Stop! Don't Let Your Business Fall off the Digital Disruption Cliff

Have you ever seen the industry you're working in walk-off a digital cliff? I have, and let me tell you, it isn't pretty, and it happens fast.

Once an industry begins transforming to a digital business with digital-only competitors, incumbents have to move early, quickly, and intelligently through a digital transformation. These businesses must bring in new talent, invest in digital capabilities, and leave sacred cows behind to compete with digital disruptors.

Newspaper Ad Revenue - Isaac Sacolick

The figure shown here is what happened and continues to happen to the newspaper industry, where the digital transformation started as soon as the internet became mainstream in the 1990s. 

The startup I joined and later became CTO partnered with newspapers to help them go from "print to web," as the transformation was called back then in media. We started with a classified ad platform with natural language processing, a search engine, and a pre-CSS publishing engine. It enabled us to aggregate classified ads from ~1600 newspapers and deliver a SaaS (back then, it was called an ASP) product that allowed searching classified ads on the newspaper website. 

Over the next decade, we built, merged, and acquired capabilities to help run all the digital capabilities newspapers required, including publishing content, hosting job boards, integrating with auto dealer websites, and running a digital newspaper ad network. By 2002 we had eleven newspaper companies investing and using our platforms.

The Impact of Digital Disruption

But most of you know the other side of the story. Craigslist, eBay,,, hot jobs,, yahoo, AOL, and countless others saw the paper-driven, inefficient, local newspaper as a slow fat target. Newspaper revenue grew in 1996-2001 during the bubble but fell off a sharp cliff when it burst? Why? Simply because consumers and advertisers had lower cost and higher value options, the branding, localization, and trust newspapers heralded weren't sufficient to retain loyal customers.

Once digital alternatives appear in the market, things go downhill fast for incumbents. While digital players learned how to compete digitally and improve user experiences, newspapers had to adjust their operating models and philosophies. Hours invested by newspapers to preserve editorial excellence, transform manual processes or consider print/digital subscription models came in lieu of the hours invested by digital companies to improve customer experiences, steal market share, develop analytics, or automate processes aimed at growing revenue profitably. That transformational gap, along with drastically different digital pricing, creates a steep fall-off in revenue.

But that was Media; It Can't Happen In...

If you're naive to think this is a media phenomenon, then think again. I shared several other examples in my post, What is Digital Business and Digital Transformation. HBR recently reviewed results of a Russell Reynolds Associates survey of industries where executives anticipate moderate or massive digital disruption, and while Media was number one on the list, it is quickly followed by telecom, consumer financial services, retail, technology, insurance, and consumer products. Basically, any product or service with differentiating capabilities via digital transactions, digitally enriched products (content, data, and IoT), multimode or omnichannel customer experiences, algorithmic or AI-driven automation are likely to experience some form of disruption.

I'll let the experts predict which industries will be disrupted, whether they will be moderate or massive, when will they kick in, and how fast they will transform. I will continue to share what to do about it.

Further reading on Digital Transformation

1 comment:

  1. All industries need to adapt and evolve in the face of new technology...


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