Is it disruptive? Defining disruptive innovation for entrepreneurs

Date Posted

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This blog post originally appeared in The Learning Partnership’s publication, SPARK.

Disruptive innovation and entrepreneurs are good friends. Entrepreneurs are often the ones that develop new products or services that change an entire industry. But before we get into the reasons why that is, it’s important to ensure we’re all talking about the same thing.

“Disruptive” has become much like the word “innovation”—both are used so often and to describe so many different ideas that the real meaning often gets lost in translation. Today, these words can mean pretty much anything.

defining disruptive innovation

For a common reference, we turn to Harvard Professor Clayton Christensen who defines disruptive innovation as:

A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

Disruptive innovations are: 

  • Affordable to a large group of consumers
  • Simple to use
  • Improved upon and continue to take a larger share of the market

Incumbents in the market don’t tend to focus here, instead choosing to concentrate on producing higher-priced products and enhancing the value for current customers.

This open space should be good news for entrepreneurs, who can start small in a niche market, and then build the product to appeal to wider and wider groups of people. Startups don’t necessarily need to be intimidated by bigger players either, as established companies are probably not interested in developing these low-margin products.

is it disruptive?

But a word of warning. As Martin Zwilling points out in his article Startups Should be Wary of Disruptive Technologies, just because an entrepreneur has a potentially disruptive innovation, doesn’t mean instant success (or success at all). It can take a long time (possibly a decade or more) for a product to reach a large audience. Zwilling notes that it took six years for the smartphone to reach a 50 per cent adoption rate in the US.

Where might a disruption happen down the road? One possible scenario is in the electric vehicle (EV) industry. It’s argued that electric vehicles are not disruptive, because, compared to cars today, EVs are not cheaper or simpler to use; nor do they reach new consumers. And more significantly, all the major car companies are developing their own EVs.

However, EVs themselves could be disrupted someday by “souped-up golf carts” that appeal to consumers looking for a cheap alternative for local transportation—a trip to the grocery store or a joy ride with entrepreneurial friends, perhaps.

Certainly, the definition leaves open the possibility that any industry can be disrupted, including education. Several years back, Christensen himself predicted that higher education could see its own disruption. Where from? Online institutes are creating cheap (sometimes free) courses that are simple to use, and can potentially reach a large group of students, from all over the world.

Universities may not be threatened by this approach initially, since the quality of the online classes can be perceived as subpar. However, we can expect that gradual improvements to the overall experience will take place.

Whether these changes will lead to a disruption, only time will tell.

To reiterate, a technology may have a significant impact on an industry, but if we are true to Dr. Christensen’s definition, few products are disruptive since they don’t create new industries. When pitching an innovative product, “valuable” or “groundbreaking” might be more appropriate adjectives. Then wait to see if it is disruptive.