Disruption is a word that is no longer associated with purely negative connotations, especially in the way businesses work of late. Disruptive innovation, a term founded by Clayton Christensen, is described as 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. McKinsey has also acknowledged disruptive technologies as “advances that will transform life, business, and the global economy”. To put this in context, some of the more well-known “disruptors” are Amazon (to traditional bookstores), Walmart (to discount chains), and Skype (to what we know about communication). And in a way that all of us can relate to, e-commerce has disrupted the way we do our shopping forever.
Disruption is the theme that frames the keynote presentation by Taavet Hinrikus, founder of Transferwise, and also the first-ever employee at Skype (pretty amazing stuff), titled It Is The Fast That Eats The Slow – Disruption From Banking To Telcos. He shared the startling statistic thatapproximately 40% of the market share will be owned by these new entrants, or disruptive technologies, which highlights the impact that these disruptors have to the organisations that run their businesses. It should serve as an encouragement to entrepreneurs, as they have an idea of how huge an opportunity is potentially out there for them and their startup, if they are smart enough in going about it.
The truth is consumers now have a baseline expectation regardless of whichever industry your startup is based in – having better products is no longer enough. In order to stand out from the competition, and be truly disruptive, your product or service needs to be cheaper, faster (in terms of execution or operation), and more transparent with communication and sharing of information than the rest of the competition.
And to get that done, Taavet shared the essence of what his time at Skype has taught him:
1) Make sure you get an awesome team
Your team can make or break you. Have a great team, and you guys can touch the sky. If you have just one bad member, it has the potential to take down the entire team. As the saying goes, one bad apple spoils the bunch.
2) Location – it no longer matters!
We now live in a time and age where it no longer matters which continent, country or city our startup is based in. We live in the Internet age and geographical boundaries no longer limit our ability to succeed.
3) Keep your users in mind
“Delight the user” was a motto in the initial years of Skype, and it seems to have worked wonders for their growth as a company. Many a times, startups focus so much on building the perfect product or service that they neglect the ever-important criteria of whether there is a demand for it.
4) The “Innovators Dilemma”
It is becoming more and more complex a discussion as to what is powering innovation. Swift and agile startups are bringing about disruption at such a pace that large organisations are not quite sure what they need to do when these disruptive innovations spring up in the market place, and how they are supposed to transform their business to defend against them. This presents an amazing opportunity for startups to make use of that one competitive advantage they have over large organisations, and carve a niche for themselves and penetrate the marketplace.
As an bonus nugget of information, he also shared with us the different stages of disruptive technology adoption that various industries have experienced. The industries that are seasoned with disruption include music, movie, travel, communication and e-commerce. Those that are in progress of introducing such technologies to the way they conduct business include the finance, transportation, education and health industries. They present amazing opportunities for startups and companies who dare to think out of the box and bring disruption to the marketplace which they play in.
All in all, it is a great time for entrepreneurs and startups who dare to take risks and innovate to thrive!
Image credits: Grey Hours, Clara Chen