What’s Your Skype?

In his latest book Macrowikinomics, Don Tapscott (along with Anthony Williams) argues that there are two types of business models in existence today: those that have been disrupted by the internet, and those that are waiting to be disrupted by the internet (summarised in an article from the Wall Street Journal).

I’m not 100% convinced that this is true, but I think that there is great value in acting as though it is.

Here’s an example – take a look at this graph (from TeleGeography):

It shows the annual growth in minutes of international phone calls made over regular phone lines, versus those made on Skype.

Skype was founded in 2003, and almost instantly it was heralded as the death of long distance. It hasn’t been yet (although it has been in my household). However, the graph shows that it took close to eight years for Skype to really start biting into the market share of the traditional telcos.

Like I’ve said before, it takes a lot longer for a new idea to spread than we expect. What happens while this delayed diffusion takes place?

First, there are a lot of inflated claims made about the impact of the new idea. Then it takes longer to diffuse than expected, and everyone that should be worried about it is able to decide that it isn’t a threat after all. Eventually, the new idea either dies out (think Friendfeed), or takes off (think Skype) – but usually much later than expected. When these new ideas do take off, they often seem to take by surprise those operating business models that are disrupted by these ideas.

That’s why I think that it is very important for you to think about your business model, and ask: What’s my Skype?

Thinking about this question now will give you a few advantages:

  • Planning for disruption means it won’t take you by surprise when it arrives: by giving some thought to what might disrupt your current business model, it gives you some time to react to these threats.
  • Even if you don’t pick the exact idea that disrupts your business model, it’s good practice to think about what could do so: you might not be able to pick the exact idea that will disrupt your current business model. However, giving some thought to what could will help you be flexible in planning for change, and for thinking about scenarios that will help you cope with this change.
  • Building this flexible thinking will help you maintain a balanced innovation portfolio: to be successful over the long term, you need to divide your innovation efforts across both ideas that will make you better at what you’re currently doing, and ideas that will disrupt whatever you’re currently doing. You don’t need to invest equal amounts into both types of innovation, but you need to be thinking about both.

Your Skype may not be out there yet. If not, great – you can work on inventing it yourself. If so, thinking about it now, and thinking about how you can respond to the changes it will instigate can be extremely valuable.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.