John Geraci

Last week Business Insider ran an article about companies that JP Morgan thinks could be "the next Apple".  It's worth a read if you are looking for companies to invest your money in (Apple's 10-year return has been about 5000%, the article references companies poised to do the same).

But let's face it, companies like Disney, Comcast and Qualcomm are not the next Apple  - they're just big companies with stocks that will likely go up over time. Apple has of course done much more than provide good returns on stockholders' investments - it has provided good returns because it changed the way people interact with their world.  Multiple times. 

So then who is The Real Next Apple?  When we look back twenty years from now, who will we point to and say "that company changed everything"?  

Here are a few contenders:

MakerBot.   When Jobs and Wozniak started Apple, computing was in its infancy.  They saw the power of computing and wanted to make it cheap enough that people could do it in their own homes.  Makerbot is doing the same thing for 3D printing - taking a hugely disruptive, transformative technology that is currently only available to big companies and making it available for anybody with 500 bucks in his or her pocket.  Where will this go?  Nobody knows, but as the capabilities of 3D printing expand over the next decade, and Makerbot continues to refine its product, it's possible that they could become one of those rare companies that is in everybody's home, everywhere.

Square.  Aside from the fact that Jack Dorsey seems to resemble Steve Jobs more with every passing day, Square is a real contender for The Real Next Apple. As Apple did with computing, Square has extended the places in which credit card transactions can occur to include pretty much anywhere on earth.  And they're moving into specific verticals too, as with their recent pilot project to put Square in the back of NYC Taxis.  When Square was first looking for money, a VC who had heard their pitch said to me "They wont be the next big thing".  How wrong he was.

Simple.  Banks have been due for a shakeup since... well, pretty much forever.  Their collective policy of "fees no matter what you do" makes them ripe for disruption.  Enter Simple - a service that "replaces your bank", eliminating unnecessary fees, allowing you to do as much as possible on your smart phone, and giving you access to ATMs to get the cash you need when you need it.  It's the sort of huge-yet-simple idea that Jobs himself might have thought up. Simple is still in private beta, but their vision is big and the need is there - if they play things right, they could be the kind of company that changes the way we operate.

FitBit.  The ecosystem of everything related to computers was barely a twinkle in Steve Jobs' eye when Apple began.  And then that ecosystem grew.  And grew.  And grew.  Same thing for FitBit - when they started, the quantified self was hardly a footnote in tech.  Now it's quickly becoming something that many people can't get through their day without.  And the healthcare industry is now eyeing it as an efficient solution to many challenges it currently faces.  The intersection of people's lives and data will only grow over the next decade - FitBit could ride that wave to touch our lives in ways we presently don't even imagine.

The real next Apple, whoever it turns out to be, may eventually return 5000% over ten years - not because they are giant companies positioned to grow into even more-giant companies, but because, like Apple, they've changed the world around them profoundly.  

Do you own retail storefronts, big or small?  Do you look at the web and wonder if it's going to eat your company alive in one year, five years, ten years?    Well here are two simple questions you can ask yourself to determine whether your storefront is safe against the onslaught of web disruption:

1) Is your storefront significantly more convenient to customers than the web?

2) Do you sell a good/service that can't be sold via the web?

If you answered yes to either or both of these things, you're safe from web disruption.  For now.

If not (and most storefronts would answer no to both of these questions), you are directly in the path of the web's disruption of retail.  

Here are some examples of stores that are safe and stores that are not safe:

My corner store sells butter, orange juice and toilet paper, three things everyone in my neighborhood needs and runs out of constantly.  When we run out of these things, we need them NOW - we can't wait for the online service to show up with its truck and deliver.  It is safe from web disruption for now.

The cafe down the street sells coffee, which I need several times a day.  I can't get it on the web.  (Not yet at least - next year, who knows?)  What's more, it is nearby and I enjoy walking to get it.  It is safe from web disruption for now.

The shoe store on Broadway?  It sells shoes that I can get on the web more easily than by walking to the store.  Its selection is smaller.  And try as I might, I can't even remember the name of the store!  I CAN remember the brand of shoe I want - which I can easily look up on the web.  It is not safe from web disruption.  

The big electronics store on Union Square?  I go into it and decide what electronics I want, then buy them for less online. It is not safe from web disruption.

So then what do you do if you're sitting directly in the path of web disruption, like Dorothy's house in the Wizard of Oz?  

Well, it turns out that (thankfully) there is a third question you can ask yourself, which can save you from web disruption.  And this one you have the power to determine the answer to yourself.  It is this:

3) Are you a company that co-exists equally in physical space and on the web?  Does your storefront operation tie in seamlessly to an online experience, allowing in-store visitors to become online buyers of products (and services!) now and at any time in the future? 

If your answer to that third question is "yes", then congratulations - you are positioned to move forward into the new age of storefront retail.  

In the new age of retail, the successful storefront is an extension of the online store.  The two are not separate, but continuous.  The physical reinforces the virtual, and the virtual reinforces the physical.  A customer who leaves the store without buying something isn't a loss to the business - they are simply a customer who will continue their experience online, and develop a closer relationship with the company.  A customer who starts their buying process on the web may decide to go to the storefront to finish it, pre-armed with knowledge of what they want.

The two together add up to more than the sum of their parts.  

The disruption of the web is continually accelerating, but as a retailer you don't have to lose from it.  You can instead join it and win.