In the event that you invest a great deal of time and energy in the start-up environment or the tech ecosystems, there is a strong chance you have heard the term Disruptive Innovation more often than you can remember. Organizations worldwide have been using this phrase for some time now, and in my view, it will not be going away any time soon.
Many have misunderstood the term, and some have even brandished it as having a negative connotation. The reality is that we should all be seeing this disruptive innovation as creating new value or uprooting an existing market by introducing new and improved products or services that incumbents don’t expect. In the case of disruptive innovations, established competition usually leaves a new market wide open to newcomers. As disruptive innovators enter the mainstream, established companies now have no option but to take up the new concept or technology to respond to competition effectively. The disruptor’s business model is often very different from what was already in place, so it can be difficult to identify disruptive innovations in their early stages and in some instances not even realise they are eating away at big business market share within a short space of time.
I have often been asked how to become disruptive or to pursue a disruptive innovation. Well, the answer I usually give is that you need to first and foremost make the customer the focal point of any innovation you want to start or add to a going concern. That is for me the fundamental key step. Make the customer the Hero. Then, it really is about finding something that does not work very well or has market potential with a clear path to profitability very quickly. An example would be what Google did when search was dying or already dead. Another challenge I see is that everyone from entrepreneur’s to big business “try too hard” to be part of the disruptor segment. They too want to be progressive and cutting edge, with-it if you will. They create elaborate innovations with massive teams and in some instance’s significant investment. The problem is that they forget to ask a simple question “Are we solving a problem that doesn’t exist or there is no market for?”.
Disruptive innovations do not enter a mainstream market. They attract customers to a new market because they find it more convenient to use the new product. Often it is a product or service that is more affordable and accessible to a larger population, opening a whole new market. The innovator’s dilemma is the difficult choice that companies face when they have to decide whether to stick to an existing market to do the same and sustain innovation or conquer new markets by adopting new technologies or adopting new business models through disruptive innovation.
The theory of disruptive innovation helps explain how complicated and expensive products and services are ultimately transformed into simple and affordable ones. When a product offers more functionality than the customer needs or wishes, another kind of innovation, disruptive innovations are born. Theoretically this allows a whole new population of consumers to access products or services that are more affordable and accessible to a wider range of people than their traditional counterparts.
What we now know is that disruptive innovation needs a vacuum, so to speak, that an established company leaves in the mainstream market. Without truly disruptive innovation, products land up at the bottom of the market and develop a poor, low reputation. The flip side could be that start-up companies come to market with products that are so bad that they overlook the disruptive innovations of the incumbents, hence the huge failure rate of start-ups.
As we move further and further info the 4th Industrial Revolution and more and more disruptive products take hold, the products themselves will start answering an ever-increasing number of questions consumers and customers will ask in future. The disruptive process will begin to improve over time, and gradually customers and businesses will increasingly find that disruptive innovation can meet their needs. The challenge traditional business face is that integrating disruptive innovations into an existing business model never transforms the model. Instead, the existing model usually renounces innovation in order to maintain the functioning of that model. It has been shown that companies in systemic industries are dismantled when disruptive innovations are introduced into their ecosystem.
Technology enables much and is often at the heart of disruptive innovation, but we do not need to use revolutionary technology to make changes. Revolutionary innovations require us to keep pace with technological advances in our respective industries to stay one step ahead. With a disruptive innovation strategy, we can create a plan to get from where we are now to where you want to be. An example of disruptive innovation is how Apple brought together strong technology and a ground-breaking business model when it launched the iPod. By integrating the Internet into the process of music curation, Apple has harnessed disruptive innovations to transform the way consumers listen to music.
Ultimately the desire of people or organizations to create, to be innovative and to make a difference to others is the reason why innovations succeed. Disruptive Innovation is empowering.
Riaaz Jeena – is a Entrepreneur and Strategist who partners with Founders, Executives and Business to create scale in their businesses. After spending nearly 20 years in the Technology sector performing multiple roles for Multi-Nationals, Riaaz knows what drives growth. Riaaz believes in a few guiding philosophies; Add Value First, Make the Customer the Hero, Yes and No are both good answers. Maybe, is the bad one. Riaaz holds a Computer Science qualification along with multiple certifications in Business Management, Sales and has more recently started a program in Private Equity and Venture Capital.