Disrupting an Industry

A colleague and I had a recent discussion about this: what does it mean to “disrupt” an industry?  I think we’ve all heard it at some point another – usually in a bunch of marketing speak.  But what constitutes a “disruption”?

In my mind, a disruption is some sort of rapid introduction which forces a rapid reaction from the rest of an industry.  If a company fails to react, it may find itself facing a reduced market share or bankruptcy.  A disruption is not a gradual change, nor it is it a soft change.

A few thoughts about the subject have been on my mind:

In order to disrupt an existing industry, it generally takes some sort of new technology which makes an existing task (or series of tasks) easier, faster, or simpler.  Streaming movies on Netflix is an example of this.  Rather than having to get off your couch, walk/drive to the movie store, browse over a series of movies, pay the clerk to rent it, then go back home (only to discover the VHS tape you’ve rented is stretched and garbled), now all you do is fire up Netflix and start streaming a show.  Companies like Blockbuster failed to either accept (or counter) this kind of change, and as a result, didn’t fare so well.

There are a few considerations in regards to disruption:

  1. What gains are to be made with a disruption? If the potential revenue gains are small, there’s a smaller chance that it’s a good target for disruption. It’s not too likely that someone is going to introduce an iPhone app that’ll destroy lemonade stands, partly because there’s little to no revenue in it.  Because there’s little revenue in it, it’s not as big of a target.
  2. How difficult is it to disrupt a given industry?  There’s a lot of smart people out there, and the low hanging fruit is usually the first to go.  For example, when I was a missionary, my old mission president and a colleague created a system for computerizing index cards in libraries.  This was something that hadn’t really been done before (at the time), and as a result, they did well.  Because the market of library card catalog equivalent software is already established, they likely wouldn’t be as successful if they were to do it again.
  3. How “big” is the disruption?   If you created an app to save someone a single click per day, it’s not too likely to catch on.  If you save them an hour of work a day, it’s a lot bigger of a deal.  This is why I say a disruption has to be significant in order to be consider a disruption.  This also involves the number of potential people affected by the disruption.  Saving a single click to half a dozen users per day isn’t going to make you a billionaire.  Saving a hundred million people a single click per day has a potentially bigger impact.*  The value of the impact could be measured as the number of users affected times the impact per user.

A conference I was at recently got me thinking more about this: what industries are ripe for disruption?  What is the next “low hanging fruit” which could be automated or digitized?  This is a difficult question, and to a certain extent, I think is impossible to predict.  I never would have guessed that app that helps you take grainy, washed out pictures of food could be worth a billion dollars.  I also wouldn’t have guessed that a chat app would also have a similar value.

A few things are coming to my mind, which are ripe for disruption:

  • Video chat.  I use Skype a lot at work and home, and I’ve grown to hate it.  Someone is totally going to create a decent cross-platform web based video chat.  Even if it resorts to using black/white imagery, if the frame-rate is good, I think people could go for it.
  • “Real” social networking.  There’s a growing counter-culture movement of people getting outside and actually doing things in person, but in an augmented way.  Pokemon Go is a perfect example of this – it took a video game outside.
  • Wireless headphones.  It may just be my perspective, but there’s very few wireless headphones that actually work well, sound good, have decent battery life, and are reasonably priced.  I think the first <$100 (USD) pair of wireless headphones that look and sound good, and have decent battery life will sell well.  People hate dealing with cords, especially headphone cords.
  • Non-Apple laptops.  Manufacturers are slowly figuring this one out, but I’m amazed it has taken them this long.  Try to find me a decent Windows based laptop that has a 1080p screen, a decent keyboard, decent battery life, and is made from something other than plastic.  That criteria alone narrows it down to maybe half a dozen models.  It’s only a matter of time before someone does it right.  The question is, who will have the guts to actually try making something decent?

* By this, I’m referring to Google’s search engine, which doesn’t even require a user to click “Search” – it just starts searching as soon as they start typing in a query.

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