Posted on: Monday 1st of June 2015
New technologies make it possible to do new things. Once upon a time, electric light bulbs, the ability to access energy at the flick of a switch, the ability to listen to a radio, or watch a TV, or fly through the air – they were all inconceivable. Now they’re commonplace.
While so much is obvious, what’s less obvious are the ways in which new technologies define the sorts of innovations that are made possible. The rise of the steam engine, and then electricity, transformed what we made, how we made it, and the business models that made it possible. They created an industrial age when value was embedded into the functionality of a physical product that was made in factories and sold in shops. That was supplemented by industrialised services like transport, retailing and banking which depended on industrial infrastructure to deliver value reliably, at scale and at low cost.
The consumer products and services that followed completely transformed the way we live: washing machines, fridges, TVs, motor cars, holidays abroad, phones, computers – we live our daily lives in and through these products.
Spotting the value gaps
Amazingly rich and diverse as such products are there are some dimensions of consumer value they didn’t touch. We call these blindspots ‘value gaps’. Cars have improved in a million ways over the past few decades. But making a decision about which car to buy hasn’t improved half as much. If anything, it’s got more difficult. The the process of maintaining and running a car (paying taxes, getting licences and parking permits, getting insurance, and so on) hasn’t got any easier either. If anything, it’s also got more difficult.
There is a reason for this. Ever better products (and industrial age services) are based on our increased ability to use (mainly fossil fuel) energy to transform and combine materials that do useful things. Whereas making decisions about which car to buy, and managing and maintaining the car, are information intensive processes which passed the industrial age by – creating a whole series of value gaps around decision support and life management.
It’s these value gaps that are now being addressed by PIMS (personal information management services), which address all the information intensive aspects of our lives by putting the power of information into the hands of individuals to help them make better decisions and manage their lives better.
PIMS represent a completely new dimension of consumer value, addressing dimensions of value that traditional products and services simply cannot reach.
They’re emerging now because the costs of gathering, storing, processing and sharing information have fallen so fast that it’s now becoming possible to make them work at scale, at low cost – just as, in the industrial age, new sources of energy made it possible to make new things at scale, at low cost.
How PIMS transform innovation
So if you work in banking, or health, or transport, or leisure, or the motor industry, or retailing, or media, why does this matter to you?
Let’s start with the threats first. As the PIMS market matures:
- Consumers’ first port of call when going to market (the brand whose information they trust, the brand they pay most attention to, the brand they spend money with) migrates to decision support services. Why? Because a better decision is a better way to lead you to a better product. This throws a potential spanner into traditional brands’ marketing and sales strategies.
- Many products and services get subsumed into bigger life management services. For example, a service that helps me manage my money better reduces current accounts, savings, loans, credit cards etc into mere components of something more integrated and complete. The same with ‘manage my home’, or ‘manage my health’.
For this reason, brands that ignore PIMS risk being disintermediated and commoditised.
So what about the opportunities?
- First and foremost, PIMS represent a massive innovation opportunity. What are the adjacent decision support and life management tasks that current product and support portfolios fail to address. Once you start looking, you ‘ll find many!
- Second, it’s also an opportunity for transformation of existing offerings. When the industrial revolution first got going it started in different world: the first dark satanic mills were a million miles away from the farm and the countryside. But over time, farming became industrialised, and food became processed, turning agriculture into ‘an industry’ in its own right, with mega-brands of its own.
The legacy of the industrial age is that many companies and brands today find themselves struggling in over-crowded slow-growing markets where ‘innovation’ has been reduced to a few tweaks on the edge.
Meanwhile, a completely new industry is being born – an industry that will transform how every other consumer industry works. The opportunity is there for every brand. The question is, which ones will pick it up?