Three Industries Ripe For Disruption


Yesterday I posted about the impact of code based payments in the China and how likely it for the same technology change to affect financial institutions world wide.

Getting into this market requires an enormous customer base, deep pockets and an awful lot of data. In my view Apple and Amazon are well placed to significantly disrupt the world of retail banking and payments.

Whether they want to or not is immaterial, competition from the East may force them to do so.

There are two other industries currently making a target of themselves and one company is showing signs of exploiting this to position itself as the future leader of both.

Transport and power are both industries which arose in the Victorian era and have fought modernisation and change ever since.

It's in both these areas that Elon Musk and Tesla are promising to play a game changing role and disrupt the way both industries operate.

Tesla Motors has gone from zero to customer darling in a few short years. It is a premium brand to compete with the best of Germany and it has achieved this distinction by playing to a different set of rules than incumbent auto makers.

Tesla is also pushing change in the power generation market by investing heavily in the creation of new solar power generation and storage solutions which remove control from central monopolies and puts it in the hands of the consumer.

With Tesla's vehicles being exclusively electrically powered it is in its interests to be in the power game and its power business needs the extra volume the significant demand of EVs in large numbers.

It has put itself in a position where it wins twice and neither power nor motor industries are able to quickly or easily change their business models to compete. Even now Tesla's EV and self driving propositions outgun those of every other car maker. Combined.

In fact Tesla's most likely competition is going to come from Google or Apple. Tesla's EVs will become the iPhones of the future auto market, even if the volume goes elsewhere.

A couple of years ago I remember the argument being made against EV sales growth, on the basis that capacity to generate power at scale was unachievable. It reminded me of movie company execs who laughed at the decimation of the music industry by MP3 file sharing, safe in the knowledge that movies were too big and connections too slow to impact their own profits.

Look how well that worked out for them.

Motor manufacturers and power companies are like Nokia, Microsoft and Blackberry in the face of the iPhone. Too set in the ways of the old to decisively react to the new upstart. Their fates are likely to be the same.

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