The lowdown: Digital Darwinism is a book by Tom Goodwin that emphasizes the importance of keeping up with the latest trends in technology to avoid getting left behind by the inevitable change that is coming.
Blockbuster used to be a model of a thriving chain of retail video rental. Suddenly, it became a cautionary tale for how not to run a business. The consensus is that the DVD rental giants failed to evolve with the times and they got left behind by the competition and the industry as a whole.
Digital Darwinism, as defined by Tom Goodwin, is the wholesale integration of the latest digital tech into a business. This is entirely different from simply setting up a website or developing a chatbot for your business.
Three valuable lessons that I learned from reading this book were –
- Avoid the Heathrow Airport business model.
- The traditional definition of disruption is wrong.
- Do more than pay lip service to digital integration.
1. Avoid the Heathrow Airport Business Model
Heathrow Airport, London is located in an area that makes it difficult to maneuver planes. They could easily accept their losses and move to a new location. Instead, they have doubled down and spent a lot of money trying to make a failing idea work even with contrary evidence. It’s only a matter of time before another airport comes in a better location and makes Heathrow a relic of the past.
It’s the same thing with many old businesses these days. Instead of using the latest tech to make the best customer experience that they can, they are more focused on forcing technology into a dying system. We could say the same thing about banks. They ask you to take photos of deposit slips when the entire process could easily be done paperless, without the bank queues. There are just too many examples to cite.
2. The Traditional Definition of Disruption Is Wrong
According to Harvard Business School academician, Clayton Christensen, disruption in the business world occurs when a new company comes with new tech and offers a lower cost of service that the older companies cannot compete with.
However, Digital Darwinism argues that is not entirely true. New business models like Uber and Airbnb do not offer lower prices. They simply offered customers better services. This goes to show that disruption is more than new technology and lower prices.
3. Do More Than Pay Lip Service to Digital Integration
To disrupt your industry, you don’t have to be the new kid on the block. You could do it in either of four ways –
- Self-disruption – Netflix pioneered the streaming service when they were doing so good in the DVD rental framework. This is a risky approach that has the potential to change the industry with you at the top of the food chain.
- Continual reinvention – Facebook operates on this framework, maintaining flexibility to be continually relevant.
- Measured bets – BMW knows that electric vehicles could be the future, and it would not hurt to have a few of their own – the BMWi. The operation is kept separate from their regular cars, but they retain the ability to benefit from these new technologies.
- Hedge bet – This happens when giants like Google, Dell, Cisco and Intel invest in entirely different industries that could help them. A typical example is DuPont, a plastic and chemical manufacturer that invested in General Motors, a car manufacturer back in 1914.
My Personal Takeaway
After reading this book, I learned that there is always room for improvement in even the best business models. The only thing constant is change. Shutting yourself off from these advances translates to you literally closing up shop.
Today, people only notice the technology when it fails them. When your tech is found wanting, it is only a matter of time before people leave you for options that are less likely to fail. A typical example is Amazon. Amazon allows people to buy with a single click from their devices, eliminating the long queues at checkout counters.
Put into Action
- Embrace the digital age.
- Integrate your business model with the latest tech.
- Create new forms of value.
- Put customer experience first.
- Try not to be the next Blockbuster.
I would recommend this book to every entrepreneur and business owner. It will help you avoid repeating the same mistakes that other businesses have made.