Disruption has become an overused buzzword since the early 00s, with every new tech company telling their clients and investors how they would disrupt their industry and create a billion dollar business. The word may have been overused and diluted to within an inch of its life, but disruption remains key to building a business in an already saturated sector, but in reality the disruption is unlikely to be ground-breaking – it is the small incremental changes that are more often than not the right answer.
Entrepreneurship is about creation, building something from scratch or scaling it up to something much bigger, and it is plainest sense, disruption tends to mean destruction, which would be the exact opposite. Huge disruptions can occur within business, but they are unfailingly painful – a new company comes along with a completely new offering that undercuts the competition to such an extent that they cannot compete and the entire industry is swallowed up by the new entrant. This is one way to create business unicorns, but it is really only for startups that can raise huge financing rounds so that they can not only destroy the traditional industry with their products and services, but also on price. This is how Uber has run roughshod over taxi firms, burning through VC money at an alarming rate with the promise of profits at the end once they have created a near monopoly.
More often, disruption tends to be small – a new system that reduces customer friction or expands the market, and helps build an industry. This is the disruption that most startups will really rely upon to grow their business, not a change that destroys everything before, but an incremental improvement that can expand the horizons of an industry and generate significantly better returns.
Large businesses become slow and stagnant, and that creates opportunities for small upstarts to weave their way in and push the boundaries that the larger established businesses have become too bloated and lazy to exploit. This is disruption to the larger business, but these are the small changes, the improved efficiencies and work ethics that come form startups looking to grow rather than large enterprises looking for stability for their bottom line.
The integration of new technologies has always been one way for companies to disrupt a business, and with computers now able to replace significant numbers of employees and save money this trend is only going to continue. The best way to integrate these new technologies to an existing business is by retraining staff and beta-testing the processes with small groups of clients – but startups don’t need this extra work and can launch with new technologies straight out of the gate, and push their competitors to catch up.
These new technologies may be as simple as unifying a disparate system of digital tools into a single cloud-based tool that is both easier to administer and cheaper to run, or something else like bring AI chatbots in to help reduce the stress on support staff and improve response times for customers. The first movers towards these technologies may hit some bumps along the road, but if implemented correctly they could soon find themselves leading the pack.
Photograph by dfilushin