For a long time we (humans) have been using tools (including machines) to make our tasks easier. Our digital tools are getting better *very* fast.

For example, a guy emailed us asking if we do a certain part. Chris took the inquiry, and handled it well. We didn’t know this guy from a bar of soap, but he found us. How? He googled the product description he wanted (he was searching for a “polypropylene flange to hosetail” product). He didn’t get recommended to us, he didn’t know us, google just found the product description on the vultrex website. I performed the search – Vultrex comes up *twice* on the first page of results. Once for the product’s webpage on our site, and another time for the picture (google image search) on that same webpage.

Chris called the customer, got a quote across in a timely manner. The customer got back to us saying he will place a purchase order, and the order was emailed a few hours later. We won the business, at list price (no discount), prepaid terms.

Back to digital tools getting better very quickly. The customer used google as a tool. Google helped him find the product he wanted. Consider some of the facets of digital tools:

* Never wear out
* Infinitely scalable (doesn’t matter if one person, or 1 million people, want to use the tool simultaneously)
* Effectively zero cost to copy
* Can be improved whilst still in use (by improving a copy, whilst the original is in use)
* Improvements can be made cheaply (effectively just the labour time, use of other tools to “sharpen” the desired tool is pretty much free)
* User behaviour can be monitored in real-time (as it happens), and analytics can be gathered (again for effectively zero cost) to very the “goodness” of the improvement
* Rolling back to the previous version of the tool is zero cost, and can be automated if certain analytics trigger it (this reduces risk associated with making a change in the tool)
* A competitive environment means that, as a digital tool-maker, your competing tool-maker will be trying to improve as quickly as possible, which will prompt you try to improve even faster.

With these properties, its easy to see that exponential improvement in the usefulness of digital tools is almost a dead certainty.

Consider the core function of a market place: to broker a connection between parties. Marketplaces facilitate connection. Connection is necessary for trade. Marketplaces do not broker a trade, they broker the connection. The iTunes store is a market place for music (and TV and movies) and they take a 30% cut of sales. So they broker a connection between suppliers (e.g. Jacinta as a musician) and customers (e.g. Jacinta’s fans), but charge only when there is a trade. Other examples of marketplaces are Google Marketplace, Amazon, Ebay, Gum Tree, the AppStore. I purposely exclude the Vultrex website from this list because my definition of a market place requires more than one supplier.

Back to the customer finding my product via a google search. The search itself acted as a marketplace. With no brokerage fee (much like Gum Tree where it is free to buy and sell, and advertising pays the bills).

What does this mean for traditional marketplaces like Ebay, iTunes, and AliBaba? They will change or they will die. It’s a hassle driving from shopping centre to shopping centre (physical shopping centres are marketplaces) to find a product, or to find the best price. Similarly, it’s a hassle for me to buy a book, checking the price on amazon and The Book Depository. Google helped the customer find my product, which is not present in any of the traditional marketplaces, leads me to this conclusion:

* search has subsumed the role of the traditional marketplace *

Why? Because search (the google search tool) can broker the connection without a marketplace.

Still on the theme of digital tools. Artificial intelligence (specifically, Machine Learning – or Machines that learn) will also improve the usefulness of the digital tools. Machine learning has fewer limits than human learning (it can happen faster, be transmitted quicker, doesn’t need to stop when tired, can learn to access more storage, can build tools that makes its own job of learning easier). We can learn and create because we are made in the image of God who also learns and creates. Similarly, we have already made machines that can learn and create (we are making them in our image). The machines will also create “something else” (other machines?) that also learn and create – but they will make the “something else” much faster than we have made them.

The industrial revolution created an “S-curve” of innovation – steep at first, and then leveling off. Innovation happened a lot, then settled down until we learned to build stuff on the assumption of an industrialised society. Machine learning is not an S-curve of innovation – there is no leveling off.

Lessons learned:
* Search is killing traditional (on-line) marketplaces
* Digital Tools are exponentially improving
* This improvement, aided by machine learning, has no limit I see

Just reviewed and received a quote. I had a different perspective of the timing of the quote.

I reviewed a quote we sent out before Easter (price and availability). After phoning the person to check that they got everything they wanted, I found out that they had needed the items urgently, and decided to make them up on a hand lathe – meanwhile they said it took us 2 weeks to quote them. I was stunned – our service was so poor and hand lathing is so expensive! I apologised and said we usually did same-day with quotes. I thanked them for letting me know how we were doing.

It was in that stunned, in-a-daze, mode that I considered that quoting late is just disrespectful. It’s clear that we didn’t want the business and, more importantly, we didn’t care about helping them with their problem.

To top it off, it seemed to me that they had only sought a quote from us! This is the easiest sort of business to win, and we lost it. Wow.

In fairness, it looked like we responded within 41 minutes, but something didn’t connect. When helping someone out is this easy, I’m prepared to do more than just flick an email quote back. The probability of connecting is so high that it is safe to invest more effort. I was thinking a follow up phone call: did you get the quote, how does it look to you, is there anything else I can do to help your business?

Receiving a quote was a very different story. I must have got ~7 quotes back by now. My normal supplier hasn’t replied to me. The first quote (apart from the generate-an-instant-quote-online) was 30 min in. Prices for printing my catalogue ranged from a bit over $200 to a bit over $500. In my mind, I had done the work of specifying what I wanted, translating it into print-house-language, and was basically buying a commodity product.

One of the stand-out quotes was from a place who wasn’t setup to help me out. They explained that they only did long runs, and said they had passed on my request for a quote to kwik-copy. They were not going to get a cent out of me, but genuinely did something that might be helpful (even though I don’t think very highly of kwik-copy). Very impressive.

I took on the practice of deleting the quotes that were higher than the lowest quote I had received. For me, cutting the cost from $330 to $230 is a massive incentive to choose a supplier. I guess I look at the catalogue as an expense, rather than as an investment. I hope it will increase sales, but I really have no way of telling its impact. I guess it also helps to say that I’m coming from digital-only where distribution was free.

Speed of responding to a request for quote (RFQ) seems to translate to: these people care, these people are on the ball, these people will be fast with my job because they are fast with my quote, they must be the best. In my mind I thought all of those things. If there is no quote issued promptly, there is no chance of winning the business. I discarded lots of quotes because the price was too high, but I’m not even considering those that don’t quote me.

If the product is easy to source (like print work for my catalogue), then price will be a determining factor. So, unless I have an existing relationship with a customer, or the customer clearly prefers my product, then I better be the cheapest.

Other notable, a person called me to say their sales rep was out, and they would get a quote to me as soon as possible. They were quite apologetic. Clearly, they perceived speed of quoting as critical. It did more for me than automated email responders.

Lessons learned:
* I want to help people, so I need to respond promptly with a quote
* Emailing a quote is not always sufficient and provides no feedback, so do a follow-up call