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Disruption 101 for product managers and entrepreneurs

26 April, 2016

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Date of Publication: 26 April, 2016
Sounds like a fairy tale for startup founders. A small company with limited resources becomes able to challenge bigger, established players - sometimes to the point of wiping them out completely. It’s called “disruptive innovation”. Besides being also the secret nightmare of savvy product managers, it’s a well-documented process that every business should watch out for. How does disruption work? Can it be engineered? And can a traditional company defend itself from a disruptive newcomer?

It’s not disruption when it starts big.

Disruption starts small by definition. The new service or product aims either at an overlooked niche or at a totally unexplored market. It may be imperfect, but it’s cheap and most of all it’s there, responding to a need that big companies have no interest in fulfilling.

That’s where the “small” part of it comes into play. Established players are not ignoring these targets out of carelessness: they’re just too busy with traditional clients and cannot afford spending time and resources to run after the needs of the few.

It's not about you: it's about the market.

Cars started out as luxury items. Nobody was interested in producing cars for the masses, until Ford launched its Model T in 1908 and disrupted the market of horse-driven vehicles.

Ford did not invent cars, just as Netflix did not invent the home video. And the world had plenty of holiday homes way before Airbnb.

What these companies did has little to do with technological breakthrough. Disruption is all about making an existing solution more accessible and affordable.

Disruption is inevitable and unpredictable. But somehow manageable, too.

There will always be newcomers transforming market niches into early adopters of imperfect new solutions. Those solutions will improve and eventually catch up with industry quality standards. Early adopters will spread the voice among mainstream users. And finally, a decades-old status quo gets overturned when it’s too late to plan an effective counter-strategy.

Disruption is a slow process, not always intentional, not always successful. Overlooking its early signs is just as easy as ignoring an unprofitable market segment.

Should a mindful Product Manager observe a potential disruptive threat, there is no miracle cure. An early recognition would allow the big company to acquire the disruptor - or at least to undertake a collaboration. When it’s too late for partnerships or acquisitions, big companies could even start disrupting on their own, with dedicated spinoff projects.

The so-called disruptive market is unknowable. It doesn't matter whether you're a beginner or the Old Big Brand - you'd better be running after the next forgotten niche.

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