I’d like to start today’s article with a story about something that shook me up a bit recently.
I recently bought a diamond engagement ring at an amazing online store, but needed to get the size adjusted slightly.
Instead of sending it back to the USA by post, I decided to find a good quality local jeweler who would be able to make the adjustment in a few days instead of weeks.
But when I started speaking with the jeweler about my request, it became obvious what he thought of the innovative new way I had used to buy jewelry online:
Jeweler: Where did you get this piece?
Me: I got it online from the USA, and they shipped it to me in Australia. I’m really happy with how it went.
Jeweler: You shouldn’t have got it online. You are going to get scammed.
Me: I wasn’t scammed. My purchase went really well.
Jeweler: I have had so many women come into my shop crying, saying they were so disappointed that their boyfriend bought something online and when it arrived, it wasn’t anything like you were expecting. You need to see the item before you can decide to buy it, and you need someone professional to explain the 4 C’s to understand what a real high quality diamond is. You just can’t do that online.
Me: Well actually, I was able to do all the research I needed online now, and I could choose exactly what I wanted based on my budget and what was important to me. And I got an amazing deal. I’m very happy.
Jeweler: Listen, I’m an expert and I know what I’m talking about. Next time, you should buy things in a shop like this one.
I might be paraphrasing slightly, but as you can see, the Jeweler was not very positive about the trend of buying high-end jewelry online, instead of in shops like his.
And it is easy to understand why he would be skeptical.
Innovations like 3D high definition scans of thousands of diamonds at wholesale prices online were undercutting his business model and stealing his customers.
So while his message was all about the crying women who were upset, what he was actually saying was “You should be doing business with me in the way that I am used to“.
Usually, when a company finds that a competitor or Startup has found an innovative way of delighting their customers, their reaction is not to jump for joy about how they can also benefit from this new innovation.
Their reaction is usually anger.
And the desire to fight to defend what they have.
This is a cognitive bias called Loss Aversion, which I have written about previously.
This has been an increasing trend in the past few years, especially as app-based platform companies have completely disrupted existing monopolies.
Probably the best example is with ride-sharing companies like Uber, which have completely undercut the taxi industry, which previously had strict control over who was able to have a license to drive the streets.
Getting taxi licenses like this often took huge investments, being worth almost $1.3 million dollars in New York in 2013, but now being sold for as low as $160,000 since Uber and Lyft took over the streets.
This has led to thousands of taxi drivers across the world being furious that the industry they have built up over years has been so ruthlessly disrupted by a system which is faster, safer, cheaper and more convenient for the end user.
They see the innovators as the enemy.
As a result, instead of embracing the innovation ethos of Uber and using it to build up their own better offerings, most Taxi Drivers did the opposite of innovation: Entrenching themselves in their existing system and telling users to ignore the obviously better solution.
While I was in Bali recently, we used the South-East-Asian ride-sharing app, and the driver often told us that they experienced threats of violence, abuse and property damage by existing taxi drivers.
All this because people were afraid that a new company was taking away their way of life.
This doesn’t only happen in industries.
It also happens within companies far too often.
I have seen first-hand how innovation challenges and incubators within companies fail once an idea has been tested and the end-users love it, but the company’s leadership is hesitant to release and scale it as it might impact their existing core business.
They are in essence afraid of disrupting themselves.
But here is the thing. If you don’t disrupt yourself when a new innovation provides a better experience for the end user, then another company will.
Sometimes, in order to prevent the enemy from destroying you, you need to make peace with it.
Sometimes, make love with it.
Love overcomes fear and anger.
And only then will you benefit from the innovation as well.
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