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The Disruption Economy Lacks Empathy

A startup's attack on the bodega industry has illuminated the problems that come with brazen disruption

14Sep

As a term, ‘startup’ gets a remarkably easy ride. Infatuated as the world is with plucky smaller companies taking on established corporate giants, the impacts of an obsession with ‘disruption’ are not always positive. With every innovative idea that comes to dominate an industry, both the previous incumbents of that industry and the idea’s effect on society at large are rarely considered - the change is exciting, the business is impressive, and we move on.

The problems come when a business’ success is measured on limited metrics without taking into account its wider impact on society. Take Uber, for example; the ride-hailing giant grew at a phenomenal rate thanks to its cheaper prices, more convenient user experience, and (in part) its novelty factor. Few could argue that Uber doesn’t offer a good product, but this is far too simplistic an analysis for a company that now spans and dominates the globe.

Existing taxicab industries have been torn apart, the money available to drivers (working realistic hours) has plummeted, and a great deal of the wealth from ride-hailing as an industry is being concentrated in just one office complex in Silicon Valley. Uber has also been haemorrhaging cash at an unbelievable rate, and this is all before we even get into the company’s tax situation and internal cultural problems. It’s important in this case to disconnect a company’s size and impact from its worth and societal value. Just because something is disruptive, doesn’t make it a positive force, and smaller companies should consider not just how much money they can make, but what they offer.

One such company has been set up by former Google product manager Paul McDonald. The startup wants to make going to local stores a thing of the past by installing unmanned pantry boxes in offices, apartment blocks, college dorms, and gyms. The express purpose is to disrupt the established mom and pop shop and bodega industry by ‘learning’ what each particular community buys the most of and stocking its ‘pantries’ with these items. Its name? Bodega.

There are a number of reasons that Bodega is emblematic of a disruption economy that lacks empathy. The name, though, has been the initial eye-catcher for many detractors. To attempt to negate an existing business while taking its name is bold, even before the cultural context of the bodega is taken into account - and, unsurprisingly, many have taken issue with the appropriation of the term. ’To me, it is offensive for people who are not Hispanic to use the name ‘bodega,’ to make a quick buck,’’ Frank Garcia, chairman of the New York State Coalition of Hispanic Chamber of Commerce, says. ‘It’s disrespecting all the mom-and-pop bodega owners that started these businesses in the ’60s and ’70s… Bodegas can’t compete with this technology, because it is so much more expensive to have a brick-and-mortar store than a small machine,’ Garcia says. ‘To compete with bodegas and also use the ‘bodega’ name is unbelievably disrespectful.’

When asked by the Fast Company if he thought the name Bodega was culturally insensitive, McDonald said: ‘I’m not particularly concerned about it. We did surveys in the Latin American community to understand if they felt the name was a misappropriation of that term or had negative connotations, and 97% said ‘no’. It’s a simple name and I think it works.’

It’s the disconnect between product owners and the communities the product is intended to serve that many find distasteful about some disruptive startups. A lack of consideration for existing incumbents, particularly when those incumbents are largely independent stores owned and staffed by immigrants rather than faceless corporations, is deeply off-putting. And, despite the results of the survey, the appropriation of the Spanish term ‘bodega’ was always bound to cause outrage.

The product itself has come under fire too. Essentially, Bodega offers vending machines that use data to stock relevant items. It cannot logistically offer the range of products that an actual bodega does, which makes it unlikely to quickly fulfil the same role after it has established itself (in the same way that Uber, Blockbuster, and others have done). Instead, it will likely chip away at the top line of its brick-and-mortar competition, forcing closures.

Also, to assume that customers will always value convenience over heritage or human interaction is to misunderstand or ignore community. Particularly in the urban hubs of New York and California, the bodega is part of the furniture culturally - it is a glimmer of community in an urban living environment that can otherwise feel oddly anonymous. One bodega owner, Abdul Sulaimani, relayed the significance of the stores to NPR: ’Corner stores play a huge part in anyone's life living in New York. If you're not cool with your corner store guy, you're not from New York.’

Bodegas have been struggling under the weight of increasing overheads and aggressive competition from the likes of Amazon for some time now. It’s digital namesake doesn’t have to pay for retail space either, instead positioning itself as an amenity, which gives it a serious competitive advantage. People don’t want to see their local independent stores close down, particularly not if a tech giant’s inherent advantage is the reason for that closure.

In this sense, it’s not that Bodega’s detractors think the company will fail. On the contrary, it’s easy to see the concept taking off, particularly for items people often buy in isolation as and when they need them. The argument, though, is that many don’t think Bodega *should* succeed. The intense online pushback against the startup is actually about far more than just Bodega; it’s about Silicon Valley’s insatiable hunger for the next game changing innovation, with disruption often popping up in areas many consider to be in no need of change. A company can burst onto the scene, taking down existing companies by undercutting prices and eating away at bread and butter areas of the business, all while maintaining an inferior product or an unsustainable business model.

Other more sensitive companies take a different approach. Postmates, for example, is an on demand delivery service which essentially solves the same ‘problem’ as Bodega. Where it differs - and it has been quick to point this out in the wake of the Bodega backlash - is that it buys all its merchandise from local stores. Disruption can be done gently; it can offer something slightly different while also shaking an industry up and forcing key players into action.

The pushback against Bodega will likely make little difference in the grand scheme of automation and the demise of traditional brick-and-mortar stores. What it does do, at least, is shine some light on the desire to keep human interaction and community as elements of society and commerce. Bodega has touched a nerve because of its insensitivity, as well as the fact it aims to take down independent businesses that many people have developed relationships with. Ultimately, just because an industry can be disrupted, doesn’t mean it should be. 

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