Time and again, you may have heard of the term “disruption” or “disruptive”, especially when discussions about startups are in place. A startup may be running on a disruptive business model if it is radically challenging incumbent companies and their stale or traditional business models. Or, a startup may be disruptive if it’s doing something new and innovative.
Apple and Microsoft were disruptive when they challenged the business model of big mainframe companies like IBM in the early 70’s. Google was a disruptive technology in a time when the Internet was supposedly meant to be catalogued and not searched. It again disrupted the traditional advertising business when it introduced contextual marketing. Airbnb is disruptive in how it encourages property owners to monetize their under-utilized homes or apartments.
The term is not exactly new, having been coined in the late 1990s. But the use has come into fashion lately, especially considering the rise of technology startup companies that are starting to change the way we live, work, play, transact and move about.
Beyond starting up, the idea of disruption has been placed front-and-center lately, with The New Yorker‘s Jill Lepore arguing that the business and technology media have over-used the term disruption to the point of being misused, far after Clayton M. Christensen coined the word to describe disruption to be “the selling of a cheaper, poorer-quality product that initially reaches less profitable customers but eventually takes over and devours an entire industry,” in his 1997 book The Innovator’s Dilemma.
Lepore has gone as far as to criticize Christensen’s arguments about disruption, saying that a lot of the disruptive companies, technologies and ideas in the past eventually ended up as failures in the long run. Vox‘s Timothy B. Lee calls the term a “dumb buzzword” and yet an “important concept” at the same time. Lee wrote a rebuttal to Lepore’s piece, saying that, yes, even though disruptive ideas sometimes — or even often fail — in the long term, it’s the effort that counts. “Most of the experiments fail, but the successes push the industry forward.”
Yes, you read the term everywhere. There’s even a startup conference called “Disrupt”. But to what extent is it over-used, and what’s a reasonable usage of the word in today’s context? Does it still follow that a disruption should necessarily be cheaper, poorer-quality and less profitable for the innovative enterprises that introduce them?
Language is evolving, after all. And while the disruption used to refer to the smaller David that undertook guerilla-like tactics to overcome the incumbent Goliath, today the context seems to be more in line with having a nature of innovation rather than being cheap, quick and effective. Uber, for one, is not exactly cheap, say compared with using a regular taxi cab. And yet it is shaking up the transportation business model so much that some taxi fleets have threatened lawsuit. The iPhone was innovative, but it’s not exactly a cheap device, at least in non-subsidized markets. And yet, it has spawned a whole new industry of application marketplaces and app developers.
Whenever you want to disrupt something, it’s all about breaking down the barriers to entry, challenging the old guard, and presenting a new way of doing things. On TechCrunch, Andy Rachleff even goes as far as describe different kinds of disruption. These include low-end disruptions (the better, cheaper and faster approach), as well as new-market disruptions (creation of new, innovative means of doing business altogether).
According to Rachleff, it’s the business model that’s supposed to be disruptive, rather than the product or technology itself. “It’s more appropriate to call the business model disruptive. In order for a company to disrupt, the revenue and cost structure of the incumbents that the company faces must keep them from responding.”
It’s not easy to understand disruption, he says. And it’s usually more difficult to actually disrupt. But it is in the disruption where startups flourish. After all, a startup is not really contributing to innovation and change if it simply imitates others and follows old ways of doing business.