Disruption is not a strategy
reactionwheel.netThere's something important in the latter half of this: understanding that this isn't useful as a guide, but as a warning.
No-one realistically sets out to create "a Google". People set out to solve a problem. Sometimes that problem turns out to fuel vast business, sometimes not. You can guess at the size, but sometimes you're going to be wrong (hello Twitter).
You can aim to replace a business, but it's near impossible to do it because you know what the future of that thing will be (hello Windows Mobile). Even ARM didn't know smartphones were going to be a thing, at the scale they are. ARM ate Intel's lunch, not by going after smartphones, but by making processors designed to work with virtually no power. Smartphones just happened to come along and need that.
You can't intend to be disruptive. You can aim to become a big business, but that's out-competing, not disrupting, and they're not the same (hello Snapchat). The market tells you you were disruptive after the fact.
Good comment. However for future readers, I wish to point out that "ARM are Intel's lunch" is probably instead "ARM ate Intel's lunch".
That might save some confusion :)
Edited. Good spot!
Also, is there a "don't" missing in "you know what the future of that thing will be"?
But still, you can try to steer towards being disruptive when your choose your idea: you select unserved/underserved markets, or markets you can serve at lower profits than the incumbent, and do so using technologies you think can improve enough in performance/quality to compete with the incumbent while still having lower costs(which is a good way to choose a tech anyway).
And sure it doesn't guarrantee anything, but it increases your chances of disruption.
And with that, you still need to build a strategy and find barriers to entry. because (a)companies are more prepared towards disruptive innovation today , and (b)if you don't have good barriers to entry, once you become a threat, the incumbent will copy you.
>No-one realistically sets out to create "a Google"
but lots of people unrealistically set out to create "a Google" and some of them succeed. Who never would have if they had had a realistic goal.
my goals are completely unrealistic. most people with such goals fail completely.
Even if you succeed, that's anecdotal. Telling others to do the same wouldn't be good advice, in the same way as a lottery winner telling others to play wouldn't.
If one in ten thousand people who set out to create a billion dollars of value for society and themselves succeed, and the others fail but use the skills they learned to lead gainfully employed, happy lives, why is that not good advice? Society nets a billion dollars, and the expected return is let's say 1b/10k = $100k, though the distribution of outcomes is skewed. So why not? What's the objection?
I think this is changing and a company like Google can see what we call "the future", based on virtually infinite data points. I am not saying that these data points are all possible futures but they give a clear advantage over entrepreneurs with minimal data. True, you can't predict the real future but Intel could act earlier with more information. Andy Grove wrote about this on his "paranoid book".
Google can see what we call "the future", based on virtually infinite data points.
If Google can manage them usefully, those points are clearly not virtually infinite. (Otherwise, you're diluting the meaning of the word.)
A great article.
One addition - the answer to the question why 'disruption' became so popular should include that it is so ego stroking.
Although I agree that having a business plan that's based on nothing more than a concept of "being disruptive" is not much of a plan at all, I feel that in some parts, he's picking a strawman and arguing against that.
He claims that "I’m sure what the presenter of the slide was getting at was Clayton Christensen’s definition of disruption from his classic book The Innovator’s Dilemma. ".
He then goes on to say (talking about Square and Uber) that "neither of these companies were disruptive in The Innovator’s Dilemma sense". However, I'd be surprised if the presenter wasn't thinking precisely of people like Uber and the type of "disruption" they've brought to the taxi industry.
So, if they are thinking of Uber, and if Uber's disruption isn't the sort being talked about in the Innovators dilemma, then I suspect they weren't thinking of Christensen’s definition at all.
I'm not sure why disruption has to be less functional - it just needs to be tackling the root problem (and often redefining what that root problem is) in a different way to the incumbent.
OP.
Meh, every single startup I've seen in the past 25 years has claimed that they are tackling their problem differently than their competitors in some way. If this is what disruption means, then it's the quintessential distinction without a difference. It's the entrepreneurs' equivalent of a VC saying "we add value." A waste of pixels. And if that's the entire content of your strategy--you think being different is all the strategy you need because, "disruptive"--then chances are you're cooked.
There's a huge difference between "tackling the problem differently than their competitors" and "tackling the problem differently in a way that their competitors can't imitate easily without sacrificing their assets". The latter is disruptive, the former is just what doing business means. I think Uber does fit into the latter.
Just to be clear, I do agree with your general tone of the article, it's just that your Uber part made me cringe.
