Time For Disruption Is Now
Industries are ready to be disrupted by technology-enabled companies with the agility needed to create new markets.
While I normally write about how technology and digital technologies can lead to the transformation of a single company, they can have an even broader impact. Sometimes, a technology or an idea, made possible and enabled by technology, can disrupt a whole industry.
We are in the era, where technology is changing a whole range of industries that seemed unassailable just a few years ago. Companies like Expedia, Airbnb, and Kayak have changed the way we plan our vacation and companies like Uber are even changing the way we hail a cab. Airbnb makes it possible for anyone to rent out a room and Uber makes it possible for anyone to become a driver.
In a world like this it sometimes seems that you just need an idea and you can create a business to serve the need you found. However, that’s not entirely true and most small businesses still require loans to start operations. The problem is that, generally, getting a loan is difficult and time consuming, keeping small business owners away from their companies. And this process that hasn’t changed much in the past century has become a problem in today’s fast-moving world, where customers expect everything to happen within minutes rather than hours.
Recently, we’ve been seeing an increasing number of individuals and small businesses engaging on Kickstarter, Indiegogo, Patreon and other services that enable them to bypass traditional banking channels and get financial support directly from buyers. Of course, they need to have a compelling product, a great idea or a proven track record. And Slovenians are no exception and have launched a number of successful and visible Kickstarter campaigns.
These sites are disrupting traditional investment and banking industries by enabling direct communication with customers and being accountable to them. Of course, there will still be a place for investors and banks, particularly at the high and middle-end. But for small companies and independent creators, this is a new opportunity that simply was not available a couple of years ago.
And of course, something like this would never have been possible, if it weren’t for digital technologies. All of these sites and services are depending either on powerful websites or mobile apps to provide cloud-enabled marketplaces that connect consumers and providers directly, without intermediaries.
To get back to the issue of funding. While loans and lines of credits were more readily available to mid-size companies, they are becoming more and more attainable even for the smallest companies. This will in turn spur more and better innovation in this segment of the market as small companies are more motivated to take risks and create ground-breaking new products and services.
There is also an increasing number of online services and companies that offer small loans to small businesses without the hassles of traditional loans from banks. While these are still mostly confined to more mature markets, such as USA, it is only a matter of time, before they reach the fertile ground of Slovenia, where the majority of companies are very small and in need of fresh capital to develop and grow.
What we are looking at now with loans for entrepreneurs and small businesses is an industry that is ready to be disrupted by technology-enabled companies with the agility needed to create a new market.
Find out more on the future of Business at our DLUK - Trends Briefing on the 24th September 2015