Innovation isn't About Replacement

Peter : On Rad's Radar?
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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Innovation isn't About Replacement

In an article about the over-valuation of Uber, was this tidbit:

"In 1980, McKinsey & Company was commissioned by AT&T (whose Bell Labs had invented cellular telephony) to forecast cell phone penetration in the U.S. by 2000. The consultant's prediction, 900,000 subscribers, was less than 1% of the actual figure, 109 Million. Based on this legendary mistake, AT&T decided there was not much future to these toys. A decade later, to rejoin the cellular market, AT&T had to acquire McCaw Cellular for $12.6 Billion. By 2011, the number of subscribers worldwide had surpassed 5 Billion and cellular communication had become an unprecedented technological revolution." (article via @trengriffin)

Innovation is a funny thing. In many cases, these meshed start-ups (like Uber, AirBnB) combine many elements that go beyond just replacing a previous service (like cabs, hotels). They enable anyone to leverage their assets (sofas, guest room, car) to make money, meet people, help out a stranger - all enabled by cellular, GPS, databases, a website and apps.

The car didn't replace the horse. The Blue Ocean of the car eclipsed the horse and the railroad.

Uber doesn't replace taxis, so much as it creates a separate sector. (I am seeing people replace their cars with Uber.) The same can be said cellalar data - it can't really replace wireline broadband, although there are those that use it this way.

Innovation today (I think) is being powered by economic stress. Etsy, eBay, eLance and other platforms allow people to turn hobbies or skills into extra income or even replacement income. All of this is driven by economic need. It will be interesting to see how this plays out. The laws need to catch up to innovation, because AirBnB doesn't follow hotel regulations (neither does VRBO) and Uber & Lyft don't follow cab regulations (and probably not commercial insurance either).

Just some thoughts running through my head today.



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