Why do some companies make bank every year while others struggle to stay afloat? There are a lot of factors which decide the longevity and success of a business. But if there is one rare ingredient which can put any company at the top, it is this- presence of a disruptive technology.
The personal computer, internet, smart phones, artificial intelligence, 3D printing are all examples of disruptive technologies. Some of these technologies have even managed to change the way we live our lives.
What is disruptive technology?
It is any technology that disrupts the status quo of an industry or a market. A disruptive technology will be completely new for everyone and its use cases might not even be defined yet. Disruptive technologies are impactful and usually affect other technologies as well. There are times when it is not the technology that is disruptive per se, but it is the way in which it is combined with others.
Innovation is usually either sustaining or disruptive. If your innovation incrementally improves the existing product, then the innovation is sustainable. But if it completely changes the way the product has been used so far, or if it serves a completely different set of customers, then the innovation is disruptive.
Here are a few questions which you can use to see if an innovation is sustainable or disruptive:
- Is the innovation based on a product that appeals to a huge segment of customers? If the answer to it is yes, then it might not be disruptive.
- Is it an enhanced version of the product? Or is it just a modified version? It is a sustained innovation if the answer is yes.
- Are the use cases from this innovation not fully identified yet? Then it might be disruptive.
- What do the experts in your organization tell you about the technology? If they think that you have hit the jackpot and are preparing to leverage it, then it could be a disruptive innovation.
How to identify disruptive technologies:
A new technology in the market cannot necessarily be identified as a disruptive technology. Disruptive technologies become successful since it helps in targeting a new segment of customers, creates success for its network of stakeholders, and makes the end product accessible and affordable to more people.
#1 Smaller target area:
While a smaller market may not always be the case, a disruptive technology usually captures the attention of all and sundry, albeit in a smaller target area. A few people or an organization will make use of the technology where they will cater to this area. Based on the results from this, the next set of events will occur. The success of the disruptive technology depends on how the first few customers react to it.
#2 Great risks:
One of the characteristics of a disruptive technology is that it is highly risky. Not every organization will be willing to bet on them as soon as they hear about it. Since there is no data to ascertain the effectiveness of an innovative technology, there is a lot of risk associated with it. Most of them will wait to see how the new technology is faring for those who have used the technology in one of their product offerings or services. In fact, this is a well-known strategy called ‘second to invent’.
#3 Creates a new market segment:
While creating a new market segment may not always be how disruptive technologies can be characterized, the chances of the same are there. There was no market for 3D printers because there were no similar products and people had no idea what they were. When 3D printers had mainstream uses, people started recognizing it. Today, there are 3D printer enthusiasts who have them just to print things that they would like to have.
#4 Grows slowly:
The best thing about disruptive technologies is that not everyone would want to get their hands dirty as soon as they hear about it. There will be a bit of resistance to the new technology, but a few people will start adopting it and it will gain a bit of traction. Once a few businesses make use of the disruptive technology, it will reach the mainstream, and from that point, the growth will be incredibly fast.
#5 Disrupts an existing market:
Reading books is a great hobby to have. People love the smell of paperbacks, it is a unique feeling when you are a book lover. In 2004, Sony Librie, the first e-book reader, was released to the public. Today, e-book readers are available mainstream and there is a lot of demand for newer and improved versions. The ebook reader is an example of how a disruptive technology has disrupted an existing market.
When Jeff Bezos introduced the Kindle, everyone thought that he was betting against himself because the majority of Amazon’s sales were from physical books. In the first 4 months of 2021, ebook revenues were up by 14.5% and it amounted to $368.9 million. No one blames Bezos anymore.
6 examples of disruptive technologies:
#1 Virtual Reality:
VR takes you to a completely new world, an effect that is created by the VR headsets which have goggles and a screen. Google’s Cardboard, Facebook’s Oculus or Samsung’s Gear are a few examples of VR devices. From retailing to the automobile industry, many industries have taken note of its uses and have been leveraging it to the hilt. In retail, VR lets customers check out the products before purchasing.
#2 3D Printing:
To put it simply, it makes three dimensional solid objects with the help of digital models. When you use 3D visualization on a computer screen, you will be able to have a better understanding of the spatial aspects of a physical environment. From military applications to its importance in urban planning, 3D printing has taken the world by storm. It has had a huge effect on the satellite and space industry as well. With 3D printers becoming more affordable than earlier, the number of applications for it will only keep increasing.
There is no doubt that smartphones have changed the way we lead our lives. With the single click of a button, we can do so many things that might have been unimaginable just two decades back. Smartphones are easily one of the most disruptive technologies that we have been witness to. We rely on it every day. We have it on our person everywhere we go. That’s how disruptive smartphones have been.
There was a time when we had to walk into a brick-and-mortar store to buy anything. That’s not the case anymore. We could buy anything from a pin to an airplane in an eCommerce store. Ecommerce has changed the status quo of every industry that you can possibly imagine. Add the internet to the mix, it has changed the way supply chains are managed and controlled.
#5 Cab aggregators:
There was a time when we could not hail a cab with the simple touch of a button on your smartphone. You had to walk out on the streets to search for one. Ride-sharing companies like Uber have completely changed the way we commute. Uber was able to create a $70 billion valuation within its first decade, that’s how disruptive it was.
#6 Online education:
Online learning platforms have become even more important with the pandemic shutting down educational institutions in many places across the world. Massive Online Open Courses (MOOC) has made education accessible to a broader set of people. It is much cheaper than getting full-time education from a university, but you get to learn just as much. With platforms like Udemy, anyone can become a tutor, that too on any topic. There are many platforms like Thinkific, Kajabi and Teachable where you can host the content of your online course here.
Disruptive technology can change the way industries behave. It is also a great opportunity for an established business to adapt and grow. Not to forget that even startups can and should take advantage of the shifting demands in the market. There are many innovations which bring about a lot of change, but they are not necessarily disruptive. Identify the ones that are truly disruptive and see if you can leverage it for the greater good, the rewards will follow.
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