The Human Network” attempting to own both the hardware that routes the data as well as the software that generates the content with Cisco Quad – its social networking platform for work. But coming from the router end of this equation proved challenging. Now Facebook is doing the same by coming at this opportunity from the other end. It’s teaming up with Juniper to ensure that the best networking gear needed to connect people is open. And with over a billion patrons locked in at the final mile, they can affect this change.
Commerce: Amazon is now offering Elements, its own branded Diapers to ring fence new parents – a lucrative segment of buyers. Because, as the gatekeeper of the last mile, it can offer an alternative to every other player in that supply chain, instantly.
Media: Netflix built its business on the backs of the movie studios by renting their products in a way that was more convenient to the consumer. With a huge customer base in its back pocket and 7 Emmys to boast about just in 2014, Netflix threatens to dis-intermediate the movie studio altogether. The last mile is at it again.
Automotive: Tesla in may ways, is ultimately the last mile in the assembly line of hundreds of hardware components and hundreds of thousands of software apps. Once you’re in the driver’s seat of this software-first car, Tesla controls the immediate digital delivery of gadgets, of OEM’ed software and prioritization of future enhancements to your driving and travel experience. In that sense, Tesla’s position in its’ industry is no less lucrative than my 8 year olds iPad – his portal into the world wide web that can prioritize what results he sees. The last mile calls all the shots.
Mobile Payments: And finally, the most revolutionary and most ruthless win by the last mile, described in this post by Rick Oglesby of Mobile Payments Today: After valiant attempts to control digital payments by Telcos / MNOs (by storing payment information in its SIM card), or by payment processors such as Paypal or Starbucks (by storing information in the cloud), and even the Banks who have carried the float, Apple jumped the gun and is embedding the digital wallet into the bowels of the operating system thereby threatening to remove any intimate connection you might have with any single 2nd, 3rd, 4th mile vendor in the current payment supply chain. Ironically, the term the “last mile” was coined by the Telco industry. It’s just that Apple altered the definition of what the last mile is in the world of mobile. And showed us who’s boss.
We didn’t start the fire, btw. Retailers and distributors who owned the final purchase experience have wielded the most power over manufacturers for centuries. Its just that digital products actually transform how we both procure and consume, providing a lot more than just convenient delivery and a better experience. It has the power to re-arrange the very pecking order of the traditional demand and supply chain and at break neck speed.
This show isn’t over by any means. Internet enabled devices, wearables, consumer messaging apps, networked businesses, your other favorite buzzword of the day and even Enterprise Applications all have a shot at re-arranging the deck chairs by owning the final mile. In fact, digital products blur the very distinction between manufacturers and distributors. And it won’t be evenly distributed, geographically. Fred Wilson details a host of new entrants into the US markets such as Xiaomi, Line and We Chat that can shake Apple and Amazon lead, here.
Everyone is a contender and as someone who builds and sells products, it’s a wonderful time to be able to do what we do.
Transformation will happen up and down the supply chain but serious disruption will happen at the last mile.
Comments also rolling on LinkedIn, here.