Thursday, April 23, 2009

Strategy: On Death of Newspapers and Impending Dealth of Airlines

I don't think too many airline CEO's read my blog. I do know a few tech CEO's that do read it. Let's pretend to be an airline CEO - I want you to answer this question:

What business are you in? Flights or Meetings?

Just as newspapers thought they were in the business of gathering news and printing news papers; the music industry CEO's thought they were in the business of vinyl records, tapes or CDs; many airlines appear to think they are in the business of ensuring flights are running on time, tickets are sold and customers pay extra for baggage (monetization). I think they are wrong.

Serving Customers with 50 year old technology - the flying machine (Image)

Cisco Telepresence is to airlines what Google Search was to newspapers and classfieds. And airlines have a choice - they can rethink their mission and realize that what customers are looking for is not flights or tickets or baggage fees but meeting business counterparts face to face, connect with family and go on vacations. The visionary airline CEO would then try to see how Telepresence would impact this market. And then take steps to re-imagine their business.

Here are things I would do if I were the CEO of Mythical Air:
  • Embrace Telepresence as another mechanism for people to meet and declare that we would help customers with this.
  • Create "Mythical Air" Telepresence Lounges - in major cities and smaller towns. These lounges will include Cisco Telepresence.
  • Mythical Air Lounges in airports will also include Cisco Telepresence - while this may threaten our 'flights' business but in reality our customers would be happy - if they are late, they can connect via telepresence. Even when the flights are on time, they can leverage time in the lounges doing business - and learning how useful this system is. So, next time they are likely to buy Mythical Air Telepresence trips rather than Airline trips.
  • Tie up with major hotel chains to partner and run Mythical Lounges inside hotels. Now our customers can run global meetings by meeting regionally in hotels.
  • Work with Expedia, Orbitz and others to list Mythical Telepresence among the 'flight options' in results. So, when a customer types in Sacramento to London - the results include flight from Sacramento to San Francisco and 'telepresence flight' from San Francisco to London (and offer a hotel in San Francisco).
Imagine if,
  • Newspapers had co-opted internet search and publishing
  • Music industry had co-opted internet delivery
Let's see if any airlines re-define their mission statements and co-opt this innovation. Or do they all end up fighting this trend and each other for the shrinking market. Blue ocean or red ocean?

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Magnus said...

Brilliant post!
I think your right on the target.

The ability to rent a room equipped with high end telepresence solutions is a brilliant and cost efficient way for most companies in order to arrange 'upper management' meetings. (With the service to set up the meeting, support and upgrades.)

Another great trend is the use of less quality video meetings using just a laptop and for example Skype. This for less important meetings and for people with higher IT knowledge (then upper management).

Jackie Bassett said...

Yes, Brilliant post! Knowing what business you are in is the first step toward getting your strategy right.

Ask customers what problem THEY believe you solve for them and that's the business you are in.

The Blackberry is not about email -no one wants more emails. It actually the opposite - getting "rid" of emails, catching up with all of those emails that pile up while we spend more time away from our PCs.

How about a post on where RIM et al should take their business next?

Anonymous said...

Beam Me Up Scotty !
What dribble from a Monday Morning quarterback ? Of course we all will be watching and playing our football on Wie,so no need to go to the game,park the time machine,and drink beer.
Get a life

Unknown said...

@Magnus - Thank you.

@Jackie - Thanks. In fact, one of the things I am looking for Bartz to do at Yahoo! is clearly define their mission. I love your Blackberry comment - in fact, this is an under-attacked problem by Email vendors - helping us get rid of email.

@Anonymous - I don't know if you notice the irony of reading my blog, leaving a comment without your name and then calling me a Monday Morning quarterback. I do agree that a lot of people view Bloggers as a strain on society at large. But, I am not quitting writing any time soon... :)

Unknown said...

If the Obama administration regulates airlines with its carbon cap-and-trade plans, as it seems they are inclined to, airlines just might embrace this strategy in a blink.

Nick said...

Interesting - some travel companies are coming up with exactly this approach. So if I book a travel, it will first give me all the other options (video conf., driving to some place etc.) before you can book air travel.

I think the intermediaries are in a better position to do so today than the airlines.

Anonymous said...

I will buy cisco stock and take a siesta in a hammock.

Anurag Batra said...

In keeping with tradition, I'll argue with you. Yes, airlines suffer with remote meeting technology becoming popular. But that doesn't mean that they should now diversify into something that they don't know anything about. When did flying people from point A to point B qualify anybody to become an expert in knowing how people would like to collaborate to solve business problems? In fact, I'd challenge you to think of Cisco's technology as something that actually promotes air travel. As this technology spreads, businesses get more and more global. So, those who'd have otherwise dealt with local suppliers only, now can solicit offers from suppliers halfway across the world. Companies can build virtual teams and hire employees time-zones away from the HQ. Eventually, this adds to the potential air travelers. Did television mark the death of theater? Or would you say that theater has gotten better (and more widespread) over the past hundred years? I agree with you that airlines should not be alarmed at the growth of remote meetings. But I'd dump Southwest stock if they came up with Southwest Meetingplace.

PeterWinters said...

Very interesting idea - and a key question, for individual airlines, is to rework their business models to keep making money!

Subsequent to your post, on May 29 2009, we released a press release showing the threat that airlines gace to their business traffic -

'Survey finds that over 35% of ‘American business flights’ are threatened by telepresence'

If you Google it you should find it.

Peter Winters, Haddock Research

Unknown said...

Why would you even build special rooms when you can experience HD personal telepresence right from your computer and share all your powerpoint, excel worksheets and collaborate in real time.
read more about scalable video that is making is all possible. (