disruption

All You Have To Do Is To Think Disruption

Disruption Is Easy When You Think About It

As I said a few posts ago, forget about innovation already! Everyone already does it – it’s not interesting anymore. In fact, it’s probably past time we all changed our job titles: Chief Disruption Officer sounds way cooler than Chief Innovation Officer. Plus you get a much better acronym CDO vs CINO (you know, CINO is a four letter word). Just think about doing a search and replace on all of your job titles and documentation, don’t you think you’d get so much farther as a “Disruption Manager” running a “Disruption Program”, reporting to the “Director of Disruption” (almost sounds like a Batman villain. Oh yeah, I thought I saw him hanging out and grabbing a drink with the Joker and the Penguin the other day.)

It’s time to think disruption. and thinking disruption is much easier than you think.

Let’s go out there and look at a few things people are talking about as being innovative, disruptive lately.

I’m sure that you’ve heard about the tiny home movement, where hipsters all over the country leave their relatively huge, but immobile normal American homes and build an immaculately and efficiently designed very small home which sits on wheels and can be taken anywhere. Not liking where you are living? Just hook your house up to a truck (or car) and go somewhere else. These tiny homes are all the rage, cropping up in a show after show, closely following a new minimalist trends we’ve been seeing, with its origins in eastern philosophies, with its focus on simplicity, mindfulness, and finding joy in everything you own, otherwise you should just discard it. Actually, if you think about it, there are some analogs to jettisoning friends and family who don’t support you in your life’s journey. But I digress.

Tiny homes are innovative, disruptive even. And cool.

What about mobile homes? Are they innovative, disruptive and cool? No, they are where the poor folks live and the butt of jokes. Ever watched “Trailer Park Boys“? In the San Francisco Bay Area, mobile homes are the only affordable housing, but the stigma is so great that no one wants to live in them. I used to have a manager at a company I worked at in Canada who lived in a trailer park with his wife. It was by a lake and they were very happy living there, saving a ton of money by not having to pay the exorbitant rent or mortgage if they lived in a “real house.” Mobile homes, trailer parks just get a bad rap.

What is the difference, really, between a mobile home and a tiny home? Nothing other than design. So your tip on creating a disruptive product from this lesson: Take something boring and passe and redesign/rebrand it as something new.

Another example: when podcasts first became a thing (about 10 years ago), I tried to get people to think of them as nothing really new or exotic. They were simply like a radio show that you downloaded onto your iPod. However, the companies involved in the business didn’t want their investors to think it was something boring like radio, so they kept pushing the term “podcast”, and it’s now going through another surge.

How about in the food space? The latest and greatest, hottest thing out there is “bone broth”.  I was at a coffee shop in Santa Cruz the other day and right beside all of the drip coffee, lattes, espressos, mochas, and macchiatos, they were offering both beef and chicken bone broth, fully organic, grass-fed and cage-free, for a whopping $5 for a small cup.

Despite the fact that bone broth is one of the simplest things that you can make (fill a slow cooker with bones, water, vinegar & salt, then run 24 hours for chicken, 48 hours for beef, then strain and enjoy) it’s also absolutely nothing new.

Bone broth is soup stock. Cooks have been making soup stock since the dawn of cooking, and the term “broth” existed way before it was  written down in the proverb “Too many cooks spoil the broth’ recorded in Sir Balthazar Gerbier’s “Three Chief Principals of Magnificent Building, 1665.”

Back to thinking disruption. As you can see from these examples, some “disruptive new products” are simply rebrands and redesigns of things that have come before, appealing to a whole new generation who may have never heard of these things before. If you think about it, those of us older folks who have seen these things before may have a leg up on introducing old as new products. In the same way, you can introduce boring things in one country as innovation in another, and boring things from company X as innovation to company Y.

This is but one of many ways in order to think disruptively. In future posts, we’ll get into more detail on that.

Your current assignment: look at your current stable of products, or maybe products you launched in the past and discontinued. Now may be just the right time to bring them back, updated and redesigned for a whole new market and generation. Easy, right?

Me, I’m waiting for the Pet Rock and the Virtual Boy.

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All You Have To Do Is To Think Disruption – Startup News Land
September 15, 2016 at 06:09 AM

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thinkdisruptive
October 02, 2016 at 04:10 PM

Real disruption is both more difficult than you describe, but easier than most think if you consider what actually makes things disruptive. Unfortunately, the things you describe as being disruptive have no chance of disrupting any markets. They are fads, niche products, and rebranded stuff (none of which fit the definition of a disruptive innovation).

Products that disrupt change the basis of competition and what the market values, and upset incumbents to become the new market leaders. They conform to a repeating pattern, and have a specific definition.

