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Strategy and Transformation

Form, Function and Business

Today Seth Godin posted a blog about how advances in technology affect incumbent businesses and the ways in which they operate.

Mail —> email
Books —> ebooks
DVD —> YouTube/Netflix
1040 —> Online taxes
Visa —> Paypal
Open outcry —> Electronic trading
Voice call centers —> forums and online chat
Direct mail —> permission marketing

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Godin makes an observation that firms usually ask the wrong question when there is a technology shift in their business. Instead of asking “how does this shift help our existing business?” they should be asking “how does this shift hurt us or create new opportunities for us?” In the case of publishing, many traditional publishing firms likely saw the rise of ebooks as a positive sign for literature and book sales overall but may have overlooked the dangers to their incumbent industry as a result. With that example, the market for books may get larger but traditional publishing firms may find themselves with a smaller piece of that market when all is said and done.

In each case, the original players in the legacy industry decided that the new form could be bolted onto their existing business model. And in each case they were wrong. Speed and marginal cost and ubiquity and a dozen other elements of digitalness changed the interaction itself, and so the function changes too.

Form and functionSeth’s Blog

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