Uncategorized

Behavior is disrupting everything, from markets to economies and governments?

Behavior is the API!  Airbnb, the API was “Trust” that is disrupting a global hospitality industry creating new value in a very old industry.

What has behavior got to do with rational policy, business models, balance sheets and how consumers buy? Everything!

When you look at behavioral economics, it a real surprise to all who know that the two Nobel Prize winners Herbert Simon (1978) and Daniel Kahneman (2002) where not economists!

Why is behavior such a critical topic that’s got everyone from shareholders, CXOs and board members to startup entrepreneurs in Silicon Valley interested critically in this extraordinary subject? Because we are people!

When most planning for a product or a service or a business or a policy is developed, it is in majority in isolation of behavior of the stakeholders involved. This often is a rationality that seems highly irrational, but more often than not, isn’t.

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Daniel Kahneman and Amos Tversky wrote “Prospect theory: An Analysis of Decision under Risk” in 1979 which laid the foundation of how psychological behavior and it’s impact on economics in decision making was a critical causal behavior.  This was seminal.

So let’s look at some of the most recent disruptive companies that are and have changed the “behavior” of their ecosystems and thus lead to disruption.

Apple, Google, FaceBook, Twitter, Airbnb, WhatsApp, Uber, et al. The behavior altering models deployed with through algorithms and engineering wrapped around lead to the disruption of their ecosystems. This was critical, not just their pieces of software that made a process more efficient. Their altered or amplified behaviors that lead to the disruption of behaviors and with economic impact across their ecosystems.

Thus the classic business models that create “Abundances” and “Scarcities” as a dichotomy are now resulting in behaviors that have never been witnessed before. From change in politics to consumer to the environment to financial main street, never before has behavior radically altered models. One of the most critical factors is technology which has disrupted the economics of;

1. Behaviors discovering relationships (WhatsApp, FaceBook, Google)
2. Behaviors accelerating instant gratification (Like, Comment, Share)
3. Behaviors accelerating discovery, collaboration and commerce (Amazon, eBay, Google, iTunes, etc)

A good example is agriculture and food security.

LOCAVORE, HOW BEHAVIOR IS DISRUPTING A TRILLION DOLLAR MARKET IN FOOD RETAIL
https://gerardjrego.com/2014/03/23/locavore-how-behavior-is-disrupting-a-trillion-dollar-market-in-food-retail/

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Thus whether you are a entrepreneur, academic, investor, employee, board member or consumer. Look at behavior, the API of the ecosystem you are looking at and you can instinctively as well as model what’s potentially coming next around your own behavior to the question you asked yourself. That is disruptive.

Is your company next?

We as a group are working on leveraging behaviors to potentially create new models, workflow and collaboration for industries that are seen as only hardware intensive and pure tech play to address these opportunities. The question I leave you with.

Wearables. Is behavior going to really be the pivot on which you and the rest of the world decides to leverage. If so what behavior(s) will alter the current ecosystems and lead to creative disruption?

Categories: Uncategorized

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