THE biggest startup lesson I’ve learned is that you can’t succeed without embracing disruptive technology. It might seem like a buzzword, but it’s true: Disruptive technology is what makes or breaks a business. Specifically, I mean technologies that make your product obsolete overnight—and there are plenty of examples to prove this point.
Kodak was a dominant player in the traditional film camera industry, and it had built its business model around the sale of film, cameras, and the processing of film. However, the rise of digital cameras and digital photography presented several challenges to Kodak’s business model. As a result of these challenges, Kodak’s business model began to crumble, and the company filed for bankruptcy in 2012.
Kodak’s cautionary tale
The rise of digital cameras and digital photography had disrupted Kodak’s traditional business model, and the company was unable to adapt quickly enough to survive in the new digital landscape. The story of Kodak serves as a cautionary tale of how failing to embrace disruptive technology can lead to the downfall of even the most established and dominant players in an industry.
Disruptive technology refers to an innovation that fundamentally changes the way a particular industry or market operates. It can create new markets, disrupt existing ones, and displace established market leaders. Disruptive technologies often start as simple, low-cost alternatives to existing technologies, but as they improve and become more widely adopted, they can have a significant impact on the industry. Examples of disruptive technologies include the personal computer, streaming services, and ride-sharing apps.
Catching the Wave
Harvard Business School Professor Clayton Christensen is credited with coining the term “disruptive technology” and introducing it in his 1995 article ‘Disruptive Technologies: Catching the Wave’, which he co-wrote with Joseph Bower. ‘Disruptive Technologies: Catching the Wave’ is a seminal article published by Clayton Christensen and Joseph Bower in the Harvard Business Review in 1995. The article introduced the concept of “disruptive technology,” which refers to a new technology that disrupts an existing market or creates a new one.
Christensen and Bower identified two types of technologies: sustaining and disruptive. Sustaining technologies are incremental improvements to existing technologies, while disruptive technologies are fundamentally different and can create new markets or disrupt existing ones.
The authors argued that established companies often struggle to adopt disruptive technologies because they are focused on improving their existing products or services, and are not willing to take risks on unproven technologies. In contrast, startups and new entrants are more likely to adopt disruptive technologies because they have less to lose and are more willing to take risks.
An innovation classic
The article provided several examples of disruptive technologies, including the personal computer, mini steel mills, and discount retailers. It also discussed strategies for established companies to respond to disruptive technologies, including creating a separate division or entity to focus on the new technology, acquiring a startup that has developed the technology, or partnering with a startup to bring the technology to market.
‘Disruptive Technologies: Catching the Wave’ has become a classic in the field of innovation and entrepreneurship and has influenced many business leaders and academics.