Comparing Uber and the Pocket Calculator
What do Uber and the pocket calculator have in common?
More than you might think.
Both are classic examples of disruptive innovations, what Harvard Business School professor and “The Innovator’s Dilemma” author Clayton Christiansen defines as “advances that…transform life, business, and the global economy.”
In short, they rocked the boat — they were ideas that started small and simple but gradually changed the way major industries worked.
Take the taxi industry, for example. Less than four years ago, city cabs had a monopoly on the market and taxi service was neither convenient nor customer-focused. Some cities still weren’t accepting credit cards.
In 2009, Uber launched a new model with a premium on convenience and customer service. At first it was expensive and only available in a few cities, but, over time with large scale adoption, the cost has come down, making it more accessible. Now available in most major cities, Uber has become a real threat to traditional taxi service.
The pocket calculator followed a similar trajectory. Although its performance was less reliable than the desktop calculator, it was portable and more affordable. Over time, performance improved until the desktop calculator was eventually made obsolete.
So which industry will be next? We believe real estate.
Real estate is a multi-trillion dollar industry and is estimated to account for roughly 12% of the total economy (US BEA).
As it stands today, however, the industry is characterized by a lack of transparency and accessibility to the average investor.
Regulations generally limit investment in individual property to high net-worth investors, barring more than 97% of Americans from investment and the potential profits that come with it.
Fortunately, that is about to change. The passing of the Jumpstart Our Business Startups (JOBS) Act in April 2012 opens up investment opportunities to the general public, and that means hundreds of millions of new investors able to access real estate investments like never before.
We believe crowdfunding will fundamentally change financial markets, doing to capital what the Internet did to commerce — eliminating the middlemen. Soon, everyone will be able to invest.
Keep watching to see what happens next. Big changes are ahead.
Fundrise, co-founded by Ben and Dan Miller, is the first U.S. online equity crowdfunding platform for real estate. Fundrise gives communities the tools to build the city they want to live in. With Fundrise, local people can invest in, own, and build local real estate, fundamentally changing what is possible in community development. The team also co-founded Popularise, the online ...