Embrace Unfairness: it’s the very heart of disruption
Attempts to hold back the rise of app-based taxi booking are the equivalent of the government going "it's not fair". Well, life isn't fair - and because that allows disruption, we should be grateful.
Disruption is unfair. That’s at the very heart of the idea of disruption. It’s the very unfairness of it that makes it so effective. You go from competing with companies much like yourself, to competing with companies with utterly different business models, cost structures and revenue sources.
Let me say that again: disruption is unfair.
That’s a pretty bitter pill to swallow, whichever end of the equation you’re on. For the disrupted, there’s surprisingly little you can do, because all the rules and assumptions you built a business on are now thrown out of the window. For the person doing the disruption, it can be humbling. You didn’t bring down the incumbent giants in a fair fight – you had an advantage, even if you came up with it yourself.
The problem here is that most of us, from our earliest schooldays, are taught to work against unfairness. The toddler’s petulant cry of “it’s not fair” eventually becomes systemised into a belief in societal fairness. We strive for equality and fairness. But those two ideas don’t have much role in business competition, and technological advancement.
Disruption is unfair. As analyst and VC Benedict Evans put it in his latest blog post:
Customers don’t care if a company’s advantage is unfair. Investors don’t care. Unfair advantages are often the best kind. They are something that flows structurally from the reason why your business is going to change everything – they flow from a technology change you are building on or a change in market dynamics or consumer behaviour that you’re riding, and that your competitors cannot address. Disruption is unfair.
Once we accept this, we’re left with a choice: do we embrace it, or do we resist it?
King Canute and Über
Well, if you want an example of what happens if you try to resist it, you only have to look at France, where the government is trying to interfere in a process that fundamentally reshapes the ways taxis operate. Their attempts to impose a 15 minute delay on pickups booked from apps were suspended – but that doesn’t mean that the taxi drivers have taken it well. Protests against the phone-based taxi services are growing violent.
Now, Berlin has become the latest city to try and enface laws from a different era on disruptive taxi companies.
These attempts to hold back technological change have a certain King Canute quality to them. Can you really hold back such forces, or are you doomed to a display of impotent power before you’re swept away?
Taming the political toddler
This legal quest to hold back disruption is actually just a systemic reaction of “I don’t want things to change” – but life is almost entirely about change. You cannot hold back change, no matter how much you cry and wail about it. This is the lesson we try to teach our wailing toddlers: that change happens, they can’t always have what they want, and that they need to learn to deal with it.
As my dear, late father so often told me (to my annoyance, at the time): “Life isn’t fair”. No, it’s not. And now, I’m very glad of that.
Disruption is inevitable. And so, perhaps, we should accept that mature societies embrace disruption, and do their best to shelter people from the worst of it – not businesses. No business has a right to survive in the face of disruptive competition. Trying to hold back that force will only make the crash – when it comes – that much worse. To return to our possibly apocryphal friend King Canute, even if he had succeeded in holding back the waves for a while, the growing force behind them would eventually lead to a torrent.
Strained metaphors aside, there’s a clear customer benefit around phone-based taxi booking. It changes the dynamics in a way that benefits both the customer and the operator. How long can a government realistically hope to hold that back for the benefit of third parties who haven’t taken advantage of the disruptive technology? Even if it should prove a vote-winner, that in itself suggests a nation willing to hold back ethnology out of fear – and that’s hardly conducive to being a player in the world economy. There are consequences to being selectively fair.
Embracing disruption is surviving disruption
On the other hand, once you accept unfair disruption as the new normal, you can start planning for it. You can plan for it as an individual, by not getting complacent about your skills, and adapting as things change around you. You can adapt as a company, by embracing disruption from within, and rapidly copying disruption from without, to give yourself a chance – a chance – of surviving the process. And as a government, you can plan to help the people from disrupted businesses, even if the businesses themselves fail. And perhaps the best way you can do that is by ensuring that bright new disruptive businesses can thrive. It may not be fair – but it seems rather just.
Disruption is the new normal. So embrace the unfairness.
Photo by Emanuele and used under a Creative Commons licence