Innovation gives you a choice. You can either ride with the change and benefit or oppose the change and be run over. A recent Reuters report describes how taxi drivers in Milan, Chicago and Paris are vigorously opposing the use of the Uber service – a mobile app that allows users to summon a chauffeured car. It bypasses one of the best established of closed shops. In places like Milan taxi permits are handed down from father to son or sold for six figure sums. The unions want to jealously guard their privileges but history tells us that they are fighting a lost cause. The Milan taxi drivers went on strike but Uber responded by reducing their prices on the strike days and they picked up plenty of business. The taxi unions would do better to develop their own mobile apps and try to beat Uber with a better service.
Transporting and selling ice was a big business which was destroyed by the invention of the refrigerator. Smith Corona made beautiful typewriters but word processors made typewriters obsolete. Encyclopedia Britannia made excellent encyclopedias but Wikipedia killed that business. Kodak were leaders in photographic film but consumers now prefer Instagram to prints. Warner Brothers and EMI were destroyed by music downloads and iTunes. The internet has accelerated the opportunities for innovation and we continue to see that innovation leads to winners and losers.
What should you do if you see new technologies and business models that threaten your business? Develop a plan. Buy one of the start-ups. Build your own prototype. Fight fire with a better fire. Don’t try to pull up the drawbridge and defend your castle. It is already too late.