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If you want to predict the path of innovation in your industry, consider one unifying strategic concept: proximity. Introduced by innovation guru Rob Wolcott, proximity is the theory that the production and provision of value moves ever closer to the point of demand. Viewing your industry through this lens can reveal new opportunities, help you clarify where to focus your innovation efforts, and help you better anticipate which innovations will thrive and which will fall.

Consider TJ Parker, a second-generation pharmacist who came to realize the pharmacy industry was broken. Over the years, he observed how convoluted the experience was for patients, particularly those with multiple prescriptions, to get the drugs their health depended on.

Multiple prescriptions meant multiple trips to the drugstore. At home, they had to handle multiple bottles of drugs and keep track of how often they took each one (some once per day, some multiple times per day, others only on certain days of the week). They might sort the pills at home into pill organizers. But, still, the time and effort was onerous, resulting in low compliance and poorer health.

The complex web of the pharmacy industry

Behind the scenes, the process is even more complicated. You see, regulations and historical practices have evolved the pharmacy industry into a complex web of players. Doctors give consumers prescriptions, which are partially paid for by pharmacy insurance they receive from employers or the government.

But pharmacies do not directly negotiate prices or choose which brands of drugs to give the patient. Instead the system is administered by Prescription Benefit Managers (PBMs), which negotiate with pharmaceutical producers and insurance companies. Pharmacies purchase drugs at prices negotiated by PBMs from wholesalers. Money flows back and forth between these players, sometimes even in circles.

For example, a patient might make a copayment that flows to the PBM, the PBM sends money to the pharmacy as incentive, the pharmacy pays wholesalers for drug supply, and then the wholesaler makes payments to the PBM in order to be part of the PBM’s network. By some estimates, these intermediaries add 100% of the drug manufacturing cost to the end price of the pills you buy.

In 2012, while finishing pharmacy school, Parker participated in a hackathon organized by MIT, and began developing an idea. If one rethought the complicated system by which pharmaceuticals are produced and provisioned to point of demand, could the proximity of patients to the drugs they need be radically shortened?

Parker met Eliot Cohen at the MIT hackathon and together they decided to launch a company called PillPack to take this idea on. Their idea was elegant and simple on the surface, though it did require untangling a web of regulations, norms, and operational complexities.

PillPack: the big idea

Instead of patients leaving their home to visit a drugstore, drugs would be delivered directly to their home. Instead of pills coming in separate bottles, they would come presorted into individual packets. Each packet would contain just the drugs a patient needed at any given time, with the packets attached in the order in which you would take them. Your first packet, for example, would be marked “Monday, 8am” and contain the three pills you needed to take at the beginning of the week, the next would be for “Monday, 7pm,” and so on.

As with most innovators seeking to introduce a better approach, the team faced resistance and disbelief. But they persisted, committed to their belief that their approach was better.

In 2013, they raised start-up funds from investors including IDEO and Techstars. The next year they launched their first pharmacy in Manchester, New Hampshire. In 2016, they won a tussle with one of the largest PBMs (Express Scripts) who said PillPack’s claim it was a retail pharmacy was a misrepresentation. They worked through the regulatory process to get approval to operate in most US states and developed a proprietary software system for managing the pharmacy supply chain.

Amazon pounces on proximity

With winds of proximity at their backs, Parker and Cohen pursued their vision doggedly. They began negotiations to sell the company to Walmart when, in 2018, Amazon swooped in and bought the company for $753 million, beating out Walmart’s offer.

Amazon was drawn to PillPack by the proximity opportunity. PillPack had already dramatically cut the proximity of patients to their prescription drugs dramatically, but Amazon could bring them even closer, potentially disrupting the $330 billion prescription drug market.

Imagine a day when you say “Alexa, refill my prescription,” and your drugs are delivered to your door by Amazon’s finely tuned distribution machine in a matter of hours. But don’t imagine for too long, because they day will be here soon.


To see what your next $1 billion idea may be, simply put on the lens of proximity. Consider the following:

  • In your industry, what would it look like if proximity reached zero?
  • What is blocking a leap in the production and/or provision of demand being instantaneously at the point of demand? List as many blockages as you can.
  • Rate those blockages based on three criteria:
      1. Which would have the biggest impact?
      2. Which would be the most profitable?
      3. Which would be the most fun to dislodge?

Photo by ready made from Pexels

“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and

- How can you develop a more sustainable production model to accommodate constraints on arable

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
Placement- How food products reach consumers. How the technologies, data, and services reach stakeholders in the supply chain.9- What new paths might exist for helping consumers access the food they desire?
- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
- How could you anticipate customer expectation to make products more
accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
- How do you anticipate new organizational capabilities needed to perform your future strategy (innovation, exponential technologies needed, agile customer relationship, innovative supply chain)?
- How do you manage your talents to assure suitable development with exposure in the agrifood main challenges/allowing a more sustainable view of the opportunities/cross-sectors?