How Advances in Technology Impact Business Models

As part of our upcoming campaign on how the advances in technology impact people and businesses, we’ve spoken with Gero Lueben, Managing Director at Ingasol, to find out what organizations need to do in order to innovate continuously and avoid being run over by disruptors. 

Beaglecat: Do you see as positive or negative the fact that connected devices will reduce human effort to a minimum?

Gero Lueben: I feel it’s positive in terms of ease of use, reduction of unnecessary input and work. At the same time, with every automation, I see an increased need for awareness of people using the devices and actually applying or handling the apps and devices. Are human capabilities keeping up with the pace of technical development? I don’t have an answer to this. I would say that, in general, the simple way for developments is that they will go faster and faster until everything will be automated. Of course, on the other side lies the challenge of human development.

BC: There are jobs now that might not exist anymore if everything gets automated. What happens then?

G.L: If a computer can replace jobs, it should. It’s no longer work if it’s something that’s repetitive or not that intelligent. I see this as the development of weather: when it rains, that’s the way it is. You need to adapt anyway. If you think about the ways in which you need to adapt, and whether it’s positive or negative, it is pretty much the same as asking: do you feel gravity as negative or positive? It’s a force that’s simply there, the same way that the increased automation is simply there. What we can do is adapt to it in the most clever way, and that’s the challenge.

BC: We’re witnessing a wave of disruptors changing the rules of the game. How do you think that companies such as Airbnb or Uber have managed to go such a long way in such a short period of time?

G.L: With significant investment, access to a capital and methodologies that allowed them to innovate very quickly. Many times, they are so good because they have discovered the shortest ways from ideas to live product and from new idea to product adaptations. The Head of Daimler-Chrysler in Stuttgart, formerly in Silicon Valley, has said: “The main capability that we have to learn as Merceds-Benz is how to increase the speed from I (idea) to P (product).”

These companies that you’ve mentioned are very capable there, but also as platform technologies, they have access to vast amounts of money, meaning that they can roll out something globally with very little incremental costs, and can dominate right away the global market. Others may have identified the same need, but while they invested $500,000 into an idea, companies such as the ones you’ve mentioned have invested $15 million or more.

BC: What’s your advice for established companies to prevent them from being run over by these other guys?

G.L: Plan less, test more. That’s Ingasol’s motto. I find it interesting that Bosch for example, an automotive supplier with a yearly turnover of 48 billion euros, has a managing director who says that it will not be the best technology or the best connectivity that win, it will be the best business model. Since we do not know which business model will work best in the future because everything is emerging at the moment, all we can do is try out and test out as many options of the future so that we can discover which one actually works. It’s interesting to see that big companies are starting to experiment more because in the past they planned and predicted the future while now they’re testing the future. The interesting thing about Bosch is that it’s both B2B and B2C, which is neither positive nor negative. This is just how it evolves.

BC: How much room is there left for innovation? Sometimes one might get the feeling that we’ve already got everything we need. We are flooded now with apps and software. Is this it?

G.L: My impression is that the barriers to innovation are at a historic low, because you have a device in your pocket that’s as capable as a supercomputer used to be, and we’ve only just started with the innovation that’s going to take place with and through it. For example, when a company like Finance Fox (to whom we’re providing consulting services) put all of their insurances into a mobile app, I didn’t think it would be possible. Now I’m impressed and surprised with how the project turned out.

The app simplifies insurances and enables people to have everything they need on their mobile device. Some of the big players in this industry take pride in having responsive websites, but these guys went further and said: “We don’t have a website. We only have the app. Yes, we’ve also put up a website, but that’s not for people to manage their stuff.” All of a sudden, all of the development effort goes into making that thing usable, and it works! They have customers who claim that this is what they wanted and needed all along. Furthermore, they have a new generation that’s coming and wants to use such things.

With great technologies being so readily available for everyone to use, you can test out things and use them for free in the beginning. I truly believe that there has never been a time with less innovation. The innovation increases and so is the speed of innovating because it’s so easy to do something new.

BC: With all these advances in technology, we’re more and more tied to our smartphones and laptops, but seem to be less connected to the physical world around us. Do you see this as a downside of technology advancements? How can we avoid turning into little robots?

G.L: This is also a question for parents and how they deal with their kids at home. There are two options: you either try to forbid them something or you give them better alternatives. In many cases, the physical world has better alternatives. While we cannot generalize, for kids this is the case for sure.

How do we avoid becoming little robots? All of our attention goes into these devices, and I think that education about the effects of these devices will help people deal better with them. There are studies about how your thinking is less realistic and less profound the more you deal with PCs and mobile devices. People wondering “What should I do with these devices?” are some of the most profound thinkers I know, because there is some observation and they are very reflective. They’re not interrupted by these things. If kids started learning the benefits of not using them and not being drawn into them, that would be fantastic. All the schools are individually struggling with this: “What should we do? Should we forbid them entirely, should we teach the kids how to use them?” but it’s very difficult.

BC: If you were to envisage the world 20 years from now, what would you see?

G.L: The big question is “Will we still have external devices?” and that’s a scary forethought. The technological developments over the last 10 years are enormous, and now the speed increases. Things like AI and chat bots are just getting started with their applications.

As people are discovering new apps and devices every day, they should ask themselves if this brings them any benefits and if it makes their life meaningful, continuous and persistent. And then maybe these insights, like for example in the Harvard studies where they observed people over 75 years of age, increase in importance.

Gero Lueben started his career in 1997 as a project engineer at Lahmeyer International in Frankfurt, one of Germany’s largest engineering consulting firms. At the age of 29, he was appointed as the CEO of Exorbyte, a technology leader in error-tolerant search solutions. Gero founded Ingasol in 2005.

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