Disruption

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governments www.tbjones.com

I mean…everything is great!Tremors

SomeLeaders

areworried

How can my organizationbe big and nimble?

Things are moving faster

Some are content

“Neither RedBox nor Netflix areeven on our radar screen in

terms of competition”

CEO Blockbuster2008

Telephone took 75 years to reach 50 million users

Pokemon Go took 15 Days! It is a difficult time to be a leader

Speed of change

Information

Overload

Lack of

certainty

Talent

Twitter:Terrellbjones

I can’t take more…

Every company founded by a ri

sk taker

Would your company approvean idea as radical as the one that

founded your company?

What if disruption is coming?

Isn’t standing still a huge risk

Self Driving

Cars

Insurance

Hotels

Parking

Gas Station

Deliveries

Auto Repair

Billboards

Healthcare

Traffic Cops!

Truck Drivers

Who is the enemy? Not Godzilla but…

3,000-4000 Startups per year! Who & What is likely to disrupt you

What you can

do about it!

6 7

3 421

Forces of disruption

1098

5`

Get slides @www.tbjones.com

Twitter:Terrellbjones

Systems of RecordI.T. Phase 1 Systems that

• Added up sales

• Made reservations

• Created the financials

5mb Disk

Connectivity

The Internet

Information found its

FREEDOMInformation everywhere

Flowed

one

way

Information

Limited Connectivity = Opportunity Systems of engagementI.T. Phase II

DISRUPTION!

• By the song• Digital/Free• Digital/<$

• New Model

• Digital/<$

Users create information

InformationMade

it flow two

ways

People startedwriting

And selling

and rating

Rich BartonFounderExpedia

GlassDoorZillow

“If it can be rated it will be rated”

Buyer experiences are shared

DISRUPTION!

• Sharing• Free/Sharing• Sharing/Cheap• Free/Sharing

• New Model

• Free/Ad Based

Communication & Computing became mobile

7.3 Billion Cell Phones

•20GB speed •Reduced latency

•Internet of skills •High motion mobility •Autonomous vehicles

Torrent

Stream

Big Data

2.5 Quintillion bytes daily

Where to put it? Cloud

Instead of our own

Shared

Why is cloud important?

• Instantly available • Insanely inexpensive • Infinitely scalable

Game Changer

It’s why two guys in a startup Have as much computing power as a Fortune 500 company!

DISRUPTION!

MAAS

90% of the world datacreated in the last three years

80% Unstructured

Dark Data

Digital Exhaust

Seat 4F

Seat 4F

Seat 4F

Have Data

Highfloorroom

Highfloorroom

Highfloorroom

Have Data

Complexity = Opportunity

Systems of insightI.T. Phase III

Systems that can make senseof the data in which we are

drowning

Big Data

Big data is the oil of the 21st CenturyWe must refine it!

A. I.

Here Now!

Components

• Deep Learning - artificial neural networks

• Large Scale Learning - ever larger datasets

• Reinforcement Learning - moving from patterns to experience

• Computer Vision - recognizing objects better than humans

• Natural Language Processing - fully communicating through speech

Computer Vision

VR vs AR

Wal-Mart Training Selfie Applications for life policies

Security checks

Amazon Echo

100 Million of these devices install

ed by y/e

Natural Language Processing

Many Choices

What will it cost to be the only one?

Convergenceof

Technologies

I.O.T.

75 Billion by 2025

I.O.T. Examples From Sensing To MeaningTo ActionAC Shutdown

Section 1`

Backup ON Service

Dispatched

Robotics

Robotics

Average age of major hotel chain’s housekeeper in hawaii?

Drones

Drug delivery drone Combination - Self DriveComputer

Vision

Neural Nets

Deep Learning

Natural Language

Self Driving Here Now

Additive Manufacturing

90% of hearing aids 3D printed

In 4 years!

Jet Engine Fuel Nozzle

Part Supply Chain Manufacturer Benefits• Cheaper

• Lighter (25%)

• Stronger (5X)

• Faster (1 Year Faster to Market)

• No Inventory

• Fewer Sub Parts to Maintain (-20 Parts)

• Etc

Local 3d

Parts

Insurance

Forwarder

Warehouse

Sub Assembly

Assembler

Container Ship

Long Haul Truck

Materials Suppliers

Customs Broker

Truck Drivers Better to be the disruptor!

Disruption by algorithm Disruption by Algorithm

Algorithms Constrained resources =

U. S Mars

Mission

$730,000,000 $73,000,000

IndianMars

Mission

“Martian” = $100mm!

Countries that SKIP

6 7

3 421

Forces of disruption

1098

5

“If you don’t like change, you’re going to like irrelevance even

less.” Then Suddenly”

“How did you go bankrupt?”

“Two ways.

Ernest HemmingwayThe Sun Also Rises

First gradually

Technique

Technologyfollows

New Business Models

owns no vehicles

develops no content

has no inventory

owns no real estate

Tom GoodwinTechCrunch

Own the

edge

Location, Location, Location Edge is where the customer is

Apps Rule the Edge

20% Increase in Order

Size vs Counter!

Amazon Dash

“The battle is decided if the startup gets the distrubution before the incumbent gets the innovation”

James JonesRetail Analyst

RBC

Hide?

Hold it

Back?

Instagram raised$1 Billion

The day Kodak went bankrupt

Kodak invented thedigital camera!

