Nature of industry disruptions – are there some commonalities?

Over the past decades we have seen many companies establishing disruptive business models. Some are succeeding and some not. Without any statistical analyse  i think there are few things that are the same for all those who succeed.


Those who fail

Having clever idea how to change the world visibility to infrastructure to be utilized, seem not be enough, if the world is not ready. Timing seem to be really important thing, if you plan to change the way business is done. Good example of this are those companies trying to pull through their ideas during internet boom in early 2000. The customers were not ready then. Neither we companies. Good thing is that some of those clever ideas have been reinvented lately as more customers and companies have become capable of utilising them.

Those who succeed

One common factor behind successful concepts seem to be ready made infrastructure utilisation that is already publicly accepted and widely utilise. You just invent new way to utilise it. Communication tools replacing costly telco invented solutions is one good example. They even utilise the networks created by Telcos while cannibalising Telcos business.

Other thing is to replace part of existing value chain, which has not developed to the level expected by customers. Examples of this could be Uber or AirBnb. They make it easy to order and easy reach resources otherwise randomly located. Original players of industry are just grouped together in a way appealing to usage habits of endusers.

Regulatory changes is third opportunity creator for companies seeking position to distrupt industries. When new restrictions are applied or old removed it is usually greater effort for existing players to change than new players to rethink new way of utilising the change. Privacy laws are one example creating new opportunities for those thinking forward.

So what to look for?

  1. Is there commonly accepted infrastructure, which you can think new purpose or way of utilization for?
  2. Are there value chains that are not developing fast enough full filling customer needs?
  3. Are regulatory changes shaking old ways of doing business in way that creates new business opportunities.

Naturally there are many more. Most important thing is to see change as an opportunity and seek weak indicators pointing out positions where demand for changes is developing. There might be also an opportunity for you to seize.



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