The article states that while the mobile shopping market only accounts for sales numbers of about $750 million in a $2.3 trillion retail market, the rush has begun with more and more retailers offering coupons, applications and even purchasing power without ever leaving the comfort of your smartphone’s screen. Nita Rollins, a futurist with the digital marketing agency Resource Interactive said, “The majority of American consumers will be mobile device-centric in a few years. Now that it’s technologically feasible, possessing such power literally in the palm of our hands is quite irresistible.” Mobility’s irresistibility is becoming clearer all the time. The article goes on to state that retailers such as Best Buy, Toys R Us and EBay had all either newly instituted or completely revamped mobile-enabled sites for the holiday shopping season. Often when trying to shop on their phones customers may be frustrated by a redirection at the final purchase screen asking the consumer to move to a secure PC for the transaction, but efforts on the parts of such huge big box and online retailers such as those above are evidence of the growing trend towards mobility. One female consumer interviewed for the article said, “I still have a much greater comfort level with my PC, but if I came to find buying was quick and efficient on my phone, I most definitely would do that. I’m on the road a lot.” The majority of consumers today are “on the road a lot” too, whether that is the commute, at work or on the go with family. The demand for more and more mobile accessibility is there, and mobile technology’s potential in the retail world will continue to display itself as fast as companies can adapt platforms to allow the consumer to continue using their mobile devices to make their many purchases.

In order to know when to pursue the right idea at the right time, Bienvenu applies the theory of Punctuated Equilibrium to technology cycles which is covered in his new book, The Fourth Shock. Without exploring the technical arcana surrounding the nuances of the neo-Darwinist evolutionary debate, the Theory of Punctuated Equilibrium generally holds that evolution rarely occurs and that long periods of stasis are occasionally interrupted by rapid, catastrophic change.  In periods of stasis, most mutations fail as the ecosystem and the species that make up the environment are in balance.  This is not to say that all evolution ceases, but the types of evolution tend to be gradual and within species rather than the radical creation of totally new species. However, every so often a fundamental shock to the environment occurs and all hell breaks loose as the ability to radically mutate becomes a huge advantage in an evolutionary sense of the word.  In these periods of punctuation, evolution tends to explode as incumbents in the old environment are replaced by new species better adapted to the now changed environment.

 Mobility is next wave. It is bringing about the next period of intense evolution in the consumer packaged goods (CPG) industry. The new consumer data that mobile technology can offer is changing the way companies interact within themselves, with other companies and with consumers. The CPG supply chain, which has always been essentially reactive to consumer trends in nature, is becoming a proactive entity. The CPG companies that are able to adapt to these trends the fastest (a la the Theory of Punctuated Equilibrium) will be the ones to survive this next surge in the evolution of the industry. Those companies who stay too comfortable in stasis will find that their particular period of equilibrium is over, that the old environment is gone and that without the necessary adaptations this new evolutionary period the spiral begins toward extinction.

Throughout the early 1980’s, Microsoft was all for performing the first three E’s, embracing, empowering and extending the software market left and right in a number of ways. First, they made if very easy for any programmer, whether a professional or just a hobbyist, to write software for the Microsoft operating system. While companies like Apple wanted to control the entire technology stack so as to gain the most profit from hardware and software production, Microsoft empowered programmers with cheap tools such as software development kits to encourage the creation of new options for Microsoft users. Microsoft would offer coupons for different kinds of handy software with their own operating systems. And they were smart about which kinds of software to push, harvesting data from their OS users as to which programs were popular and which ones were less so. This process allowed Microsoft to create a virtuous cycle. Empowering the developers meant more programs for their operating system. More software options meant more people wanted to use Microsoft. And more users meant even more developers desired to write software for the Microsoft platform.

Once Microsoft reached this cycle, they were in a position to execute the fourth E: extermination. Upon gaining demand data from its operating system user base as to which software was becoming popular, Microsoft would buy a small competitor to whomever was making that software, and offer it to the Microsoft OS customer base at a fraction of the price, if not free. In no time the creator or main supplier of said software would be run out of the market due to the extensiveness of Microsoft’s customer base. It was brilliant and ruthless, and the fourth E is exactly what has made Microsoft into the dominant and often hated market player that it is today.

If a company can use the first three E’s to gain a substantial share of the market, it can perform the fourth E to gain the dominant place in that market. And again, those companies that start the process of gathering real-time demand data and executing the three E’s sooner than later will be the one’s that find themselves in a place of being able to exterminate competitors.

The second E is empowering the supply chain. The information Retail Link provided would allow Wal-Mart’s suppliers to make adept changes when necessary to sell better. Suppliers have a better understanding how their products perform, and can be ready to make changes to perform better. It helps suppliers move more of their products and Wal-Mart’s cash registers to keep gathering money and data at a furious pace.

This symbiotic relationship is the nature of the third E: extend. The whole point of Wal-Mart’s empowering of their supply chain with massive amounts of demand data is so that the product sales of the supplier can be extended. Wal-Mart’s offer to producers: use our data management system to figure out the most efficient way to sell your product, cut your costs on the production and distribution end, cut your prices to us, we will cut costs to customers, and thereby we will aggregate an even greater number of customers to buy even more of your product.

