Last updated: Everything they don’t tell you about digital disruption

Everything they don’t tell you about digital disruption


When you’re looking at digital disruption and the products, brands, or market forces that compose this phenomenon, the first thing you need to ask is “who benefits?”

As a young lad, being one of the school’s great disruptive influences should perhaps have been lower on my list of priorities than it was. Nowadays though, it seems you’re no one unless you’ve got your disruptive pants on.

For entrepreneurs, athletes, and politicians it can be a backhanded compliment, shorthand for someone bright enough to spot an opportunity and defy conventional wisdom – but also bloody-minded enough to fight tooth and nail for change as they see would like to see it done.

This is all well and good when said disruptor is on side and healthily managed, but less so when their idiosyncrasies make working with others awkward. Small wonder that they tend to work better as leaders or self-starters rather than team players.

Is ‘disruptive’ always a good label to have?

The dark side of digital disruption

So far so zeitgeisty. But things get more interesting when you look at disruptive innovation. When applied correctly the term describes something that might start out as a single product or service but then goes on to disrupt an entire market.

With the advantage of hindsight, we can spot all sorts of disruptive innovations, some of which we saw coming a mile off, others which may have some way to go: 3D printing (manufacturing), long distance calls (Skype), taxis (Uber), the internet (almost everything).

It’s worth remembering just how quickly the disruptor becomes seen as an incumbent by its customers, if not by its competitors. Further tweaks and finessing to the product are seen as sustaining innovations – even if it is still fighting for space to put up its market stall.

With disruptive innovations, as well as there being groups who benefit from their introduction (consumers), there are also those who benefit from penalizing them. Look for instance at the way e-cigarettes are making their way to the market. Socially, vapers seem to be treated very much as smokers used to be before bans – tolerated if not encouraged. Certainly marketed to with glamorous, glittering campaigns.

But the tobacco industry is suddenly under threat. And while it continues to expand in developing nations, it is beginning to plateau elsewhere. Hence its need to lobby against – or buy into – e-cigarettes. But it’s very difficult to tax something as tobacco when it physically isn’t the same thing. Different interface, different chemicals, different product. Rather like Uber, it’s a hugely disruptive innovation that actually exists slightly apart from the market forces it threatens.

In some ways it reminds me of the bad old days of index-linked derivatives, when as soon as regulators worked out a way to control the market, banks would create a new asset class that circumvented it.

Disruptors – both people and products – are often evangelized before they’ve been stress-tested. So the question for us is how to weed the opportunities (and threats) from those destined to fall by the wayside. It’s a marathon not a sprint after all, but if you’re really disruptive won’t be afraid to just take the bus.

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