Sure, but tackling a problem in a way that your competition can't respond well to is called a strategy. I mean, you can define disruption any way you want, but keep in mind that the reason people use the word disruption when they mean strategy is because they imbue the word with magic power, not because it communicates anything meaningful.
Uber succeeded mostly by violating local licensing laws. And federal employment laws which they may still need to pay the piper for.
> violating local licensing laws
They recognized that the local licensing laws were causing horrible market distortions or outright market dysfunctions. The salient points are the market dysfunctions. Where is the market failing and causing misery? What businesses/organizations have captive customer bases, really don't care about bad user experiences, and have outdated equipment?
20th century cabs were miserable, and even faced with competition, taxis are slow to adapt, have outdated technology, and persist in poor user experiences.
most small businesses do it they pay fines and penalties of 100% or more. They were able to play politics and won, congrats to them. didn't work so well for theranos, lending club, zenefits.
You seem to think being disruptive means it has to be always super successful and always ethical. Being disruptive has nothing to do with how successful they are. There are tons of disruptive approaches that failed. Also being disruptive has nothing to do with whether they're ethical or not. Maybe you have your own little definition, but that's not the definition the rest of the world uses.
Exactly, that's why the incumbents couldn't replicate them, because they had to stay legal. Let's not go into whether this is ethical or not. I'm simply pointing out what disruptive means.
that's kind of a stretch on the definition.
Ok smart guy, then tell me how so.
usually the definition is around some technology coming out that the incumbents were so heavily invested in earlier technology that they couldn't embrace the new technology until it was too late. It's not that taxis companies couldn't have developed tech, it's because they followed the law which caused them not to be able compete. so, unless you call "law" a technology I don't include it in my definition. And since most of the other on demand companies are failing it leads me to believe it's not about technology or even strategy(unless you call breaking the law a strategy). Is my way the only way to look at it obviously not. Just like facebook didn't disrupt anything. they just executed better.
What you described is a "symptom", not a "definition". However let's say that you're correct and think for a second. Where do you pull out this notion that something has to be a technology to be disruptive? Here's the real definition of disruptive: http://www.merriam-webster.com/dictionary/disrupt There were many cases in history where people came up with disruptive invention, philosophy, business model, or any idea. Anything is disruptive if it renders the previous approach obsolete. Napster was disruptive, but both illegal and a failure. Based on your definition Napster is not at all disruptive. What else would you call it then? Being disruptive is not just about a small number of successful case studies mentioned in Christensen books.
> tackling the problem differently in a way that their competitors can't imitate easily without sacrificing their assets
That isn't enough. You have to tackle the problem differently in a way that matters to the market. It has to show up somewhere, in terms of price, features, or quality.
Like I say, I'm not disagreeing with the idea that "we will disrupt" on its own is no more use as a business case than "we will make wads of cash".
What I am questioning is the idea that there's only one way to disrupt an industry - to be cheaper and in some way subpar compared to the incumbent. You seem to be suggesting that the taxi industry hasn't been disrupted by Uber, because it doesn't align with one person's definition of what disruption looks like. And I don't really understand that. There's clearly been huge disruption there.
Christensen’s theory is descriptive, not prescriptive. It names a process but does not tell you how to generate that process
Something similar has been said of Marxism, in that it's an interesting way to think about what has come before, but has no grounding when it tries to talk about what should happen in the future.
Disruption is not something you set out to do, but it can be a result of what you are doing.
Clayton Christensens "innovators dilemma" isn't a book about how to disrupt, but how disruption happens.
The problem with a large part of the newspeak in the startup community is that it has become too formulaic.
10 things, how you, why you, how to.
I avoid these articles like the plague as they have nothing to do with running a startup.
"I avoid these articles like the plague as they have nothing to do with running a startup."
They're just for SEO anyways. I've been trying to learn more about marketing lately, and one of the biggest issues I've run into is that almost all the articles about marketing are marketing materials themselves.
Yes. Content marketing as they call it.
My point is just that market insights doesn't come on formula. You can't read a book and learn about marketing. You can go out and do it or surround you with people who have experience doing it.
Sure you can learn a little here and there. But hardly anything that will make your company make it compared to those who didn't.
Interesting perspective, color my beliefs altered. So far as tech goes I think that disruption could still be an outcome that you aim for (certainly not in medicine). Even then you may not plan for the eventuality, merely by serendipity absolutely know that you are sitting on a disruptive idea.
It's a great thing to have and maybe something that you can't plan for.
Reminds me of "going viral" and how everyone kept saying: "let's create a viral video".
But after we disrupted our pivot and enabled a sharing economy, we forgot what we were actually doing and when back to real jobs.