In a world where expertise and technology are constantly evolving and accessible to everyone, many businesses cling to outdated models, believing they are immune to disruption. However, this assumption leads to missed opportunities and potential pitfalls. Reducing your business to a first order of truth forces you to confront uncomfortable realities about your industry and the shifting expectations of your customers.
When a startup or competitor can offer a bareboned MVP representing your first order of truth, you're not just facing competition — you're staring at disruption.
So, what exactly is the first order of truth?
It represents the core principles that are fundamentally true about your business now and in the future. By identifying these truths, you can strip away the distractions and assumptions that cloud your todays understanding of your business and market. This focus allows you to discern what truly matters, enabling you to adapt and thrive amidst disruption.
Many industries have faced upheaval, not primarily due to the technology itself available to anybody, but because they failed to recognize inflection points, changing customer needs, and underserved or unserved market segments. Let's explore some examples:
The disruption of traditional services
Taxis and Ride-Sharing Services:
The rise of Uber and Lyft highlights how traditional taxi services clung to outdated business models that failed to adapt to consumer preferences for convenience and affordability. Rather than leveraging available technology, these companies were disrupted by new entrants who understood the market's evolving needs.
First Order of Truth: People need to travel from one place to another for an individual reason. Convenience, safety, and reliability are the primary expectations. Whether by taxi, ride-sharing, or autonomous vehicles, the business fundamentally fulfills the need for personal transportation.
If you can’t deliver value through analog human interactions, software will step in, providing both value and convenience — and it will eat your business.
Retail Cashiers:
Self-checkout systems and online shopping platforms have disrupted traditional retail cashiers, but this disruption stems from retailers' reluctance to adapt to consumer desires for speed and efficiency. As a result, many cashiers have been rendered obsolete.
First Order of Truth: The primary role of cashiers is to facilitate the transaction between buyer and seller. The essential truth is that customers want a fast, seamless, and secure purchasing process. Automation and self-checkouts fulfill the same need with greater efficiency.
Travel Agencies:
Travel agencies have largely been replaced by online booking platforms because they underestimated the changing dynamics of consumer behavior. As travelers sought greater control and convenience, traditional agencies struggled to pivot and address these emerging needs.
First Order of Truth: People need help planning trips, including booking transportation and accommodation. The essential value of travel agencies is to provide convenience and expertise, based on own or shared experiences. Whether handled by a person or an online platform, the core need is simplifying the travel process and guaranteeing stress-free vacations.
Video Rental Stores:
The shift to streaming services like Netflix and Hulu was driven by a failure to recognize how consumers wanted immediate access to a vast library of content. Video rental stores did not adapt to these preferences, leading to their decline.
First Order of Truth: Consumers want access to individual entertainment (movies, shows) in a convenient format and place. The shift from physical rentals to streaming does not change this core truth—it simply updates the delivery method.
Banking Desks:
Traditional banks that relied on in-person interactions failed to grasp the significance of digital banking. They overlooked how consumers were evolving toward more accessible and efficient financial solutions, resulting in a drop in demand for traditional banking services.
First Order of Truth: People need a secure place to store money, access credit, and manage finances. Whether done in person or digitally, the core truth is providing trusted financial services and convenience without paying unused buildings and clerks.
Fitness Trainers:
With the rise of fitness apps and online programs, traditional fitness trainers have been disrupted by businesses that recognize consumers' demand for flexible and affordable workout options. Many trainers failed to see this shift and adjust their services accordingly.
First Order of Truth: People seek guidance to achieve fitness goals. Whether from a personal trainer in a gym or through a digital app, the need for expert advice, motivation, and personalized workouts remains constant.
Photography:
The transition from film to digital photography was not just a technological change but a shift in consumer expectations. Businesses that focused solely on traditional film processing could not meet the new demands for instant gratification and convenience.
First Order of Truth: People want to capture and share moments and memories. The shift from film to digital does not change the fundamental value of photography—it merely changes how people achieve it.
Publishing:
The emergence of self-publishing and e-books disrupted traditional publishing because established publishers failed to adapt to the growing demand for direct author-reader connections and the flexibility of digital formats.
First Order of Truth: Authors need to share their stories, and readers seek engaging content. Whether through traditional publishers or self-publishing, the core need for storytelling and connection remains true.
Education:
Online learning platforms like Coursera and Khan Academy flourished because traditional physical educational institutions underestimated the demand for flexible, accessible learning options. The rigidity of conventional education models made them vulnerable to more adaptive alternatives.
First Order of Truth: People want to learn and develop skills for their individual career paths. Whether in a physical classroom or online, the essential truth is that education provides knowledge and personal growth.
Grocery Shopping:
Online grocery delivery services, like Instacart and Amazon Fresh, disrupted traditional grocery stores because these retailers did not recognize changing consumer preferences for convenience and the desire to shop from home.
First Order of Truth: People need access to food and essential products, without having to search, gather, carry home, preserve, and then prepare the food as our ancestors did. Whether through in-store shopping or online delivery, the fundamental value lies in convenience and fulfilling basic needs.
Conclusion
By reducing your business to its first order of truth, you can better understand how outdated business models and a failure to recognize inflection points and changing customer needs can lead to disruption. Recognizing the core principles that will remain true about your business is essential for staying relevant in a rapidly evolving market. Embracing this mindset will empower businesses to adapt and innovate in response to inevitable disruptions.
Want to read more? Visit my blog or better subscribe to my newsletter.
P.S: Do you want to know more about how to make your innovation project successful and avoiding typical pitfalls?
Extend your team and knowledge on a temporary or permanent basis: Contact me for a conversation.
Transfer the knowledge: Book one of the innovation bootcamps
Get a keynote on this topic for your organization: Book a keynote now