Disruptive innovation is a term coined by Clayton Christensen in the late 1990s to describe how new ideas change existing industries. Disruptors don’t change an industry gradually; they transform products and services entirely.
Christensen’s theory of disruptive innovation suggests that disruptors are often cheaper, simpler, and more convenient than existing products or services, making them attractive to a broader market. Disruptors usually start in niche markets and then rapidly spread to larger markets, eventually replacing the traditional products or services.
To be considered a disruptor, a company must embody specific characteristics. You must have a deep understanding of your target audience. Customers may wish for products and services to be delivered differently, and you’re ready to address that need.
Industry disruptors must also have a high level of adaptability. If something isn’t working, they can switch gears and make the changes needed for the product to thrive.
Some Examples of Disruptive Innovation
Disruptive innovation requires the ability to scale rapidly. Companies associated with disruptive innovation have grown at unprecedented rates. The following are examples of disruptive innovation that seemingly exploded overnight:
- Uber
Uber disrupted the traditional taxi industry by introducing a convenient ride-sharing service. The service is available to schedule through a mobile app. By leveraging technology and providing a seamless user experience, Uber transformed how people commute.
- Streaming Services
Netflix was the first streaming service, revolutionizing the entertainment industry. The company shifted from physical DVDs to a digital platform. Streamers disrupted the traditional model of TV watching. They empowered consumers to choose what, when, and how they watch their favorite shows and movies.
- Airbnb
Airbnb single-handedly changed the hospitality industry by allowing individuals to share their homes with travelers. Airbnb provides a cost-effective alternative to traditional hotels. Also, Airbnb has permitted individuals to make money from unused spaces.
- Smartphones
The product combined a phone, radio, camera, GPS, and computer into a single handheld device. The iPhone, released by Apple in 2007, made many products, such as GPS units, digital cameras, and MP3 players, obsolete.
Disruptive Innovation in the Cybersecurity Industry
Another curious example of modern-day disruptive innovation is the introduction of virtual private networks (VPNs). What draws our attention to this technology is that it has disrupted more than one industry.
VPNs have disrupted the cybersecurity landscape by addressing the growing concerns surrounding online privacy. Individuals and businesses can have a secure and private browsing experience. VPNs shield the user’s sensitive information from potential threats and surveillance.
VPNs are also changing how we watch TV and movies. They let you watch shows from other places that you normally can’t see because of rules about where shows can be shown. Streaming services often have region-specific content due to licensing agreements. But with a VPN, you can pretend to be in a different place and watch more shows and movies.
It’s worth mentioning that this technology has also supported the global shift towards remote work. As organizations embrace flexible work arrangements, VPNs enable employees to connect to corporate networks securely from anywhere in the world.
Using a VPN service, employees and managers can help safeguard access to sensitive company data. All these possibilities have allowed for a disruption of the traditional in-office workplace model.
The Impact of Disruptive Innovation
Disruptive innovation has a profound impact on both businesses and consumers. Let’s quickly talk about some of the top benefits of disruptive innovation today:
New Competitors
Disruptors create competition within their industries. Companies know they need to pivot their business operations to succeed when disruptors change the industry.
For instance, Netflix inspired streaming agencies such as Peacock, Hulu, HBO Max, and Disney Plus to launch. With more competitors, there’s a higher likelihood of better products at better prices being offered to consumers.
New Jobs
As disruptors expand their operations, they create new job opportunities. Disruptive companies help stimulate economic growth within their communities.
Financial Perks
Disruptive companies often attract significant investments. These investments provide the capital necessary for further growth and innovation.
Public Benefits
Ultimately, consumers get the most perks in incidences of disruptive innovation. They gain access to better products and services at lower prices. Most disruptive companies focus on affordability and better user experiences.
Final Thought
Disruptive innovation creates change within all industries. Disruptors challenge the norms as a way to allow progress. To be a disruptor, you must evaluate your current market and determine its pain points. Once you assess customer needs, you could introduce new products, services, or delivery types to serve them better.
Past examples of disruptive innovation, such as streaming services and smartphones, seemed like risks at the time. However, the companies that launched the products had a vision that came to fruition.
As we continue to see new examples of disruptive innovation emerge, it’s important to remember that change is inevitable and necessary for continued growth and improvement.