Posts Tagged: Disruptive Technology



What Wi-Fi Equipped Gondolas Teach Us About The Cable Industry

Vail Resorts in Colorado just recently announced plans to replace a 4-seater chairlift with a new gondola system. That in itself isn’t particularly exciting or interesting. What is, however, is the plan to equip each and every gondola with a Wi-Fi connection.

Why a skier would need such a connection escapes me, but it’s a welcome addition to the technology.

As we’ve seen before (here and here, for example), many (if not most) of the major advances in cable technology have been developed with the alpine/resort market in mind. Yet a Wi-Fi enabled gondola system is far more useful in an urban commuting situation. Why then do we not see more innovations such as this developed specifically for the urban market?

Simple: Economics.

While there is a clear shift in the cable industry towards the urban market, the vast majority of the industry’s income still comes from the alpine market. It’s their bread and butter and innovations will necessarily have to privilege a large, existing customer base rather than a small, emerging market. That makes logical sense.

Trouble is, a policy of ignoring a small, emerging market often leads to disruptive situations where smaller, unknown agents are able to spot the needs of the emerging markets and satisfy them better than long-entrenched industry players. This situation leads, in turn, to the established players playing catch-up while the smaller, more nimble player gradually begins to dominate. Look at what happened with High Speed Rail in China (or Apple – to trot that cliché out yet again).

If the two existing players in the cable industry (Doppelmayr and Leitner/Poma) want to maintain their dominance, they need to begin to see that the needs of the urban market are different than the needs of the ski resort market. A Wi-Fi equipped gondola is a nice frill for the privileged few who ski on a regular basis. But for everyday commuters it would be a godsend – not to mention far easier to implement than in an underground, metro situation. Upon further reflection, it’s positively absurd such a development would have to wait for a ski resort to explicitly ask for it, rather than it being offered directly from the industry itself.

It’s a question of being proactive rather than reactive.

Here’s a prediction:

It won’t be too long before a company (probably from China, India or Brazil) recognizes all the little improvements that could be made to the technology specific to the urban market – and that such minor changes will dramatically increase the technology’s uptake in the urban environment. This company will recognize the opportunity and go for it – and take the unexpected step of completely ignoring the ski resort market entirely. Sounds like madness, doesn’t it?

Not really.

There are far more developing world citizens who live in poor but up-and-coming cities with horrible traffic congestion than there are wealthy white people who ski. That may sound glib, but it’s not. Skiing is still primarily an activity that appeals to a shockingly small number of (predominantly white) people due to the financial and topographical constraints of the sport. Yet the urban market is far, far, far larger than the ski market. That’s just a fact.

How long until someone figures that out?

And how long until the company that figures that out develops a product aimed exclusively at the urban market that not only dominates that market, but presents such a compelling product it eventually begins to penetrate back into the ski market, eroding market share from the existing players? That’s an incredibly plausible scenario and one the cable industry needs to devote serious time and energy contemplating.

It’s worth thinking about.

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