Disruption Eruption in Business
Cast your mind back to your school days. To that fateful day (or days if you were a bit of a rebel) when you were told to stop acting up in History because you were being a “disruption to the class”. Detention for you.
Fast forward to now, when you’ve long grown out of the uniform (hopefully) and are in the position to start your own business (unless detention was REALLY long). In these modern times, depending on your industry, being a disruption in business is no longer a bad thing, in fact it could be the making of you.
Disruptive business is a phrase initially coined by Harvard Business Professor, Clayton Christensen in 1995. Disruptive business is about introducing new technologies, services or products into an existing market to ‘disrupt’ traditional methodologies. This definition can differ enormously from other commonly used terms. It’s important to understand the difference between disruption and other terminology that often become incorrectly interchangeable, i.e. innovation or sustaining. For example, merely ‘sustaining’ an existing product would include making it bigger, better, faster, etc. as you attempt to retain customers. Alternatively, disruption could mean adding a feature or service previously unknown that radically alters how it is used.
This can even create previously unimagined new markets around it. Companies regularly find they lose market share as they fail to understand the difference quickly enough and find their products ‘treading water’ as customers move on. To explain further, think back to when you were at school (again). Let’s say you had relative’s birthday coming up. To get them a card you would have to go to a card shop (a real bricks and mortar retail unit no less) and buy a generic, mundanely-versed birthday card. Once purchased, you’d then have to walk (probably in the rain) to the post office to get a stamp and manually post it. If that was your industry and you wanted to innovate then you could attempt to ‘sustain’ your product by, for example, leaving the inside of card blank or including various verses a customer could stick inside. Whilst this would be a nice feature, it’s not going to revolutionise the industry. Now, in 2014, let’s now imagine the same scenario; what would you do? You could still do the manual posting or you could disrupt it!
How about you go online, buy a customised card, add an embarrassing photo of them, rewrite the entire text yourself, have it printed and posted for you all in a matter of moments. Alternatively you could log onto Facebook or even an app on your smartphone and, after being automatically reminded of the date, create an electronic card they would receive in their inbox on their special day with the minimum of fuss. The entrepreneurs behind companies like Moonpig, Funky Pigeon or Clever Cards saw an opportunity to disrupt their marketplace in an enormous way. Clintons were, at the time, still selling cards and suffered the consequences.
So what does all this disruption mean to your new start-up? Well the first thing to remember is that not every new business has to disrupt an established market just to succeed. It certainly won’t hurt, but running a successful start-up has many more facets to it. One thing you will have to do, however, is become increasingly aware of your competition. When you see a shift coming, be prepared to move. Quickly. As we mentioned earlier, many a business has floundered due to a seismic shift they didn’t see coming.
Go back to 2007 and ask telecom stalwarts Nokia or Blackberry (who were the dominant, pace setting mobile phone maker) if they thought Apple new-fangled, funny-looking mobile phone would cause them (or their brand) a problem and they would have laughed at the suggestion (considering they controlled nearly fifty per cent of the market). Who is having the last laugh now?
Staying on top of not only your game but competitors is a vital skill to learn, but it’s not the only one.
The good news is that the others are skills you probably already possess. As you embark on your entrepreneurial journey make sure you understand the needs of your customers. Whether that’s through insight and / or research, it’s those results will help you keep one step ahead. Take a client of mine who offers retreat packages for the stressed out female executive. Everyone raved about her healthy juices but would never do them at home. Well why not package them and sell them in weekly bulks and deliver just like diet chef? “Your customers don’t juice because they are too busy and don’t have time to research the menus.” She had the solution to their problems and a great business extension to her retreats!
Remember also that it’s not a one-off. Repeat the process regularly to monitor the changes in the market or customer’s habits. It’s also important that, within your business, you are always solving a problem. Use your customers at every stage of a development process to hone your idea and perfect it to the best of your ability. The next disruptive business may just come from one of your own customers.
So when you’re thinking about the next big thing, remember it can just as easily come from you as anyone else. You are more than capable. Be brave, be bold and, regardless of what your teachers said, be as disrupting as possible!