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Innovation

Disruptors in progress: $150-a-month plane tickets, $720 houses

We may never see or use such low-priced commodities, but such thinking helps inject new thinking into stale markets.
Written by Joe McKendrick, Contributing Writer on

A couple of tidbits on companies in different parts of the world that are offering transportation and shelter at prices lower than what one would pay for a single television set.

In the Northeast corridor of the US, a new startup called PlaneRed is planning to offer flights between major cities in the region for a flat monthly subscription fee of $150, employing nine-seater executive jets.

Forbes' Ed Zitron explored the PlaneRed proposition, noting statements from Wade Eyerly, PlaneRed's founder, that air travel these days is a too-big-to-fail, cumbersome process that ends up being subsidized by the government anyway:

"The subscriptions will work as such – passengers will pay around $150 a month for access to a booking system much like a city bus, able to book on popular routes on the east coast, serving Atlantic City, New York, Philadelphia, Washington D.C.. They hope to expand quickly to Boston, and then open up new runs in Texas, California, and the Midwest."

Interesting model -- we'll see if it takes off. A startup called People Express attempted to commoditize air travel in the 1980s to bring down prices in a menu-oriented, mass-transit (but highly customer friendly) type of system.  While People Express ultimately did not last, it did help to inject fresh competition into the stale air-travel market, while spurring major airlines to get their customer service acts together.

On the other side of the globe, in India, the Tata Group plans to unveil a $720 flatpack house that can be constructed within a week. The 215-square-foot structure isn't intended for North American or urban markets, but is targeted at Indian state governments seeking to build more homes for India's poor and homeless. According to a report in Fast Company, the company "also plans to market a larger version with rooftop solar panels and a veranda that may be more attractive to certain buyers."

These new offerings are the result of innovative business thinking that meets pressing problems -- be it the costs and hassles of airline travel, or homelessness. The ideas may be too remote or may not be sustainable in fast-changing and fickle markets. But they help lay the foundation for market disruptions -- or creating new markets not served or underserved. Remember, 30 years ago, in the era when million-dollar mainframes were the norm, the idea that an enterprise could be run off $500 computers was also greeted with skepticism. Don't be afraid to shake up the established order with something radically different.

This post was originally published on Smartplanet.com

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