disruption theory

What Causes Market Disruption? (Part 1)

Christensen's model of disruptive innovation tells us that when new market entrants offer products that are inferior to incumbents, at a lower price point, targeting non-consumers of existing products with solutions that are simpler, easier to use, more convenient and/or more accessible, that the upstarts will almost always win the competitive battle. We see this recurring pattern frequently, and it's easy to mistake these attributes as causing disruption, rather than as signals that disruption is happening. This two part series examines the root causes that enable disruption to occur.

Disruption by Design: The Book

Historically, virtually all disruptive innovation has happened by accident. Even though there is a distinct pattern to disruption that the theory describes, before Christensen observed and synthesized the mechanics of the pattern we weren't aware of it, and it certainly hasn't been obvious how to create that pattern on purpose.

After all, if you used theory to build:

  • an inferior product
  • with a low price
  • targeting an undesirable market that incumbents will run from rather than fight for

you'd have a product that bears the hallmarks of disruption as described in The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. But you wouldn't have any guarantees that your product is a disruptive innovation. In fact, it could be that you’ve simply built a crappy product that no one wants.

Strikingly, although many have tried to use Christensen's theory to design disruptive products, it's noteworthy that Clay's books were not written with that purpose in mind. In fact, he writes in the introduction to The Innovator's Dilemma that his research and writing was motivated by the desire to help executives “do what is right for the near term health of their established businesses, while focusing adequate resources on the disruptive technologies that ultimately could lead to their downfall”. In other words, his goal was to help industry incumbents recognize and avoid disruption.

About 2 years ago, I set out to do exactly the opposite.I wanted to create a handbook for entrepreneurs, startup founders, and marketers of potentially disruptive products that would help them to disrupt markets on purpose.

After a long gestation, that book "Disruption by Design: How to Create Products that Disrupt and then Dominate Markets" has arrived. (if you hurry, you might still find some sites selling it at pre-release prices -- take advantage because in a few days, if not sooner, the price will go up significantly).

Disruption by Design is intended to be a self-contained book that guides you through all of the key things you need to know, from a quick review of the most important elements of the theory, to how to predict market disruption, to creation of product and marketing strategy with disruptive potential, to designing a disruptive business model and ultimately, how to go to market, disrupt, and stay on top for the long term.

If you want to build disruptive products on purpose, you need this book

I don't often "sell" in this space, but I did want to let my readers know why I'd been absent for a long while, and also beat my chest a little today. I've worked hard to distill the things I've learned about disruption from working as a consultant in the field into a guide which is easy to read and follow. I did that because if we're ever going to reinvigorate our economy, we need 10x more disruption and we need it 10x faster than we're currently innovating. We need disruptive innovation because it is the economic engine of growth that moves us forward, and creates jobs and wealth.

Over the coming months, I'll be highlighting some of the key ideas from my book in this space, and hope you'll join me in discussing how to create disruptive products by design.

To learn more about the book, visit this page: Disruption by Design.

Update: The People Have Spoken

It's been very gratifying to get lots of positive feedback about my book. The widget below collects review comments from a variety of sites, which I thought might be a useful update to share here. You can click on the profile that's displayed to learn more about the reviewer, and follow or connect with them.

The 6 Most Common Misconceptions About Disruptive Innovation

In the nearly 15 years since The Innovator's Dilemma was published, the notion of disruptive innovation has grown in awareness immensely, particularly among tech startups, venture capitalists and angel investors.

It has become the holy grail for investors and entrepreneurs, with many funds targeting disruption exclusively. Yet, as strong as this meme has become, it is also one of the most widely misused and misunderstood terms among those same groups.

Misuse, Overuse, Confused Use

We can speculate about the reasons why. Certainly the word 'disruptive' is at once a powerful and suggestive descriptor, and simultaneously an instrument of misdirection. Disruption had a (strong) meaning before Christensen appended it to Innovation to label his theory (that's why he used it), and many simply imbue the phrase "disruptive innovation" with their personal interpretation of what it means to be disruptive. Or, they focus on the innovation part of the term, and think that means it's all about technology (it isn't).

More importantly, I think, is that the language Christensen used to write The Innovator's Dilemma is highly academic, sometimes deliberately ambiguous, often speculative, and extremely dense. When these attributes are combined, it makes for very difficult reading that is hard to make sense of even for dedicated practitioners and students of the theory. Then to compensate, Christensen himself often tries to over-simplify the theory to summarize it, and people take the simplistic descriptions as a complete rendering, repeating them as axiomatic.

On top of all that, the theory has been refined over time, but most people have read only the original book, if they've read anything at all. It's a a perfect storm prescription for confusion and misuse.

Not Just Another Square on the Buzzword Bingo Card

The result is that there are dozens of people preaching the gospel of disruption, many if not most with their own (commercial) agenda, and it is rare to find any two in agreement. Well over 95% of headlines and articles written about disruption are blatantly wrong or misguided, or metaphorical at best. And, many pundits and writers have taken a great deal of liberty and license in inventing their own definitions, or expressing what they think the theory says rather than the model it actually describes. Thus, we have tremendous misinformation, misunderstanding, and strong misconceptions about what the theory is, which is a shame because it is possibly the most important economic theory of the past 50 years.

Getting Disruption Right Matters

The problem with all the misinformation, fuzziness about what it is and isn't, and even deliberate misrepresentation is that if businesses don't understand what disruptive innovation really is, and what the opportunities and threats are, then the theory can't be applied. And, the whole point of identifying this phenomenon and describing how it works is to improve: to not be blindsided when new disruptions are on the horizon, to capitalize on massive growth opportunities, and place intelligent bets on the future by making wise investments.

Getting it wrong is like the old saw "if you don't know where you're going, then any direction will get you there". It's no different than if Christensen had never developed the theory in the first place.

Clarity About Disruption

In a newly published eBook designed to bring clarity and simplicity to the discussion and outline the business significance of disruption innovation from financial, growth, investing and risk perspectives, Innovative Disruption's CEO, Paul Paetz, describes the 6 most common misconceptions about market disruption. They include:

  1. All innovation is disruptive by definition
  2. Innovation has to be breakthrough to be disruptive
  3. Disruption only applies to technology
  4. "Disruptive" is just a marketing adjective companies use to imply that their product is more advanced
  5. Disruptive innovation is a meaningless buzz phrase
  6. All innovation is overrated, and disruptive innovation isn’t any better or different

Of course, all these notions are wrong.

Get your copy of 'Disruptive Confusion Unraveled' to learn:

  • why there are so many misconceptions
  • the strategic importance to entrepreneurial innovators and investors
  • what it means to be disruptive and why the definitions matter
  • how to recognize and predict disruption and measure its value