In the early years of being an entrepreneur, I found change was fun, a challenge to be enjoyed and gained from. But the longer I stayed an entrepreneur, the more fearful I became. One reason was the internet’s constant flow of negativity from scary news, to marketing that so efficiently plays on all our insecurities. We are told we need to do this, learn that. Now we have the tidal wave of economic, health, and planetary fears.
And change. We are seeing extreme changes in every part of how we live our lives. Technology, Robotics, IoT, AI, genetic engineering, the 4th Industrial Revolution. For those at the forefront of those industries, it is an exciting time, an opportunity to improve our lives. For many a person in the street, it is terrifying. It was one thing to want an Alexa, to demand faster and faster speed in telecoms, but quite another for the old norms swept away from us. But the message to entrepreneurs is to keep up or be doomed.
But that fear is (mostly) grounded in misconception and misinformation. Classic cases of failure “due to changes in tech” are waved over our heads. Polaroid and Kodak are regularly cited, Polaroid going out of business in 2001 and Kodak declaring bankruptcy in 2012. It is, indeed, true that the photography market was massively disrupted twice over with the arrival of instant film and digital photography.
But it is a complete misconception that these changes killed off both companies. There were many other factors from poor management decisions, shoddy patents, a complex court case, and dismal failures to react to the competition. They were not unaware of the changes that were happening, even to the point that it was a Kodak engineer who created the first prototype digital camera. Yet despite R and D investment, they remained convinced that what they did was the best solution and ignored the market research showing what the customer wanted. They lost sight of the core of the customer problem. They knew the customer wanted to keep visual memories – but believed immovably that meant those memories had to be printed. Had they thought about continuing the supply of visual memory, but in the best available way, their stories would have been very different.
Contrast this with a company such as Netflix. They started as a film rental by post company. The established leader in the supply of DVD rental was Blockbuster. But Netflix took over by making rental easier. They then changed the business model to a customer subscription one. Less than ten years later, they introduced their streaming service. They then evolved still further into producing original programmes, many of which have been award-winning. It might seem at first glance that the metamorphosing from DVD rental to where they are today is a complete change. But it is not.
The primary customer itch they are scratching has remained consistent. The customer wants quality entertainment, easily accessible. That is their core need. Unlike Kodak and Polaroid, who were both guilty of putting their opinions on what the customer wanted first, Netflix grew by keeping that primary customer need to the forefront and using every asset they could, from tech to talent, to deliver a continually improving version of it. The same story with Uber; people still wanted a taxi, just a more easily accessible one, or with Airbnb, where people wanted to rent a room to stay in.
Logically, we know this. But fear combined with tech overwhelm is a vicious little trap and easy to fall into headfirst. We have soaked up the marketing and believe it essential that we are “better” at tech for our businesses to survive. Once upon a time, that same belief might have had us buying a new piece of equipment, a new machine that was relatively easy to understand and adopt. For many of us, tech is a different story because we don’t fully understand it. Our belief that we are failing and must be “better” at it is self-fuelled.
In that fear of our own inadequacy, it is all too easy to forget the central truth that what is important is the customer problem. Tech may or may not come into that. Indeed, not every aspect of the vast complexity on offer will be relevant. Tech is only a tool. And it will also be pointless without the business basics being right. The most superb tech does not work as a cover-up for poor systems. Imagine a road system that sends people round in circles. You can add all bells and whistles, flashing lights, and automated one-way systems, but people are still going around in circles. Your business needs the basics right first.
Above all else, you can kit your company out with the latest tech in the market, but if you lose sight of the core customer problem, you will guarantee your own failure. Which would be crazy. Embrace the changes as opportunities to enhance rather than undermine. Use your expertise in your market to lead it. Believe in yourself and listen to what the market wants.