The truth is that by their very nature disruptors are innovators – but not all innovators are disruptive.
Innovators can be not only disruptive but also creative and opportunistic; occasionally all three at the same time. So how can you define the outcomes of innovation? I would suggest they broadly result in the sustaining/ cannibalisation, disruption or creation of markets.
Sustaining or cannibalising depends on your perspective i.e. whether this relates to your product or a competitor’s. This is where a product or service replaces an existing product with a better and more efficient one. We all need to innovative in sustaining our own products development or risk being overtaken by our competitors. Likewise there are always opportunities to ‘cannibalise’ our competitors ideas and come up with better ones.
Disruption on the other hand, shakes up the way customers think about a product and aims to literally disrupt a market segment. No one company is so essential that it cannot be replaced and no single business model or sector are immune to sudden moments of monumental change. Disruptors therefore change the way we think, the way we behave, how we do business and how we all go about our lives. Disruption isn’t just the creation of new, more efficient ways of doing things, it also involves breaking the existing norm, and in that regards it is also destructive. This disruption of an existing market opens up the opportunity for multiple new innovations.
Finally comes market creation – for many the optimum desired outcome – creating an entirely new product or service category to consumers. Market creation usually sparks a race to serve the market they create, first.
All three of our innovation outcomes come with advantages and risk. For a start, innovation of your own product or service poses a risk in upsetting your own existing revenues – while cannibalising someone else’s products rather than your own, can entail legal complexities. But on balance, taking the risk of being innovative is often a safer route than doing nothing at all. Various iterations of the smartphone have produced examples of cannibalisation.
Disruptors face many challenges from existing players in the market. Disrupting a current market behaviour, rendering existing solutions obsolete and transforming value propositions, is no easy task, it is also highly destructive and as such faces tough resistance from competitors and consumers. Entering an existing market place, that’s already competitive with a new product that can be very expensive to do and can take considerable time to gain market acceptance. Napster changed the way people gain access to music; it gave birth to an industry of peer-to-peer file sharing (say what you like about the legalities of it) – it was an incredibly disruptive company.
When it came to creating a new market the question of legality saw the birth of the App store – but Apple not only redefined the way we legally paid for music, it fundamentally disrupted every industry from video gaming, publishing, to on-the-go business tools and created the App economy. Today 500,000 people in the US are employed by an industry that didn’t exist a decade ago. Another example would be Red Bull, who created a whole new market segment, energy drinks.
I would argue then that the most successful business models are multi-dimensional. Take for example AirBnB. I frequently travel to meetings and hate how much hotels cost when all I wanted was a bed to crash on. AirBnB did several things, it took the best learnings from the hospitality sector and cannibalised them into an easy to use App, which it used to some extent to disrupt the hotel and BnB industry. But where the real innovation came was by taking the casual accommodation market and turning it on its head by making it peer to peer. AirBnB created a whole new market for homeowners to rent out their spare rooms (and for us to feel that it was acceptable and safe to do so). It changed the way we think about monetising our homes …and all through your web browser or smartphone. Before AirBnb, only a handful of people would have thought of booking a room for a night in a strangers house, it has for many, literally changed the way people choose where to stay when they’re away from home.
So rather than asking “should I be a disruptor or an innovator?” I now ask myself “how can I be a disruptive innovator?” True innovations don’t just offer better alternatives to existing products, they usually end up replacing them. The most powerful forms of innovation create new markets and in the meantime probably disrupt a few existing ones. Remember what Edison said – “genius is 1% inspiration and 99% perspiration;” get ready to sweat.
Mike Tinmouth, Founder of TheSocialPro
Mike is a journalist and entrepreneur who has worked with a range of dynamic businesses to build, engage and monetise online communities. His publishing credits include Your Better Business, LUX Worldwide and Entrepreneur Country Magazine, while writing regularly across the b2b press and worked with the BBC on a series of reports on the transparency of Facebook.
His experience of bridging the knowledge divide between corporates and small business has seen him work with startups, growth businesses and multi-nationals including Costa Coffee, IBM, Microsoft and Vodafone.
