Clayton Christensen – in his book The Innovators Dilemma has done a great job of explaining to us all why it is that time and again market leaders get ambushed by much smaller new entrants. If you have not read it please do it’s a fascinating read.
The classic scenario is that the much smaller new entrant launches a product that is obviously inferior from a quality point of view and therefore the existing players in the market don’t take it seriously. Ryanair is a good example of this and before them, Japanese car makers ambushed the American automobile industry with their compact cars.
And just now we are witnessing that the traditional newspaper industry is flapping around like headless chickens trying to come up with a business model that will save them from disappearing altogether – but they too woke up to late.
The key to understanding why this happens again and again is that established providers focus on their core customers and in that process lose sight of the job that needs to get done.
Take journalism, the demand for news is the same – but the way it is consumed has changed. My grandfather had the maid iron his newspaper before it was brought to him in his study. Well not many people consume news that way any more if you get my drift – but they still need it and somebody is providing it.
The reason I’m taking this up in my blog is because I have noticed how hugely popular a number of essentially couch surfing services have become. Airbnb seems to be the most visible but there are many others.
The concept enables private people to rent out their spare space to travelers. In Berlin a popular tourist destination hoteliers are now asking for government intervention, new rules and regulations because it is estimated that a whopping 5,000,000 bed nights a year are being supplied by private vendor’s. Interesting. Big chains are feeling threatened by small private vendors. What is going on?
Well, if we look at it through the lens of the job that needs to get done my interpretation is that this is not just about price – lots of private vendors are charging the same or more than your average budget hotel. I think this has more to do with hospitality – or the lack thereof.
If you visit a site like Airbnb.com and pick any popular city and look at the comments that some of the popular providers have on their listings from satisfied guests. What visitors appreciate is clearly the personal touch. The host that catered to a particular need, showed them the right dance club or whatever – in every case of a raving review it is clear that there was a real connection between the host and the guests. And that to me is what hospitality has always been about. That is the job that needs to get done.
But lately we have seen especially budget and mid priced hotels automating and streamlining their processes in order to cut costs. Check yourself in and out. Pick up your breakfast in the automate etc. But in the process they threw the baby out with the bathwater.
The obvious success of the couch surfing services is a big wake up call for the industry – we need to refocus on the job that needs to get done – which means being great hosts.