CEO’s and business owners often talk about creating more innovative products, services and business models. The more ambitious ‘game-changers’ go further and discuss disrupting entire markets.
Clearly there’s merit in both, but where should you focus – innovation or disruption? Well, let’s first look at the differences.
Consider one of mankind’s earliest moments of innovation – the wheel. Over the centuries it’s taken many forms and served many purposes, but there may be a time when someone reinvents it. It’s possible that the humble car wheel will at some point become redundant. Technical advancement and innovation may eventually redefine the entire market and see cars hovering and zooming around in mid-air. This is where innovation becomes disruption: a fundamental change that challenges convention and can instantly wrong-foot the rest of the market.
Clearly though, disruption isn’t always possible. Nor is it, in fact, necessary. Often, smaller scale innovation is more appropriate for businesses.
Arguably, every business needs innovation to sustain its own product development. Without it, there’s risk of being overtaken by competitors. Likewise there are always opportunities to ‘cannibalise’ competitors’ ideas and reformat them to come up with better ones. The consumer electronics market, for instance, is a battlefield of competing brands, each one bundling and re-bundling different technologies within their products to gain clear water and share of wallet.
Whatever your innovation strategy though, it’s always best to define your goals clearly. Is it your product or a competitor’s that you’re looking to replace with a better version? Or are you looking to break new ground?
Risks and challenges
Innovation, on any level, is not without risk. For a start, creating your own product or service can upset your own existing revenues. Competitive cannibalism can entail legal complexities. But on balance, taking the path of innovation is often a safer route than doing nothing at all.
Disruptors also face many challenges. Destructive thinking, by its nature, can be hugely expensive, time-consuming, and can take considerable time to gain market acceptance. Napster is a prime example. It turned the music industry upside-down by revolutionising the way people gain access to music. It paved the way for peer-to-peer file sharing. But it did so at incredible cost, and opened up a whole hornets’ nest of high-profile legal issues. In a case like this, being second to market can have its advantages.
Disruption and market creation
Market creation is, for many, the optimum outcome of innovation or disruption – creating an entirely new product or service category.
Perhaps the shining example is Apple. Not only did the technology giant redefine the way we legally pay for music, it was also a pioneer of the App economy, fundamentally disrupting every industry from video gaming, to publishing, to on-the-go business tools. Today 500,000 people in the US are employed in app development – an industry that didn’t even exist a decade ago.
AirBnB is another good example. It took the best learnings from the hospitality sector and aggregated them into an easy to use App, turning the casual accommodation market on its head. It also 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 innovated, cannibalised and disrupted – and a new concept was born as a result.
Innovate and disrupt
My start-up ‘Sorted’ is also doing all of the above. It disrupts the way people outsource non-skilled tasks – like mowing the lawn or waiting around for the plumber. In doing so, we’re cannibalising a service that had previously been marginally catered for by Gumtree, which was by and large unmonetised (unless paying a mate in beer money!) Now individuals can earn a second income, get tasks completed quickly and at affordable costs.
So maybe ‘should I be a disruptor or an innovator?’ isn’t really the right question. I 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. And the most powerful forms of innovation create new markets, in the meantime disrupting a few existing ones.