Demystifying Disruption, what is disruptive innovation

Demystifying Disruption

Demystifying Disruption

You’re reading this article because perhaps you do not believe in just coasting through life. You refuse mediocre in favor of extra-ordinary. You’re never happy with the status quo. You want to leave the world a slightly better place. You want to be a disruptor, an innovator. In this article I will shed some light on innovation and re-introduce a concept well-forgotten, revolution, in hopes to be Demystifying Disruption.

To talk about disruption, we must talk about revolution, invention and innovation. Let’s use an example:

 

Man invented the Demystifying Disruption, what is innovation.wheel and that was revolutionary. The wheel went through several innovative iterations and had many applications that were all quite disruptive to the early humans. Fast forward to late 1800’s when the first automobile was considered to be a great invention. Then in 1904, Ransom Eli Old mass produced Oldsmobile Curved Dash. But those expensive luxury cars were only for the elite, had very limited market and didn’t cause much disruption into the horse-and-carriage industry.  Then in the early 1900’s the Ford Model-T significantly disrupted the automotive industry and democratized the automobile for the masses. (Henry Ford adopted and enhanced the assembly line.) Since then the car has seen incremental innovations but it’s still the same 4-wheels and 2 or 4-doors. Today we are toying with the autonomous cars – but the 4-wheeled 2 or 4-door car isn’t disrupting our life, yet.

Disruptions are either transitory (Pagers, DVD and Blue Ray) or permanent like the Microwave. A revolution, an invention or innovative idea is only disruptive when it makes a complicated and prohibitively expensive idea affordable and accessible to the masses.  Revolution is an invention that is the fundamental change agents (The Wheel) but it hardly ever disrupts the market by itself. Innovation, if successful, tends to have more mainstream appeal, if it does not fall flat on it’s face (Zune, Google Glass, Yugo).

There are three types of successful innovations, and those essentially drive our economy forward.

Disruptive innovation

Disruptive innovation transforms complicated products into simpler products. It creates jobs. It creates wealth and therefore It is our main economic engine. It makes things affordable and accessible. You need lots of capital to do this. (Example Personal Computers)

 

Sustaining Innovation

Sustaining innovation makes better of what we already have. On average, these don’t create many new jobs. Sustaining innovation tends to slowly cannibalize the disruptive products. You don’t need much new capital because the existing product sales fund this.

 

Efficiency Innovation

Efficiency Innovation helps sell the same products to the same customers, but only cheaper. Like Walmart. The innovation here is primarily focused on process, pricing and logistics in nature. The number of jobs are usually reduced in this situation. This strategy frees up capital to do other things.

 

Demystifying Disruption, what is disruptive innovation

The topic of interest for this article is the Disruptive Innovation. In the last 20 or so years we have been using a rather loose definition for what’s disruptive and sometimes confuse transitory products, un-thoughtful and poorly planned incomplete products, as innovations. We must hold ourselves to the strictest sense of the concept. Anything short of that should be considered mediocre and temporary.

I present to you rather strict definition of what should pass as disruptive innovation:

1. An innovation must have a big market demand, a pain that has been or not yet realized. As Mark Cuban would say, It’s not a solution looking for a problem. The answer to “can we live without it?” Should always be “No.” (Laptops replaced Desktops)

2. An innovative product must significantly change the way people live their lives and do business. It may bring significant change in business model. (Subscription Economy)

3. It, in many cases, should threaten Job displacement or, at the very least, trigger a mass re-training and acquiring of new skills. (Blockchain, Artificial Intelligence, Machine Learning, and Marketing Automation)

4. If somebody is already doing it, it’s not innovation. It’s a “me too” product at best. Or its a feature of some larger solution? If it’s a “me too” product it better have some very compelling and substantial differentiation otherwise its waste of time and resources.

5. If it could very easily be a feature of some larger solution then you better have a very good reason to spend time and money doing it. Unless you hold a patent on that idea OR you have a pre-agreed acquisition path, you’re wasting time and money and, worst, giving a great idea away for free to that large solution provider.

 

I am curious, as humans who have been driving for more than 100 years, are we really going to take our hands and attention completely off the wheel – ever? May be we just need some assistance in driving better and avoiding accidents.

 

 
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