First in a series
The idea that incumbent businesses and even whole industries can be unexpectedly disrupted by newcomers to the market is a powerful one, and we have Clayton Christensen and his 1997 book, The Innovator’s Dilemma, to thank for this insight. In the over 20 years since the publication of Christensen’s seminal work, however, we have seen violent disruptions that were not predicted by Christensen’s description of disruptive innovation. This article begins to explore how we might update our understanding of disruption in a way that is more useful to businesses desiring to either disrupt or ward off disruption.
Seeking a meaningful definition of “disruptive innovation”
Professor Christensen says on his website:
Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
But it is striking that this definition fails to encompass some of the most disruptive products of our time, such as the iPhone and Uber. In fact, because the enormous effects of these products on the market did not take place by beginning at the bottom of a market and then moving up, Christensen has said that they do not represent disruptive innovations at all, but rather “sustaining innovations” (iPhone; Uber). It is hard not to feel that, in an attempt to protect his theory, Christensen will only accept as disruptive those innovations that disrupt in the way his theory predicts. But holding to a theory based on such a circular defense does not help businesses know how to become, or how to fend off, the next iPhone or the next Uber.
So I propose an alternative definition that does not describe a specified process that results in disruption, as Christensen does, but rather provides a more general, obvious, and practical view of disruptive innovation:
Disruptive innovation: an innovation that threatens industry incumbents with significant loss of market share, thereby requiring them to make substantial adaptations to attempt to compete with the innovation.
Such a definition, I believe, is relevant to business decision making, whether by incumbents seeking to avoid disruption or by newcomers seeking to disrupt.
Causes of disruption
By resetting our thinking using such a pragmatic definition of disruptive innovation, it becomes apparent that there may be numerous paths to disruption in addition to the one described by Christensen. Some examples:
- Digital delivery of something that was previously delivered physically (e.g., Netflix disrupting Blockbuster and the video store business);
- Platforms that connect unique buyers and sellers (e.g., eBay disrupting want ads and used book stores; Airbnb disrupting the bed & breakfast and hotel industries)
- Platforms that democratize sellers (e.g., Uber disrupting the taxi industry; Etsy disrupting the arts and crafts industry).
In articles to come, I plan to cover the above—and more—as avenues of disruption. But in this article, I will cover what I believe lies at the root of many disruptive effects: user empowerment.
When a product empowers users in some radical, breakthrough manner, disruption lurks. Here are three giant disruptors, each of which would not qualify as a disruptive innovation by Christensen’s definition:
In 1998, Google search came on the Internet scene. As the World Wide Web was growing exponentially, the value of search engines was declining because they were providing ever more irrelevant results. When Google entered the market, it quickly displaced its competition in search: Yahoo!, Alta Vista, HotBot, and others. Then, before long, Google was disrupting printed research tools of all kinds: encyclopedias, dictionaries, almanacs, and more, even challenging the idea of what a library is. The power and value of Google search to users has grown with the growth of the Internet itself. It is difficult to overstate how much power Google search has put into the hands of users worldwide. All of a sudden, the so-called information age became real to hundreds of millions of people.
Amazon entered the market in 1994 as an online book seller. In slow motion, Amazon disrupted the retail book business to the point that many booksellers were run out of business entirely (Borders, B. Dalton, and many others), and those that have survived are fighting for their lives. Amazon empowered users by giving them the ability to have nearly any book in print delivered to them quickly at a discounted price. From 1998, Amazon applied its disruptive strategy to nearly all retail goods, and now has the entire brick and mortar retail industry in severe decline. Meanwhile, users can get nearly any item they want, after meaningful comparison shopping, in as little as one click.
Before 2007, Apple had no mobile phone product. It entered a highly competitive market with a “phone” that had no keyboard, but could morph itself to do many different tasks. The earliest version incorporated all of the best features of a mobile phone, a PDA, and a mobile Internet browser. Competitors scoffed, but users lined up to get the most power in the palm of their hands that they had ever experienced. The rest is history.
What did the iPhone disrupt? Certainly the mobile phone and PDA industries. It ran all of the major competitors out of business (Nokia, Blackberry, Palm, Microsoft) and forced all remaining and new competitors to create devices that resembled the iPhone.
But that’s not all. Over the next few years after its introduction, the iPhone and its copycats have wreaked havoc in multiple industries:
Google search, Amazon, and the iPhone each has given users extraordinary new superpowers that never existed before. When this happens, watch out! One or more incumbents are likely to be disrupted. This is disruptive innovation.
A disruptor on the horizon: Coda
We usually view disruptive innovations in the rear view mirror, as I have done with the examples above. To switch things up—and to go out on a limb—I want to talk about Coda, an innovative digital product that is in development and that I believe could become a major disruptor. For full disclosure, I have some insight into Coda because my son, Jeremy, works for the startup that is building it.
Coda (“a doc,” backwards) aims to allow users to “create documents that are as powerful as apps.” I have had the opportunity to try Coda, and I believe that this tag line is not an exaggeration. In Coda, you can create a new doc in an interface that feels familiar, like a Google or Quip doc. But then you can insert a little list or table into your doc that becomes a base of data that can be accessed, presented, expanded, morphed, and manipulated in many ways, under the complete control of the doc creator. I have seen how Coda users (or “makers,” as Coda likes to refer to their enthusiastic users) have solved problems big and small, personal and corporate, using this nascent product. Putting this kind of problem-solving ability in the hands of everyday users without requiring programming skill promises the kind of empowerment that is generating real enthusiasm among early users.
What could Coda disrupt? On one hand, it could disrupt various kinds of specialty SaaS software used for management, such as JIRA, Basecamp, and Trello. On the other hand, it could disrupt more generalist software, such as spreadsheets (Excel and Google Sheets), presentation software (Powerpoint, Keynote, and Prezi), databases (Access, Filemaker, and Airtable), and word processors (Word and Google Docs). In total, it could redefine productivity software.
I had the privilege of being invited to Coda’s “Block Party,” held on September 20, 2018 in San Francisco. There were 100 or so makers there to share experiences and learn about what is new in Coda’s beta product. The feeling in the air was that we were all touching something that is going to be very big.
Coda’s success, like the success of any innovation, will depend on execution as well as the potential of the idea. So there are no guarantees, but I think Coda is one to keep an eye on to see if it will take its place in the annals of disruptive products.
It is important to update our understanding of disruption so that we can have a practical handle on how to disrupt and how to avoid being disrupted. I have argued that disruptive innovations are those that actually force major businesses and industries to adapt in order to survive. This kind of straightforward understanding opens the door to a clearheaded exploration of what causes disruption.
I believe that there are several avenues to disruption. Breakthrough advances in the empowerment of users is one root cause of major disruptions. In coming articles, I plan to explore other paths to disruption. As a person in business, whether you find the notion of disruptive innovation thrilling or terrifying depends on which end of disruption you find yourself. But either way, understanding it is imperative.
Rethinking disruption: User empowerment was originally published in The Design Innovator on Medium, where people are continuing the conversation by highlighting and responding to this story.