The 2020s have arrived. What can we expect from the new decade? In a word: Disruption.
That may sound like old hat. After all, disruption has become the new normal. But the kind of disruption you’ve witnessed thus far may not prepare you for what’s coming next. We are about to be hit by a digital tsunami, a massive technology transformation wave. Think of it as Disruption 2.0.
What’s new in the coming disruption? In earlier stages, innovation destroyed the barriers between industries. But today, innovation is wiping out the barriers within industries, as technology innovation transforms workflows, value chains and entire industries.
In the 2020s, this radical new kind of disruption will accelerate. New technologies will collapse industry boundaries, wiping out sectors and functions. Every business will be in direct contact with customers and will be forced to master customer intimacy. The pace of change will grow ever faster, and once-dominant technologies will be overwhelmed and replaced. An entirely new business ecosystem will be the result.
As Black Dragon Capital invests in and helps run growth companies in the new environment, here is what we’re nearly certain is just on the horizon.
Technologies and processes will be disrupted, even more quickly. There will be little or no “daylight” between content creator and consumer; the purveyor of goods or services and the buyer; the person with excess capital and the person in need of capital. Technologies that had previously made the value chain more powerful will be overwhelmed in every industry by the direct digital connection between buyer and seller. This year will be the beginning of the end for segments of major industries—once notable technologies that made a step or process more efficient will be gone by the end of the 2020s.
Boundaries between industries will blur—significantly. Where industries like media, retail and banking start and end will get grayer and blurrier. Companies in these industries will want to be the customer’s primary relationship: card and payment networks, cell phone carriers, cloud providers, retailers and media companies all will vie for the consumer’s primary intimacy and loyalty for whatever they buy. Loyalty will be won by whoever can best tell the story of why what they’re selling will make the customer’s life better.
A heightened imperative to master customer intimacy will emerge. As traditional workflows vanish, and most sellers of goods and services increasingly have relationships with end users, companies will have to rethink and redefine for themselves the meaning of good service. If you’ve thought of your company as only a B2B enterprise, it’s time to let that go because that identification will be a thing of the past.
The floodgates will open for cloud-based technologies. Early adopters drove Amazon Web Services, Google Cloud and Azure to dizzying heights. But now the media industry, banking and retail will become major consumers of processing power as cloud-based technology goes even more mainstream. Legacy players that are slow to move to the cloud will probably meet the same fate as Sears and Toys “R” Us.
AI will go mainstream. AI is gaining significant traction in a range of industries, even while debates continue about privacy, data management and computational innovation. It has proven its ability to support medical diagnoses, identify fraud more accurately and enhance content creation. In the 2020s, AI will become as powerful as the internet itself and, of course, supplant other once-promising technologies.
Some of our portfolio companies anticipate an even more seamless retail experience that blends the best of online and brick-and-mortar shopping, a reckoning in video streaming as the number and cost of streaming channel skyrockets, and a threat to regional banks as consumers opt for full service digital offering by big national banks.
Disruption in the 2020s will be massively challenging. But the opportunity is vast, and the rewards may far outweigh the collateral damage—for those who are ready.