Silicon Valley is coming. There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking. The ones you read about most are in the lending business, whereby the firms can lend to individuals and small businesses very quickly and—these entities believe—effectively by using Big Data to enhance credit underwriting. They are very good at reducing the “pain points” in that they can make loans in minutes, which might take banks weeks. We are going to work hard to make our services as seamless and competitive as theirs.
Jamie Dimon, Chairman and CEO, JPMorgan Chase, 2016 Annual Shareholder Letter
Silicon Valley is also coming for your company. Digital disruptors in your industry are armed with the new machine, fueled with data. As we have just outlined in the two preceding chapters, you can do the same and, if you go about it correctly, with even greater success.
That said, harnessing the power of the new machine alone is not enough. The final piece of the puzzle, and the ultimate determinant of your success, is surrounding it with the right business model.
Ten years ago, you had to learn how to compete at “the China price” as globalization mercilessly drove unit costs down. Today, your business needs to take another step-change, learning to compete at “the Google price,” not to mention the “Google speed.” In that pursuit, most industrial business models are currently ...