Wal-Mart is a fairly nuanced example, but it isn’t difficult to see the path on which the three E’s can take any company. Gathering demand data early and in real time is important, but companies will have to use that data wisely after the gathering. Embracing the supply chain, empowering your business partners and extending the profitability of all parties involved is a proven way to grow business, and actionable insights on demand data is the resource to make it happen.

Once the packet switching concept began to be utilized successfully by ARPANET, different private networks sprung up around the world. One of the more successful network protocols to arise was X.25, which used packet switching but modeled its data transmission on the same formation as telephone communication, only using virtual circuits. Throughout the ’70s and early ’80s X.25 was used to start a number of networks, such as the British JANET, the International Packet Switched Service, Telenet, and CompuServe.

The fragmentation of networks called for some sort of common factor to bind them all, which led to the creation of TCP/IP (Transmission Control Protocol / Internet Protocol). It was a standard of sorts for all would be users of the Internet. It was the development of that protocol as well as the development of the World Wide Web in 1990 by Tim Berners-Lee that moved the Internet towards becoming an everyday part of life for so many people. The Web is a collection of information, documents, images, and other resources on the Internet that can be navigated using links. It made the Internet easier to navigate for everyday users.

With standard protocol defined for the back end of the Internet and the Web to help users on the front end, its popularity exploded in the 1990s. Now it is the way that business is conducted and that people connect around the world. The Internet is the connectivity forbear of mobility. Mobility technology is already in place. Standards will soon emerge for how people on different mobile networks will connect. Some company, whether it is Apple or Google or Blackberry or someone else, will develop the dominant user front end. After that mobility will explode in a way similar to the Internet, and the Fourth Shock – which like the others has already begun taking place – will become immediately evident to people and companies the world over. It will become the dominant avenue buy which companies interact with consumers, that companies interact with other companies and that people connect with each other.

In 1936, a man named Claude Shannon articulated a theory that was on the tip of many tongues at the time. He claimed that information was a physically quantifiable thing. He realized that by using Boolean algebra, the mathematics of dealing with 1’s and 0’s, unique values of 1’s and 0’s could be given to letters, words, or any information that had a definite ending. Since computers at the time were already advanced to the point of answering yes and no questions with binary digits, it became clear that any finite piece of information could be stored in a computer, thus giving it quantifiable space.

This digitization of information was the First Shock in the string of four to the way the world experienced connectivity and did business. Once information could be quantified in a way that computers could process, the industry of computing that was already progressing quite rapidly in the ’30s began to explode. The Second Shock, the  popularization of the personal computer, would not noticeably surface for decades, but from the point of Shannon positing his theory, it was on its way. Without the digitization of information, computing power could never have reached the expansive reign it enjoys today. And certainly without digitization pushing computing out of its original place of basic number calculating, the shock that mobile technology is about to bring on a global scale would not even be an idea in our minds.

The commercialization of the PC – which is the Second Shock – changed business completely. By the mid-80s it was not uncommon for almost everyone at a larger company to have a computer at his or her desk. This pushed a computing power that until recently had only been reserved for a select few across the business enterprise. It also created the need for the networking of all of these PCs within a company.

These importance of these two aspects to the general scheme of the Fourth Shock cannot be overstated. With the popularization of the PC, the potential of computing for every business became more apparent, and it was invested in heavily. The idea of networking the ever growing number of computers was a forebear of networking outside of the company – say from one company to another. From there it is not difficult to see that the creation of the Internet – a network to connect the whole globe – was imminent. Thus the Second Shock, as with the First, was the direct factor in the onset of its successor, the commercialization of the Internet, the Third Shock. But it was not only Second Shock’s preparation for the Third that allows us to see its importance to mobility. In the pushing of computing power across the business enterprise we see a precursor of the connective and data generating power that is about to be pushed across the entire globe by the onset of mobility in the Fourth Shock.

Why does every advertiser want to have a blip up on Google.com? Because of their unique storehouse of an inordinately large amount of demand data.

No one else has the share of computer user history that Google has. They have been recording it since their search engine began, and now no one else can claim the extensiveness of their mass of user data. Google’s search engine may not even be the best on the web, but it does not have to be the best. Their user data is untouchable. And the important part was that they got there first.

Their data is proprietary; they alone have control of it. Thus what Google has done by amassing their proprietary data has been to create an insurmountable barrier to entry in their market. In this chapter, we look at how, often times, being a first mover in a certain market can have the negative effect of simply alerting a larger, more powerful market participant to an opportunity, but not so with the demand data. Google’s first mover advantage has turned into a barrier to entry that they enjoy solely. Because they were first to move on capturing the behavior of millions of people, no one can duplicate what they have. With the advent of mobility, those companies who are first to begin capturing real-time demand data will find themselves in Google’s position, while those who wait a year or five years will find themselves outside of a large barrier to entry.

Enron figured out that what they needed was a piece of the supply chain that would offer them unique information about the distribution process. They found this in their use of the pipeline, and the gathering of information at both ends.

After a few years, they turned and duplicated their process in the electric power market. In the chapter, we look at how Enron turned the mechanism of the power plant into a substitute for the pipeline in the data gathering process, and how that turned into a second successful inversion of the business model. Finally we look at why Enron failed, not because of corporate greed and lies, but because of entering markets in which they had no informational advantage. With no informational advantage, their trading was not nearly as successful, and the losses incurred were what ended up necessitating the lies and cover-ups that essentially ended the reign of Enron.