Understanding and Developing a Disruptive Idea

Published by: Mira Martinez    |   Category: Blog, Disruptive Ideas    

Thinking Outside the Box

Disruptive-Ideation-Idea-Development

A disruptive idea is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network, displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.

In contrast to a disruptive idea, a sustaining innovation does not create new markets or value networks but rather only evolves existing ones with better value, allowing the firms within to compete against each other’s sustaining improvements. Sustaining innovations may be either “discontinuous” (i.e. “transformational” or “revolutionary”) or “continuous” (i.e. “evolutionary”).

The term “disruptive technology” has been widely used as a synonym of “disruptive idea”, but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application. Sustaining innovations are typically innovations in technology, whereas disruptive innovations change entire markets. For example, the automobile was a revolutionary technological innovation, but it was not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market for transportation essentially remained intact until the debut of the lower priced Ford Model T in 1908. The mass-produced automobile was a disruptive innovation, because it changed the transportation market. The automobile, by itself, was not.

The current theoretical understanding of disruptive ideas is different from what might be expected by default, an idea that Clayton M. Christensen called the “technology mudslide hypothesis”. This is the simplistic idea that an established firm fails because it doesn’t “keep up technologically” with other firms. In this hypothesis, firms are like climbers scrambling upward on crumbling footing, where it takes constant upward-climbing effort just to stay still, and any break from the effort (such as complacency born of profitability) causes a rapid downhill slide. Christensen and colleagues have shown that this simplistic hypothesis is wrong; it doesn’t model reality. What they have shown is that good firms are usually aware of the innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining innovations (which are needed to compete against current competition). In Christensen’s terms, a firm’s existing value networks place insufficient value on the disruptive innovation to allow its pursuit by that firm. Meanwhile, start-up firms inhabit different value networks, at least until the day that their disruptive innovation is able to invade the older value network. At that time, the established firm in that network can at best only fend off the market share attack with a me-too entry, for which survival (not thriving) is the only reward.

The work of Christensen and others during the 2000s has addressed the question of what firms can do to avoid oblivion brought on by technological disruption.

Do you have an idea for a product, service or concept that you feel people will love, use and get great benefit from? Do you feel you have a concept that will entertain, be useful, will solve problems? What do you do with it next? How does one go about developing their idea and make it into a reality? Does this idea have merit? Is it worthy of spending time and resources to bring it to market?

How do you launch a disruptive idea?

After thinking long and hard about your idea, you should be able to generate several brilliant, wacky hypotheses that will challenge the norm. The established way isn’t always the best way. The general rule is that bolder “What Ifs” will offer a fresher perspective. So, don’t worry if your hypotheses seem completely ridiculous. Remember, inverting or denying industry standards can often lead to significant business breakthroughs.

Teach yourself to look at problems more expansively and in-depth. Never be dismissive of a potential solution before you have thoroughly thought it through. Think outside the proverbial box.

 

Why Great Ideas Fail

Published by: Robb Magley    |   Category: Blog, Disruptive Ideas    

What makes a ‘Great Idea’ Great?

Disruptive Idea Development

As a nation of innovators, we adore our disruptive ideas — the technologies that change everything about everything, the sudden bursts of thought that punctuate the story of our civilization. We also acknowledge that for every brilliant idea that makes it to the big time, there are thousands that don’t. But we have a tendency to shy away from examining why those thousands fail.

It might be comforting to assume these ideas failed because they just weren’t as good as the ones that were successful; unfortunately, the reality is far less romantic, and on its face perhaps less fair. We’re told that all you have to do is build a better mousetrap, and the world will beat a path to your door; if history is any indicator, nothing could be further from the truth.

Great ideas fail because unless you can successfully implement that mousetrap, it doesn’t matter how good it is. Above and beyond that great idea, a successful implementation requires a careful combination of timing, conviction, and teamwork.

There’s no substitute for good timing. Knowing you’ve got a great idea is a wonderful thing; knowing whether the time for it is right is another matter.

Remember Picturephone? Of course you don’t. It was AT&T’s highly-advanced, hugely innovative and technically elegant video phone system that debuted in 1970 and utterly flopped on the market. Historians can talk about how it was too expensive (plenty of people could afford it) or too bulky on a person’s desk (still a smaller footprint than most PCs), but what it was was plain-old ahead of its time. It took a culture reshaped by decades of television and social media to accept what was simply too intrusive for 1970: an always-on video camera in your home.

The timing wasn’t right, and the great idea failed.

Resistance is anything but futile. Disruptive ideas are going to challenge the status quo, and they’re usually the ones with the better resources. Resistance from those who benefit from “the way things have always been done” is always going to be there, and if you’re not ready to push back, they’ll win.

Pushing back doesn’t always mean trying to overcome the dominant market force; sometimes, you can subvert it from within. When the Pacific Car & Foundry Company sensed the golden age of the railroad might be coming to a close — and its days manufacturing railroad cars might be numbered — the company shifted gears to follow what it saw as the trend of the future: long-haul trucking, bringing goods right to a customer’s doorstep. Today PACCAR Inc is the parent company for Kenworth and Peterbilt (as well as Foden, Daf and Leyland trucks overseas); other railcar manufacturers that stuck with “the way things have always been done” weren’t so fortunate.

You can’t execute without teamwork. The early bird might get the worm, but if he doesn’t have the support of an effective team, he’s not going to get to keep it.

Look no further than the development of the telephone for proof. Decades of profits (and continuing innovation) didn’t fall to the first person to invent the telephone — that was a Staten Island immigrant named Antonio Meucci, who in 1856 managed to talk to his wife two floors up. Nor did they land in the lap of the designer of the better, more practical telephone — Elisha Gray’s 1876 diagrams used common water as a variable resistance medium.

The victor was Alexander Bell, because not only was he every bit the innovator as Meucci and Gray, he had the resources in place to take advantage of those innovations when he needed to. In this case, he beat Gray to a patent by having a dedicated lawyer on his team willing to physically bring the patent application to Washington, D.C. on a moment’s notice.

It also probably didn’t hurt Bell’s chances knowing the patent examiner on staff owed a bunch of money to his lawyer. In retrospect, was the whole episode a bum deal for Gray? Probably. But that advantage only underscores the point further: having the right team around you can make all the difference.