May 07, 2015

The Market is Ripe for Disruptive New Companies

by Guest Blogger

Earlier this week Gallup reported that only half of 18 million people it surveyed "believe that the companies they do business with always deliver on what they promise." The article also reported that only 38% of respondents were fully engaged brand ambassadors for the companies they were asked about, while 62% of respondents were open to switching brands.

Promises Street

A few months ago, Forbes ran an article summarizing the Brand Keys Customer Loyalty Engagement Index and came to a similar conclusion. The Forbes article noted that consumer expectations are increasing faster than companies are rising to meet expectations. Interestingly, categories are removed from the Customer Loyalty Engagement Index once all of the brands for a particular product or service become so blah that there is no significant brand differentiation. In 2015, Diapers and Breakfast Cereals were removed from the Index.

Combining these two studies, it becomes clear that there are a lot of industries out there that are ready for disruption, simply waiting for a new and different brand to bring change.

Two great examples of entrants into blah industries immediately come to mind: YouTube/NetFlix and Uber.

Uber Logo

YouTube/NetFlix: How often do you think to yourself, today is an NBC day. I am going to watch NBC because that is my channel. More likely, you find a show you like to watch and settle in on whichever channel it appears. Fascinating that NetFlix has done so well with the same programming. Even more fascinating that YouTube surpassed TV more than two years ago in viewership, with over a billion users a month. It makes sense. I prefer YouTube because it is easily searchable, it is available on any device, and it has a much larger range of content â even though the quality can be much lower than TV. I prefer Netflix because it remembers what I watched, is easy to search, and displays content in a logical format.

Uber: Is there any worse example of brand differentiation than taxi companies? Have you ever chosen one cab over another based on brand? Other than the pink ones I see from time to time, I'm not sure I could even tell any of cab companies apart. It makes perfect sense then that Uber is crushing the taxicab market. A recent story in Business Insider reported that in San Francisco revenues for the entire taxicab market are about $140M annually. By contrast, Uber's revenues are about $500M. It is mind blowing that a four year old company could surpass the entire existing taxicab industry. This also makes sense though. I love Uber because I know a friendly person will pick me up, I'll never have to wonder whether he'll take a credit card, and I'll have a receipt (that I didn't write out myself).


I think we are primed for additional big brand moves over the next few years as new enterprising companies reform blah industries of all shapes and sizes.