Introduction to Disruptive Opportunities

Netflix: Movie & TV Streaming

When I first heard about Netflix, I thought:

Why would anyone prefer Netflix over blockbuster stores or even cable connections?

Little did I know that a few years later it would become the holy grail for our generation. For millions, Netflix is the de-facto place to go for movie and TV streaming. According to sites like fortune.com, its services alone constitute about 15% of all the world’s internet bandwidth! Not bad at all right? Netflix just waltzed in and ‘disrupted’ the entire streaming industry.

On this note, let’s talk a little about disruptive opportunities!

What is a Disruptive Opportunity?

Disruptive opportunity or, as I would like to call it, radical change, essentially refers to a process wherein an underrated product or service starts to replace or ‘disrupt’ a conventional product or service.

In a nutshell, this is something that changes the consumers’ mindset. This transforms highly sophisticated products or services—previously accessible to a high-end or more-skilled segment of consumers—to those that are more affordable and accessible to a broader population. Hence disrupting the long- standing industries.

While it may be considered as an attack on the established industries, the real story behind a disruptive opportunity is not one of destruction, but of the contrary:

In every industry changed by disruption, the net effect has been total market growth.

Moreover, disruption can also lead us into an untapped, incumbent market discovery.

Fun Fact

Did you know that after Netflix disrupted the media industry, Blockbuster went from having more than 9,000 Blockbuster brick-and-mortar stores to 1, which is now an Airbnb?

The Origins of a Disruptive Opportunity

Disruptive opportunities are made possible because they get started in two types of markets that incumbents overlook:

Low-end footholds

Low-end footholds exist because incumbents typically try to provide their most profitable and demanding customers with ever-improving products and services, and they pay less attention to less-demanding customers. For example, AI making production of goods cheaper, thus accessible to all.

New market footholds

Disruptors create a market where none existed. For example, Xerox targeting corporations and then transitioning to target school librarians, bowling leagues, and others.

Requirement for Innovation to be Disruptive Opportunity

What all disruptive opportunities have in common are the 3A’s-

  1. Accessibility: ability to be readily available to all
  2. Agility: ability to understand the needs of the consumers
  3. Alterability: ability to alter or replace previous industry

Beware

Financial and strategic achievements do not qualify as disruptive. Disruptive opportunities are revolutionary, not evolutionary. Contrary to popular belief, disruption is not about improving, it’s about creating.

While Uber maybe a multi-billion-dollar company, it is not a disruptive innovation because it enhanced a preexisting technology. On the other hand, Internet and Amazon are, perhaps, the biggest flag bearers of disruptive innovations. They completely displaced their respective preexisting industries and provided access to all sections of the society.

Key Takeaway

Disruptive opportunities start from the root of the consumer’s wants and then branch into the consumer’s needs. They threaten the existence of preexisting industries, but as Silicon Valley people say:

Disrupt or be disrupted.

As you move forward with the articles from our Disruptive Opportunities Division, you will get a detailed look at various examples of present and potential disruptive innovations!

Shatakshi Sahay, Kings College London

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