Disruptive innovation has been an extremely influential business trend in the 21st century. One world-changing example is the Ford Model T, which created a completely new market of affordable, mass-produced automobiles and revolutionized the transportation sector. For those with an eye on disruptive innovation as their business model, there is enormous value in maximizing the advantages. Here’s how.
It is evident that disruption is a process, and sometimes a slow and painstaking one. However, it can guide strategic choices. Adopting a disruptive business model can guide your choice of technology and tools or your target customers. Disruption doesn’t often happen by accident.
The Theory Behind Disruptive Innovation
When a small company, a challenger in the space, with fewer resources and personnel, is able to successfully shake incumbent businesses from their comfortable positions – disruption is said to have occurred. This often happens thanks to fresh technological solution which, in the digital age, often means a smart mix of business model, user experience design and software architecture.
As established businesses improve their products and services, their focus remains on those that are most in-demand, and the customers who are high-paying. They selectively meet and exceed the needs of a few segments and ignore the needs of others. Disruptive challengers target the overlooked segments specifically, delivering highly customized and functionality-driven products and services at significantly lower costs. As they gain a greater foothold, these new entrants move upmarket, delivering solutions for mainstream customer segments too. Then, as a tipping point is reached, customers adopt the entrants’ offerings over those of the established businesses.
Following the Example of Leading Disruptors
There are things to be learned from leading disruptors of our times. The business models they employ are expressly different, and they are able to break into an established market by simply zeroing in on one issue while applying the right technological solution. This requires creativity, resilience and the courage to do things in a new, untested way.
Consider the case for Coursera – The Mountain View, California-based online education platform that lets anyone, anywhere access around 3000 courses from approximately 150 top universities in the world. This includes some coveted courses from prestigious institutions such as Yale, Stanford, Duke and the University of Pennsylvania. Coursera disrupted the education industry by making courses accessible to those who would never be able to physically attend these universities - and last year, the number of learners exceeded 25 million.
Coursera took on the MOOC (Massive Open Online Course) model, engaging their community and employing tools like peer-grading and discussion forums to manage the amount of learners without losing quality. Coursera’s content doesn’t seem technologically advanced at first glance, but they have implemented many small, useful features over the years. The option to trigger a pause in an instructional video with a quick quiz to keep learners engaged is one example out of many. Coursera’s technology stack includes Node.js (the most popular web framework in the world, according to StackOverflow), React and Amazon Web Services. All these technologies allow for fast growth and seamless scalability, which are crucial to a disruptive company. Node.js can also help to sustain a large userbase. The asynchronous framework offers concurrent computation, which, in simple terms, means efficient handling of operations without significant loss of performance due to, for example, interactions with the database or external content sources, as the app tries to read the data and the response handling needs to wait until reading from the source is completed.
Hulu is another disruptor relevant to our discussion. Hulu offers website and related subscription services including ad-supported on-demand streaming of TV shows, movies, podcasts and other media. Their services are available on network-enabled smart TVs and gaming consoles. They have disrupted the traditional media market with their anytime, anywhere suite. Hulu uses Ruby on Rails for their technology stack, likely taking advantage of its rapid development capabilities and the stability of a battle-tested framework. One of Rails’ advantages is the ease with which new features can be introduced to a live project. This is extremely helpful for managing complex apps with large user bases.
What Disruptors Have in Common
There are a handful of things that all disruptors have in common, whatever niche or market they may operate in. The first thing is the business model. All disruptors rely on a business model that is highly agile and competitive. The second, and perhaps the more important aspect, is the reliance on disruptive technologies. These technologies give the organizations an edge over their competitors – from making the build easy, transparent and collaborative, to enhancing the performance of the end product, and even exploiting untapped new features.
Cloud platforms like AWS make building and deploying complex applications easy. The biggest advantage of cloud solutions is that they are highly available (downtimes are extremely low) and easily scalable (e.g. add a new server when needed). The hybrid pay-as-you-go models and low costs on Cloud are making applications economically viable for even the smallest of enterprises.
Modern web frameworks (like Node.js, Ruby on Rails or Ember.js) support the creation of superior web and mobile apps that have the potential of disrupting any market. As does Big Data, rendering infinite possibilities of leveraging structured, unstructured, multidimensional and multisource data.
Finally, it is the disruptors’ ability to preserve the advantages of their early success by vigorously pursuing every last detail that makes them stand the test of time. Disruptors use tenets such as collaboration, automation, streamlined processes, scalability of ideas and mastery over their technology stack to continue innovating, disrupting and moving forward.
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