I've written before about why the way we often perceive innovation is impaired because we instinctively frame it in an historical context; how does an innovation compare with what came before, what is its differential impact today? That's an instinctive way of thinking that's just hard to avoid, so it usually takes a while before we are able to form a more complete picture of how certain innovations can go on to become much more impactful than we initially perceive, or lead on to subsequent more impactful iterations.
While it's true that the last fifty years has seen a huge wave of progressive computerization borne of the microprocessor revolution, and which has transformed many aspects of the modern world, I think it's also true that we are only just beginning to recognise the real potential of computerization. And the scale and impact of an emerging new wave of computerization will be several magnitudes greater than anything we've seen before.
Marc Andreessen puts this far better than I ever could, but I'm convinced that we'll look back at the first wave of computerization of the last fifty years as the application of very rudimentary technology to discrete and largely classic business processes. A necessary first step but, in the grand scheme, no big deal.
However we are now beginning to spot the faint signs of a second, much larger wave of emerging computerization where it will be possible to build an entirely different kind of buinesses entirely from scratch, and one that will sail above many of the classic constraints and disruptions historically faced by businesses.
These new businesses will only adopt the classic business processes and rules that are mandated to them by their trading environment (law, accounting, fiscal, etc.) but otherwise will employ many fewer people and will instead deploy software at every customer touch point and use software in a highly integrated way to drive all their administrative processes, enabling them to operate and scale in ways that would have been inconceivable even five years ago.
These hyperbusinesses of tomorrow will resemble software programs more than they will resemble classic businesses and will -
- Distribute their products and services more efficiently and for a fraction of the historical go-to-market cost.
- Operate customer service models that require fewer resources and deliver better service.
- Communicate effortlessly with any chosen audience.
- Scale their core operations incredibly efficiently.
- Decide to operate globally almost at a whim.
- Leverage the integrated nature of their business, customers and suppliers to drive new products, service models and value.
- Rapidly displace old world competitors in the same way the software driven word processor displaced the mechanical typewriter.
Software might have started off as an innocuous tool you deployed inside a business, but tomorrow we'll be deploying businesses almost entirely in software.