Disruptive Technology

19 Aug

This comes from my Strategy classroom. We were talking about how industries leave scope for disruptive innovations.

I will try and explain the phenomenon. Terribly simple-

You start with an idea, or an innovation. You get customers or fans who pay. Your business takes off. You grow bigger and bigger. More and more people join you. They are paying you, so it is only logical to give them their worth. You put your efforts and keep improving for them. But at the same time remaining “backward compatible”, i.e. not changing something fundamental. Pretty logical- don’t fix something which is not broken and here forget broken, this is an awesome piece!

So far, so good.

Now what happens, someone else appears on horizon. Someone doing same thing, maybe bit or totally differently, but very small. And people shift! The trouble is that people do not know what they like unless they are told! People are not geniuses, they are not so smart to know everything inside out and give rational suggestions. But the moment they have a choice, they jump!

-Simple so far. Here is the wow part. The companies CAN NOT avoid it.

Why? Look again. you are in a business, you are the leader. Reaping the best possible profits. Everything so well organized and tested. Why would you change? How can you change? New idea would mostly have a terrible profit margin to start with, the new idea implementation would seek fortunes of capital investment. You don’t know how your customers will react! You don’t know if the new idea is so scalable! And most of the times the newer tech is not better to start with! I mean who would want a machine which can let you type only 5 pages!

But there are people, who do not need awesome tech. There are people who need to type only 5 pages- and the company has overshot their expectations. Overtime this number grows. My smartphone can do a 100 things, but I need only 10! It’s really counter-intuitive to think that someone doesn’t want this awesome technology.

Plus, there is always someone who loves something new. Beyond its usage and capabilities, there is someone who just appreciates the technology-

You won’t shut your typewriters business for this! Slowly the tech innovates and you are too late to join the party. So, it is bound to happen. You can rarely convince people to keep burning money in hope to get something so ground-breaking that your own product gets packed! So it’s like life, you may have life- longer, healthier- but in the end, death gets us all.

Of course I am barely touching the tip of the iceberg- Here is a more detailed video- though only live examples can really teach.

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One Response to “Disruptive Technology”

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  1. Disruptive innovation and Life | Shiv's Weblog - August 20, 2012

    […] Leave a comment So, this thought came from the strategy lessons on Disruptive Innovation. […]

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