In 1870, visitors to New York’s Equitable Life Assurance Building were greeted with a horrific sight. Instead of a hand-powered elevator, there stood in the lobby a fully automated moving room that would ascend the daunting six floors of the city’s tallest building…on its own. Most visitors promptly refused the elevator, making their way to the stairs. The overall consensus was that the experience was “ghastly,” “ghoulish,” and “unnatural.”
So Equitable Life Assurance added a few touches. They put plush red carpet on the floor, a small chandelier atop, some music, and most importantly, a “lift man” to stand and push the buttons for people. Folks instantly warmed up to the idea. A few decades later, the lift man was obsolete and full automation had occurred.
This is the state of small business automation today in America. Automation hides around every corner, but small business owners haven’t truly assessed the risk because of the presence of human “operators.” Tweet This We’ve seen self-service checkouts come to almost every grocery store in the US, and ATMs have replaced the need for multiple bank tellers.
So is your business future-proof or on the chopping block? Here are some examples of threatened and extinct small businesses:
If you want to see a living parable of automation, walk on down the street to the spot where your neighborhood travel agency used to be. These happy little offices, with their blue-felt chairs and Aloha posters have gone the way of the dinosaur, replaced by digital giants like Expedia, HipMunk, Kayak, Orbitz, and Priceline. According to Hoover’s, there are 17,000 travel agencies in the US, down from 35,000 about 15 years ago. And the majority are online establishments. Brick and mortar agencies to exist, but mostly cater to the specialty market (cruises, that custom trip to Disney World).
Uber has singlehandedly brought the once-venerable taxi industry to its knees. The cost of a treasured NYC taxi medallion has been substantially reduced, from $1.3 million to $840,000 last year. In San Francisco, Uber’s home base, taxi medallion sales fell by 85%, according to a blog post in the Wall Street Journal. The Journal also noted that the average income of a yellow cab driver in the US has fallen by about 25% since Uber’s inception, and while this number is starting to stabilize, long-term prospects for the industry remain fraught with peril.
The neighborhood pharmacist used to be a staple on Main Street. They’re not small business owners anymore; ow pharmacists are employed by major grocery and drugstore chains. In addition to cuts in Medicaid reimbursement and market concentration from bigger firms, pharmacists face yet another challenge: automation. The University of California San Francisco already has multiple on-campus pharmacies staffed by PillPick, a pill counting robot from Swisslog. It is said to make fewer mistakes and work faster than a human being, but it can’t dish out any medical advice.
Restaurants stand to capitalize from improvements in automation as tableside tablets such as the Ziosk and E La Carte take your order and run your card, essentially phasing out wait staff and replacing them with “food runners,” while allowing the tablet to do the brunt of the sales. Unexpectedly, a tablet can be even a better salesperson than a human being, as research shows people are more likely to order that dessert or second helping from an emotionless and judgment-free robot rather than a human being.
Real Estate Brokerages
In the past, realtors could charge a premium because they controlled vital information: they had the listings and many made their living off selling exclusive homes that no other realtor had access to. All of that has changed. Most real estate listings are now non-exclusive, meaning Zillow, Trulia, and other house searching applications can access them.
At present, they still require a human operator– realtors are still waiting on the other side of that listing in order to process the sale. However, it’s completely feasible to design software that can replace the realtor and hire doormen or security guards at a fraction of the cost in order to arrange viewings. Perhaps aware of the writing on the wall, realtors are fighting back with competitor sites such as OnTheMarket in the UK, which prohibits their users from listing on more than one other site.
These firms, centered around the film industries in Los Angeles and New York, make a dime by contracting out with film crews to find great locations for photoshoots and films. But automated solutions such as Snap Scout threaten to crowdsource the service and wipe out the middleman for good.
Opening a small business can be daunting. In addition to watching your back for the competition, you have to zoom out and focus on large, industry-level shifts such as the vulnerability your business has to automation. Don’t become the next business to get wiped out by a website, robot, or mobile app! Instead, use your personal knowledge and relationships to stay ahead of the trends and make automation work for you.