Disruption From Outside

Looking at other industries makes me scratch my head about our own. Kodak, Xerox, HP, Lucent and so many others that didn’t see the light of the train coming at them in the tunnel.

When I examine the pharmacies, which consumes a large number of my dollars now, I see a train wreck coming. Amazon acquired PillPack that is disrupting Walgreens, Medco, Rite-Aid and especially highly leveraged CVS ($92B in debt after acquiring Aetna). At least, CVS is fighting back for MRC (via NYU Prof. Galloway).

There is a shift to direct to consumer marketing in many areas like Harry’s Razors and clothing options like Empress Mini or the other 30+ subscription services. Roman and Blink Health (and to a smaller extent PillPack/Amazon) are marketing direct to consumers services that are attacking the Big 3 pharmacies (who were already fighting a battle against supermarket pharmacies and Wal-mart). Now e-commerce mixed with tele-health is set to take a bite out of its ass. You just don’t know where it will come from.

One thing is certain: companies are grasping at branding so they are switching to a subscription model to mimic customer loyalty. It worked for gyms; it can work for others too. Until consumer spending dries up anyway.

I’ll give you another example. Ten years ago, newspapers were in a perfect position to establish blog networks—they had their reader’s attention and advertiser’s trust. But they blinked. Today they keep erecting pay walls so fewer and fewer eyeballs see the ads, which is there only revenue stream.

It is a takeaway game in many sectors including voice, TV and broadband (except for greenfield builds). However, over-building penetration rates are still small. Mainly because the game being played is the same game as the incumbent.

When I was watching the Twilio announcements a few weeks ago at their Signals Conf, I was astounded that Twilio is going to address the robocall issue better than AT&T and Verizon.

Twilio announces it’s “Trusted Communications” service, Verified by Twilio. Custom interaction APIs that identifies the caller.

Twilio discussed “how nuisances like robocalls are leading to not trust our phones for unknown callers. Verified by Twilio is their approach make sure the good calls get through and the unwanted ones don’ts.”

Most of my time has been spent on messaging, specifically Value Proposition, USP, and Positioning. This was Laddering at its best. Twilio established itself separate from the telcos in solving the robocall problem. If they offered flat rate service for POTS replacement, they would win market share tomorrow.

In the Toothpaste Problem, looking at these issues from a different angle can help you stand out. If you want to discuss it give me a call at 813-963-5884

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