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Covid, The Opportunity and Threat of Disruptive Technologies

During tough times is when innovation breeds and new leaders emerge . Primarily, as most organizations hunker down in attempt to ride out the storm, stretching resources others are spurring innovation to create a game changer. Clayton M. Christensen observed the rise of Steel mini-mills during the last recession and wrote several papers about the perils and benefits of “Disruptive Technologies”, we constantly encourage companies to find their “Strategic Differenator” now Jim Pinto discusses the strategy behind scarcity and abundance … enjoy

Even in the current Pandemic, most of us are better off than our parents and grandparents. People are living longer, healthier lives, and have more choices than ever before.

Food remains relatively cheap and abundant; yet some people pay $10 for "special" organic lettuce. MIT offers all its courses for free online; yet students attend classes paying annual fees over $36,000 (plus dorm expenses and books).

A disruptive technology would look like this ... as witnessed by Steel Mills in the 80's

These paradoxes make sense when we consider how markets work, and redefine what is being bought and sold. Midst the abundance of choices, we buy "scarcities" - the things we really want.

In spite of high inflation, Supply Chain Shortages we are witnessing a surge of on-line ordering of Ready-to-Eat meals or Grocery Delivery Kits such as Uber Eats, Skip the Dishes, Door Dash closely followed by Meal Kits that you prep yourself at home like Hello Chef, Chef's Plate, Noom, and Good Food. Remember that each one of these food services typicaly charge a 20-30% premium either directly from you the consumer or the provider ... but it is still ultimately a 30% additional expense. Is this disruptive technology going to survive? or will the consumer wake-up and again focus on seeking Value?

The technology guru George Gilder has long postulated: "Every economic era is based on key abundances and scarcities." Every new abundance brings matching scarcities, and many of our problems are centered on these recurring anomalies. Our current "scarcities" offer opportunities.

Markets create abundance by identifying needs, determining prices and allocating goods. Markets thrive on scarcity, and turn it into abundance. Wealth is generated when something is scarce and can be offered at a high premium over cost.

Markets have given the world an unprecedented amount of information to help make choices. Google is free, yet the company is profitable, growing and making more money each quarter. They have found ways to sell scarcities midst the free choices.

In the midst of a seemingly abundant choice of cellphone, Apple broke into the market to gain a leadership position fairly quickly. They did not offer what was already abundant - lots of cellphones with slightly different features. They offered the real value which people wanted, and were ready to buy at a premium.

Why do consumers still shop at old-fashioned retailers when they can buy cheaper on-line? Because they can touch and feel and compare products. Also, buying on the web is a lone experience; shopping becomes an outing for the family on a Saturday morning. Everyone participates, and you can have lunch together at Target Or, you can get a cheap hot-dog and a drink at Costco – and cheap gas and a car-wash.

Ultimately, Humans are creatures that crave a social relationship and acceptance and so far my computer is pretty sterile when it comes to building a relationship with it and hence i really do not have the same emotional attachment to my device as i do with my spouse ... thankfully.

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