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From Supply Chains to Markets: The Evolving Context of Disruption

There is something distinctly ironic about how enterprise social business tools have actually become a disruption agent outside of the enterprise. Those who have made the long march from E2.0 to markets see the aspiration for a more social enterprise being realised now but in the turbulent transformational clutter of the startup community. That argument is simple and powerful – the biggest impact of social is in generating new economic models, and new structures of commerce that force change on incumbents from the outside-in.

One example of this in action is ET Water (pronounced E.T. Water) covered in this Gigaom report.

ET Water has been exploring disruption in the water supply industry over the past four years and is headed now in the direction of markets –  according to Lee Williams, company COO, in interview. That’s after trying its hand at reconfiguring the supply chain in water consumption (a work in progress but disruptive in its own right) and the more mundane task of porting intelligent irrigation from agriculture to urban settings.

water

ET Water is part of the burgeoning O2O service arena, Online to Offline, where Uber is the poster child but where on-demand services are beginning to make a big mark (and might still be swallowed up ny mega platforms like Alibaba and Amazon). It is interesting to see the platform service model at work in America (take a look at Dispatch.me), where there is more scope for the startup community to make its mark.

ET Water’s mission is intelligent water use. The system or service is cloud based and allows people to control water use by mobile app, but, because it is intelligent, it takes data on local rainfall and related weather conditions, particularly evaporation, matches it to a database of plants types, and doses vegetation with the right amount of water.

It has multiple market opportunities – landscape managers, commercial property owners and domestic property owners, in conditions of worsening drought, but in truth would probably grow its business faster in markets where water usage is metered, common in Europe, less so in the USA, ET Water’s home market.

There are now a numnber of Nest-like competitors in the domestic irrigation market – companies like Blossom and Skydrop, both of which have simpler propositions targeted at domestic irrigation – save water through the use of smart sprinklers linked to weather forecasting. ET Water is more sophisticated in that it doses for specific vegetation as well as for weather conditions.

The question though is whether solutions not linked to services have a long-term future. Is it enough to buy a Blossom controller or for that matter Nest and simply rely on the IoT to improve heat or irrigation performance?

We live in a world where many people have spare time. Some of them are using it to repurpose their own cars as a taxi for Uber, or use the front room as a bedroom for AirbNb.

This activity has somehow acquired the sobriquet “sharing economy”. We know it is anything but. It is pretty Darwinian, though not necessarily bad. It’s about carving out some extra cash or creating a portfolio that can give you a step up on the property ladder, subsidise your own car use or simply form the basis of a regular revenue.

The big surprise, going back five years with Mechanical Turk was that the penny paying collaborative work platform attracted more down at heel middle class Americans (40%) than poor Indian grads (19%)

The need or desire to regrow a career through diversification is an interesting option and it is absolutely central to the reconfiguration of the economy.

The Mechanical Turk model of microtask is impoverishing. The new marketplaces seem not to be. By  creating markets where there is personal contact, and by replicating existing value chains, companies are able to create work at a living wage.

Uber and AirbNb are comparable in price to their competitors, regular taxis, Bed and Breakfast, and hotels. They have strong traction because they are not that radical – cross Couchsurfing with Booking.com and you have AirbNb. Want to know how my neighbors got by back in the 60s? They took in lodgers.

What’s of interest for the disruption observer, is that ET Water is pondering whether the real future of irrigation is not intelligent systems but a market for real people who will check on the yard or the Mall greenspace, do the necessary adjunct tasks – clear leaves, cut grass, tidy, or maybe more adventurously bring additional plants or grow a herb garden, at a cost that brings landscape support into the reach of a domestic budget.

To be successful at growing marketplaces it pays to be good with social tools, particularly those that support trust building. Likewise with anything in the domestic environment. Being able to grow trust online is a maturing skill and because of it we are reshaping the labor market around social platforms rather than using social platforms to reshape the enterprise.

New value chains, new attitudes to work, new revenue portfolios. Behind these developments individual behavioural changes are reshaping the economy, just like we see experience-sharing becoming the new context for marketing. Recognising the revolutionary power of behavior change – now that would be disruptive.