You may have heard the words disruption and innovation used loosely to define an emerging company. What you may not know about is the fact that there is an entire theory that follows the disruptive innovation framework; it is this theory that many companies use to classify their business models; and also easily identify threats in the market.
If you are thinking about a start-up or already have one, it is important to classify your business accordingly and identify if your product offerings are disruptive or sustaining innovations. The reasons are as follows:
- Realize that with sustaining innovation their is already stiff competition with the competitors as your business grows. Sustaining innovations are essentially quality and price reductions for products in the market. Uber as a taxi service is one such example. If you are looking at services something like the ASMR online craze can be considered a disruptive innovation attracting millions of consumers with the promise of brain tingles.
- With disruptive innovation, you are appealing initially to the low end market; this means that you have the ability to overtake giants by offering something unique. You are basically looking at the small group often ignored by industry giants and giving them a unique product offering. This product offering can then possibly appeal to the larger market – when they realize that it is a trusted and proven product by the smaller market; hence the advent of disruptive innovation.
If you answer yes to the below two questions, then your start-up should probably be classified under the disruptive innovation framework:
- Are you offering a new service to a specific market that competitors are not?
- is the your product or service attracting an entirely new market?
The benefits of having a start-up following the disruptive innovation framework:
- You will often go unnoticed by competitors giving your business a chance to grow
- There is a chance to take your business to great heights by taking over market share
- You are able to keep costs and profits low enough to make the business feasible
Disadvantages of having a start-up following the disruptive innovation framework:
- there is a risk in the sense of introducing a product that may or may not be accepted by competitors
- The initial buy – in may be slow with only a few initial adopters
- The initial low end market may not generate enough leads to maintain the profitability of the business
- There is still a chance that competitors may have also have a department that follows the disruptive innovation framework; they can easily retaliate against threats in the market
To learn how to fully achieve success in all facets of your life, read: Applying A Growth Mindset To Achieve Success