Embracing the Purple Cow: A Vision for Australia

| June 17, 2015

Corporate Australia is in need of a complete overhaul. As part of the “A Vision for Australia” consultation, Fi Bendall shares her thoughts on improving the nation through digital disruption.

Leading from a professional basis I have a vision stronger than ever. I would like Corporate Australia to break the historical mindset. It is the most important vision I have for Australia that would truly change this country.

Corporate and political Australia are held back by regulations so stymied it stops us from competing, from investing in our own talent. Holding on for dear life is the old school CEO’s way of thinking; “Next 6 months and shareholder value” or Pollies and the next election.

In my past 24 years of working Internationally in technology, Australia as a people are usually found in the top 5 of early adopters; we are the biggest users of social media, we live far away, it’s no wonder. But our corporate masters seem to have run and hidden from our disruptive digital world and the global world keeps moving on.

We are over-regulated and over-ridiculous. Meanwhile, overseas competitors walk in and take whole markets from us as our monopolist behavior models hand it to them on a plate. But Australia keeps hanging on to historical mindsets praying that all these weirdos who brought us digital disruption will go away.

The introduction of the Purple Cow, as Seth Godin said, isn’t going anywhere, it’s our future, Purple Cows. Anyone can be a Purple Cow and can build a business and stand up in front of 1.6 billion Internet users. Purple Cows are Uber, AirBnB, home grown Airtasker, Freelancer and so on.

Richard Branson was a Purple Cow, so was Steve Jobs. We need more Purple Cows and less corporate historical mindsets. These are the people who really run our world for tomorrow. My vision for Australia is to be the biggest Purple Cow that blows Seth Godin’s mind or theory apart.

I visualise Australia WAKING UP and embracing digital disruption in its halls of power, not making all the small guys and overseas businesses do it, while corporate Australia and politicians look on disparagingly, until they rock you and you try to regulate them out of the market as a defensive position. I want Australia to be the Purple Cow of the world.

Here’s the tax vision (yes I went there!)  – tax old thinking – un-tax new thinking – understand the economic model of disruption.

Companies need to innovate faster than their customer’s needs evolve – Australia needs to act like the biggest company in the world and evolve – Use tax to push it through and motivate change, award innovation (not product, but innovative thinking as well)

 

·         Producing products and services too complex and too expensive for new markets is useless – tax uselessness – over tax these companies

·         Pursuing sustaining innovations (remodeling of models) because this is what made us succeed historically – tax it – it’s not innovative

·         Charging the highest prices to your most demanding customers at the top of the market, (based on history) will achieve the greatest profitability – tax them – so old mindset

 

By using historical behavior and measures, Australian Companies unwittingly expose themselves to “disruptive innovations” at the bottom of the market.

An innovation that is disruptive allows a whole new range of companies at the bottom of the market to access a product or service that was historically only available to a company with a lot of money or a lot of skill.

Businesses are disrupted not on the basis of price but on the basis of product, and then the reason for disruption is if the product, as currently offered, is not how the product would be offered if it were created today, with the technological capabilities that are available now – this is the economic model.

Price becomes an issue after that.

So, start a new tax regime based on favouring the above latter point, taxing the high margin guys, forces innovation. Incentivising the low margin disruptors forces competition.

Ask yourself a question? , If you created – let’s come up with a random sector – say legal services today, with the tech capability that exists in 2015, would they look like they do, having evolved since 1600? If the answer to that is no, then the industry is ripe for disruption.

Disruptive economics are about changes in product, not necessarily changes to pricing methods.

Branson delivered a better product; a better service, a different approach. He wasn’t about undercutting on price. He changed the experience.

You may hate gaming and gambling but in the UK Betfair disrupted because the bookmaking market was bolted on to a 1960s (and earlier) model of how to deal with the problem that someone needed to sit in the middle of lots of wagers, when in reality, if bookmaking had been created in 2000, the way it would have been done would have been to use technology to match up supply and demand – i.e. the Betfair model.

P2P banking like Society One or Ratesetter is the same: if you created banking today, how would you do it? You would put supply and demand together transparently, because you can. Back in 1690 when they created banks, you couldn’t; so that is why the banking model is ripe for disruption.

The initial stages of “the disrupter” – the innovation is a needed new experience that includes smaller markets, simpler products and services and simply may not seem attractive to a large force like an incumbent or a monopoly / duopoly, at best triopoly, that Australian industry protects, especially so when compared to traditional performance metrics.

Why? Because lower tiers of the market offer experience at lower gross margins, they are unattractive to an incumbent, the upward in maket.

But…

This creates a space at the bottom of the market for new disruptive competitors to emerge based on experience.

It is International retailers, not being necessarily disruptive, that have rocked Australian retail.

It doesn’t apply to me?

                Sony & Pocket Radios

                Steel Mills & Mini Mills

                Dell & Outsourcing

                Nat West & Egg Banking

                BA / Qantas & Richard Branson

 

Any disrupter can attack product areas and service areas.

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