Technology has flourished as an industry by creating substitutes for human processes and even for itself. Increasing compute power, storage and bandwidth has helped us to automate, accelerate and connect ever faster with increasing richness and context. Telecoms and then mobile phones replaced mail and in person meetings. Mainframes and PC’s replaced manual computations.
The Internet displaced brick-and-mortar businesses of all kinds. Even in today’s relatively stagnant macro economy, there is always growth in the area of tech where an incumbent solution is being displaced. However, despite the impact that technology has had on so many aspects of human life, “tech” has remained a standalone sector.
I believe that the biggest underlying trend in technology is the death of the tech industry, or rather, the acceleration of the death of technology as a separate independent sector. We will see the “cross-pollination” of core technical advances applied to traditional industries, both by tech companies and also by traditional tech industry leaders. Innovation, design, and development will emerge from retailers, banks, and medical companies; affecting not just new products but also the demand for hiring top tech talent into key business areas and not just the “IT” department.
The evolution of Mobile, Social, Cloud and Big Data will certainly continue. But, it is the convergence of these trends that will transform every sector in the global economy. I believe we are entering a truly magical era, where changes will be based not on just technical iteration, but rather on the true marriage of engineering excellence with business model innovation and real life applications. This will go beyond doing things faster. People will be able to think differently and more creatively. They will solve bigger problems that encompass business, political, and social change.
And the companies that embrace cross-pollination will gain a new competitive advantage and become the future sustainable, multi-billion dollar businesses, and brands.
I have observed four consistent components in the cross-pollination of technology:
1. Applying technology originally envisioned for one application to a new, large market opportunity, often by deep integration into a specific vertical.
2. Developing new business models aided by the tech innovation.
3. Forming unlikely alliances or partnerships between tech and traditional players to reach users.
4. Creating new competitive advantage and leadership in an industry.
Cross-pollination tends to be driven by individuals at first who have the ability to do the following:
1. See the very big picture while knowing enough detail to understand feasibility.
2. Recognize patterns across seemingly disparate use cases.
3. Display courage to start from scratch and reinvent themselves, sacrificing continued success in a given field to risk transforming another.
4. Possess the conviction to inspire and convince reluctant stakeholders.
5. Have the patience to experiment and iterate.
6. Build and trust a team of experts from both the “old” and “new” markets to transform not just products but also culture.
We have already seen initial examples of technology cross-pollination. For example, Fortune’s 2013 Businesspeople of the Year has a smattering of leaders who achieved their ranking in some part by adopting this approach. Elon Musk is especially notable. Musk achieved early success with his first software startup and an online city guide but did not rest on his laurels. Next, he looked to improve payments by applying emerging peer-to-peer technology to facilitate money transfers. He started X.com and then acquired new technology from Confinity and relaunched as PayPal with a new business model that made basic transfers free and shifted costs to merchants. PayPal then aligned with eBay to reach a completely new segment of underserved commercial users.
In recent years, Musk has successfully and fundamentally disrupted the auto industry, considered by many to be a dying sector in the US, and in turn reinvigorated not just electric vehicles, but the evolution of the entire auto sector. His vision of Tesla encompassed a holistic technology, business model and ecosystem view of both the automobile industry and solar-powered electric engines (see his 2006SecretMasterPlanforTesla). His initial technology innovation was simple; apply lithium ion cells from mobile phones and computers to electric cars where battery issues were key impediments to distance and design. Because this was initially expensive, Musk created a product and go-to-market strategy around sports cars that targeted high end users. With this approach, he was also able to change the perception of electric cars from “boring” and “environmental” to “desirable” and “fast.” Tesla is the first successful new automobile manufacturer in the U.S. in 50 years, and the stock was up almost 325% in 2013.
Other examples of Fortune’s top businesspeople utilizing cross-pollination:
· “Pony” Ma Huateng, CEO/cofounder of China’s Tencent, who is now applying ecommerce technology to the Chinese insurance industry. Along with Jack Ma of Alibaba, he wants to offer comprehensive solutions to reduce risks in the digital economy environment, not just the physical economy.
· Jeff Bezos, CEO and founder of Amazon, who purchased the Washington Post last year with the ostensible aim of bringing internet technology and innovation to reinvent the news industry.
· Mark Parker, CEO of Nike, who has transformed a sporting gear company into a top fitness, data and services brand by embracing sensors, digital feedback, and software personalization. Nike’s new system for tracking, measuring, and sharing movement through wristbands loaded with sensors and easy to use apps, has spurred the emerging “wearables” market, and given shareholders a 50% return in 2013.
Tech companies are also open to cross-pollination. Angela Ahrendts, former CEO of fashion house Burberry, will soon run all of Apple’s $20 billion online and in-store retail operations. She drove the use of technology at Burberry, improving customer service by putting iPads in the hands of every salesperson loaded with customer information. She may be able to further elevate Apple’s brand and to spur greater change in retail overall. It will be interesting to see who else emerges to drive new cross-pollination in industries like Payments, Digital Marketing, Education, and Medicine, further accelerating the death of tech!