From your perspective: A disruption From their perspective: An innovation

Masters of the Edge“Your margin is our opportunity”

OPAOther People’s Assets

SetPrices

Find Clients

Dispatch Bill &Collect

OwnCars

LicenseCars

ServiceCars

Traditional Limo Company

EnforceStandards

Hire Drivers

OwnCars

LicenseCars

ServiceCars

Marketenforcesstandards

Driversfind

them

Add amazingsoftware

Traditional Hotel Brand

FindClient

FindHotels

HireStaff

ManageProperty

ProvideSecurity

Takereservation

SetPrices

EnforceStandards

Bill &Collect

HireStaff

ManageProperty

ProvideSecurity

Hotelsfindthem

MarketEnforcesStandards

SetPrices

Bill &Collect

Add amazingsoftware

PayAirline

Dealwith

Retuns

PostSale

Service

Travelocity

Bill &Collect

IssueItinerary

Find Clients

Searchfor

Products

IssueTicket

BookTicket

Bill &Collect

IssueItinerary

IssueTicket

PayAirline

Dealwith

Returns

PostSale

Service

SendCustomer

toAirline

Worth $1.8 BILLION

Less Capital

More Speed

Unscale

RENT -Technology ProductionCustomers

Hemant Taneja “Unscaled”

But you have.... And you don’t make it

“There isNO step two!

Don’t let some kid in the Valley... Assets & Edge

What’s the new model?

2014

0%

6.5%

13%

19.5%

26%

Microsoft Google

16%

7%

The largest cloud app of all

OPIOther People’s Information

Platform

Hubs/Platforms

Info Info

Info

Info

Info

OPI = Other People’s Information

OPPOther People’s Products

Hubs/Ecosystems/PlatformsMusic

MusicMusic

Music Music

OPP = Other People’s Products

OPDOther People’s Data

Hubs/Ecosystems/Platforms

Flights

Flights Flights

Flights

Flights

OPD = Other People’s Data

ONIOutcomes Not Iron

Outcomes

OpportunitiesNew Models

What’s holding

youback?

50% of executives are dissatisfied with

the state of innovation in their company

Boyd & Goldberg“Inside the box”

Check the mirror Risk

v I Started My Career As A Receptionist in a travel Agency - 45 years ago

Vega Travel

1st Startup

2nd Startup Sold to American Airlines

• CIO

• VP Computer Ops

• VP Applications

• Asst VP Product

• Asst VP ADS Div

• Director

18 Years AA Big Risk

• Boards

• 9 startups

• 3 went public

• 4 public companies

• 2 non profit

• Consulting company

• Venture Capitalist

• Speaker

• Author

Recently I went all in again…

Ran outta money

`

75% of venturebacked startups

FAIL

<50% make itpast 4th birthday

Operating at full throttle

vTake the first risk!

What else is holding you

back?

Come together

Customer Focus

Listen To Your Customers!

• The Phone Booth Is A Symbol• Every person in every job

required to listen to two customer calls per month

• Must discuss root cause at staff meeting

Paul English, CTO

Clay in the customer’s hands

60,000,000 Downloads

Behavior just like the desktop!

Chained to an old model?

We’ve ALWAYS done it this way

We’ve NEVER done it

that way

“What is dangerousis not to evolve”

Jeff Bezos

“Established organizations view disruption as a threat”

How could we do that?

Launched in 1996 Business Model• Airline Commissions 10% +

• Hotel Commissions 10+

• Car Commissions 10%+

• Advertising

• Merchandise

Grew Like A Weed Build a team

This Industry is broken Only we can fix it Messianic Zeal No Industry Knowledge No Industry Contacts

.com

Suits Industry Is Fine Doesn’t Need Fixing Slow Pace Domain Expertise

.corp.corpse

Staffing

A Balance of views Our own culture

“It’s better to be a pirate than to join the Navy”

Steve Jobs

• Moved to a Bankrupt Media Department Building that No One Wanted

• People Worked in Darkrooms and Sound Studios

• Took Almost One Year to Get the IT Guys to Move in as Well

• Had Spectacular Results

“Think outside the building!”

-Rosabeth Moss Kantor

I upped our clock speed By removing barriers

• We didn’t use their

• PR, Advertising

• HR Systems

• Accounting Systems

• Dress Code

Created a separate organization

President)

Manufacturing) Marke1ng) I.T.) Internet.)

Air Cover

Protect it in the greenhouse Market Forces

• Microsoft enters market

• ContemplatesBuilding Travel Into Browser

We Respond With Portal Deals

10%8%

Commission Cuts

Higher Margin Products Went Public Acqiired #3 Site & AOL

Traffic

8%5%

Commission Cuts Reduced Costs

Added Telephone Sales

Travelocity TerminatorWe Tried Everything To

Kill Them

9/11• Business fell 70%

• Leveled off at -30% of previous volume

Airlines Create More Pressure

• Don’t Want Big OnLine Agencies

• Cut Commissions To ZERO

• We Instituted Service Fee

Airlines Pressure Sabre & Travelocity

•Won’t Give Travelocity Special Fares

•Hold Best Fares For Orbitz

•Pressure Sabre To Lower Booking Fees

•Sabre Responds By Taking Travelocity Private

•Corporate Finance

•Corporate IT

•Corporate Marketing

•Even put a finance guy in charge!

InnovationDisruption

Stop being disrupted - Innovate!

Recreateimagine Chuck Hull

Reimagine Radio Controlled AirplanesDrones

Reimagine

Reimagine

“The last 25 years were all about who could build things the cheapest.

The next 25 will be all about who can make things the smartest”

Antoine van Agtmael

Lessons learned

•At your favorite online bookstore

• Paperback or Ebook

6 7

3 421

Forces of disruption

5

8 9 10

New Business Models

Slides @ tbjones.com

Assets & Edge

OPA

OPP

OPD

ONI

Slides @ tbjones.com

What’s holding

youback?

InnovationDisruption

Slides @ tbjones.com Slides @ tbjones.com

Slides @ tbjones.com

You think you have a tough job?

Mobile

6

5

3

4

2

1“You fall, you die!”

Carl Wallenda

Change is inevitable Growth is optional