The Butterfly Effect
The butterfly effect rests on the notion that the world is deeply interconnected, such that one small occurrence can influence a much larger, more complex system. The effect is named after an allegory for chaos theory; it evokes the idea that a small butterfly flapping its wings could, hypothetically, cause a typhoon. Or it could not – the mind-boggling part of the butterfly effect is that it’s virtually impossible to predict whether a small system will lead to chaotic behavior.
I was an early adopter of Google Nest and Philips Hue products. I loved the idea of lights turning on and (especially) off without human intervention. My husband was delighted to be able to see the condition of our second home thousands of miles away. Years ago, a small pipe broke on the back of a powder room toilet and water flowed into our Arizona ranch home for days before a contractor noticed water coming through the garage wall. The place had to be gutted. Now he tunes in daily to make sure he can see what’s going on. He watches the Nest thermostat to ensure that the furnace is running. The Nest automatically adjusts to lower the temperature when no one is at the house, saving us money and positively impacting the environment. I also installed motion lights in our closets and bathrooms that turn off when I leave the room so I don’t have to answer my husband’s rhetorical question, “Are you done in the closet?”
These innovations make my life easier, save us money and give us peace of mind. I never knew how annoying it is to manually shut off lights. What else does this digital butterfly affect?
Can Google Disrupt HVAC?
Last week, I was at our condo in Florida. My son and I had gone down to handle the move from our old condo to our new place. In the new condo we have two Nest thermostats. When I walked by the Nest it was off (which is odd, as they usually light up), letting me know the current room temperature and that they see me. Seeing people moving around keeps the thermostats on their regular schedule. I tapped it and it displayed an error message. I ignored it, like turning up the radio to block the sounds of a dragging muffler. The next day my son complained about how warm it was in his room. I checked the Nest again and couldn’t get it to light up. It turned out ignoring the error message was a bad idea. My first thought was to call a heating and cooling guy but they were so expensive and it seemed like I should be able to resolve something with a Google nest, right?
I sat down at my computer and typed into Google “the power is out on my Nest thermostat”. Google responded with instructions to pop off the front and plug it into an ordinary Micro USB charger. Within a few minutes the Nest came back to life. I let it charge for an hour or so and plugged it back into the thermostat. It displayed the error code from earlier. I went back to Google and typed in the error code. It brought up a YouTube (owned by Google) video that explained in perfect detail what was causing the Nest to go down. The problem was a little plastic reservoir that was an output from a drain valve on the air conditioner. All I had to do was stuff in a paper towel and soak up the water. I followed the directions and removed the water and the Nest powered back up and started cooling the apartment.
Overly Expensive, Overly Complex Services
Maybe you have experienced the same anxiety before a call to a heating and cooling company. The service calls are close to $200 before they do a minute of work. Then the hourly labor charge ($80-$100) and parts not to mention the double talk about what is wrong with your furnace. Then the threat that the 8-10 year old furnace or air conditioner should “really be replaced as soon as possible”. The “service” is very expensive and complicated. It is ripe for disruption. Typically, that disruption would come from another type of service company that can leverage some other economy of scale and provide a cheaper service for HVAC. This time the disruption is coming from the crowd sourcing services of YouTube and the digital disintermediation Nest system. It was a DIY solution. Some random person with the same problem recorded the solution and put it out on his channel, for free. This simple, free service cost the local HVAC vendor at least $200 (service fee alone) to $400+ depending on how gullible I was that day.
Indirect Disruption
This type of disruption is indirect. It is similar to the indirect effects of Microsoft Word on the armies of secretaries in the late 80s. At first MS Word was super helpful to the secretaries with its WYSIWYG (What you see if what you get) technology. Before MS Word, typists had to format their documents after they finished typing. Formatting put in margins and paragraph spacing, alignments and consistent fonts. It was a distinct step that took extra time for the typist. Once they started using MS Word they could move from their typed page to the printed page saving tons of time. It was also easier for the younger managers that learned to type in school to do their own work. Instead of endless time wasted with typewriters and crude word processors and dictation, they could use MS Word on a personal computer and type their own emails and letters. There were armies of dedicated hardware sales people convincing customers to significantly improve company productivity by giving everyone their own PC with MS Word and Excel. I was one of those sales reps at IBM. We sold millions of computers to managers that used to have their own secretary. The secretaries moved into pools and eventually only the senior managers had personal assistants.
Google Home is an entire line of products that we use to monitor our homes with cameras and thermostats, lightbulbs and Google Home Minis. These relatively inexpensive products provide smart homes for millions of people. Smart homes used to be exclusively available to the rich. Cameras, speakers and thermostats physically wired into a high end controller on the wall. These systems added tens of thousands of dollars to new home construction costs. Now the products tie into our phones with Bluetooth and are available to us from thousands of miles away helping us save time, energy, money and anxiety. Leveraging platforms like Google’s YouTube, people can help each other solve problems. These combined resources might serve to disrupt the very expensive heating and cooling companies, especially those with high costs of doing business.
Is there a DIY video on YouTube that could disrupt your business? Is there a disintermediation channel that you are stuck behind? Is your business proposition valuable or complex and expensive?
