A generation or two ago, products changed. Though younger people didn't know what a gramophone was, nor an 8-track player, someone could explain these things to them by pointing to similar physical substitutes - the record player and the cassette player. Today, products are being replaced by invisible technology. In 20 years, when a young person asks "what's a mouse?" you might not be able to answer the question by pointing to an object that serves the same purpose. This mouseless technology being developed simply tracks your hand movements. Likewise, the new Microsoft Kinect does away with game controllers and peripherals.
When there's a truly innovative change, a fundamental shift in how something works, it's easy to imagine that the designers and engineers did not start their process by asking, "How can we make this thing better?" Instead, they asked, "How can we do this better?" In other words, they focused on the function, or the desired outcome, not on the material object. In doing so, they were able to eliminate the material object altogether.
In other blogs on this site, we've highlighted products and technologies that use less mass, and noted that products are dematerialized for different reasons - to save money, to reduce energy consumption, to make an eye-catching design. But these design changes are all part of a larger trend. To meet the needs of a growing number of people and rising standards of living within an essentially closed system, we simply have to be able to use the least amount of resources possible to deliver the most benefits possible. We're gradually getting better at the first part, at using resources more efficiently. Appliances are more energy efficient, washing machines use less water. But we're just getting started on doing this on a much broader and more drastic scale. And we're only scratching the surface of possibilities for integrating the second part - employing resources to deliver much more useful benefit. For a fundamental shift in how we design things, the focus has to be on function.
The same idea can be applied to business models. Don't think about how to deliver a service better - think about the benefit that you're delivering to your customers and whether there's an entirely different and less resource-intensive way to deliver it.