Not that long ago every tech startup claimed to be innovative. Today they are disruptive, a term used so liberally and frequently that its true business meaning and origins have become lost. Let’s face it, how many entrepreneurs and business leaders really know the difference between innovation and disruption?
“True disruption comes when you fundamentally change a market, a business model, or a way of doing things and, ideally, make a significant impact on humanity,” says Sarah Kerruish, chief strategy and growth officer at digital healthcare platform TrialReach “The block-chain is poised to do this with finance, while education is being transformed by digital connectivity. But another new ad platform, in spite of its cool, new features, is not disruptive.”
Others define disruption as the sum of many innovations that, once combined, provide a credible alternative to an existing way of doing things that creates a disruption in the market.
“If you look at companies that are widely accepted as being highly disruptive, Uber and Airbnb, for example, they have focused on making everyday actions more convenient and, in so doing, have ultimately disrupted the status quo irreversibly,” says Guillaume Pousaz, founder of fintech Checkout.com.
The UK’s flourishing fintech industry is a case in point; home to a variety of companies tackling financial issues that range from lending and remittance, to foreign exchange and international payment acceptance.
“All of it is in response to a more connected, global customer who has little patience for the constraints imposed by established banks,” adds Pousaz. “True disruption in the financial services industry is by no means complete. We are in the early stages of a cycle of relentless innovation that will ultimately lead to irrevocable disruption of how people interact with their money.”
Disruptive innovation is a high stakes game, with high risk and potentially high rewards. It’s also very difficult to spot the winning disruptive opportunities, especially when disruptive ideas require other players in the ecosystem to acknowledge and embrace the change. A valuable technique is to think in terms of disruptive platforms that can be applied to more than one market or application area, says AJ van Bochoven, head of innovation strategy at Cambridge Consultants.
“As such, not only is the potential ROI increased, but also the potential to focus on the earliest of these areas to materialise, to gain earlier traction,” he says. “Time to market is always important – the earlier that market position can be secured, the higher the likely market share. A single shot disruption is often improbable and will also take too long. Instead, it’s better to focus on a staged evolution, using the earliest stages to bootstrap the innovation into the market.”
One of the greatest impacts will come from disruption in medicine. Kerruish insists that from TrialReach’s vantage point disruptive innovation in everything from the way people interact with their doctor to advances in genomics, will impact the quality of life for everyone living on the planet.
She says: “We disrupted the existing model of big pharma promoting individual trials through agencies by creating a free, open platform with information about all clinical trials. We took a tried and tested model, the online marketplace, and applied it to a new industry.
“We disrupted an existing business model by applying ‘freemium’ economics, and we disrupted the fact that all clinical trial information is free text by applying machine learning to make it machine-readable. Patients and doctors no longer have to read the eligibility of every single trial to find out which one is best for the patient. We can match a patient against all clinical trials in seconds.”
Opportunities in the modern world to harness new technologies in more agile ways is driving disruption of traditional industries, including one of the oldest, the supply of energy. A few months ago, a presentation by Drayson Technologies at London’s Royal Institution demonstrated how energy could not only be harvested from the air but also transmitted back to power devices without the need for batteries, cables or any connection.
One of those at the event was Hugh Bishop, chairman of customer experience marketing agency MRM Meteorite. He says: “The significance is huge, as are the applications in health monitoring, home appliances let alone mobiles and beacons. And as we get more devices we get more power and as modern devices use less energy so a perfect storm for disruption. Wireless energy is not new but the advent of new technology and change in market forces allows for its commercial use and this is the key to disruption.”
So how what does a business need to do to beyond innovation and think, act and deliver disruptively?
“I think it has to start with identifying a big, important problem and imagining the end state,” says Kerruish. “By imagining the end state you can then start to tackle the path to getting there. “Try applying methodologies and business models for existing industries to new sectors, or invent entirely new ones based on something you know about human nature. For example, Pierre Omidyar developed the trust economy on platforms such as eBay.
“And when you disrupt, be prepared for a lot of rejection. My good friend, Mike Stern famously turned down the opportunity to be the original investor in eBay because he thought the idea was crazy.”
This article was written by Alison Coleman from Forbes and was legally licensed through the NewsCred publisher network.