Current examples of the innovator’s dilemma

Innovators dilemma: blinding yourself to the new business model that’s coming in the near future in favor of protecting the old business model that exists today.

Caused mostly by fear.

Starbucks invested all these resources in coffee shops, but no one goes to them anymore. They’re shrinking stores and soon will be the Blockbuster of their generation because they either have to double down on their shops and turn them into actual places where people want to go (some ideas here.) or they need to set up for on-demand delivery, but right now no one is challenging them so they’re just protecting the old model. Soon they will see ever-declining revenues.

Amazon has these huge centralized warehouses. Shipping cost can only go so low, shipping time can only be brought so fast. But imagine if every store in your area (food store to Dicks sporting goods to the hardware store to staples) all joined a decentralized platform where the store five or ten minutes from your house could receive your order and drop off your package. Cost & time would eventually outstrip Amazon. Amazon fears this day, and it will start small with things that are expensive to ship etc. but it will happen and in 10-15 years amazons retail business will shrink. (More ideas here.)

Book publishers. They’re set up for publishing books, and although physical books are continuing to increase in sales, they aren’t increasing as quickly as video consumption, as well as virtual reality in 4-5 years. Video books, where you watch your books will become the most profitable medium of consuming books followed by virtual reality books where you “go into the book” and actually experience the characters and go on the journey with them, whether a business book or a biography etc. I see none of them moving on this, buying the rights, setting up an app for streaming these libraries of books. Maybe Netflix will be the one.



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