6 Counterintuitive Approaches to a Winning Disruptive Opportunity

Weekly Business Insights from Top Ten Business Magazines

Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 345 | April 19-25, 2024

Entrepreneurship Section | 1

6 Counterintuitive Approaches to a Winning Disruptive Opportunity

By Martin Zwilling | Inc Magazine | April 21, 2024

Extractive Summary of the Article | Listen

Every business leader with a new technology will claim that their innovation will be industry-disrupting, meaning that it will render the existing technology obsolete, and create a new market. Yet truly disruptive innovations, like the smartphone from Apple and the internet, are rare and are generally unpredictable. So why would any customer or investor ever believe any of these claims?   As a mentor to small business owners and an occasional investor, the author recommends that new founders avoid using the term disruptive with market professionals.  But it’s worth some extra effort to understand the attributes of the market, in concert with your new technology, which might really indicate that industry disruption is possible with your innovation. In the classic book Disruption by Design, by the renowned innovation consultant Paul Paetz, the author founds a list of common patterns and recognizable attributes that he likes, called disruption fingerprints.

1. Initially address a small market niche. Disrupting a huge market intuitively has greater potential, but it’s also like turning an aircraft carrier. It takes a long time and lots of effort to overcome existing momentum, and both investors and customers want to see results on a small scale in their lifetime before they line up to join the movement.
2. Pick a technology that somehow seems inferior to the major incumbents. Existing players normally think in terms of bigger, better, and faster, whereas more customers may be satisfied with smaller, cheaper, and simpler. Think of smartphone cameras compared with professional cameras.
3. Target large but moderate-to-low-growth segments. Usually, these are low-growth for a reason — a new technology or price point could easily be the trigger to a large opportunity. On the other hand, high-growth segments may look more attractive but are likely to be attacked by the big players and many other competitors.
4. Look for sizable customer populations unattractive to incumbents. These may be people who can’t afford existing products because of income levels or location but need the solution. Remember the explosion of cellphones throughout the world when cheap versions and new pricing models were introduced a few years ago.
5. Explore industries where you are an outsider. Most business advisers recommend that you stick with the business area you know, where you have inside knowledge. Often new business leaders are more able to think outside the box and bring disruptive change to lesser-known business domains. Consider Apple’s move into music, telephones, and watches.
6. Compete against non-consumption and non-existing markets. The most disruptive products are those that didn’t exist before, and for which no forecasts are available to size the opportunity. Facebook built the social media market before customers even knew they needed it.

2 key takeaways from the article

1. Every business leader with a new technology will claim that their innovation will be industry-disrupting, meaning that it will render the existing technology obsolete, and create a new market. Yet truly disruptive innovations are rare and are generally unpredictable. So why would any customer or investor ever believe any of these claims?   As a mentor to small business owners and an occasional investor, the author recommends that new founders avoid using the term disruptive.
2. In the classic book Disruption by Design, by the renowned innovation consultant Paul Paetz, the author founds a list of common patterns and recognizable attributes that he likes, called disruption fingerprints.  These are:  initially address a small market niche, Pick a technology that somehow seems inferior to the major incumbents, Target large but moderate-to-low-growth segments, Look for sizable customer populations unattractive to incumbents, Explore industries where you are an outsider, and Compete against non-consumption and non-existing markets.

Full Article

(Copyright lies with the publisher)

Topics:  Startup, Entrepreneurship