When you think about the phrase “disrupting the market” the first thing that comes to your mind is that the market disruptors are the chosen few that just had the luck to find the right niche in right time. That these are the chosen people, the chosen heroes in our lives that will help make our life better. While there is a fair amount of truth in there, those heroes are not the ones with shining armor. Those heroes wear rather dark armors and stack heavy weapons. They are the heroes to some while being a pain to many and for that reason, in episode 2 of Digital Transformation and Innovation series, we will be exploring why our view on market disruption is a little… clouded.
Cloud is a solid ground from which I should start my point because cloud technologies carry a lot of potentials to disrupt many industries. Some companies were clever to realize that having data and files stored on the internet is much more convenient and accessible to their users. That idea spread far and wide and from that thought market disruptors like Netflix were born.
I think that we all know what Netflix did and how it disrupted the market but one thing that we forgot to remember is what it did to its competitors. Remember Blockbuster? Or any other local video club store? Real people stood behind those businesses and a lot of them went bankrupt. Why? Because Netflix came and moved movies to the internet. And this is great. Market disruption is a must if we want to live in a better world. But like any change, it is not a pleasant one for everyone on the market.
Disruption means chaos
Disruption is chaos. If we look at the definition of market disruption our simple Google search powered by knowledge from Investopedia will tell us:
” A market disruption is a situation wherein markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or unusual trading (as in a crash).”
It is pretty straight forward. For most companies, the market disruption is not really the hero figure. And yet I see many people talking about it like it’s something that happens every day. In fact, many people get really upset when real disruption happens in their markets. And that is okay. Big advice I have for everyone working in Innovations or Digital Transformation services is to give people the right perspective on the chaos the market disruption leaves because by doing that they will be able to better understand why it is a must.
People are resisting changes and they fear new things. They feel comfortable doing things old fashioned and that is the reason why they resist change. And the only way for us to move them out of their comfort zones is to push disruptive innovation into the market.
The disruptive innovation
The disruptive innovation is one that as a result leaves the market disrupted. Because we already know that market disruption is not the most pleasant time for everyone we must have a good framework to fight all critics that will try to reverse our work. Always remember that when market disrupts companies have two choices: adapt to new rules or die. Some of them will adapt and they will compete with you some of them will just die. When the adaptation phase is over you will have some advantage but still, you need to have iterative innovations in order to stay on the top and dictate the rules. And the top is reserved only for the bravest.
When disrupting the market it is really important to think about your position from a legal perspective. Your disruptive innovation may lay its foundation on the gray area of the law. It’s brand new, it’s disruptive and it’s very likely that no one regulated that area of business yet. And your competitors will wait for you there. Fighting to push you illegal.
The two questions now come to mind. Okay, how to get a good disruptive innovation idea and how to protect me from being pushed off the legal cliff. The answer is the same: group up, partner up and talk to people.
People are the key. Partners are the key. Group is stronger than an individual. The process of innovating should be methodical. It should include all stakeholders in the market. The next episode in the series will be follow up to this exploring how partnerships can help you innovate and why they are crucial.