Being disruptive is a highly valuable thing, both from the perspective of delivering new value to customers that wasn’t possible before, but also from the perspective of the companies creating it — companies like Amazon, Google, Netflix. Historically companies like Microsoft, Apple, Cisco, Walmart and Sony were highly disruptive, and in every case, it was what made them dominant and continues to pay them an annuity for past innovations.

If you understand the real causes of disruption, you can indeed do it intentionally, as Uber and Airbnb are doing today. But none of the examples you offer are in this category, nor do they have potential to create billion dollar companies/products.

These are great ways to rejuvenate brands, create sustaining (not disruptive) innovations, and apply creative thinking to innovate when you’re stuck for ideas — I wouldn’t suggest these can’t be valuable methods — but if we water down the definition of disruption this much, we render it a useless theory. It’s important that as innovators, we recognize the difference, and don’t buy into the empty hype promoted by so many in the media who like the word ‘disruptive’ for its connotations, but have no idea what the theory says.

Chris Kalaboukis
October 03, 2016 at 10:10 AM
– In reply to: thinkdisruptive

Right. There is a difference between “true” disruption, like AirBnB and Uber, and what I describe. You’ve hit the nail on the head – most of what people consider disruptive really isn’t, its disruptive to the incumbents in the space, but only because they haven’t moved to innovate.

I’d argue that some of these can become billion dollar businesses, as being disruptive is not a prerequisite to becoming a unicorn – that list is a mishmash of a few disruptive businesses, and others who grabbed traction by doing something a little better. I’d not say that Jet.com really did anything new and different, but it rapidly became a billion dollar business.

thinkdisruptive
October 03, 2016 at 04:10 PM
– In reply to: Chris Kalaboukis

I mostly agree with your response, and it would have been better to be more precise in your article. Although statements like this “As you can see from these examples, some “disruptive new products” are simply rebrands and redesigns of things that have come before”, are completely false, not just imprecise. Disruptive innovation can be done deliberately, but only if you are actually targeting what it is. You can’t get to New York by using a rough description of the route to Cleveland. That’s why I take issue when I see the term being misused, because it further propagates the misconceptions about what it is (it’s not just a buzzword, which is how most people perceive it today).

Is it possible to become a billion dollar company without being disruptive? Of course it is, and it depends on the industry and the price things are sold at as well, especially if we’re only counting revenues rather than profits. Lots of successful companies are not disruptive.

However, those that have extremely rapid growth, capture 40% or more of market share, create new categories that redefine competition in the broader market and put incumbents on the defensive, will almost always be the disruptors, and none of the examples you use could achieve those things. It is important to distinguish between fads, market niches, brand extensions, and sustaining innovations that simply advance a product along its natural path of upgrades. Each of these is appropriate at different times, and will support different business objectives and demand different product and market strategies, which is exactly why the definition matters.

It also matters, incidentally, for people investing in innovation, because disruptions do grow rapidly and dominate markets, so have much bigger paybacks and much higher valuations. So recognizing when there is an opportunity for disruption (or when your company could be facing a disruptor) also matters quite a lot.

Jet.com rose to unicorn valuation level not because its earnings justified it, but because of two big factors that have nothing to do with disruption. One is the hyper-bubble of too much VC money chasing too few opportunities for return. The second is that it gave a company like Walmart a competitive position against Amazon who had completely destroyed Walmart’s market position in ecommerce (and was rapidly eroding their in-store sales too), making it strategically worth more to Walmart than it was to anyone else. Based purely on sales, or growth prospects, Amazon grossly overpaid (just as Mark Zuckerberg overpaid for Instagram). Jet.com is similar to Instagram in that the only thing that made Instagram that valuable was how much damage it could have done to Facebook if Google bought it, and the fact that in Facebook’s hands, it got tons more users and guaranteed success. I don’t know how you can value strategic options, which is what the buyer was paying for in both cases, except relative to the damage it would do if you didn’t buy it.

Chris Kalaboukis
October 03, 2016 at 04:10 PM
– In reply to: thinkdisruptive

Agree with you.

However, one of the points I’m probably failing to express is that in many ways “disruption is in the eye of the beholder”.

For example, to an older, more staid institution, a simple re brand and relaunch of an earlier “failed” product may be disruptive to the business itself, if it upends that corporate culture.

Would I call that disruptive? Maybe not in the overall market sense, but to that specific business, very much.

When it comes to tiny homes and bone broth, its still to early to tell. Its entirely possible that if our economy continues to slide and housing prices continue to skyrocket in some urban areas, a billion dollar tiny home builder (or a complete ecosystem of them) may emerge.

Its also not too crazy to see a Starbucks like chain serving various “broths” instead of coffee, as customers look for healthier alternatives to the Frappuccino.