The Commoditization of Technology

I spent most of my career in the media, publishing and public relations businesses. For the last decade or so I looked at and tried to figure out some use for dozens and dozens of new communications platforms, systems and technologies.

There is an almost unlimited number of tech companies emerging and an even more unlimited number of geeky sorts of solutions that all fall into the same general bucket of automatically capturing data, adding some structure to it and then generating conclusions for questions ranging from what should I write about to who would buy my stuff. Rarely did I find the technology to be truly unique. The appeal of these companies was based on how clever and unique their application of the technology.

Most of this innovation comes from start-ups. The nature of the financing that is driving start-ups is such that success doesn’t seem to be predicated on successfully building a profitable business.  That is something that established organizations can’t compete with since they have pricing structures and profit margins to maintain.

The image that Silicon and the other copycat Valleys project is one of a couple bright guys come up with a bright idea, attach a UI to it, tell their friends who in turn tell their friends, followers and connections and suddenly you’ve got it – BUZZ. (Sounds easy but keep in mind that it is estimated by Mashable that 90% of startups fail.)

Once you’ve got buzz that means there will be 10 other “companies” touting a very similar idea the next day and the following day there will be another 20 or so mashing up your new idea with their new idea (which may have already gotten stale). Because the reality is that when a smart young guy codes something in his garage there are hundreds and hundreds of smart young guys who can replicate it. So the logical goal for these fledgling organizations is to create enough buzz to sell before the market discovers that their technology isn’t so unique after all or that their solution really doesn’t solve anyone’s problem. And between Saleforce and Yahoo! and Facebook and Google and Oracle the buyers are there with millions in their pockets.

blinkJust this week Yahoo! bought a one-year old company with seven employees called Blink. They are a self-destructing messaging service. Sound familiar? That’s because a few weeks ago Facebook offered $3 billion and Google reportedly offered $4 billion for a self-destructing messaging service called Snapchat. GAFA (Google Apple Facebook Amazon) has always been a monkey see, monkey do kind of group. And now Frankly, Confide and Wickr have emerged offering, you guessed it, self-destructing messaging. (So if you can’t have anonymity you can at least be assured of non-accountability.)

Are we reaching a point where all tech solutions become commoditized before many of us have even heard of them? Having spent years thinking that the way to differentiate your business is to hire tech guys who are smarter than your competitors’ tech guys I now wonder how valid this is as a strategy. Are there really solutions in the areas of optimization, geo-tagging, natural language processing, etc., that are so unique and clever that no one else can do it, at least for a while? Well there probably are but there are so many people devoted to chasing these solutions that it is rarer and rarer that something can be delivered that will have lasting competitive advantage.

Within that mindset we look down our noses at manual solutions. Legacy! How backward. And yet what impresses me as truly unique in many businesses is having people. Artificial intelligence is terrific but if I want a business with a difference I’d rather have some real intelligence exercised by real people.

For example, think of the banking business. Personally I love online banking and not having to write out checks or make in-person deposits. But what happens if you call your bank? You get an auto-attendant with one menu of options after another. The options are always for things that are so simple (What is my balance?) that you probably wouldn’t have phoned to begin with if that was what you wanted to know. So after the frustration of going in circles through these automated menus without finding anything that fits my query I start banging away on whatever button, * or # or 0, that I think might somehow bypass this system and connect to a real person.

If I managed a bank or, for that matter any other type of service business, and I really wanted to differentiate myself from my competition I’d build my image around having a real person answer the phone when my customers call. There’s a real good chance that your customers are going to like that a whole lot better than a platform that can analyze their data.

Having a staff of smart, personable people who know their business inside out and actively interact with a company’s customers and prospects is something that can’t be replicated cheaply and quickly. Artificial intelligence is ubiquitous. I’ll take more of the real thing.

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