7 ms·

Not disruptive, and proud of it

101 points by pchristensen 17y ago

garply 17y ago
I was reading some advice from one of the Forbes 400 and he said something like: 'Start off trying for singles. Then go for doubles and triples.'
davidw 17y ago
Part of what Christensen (any relation, pchristensen?) talks about in The Innovator's Dilemma, which covers disruptive technologies ( http://www.squeezedbooks.com/book/show/13/the-innovators-dilemma-the-revolutionary-book-that-will-change-the-way-you-do-business-collins-business-essentials http://www.squeezedbooks.com/book/show/13/the-innovators-dil... ) is that more often than not, incremental improvements are dominated by existing companies, because they're operating in a space they're comfortable, and good, in. This makes it difficult for new companies to compete. Now, there's a lot to be discussed there, and a huge need for actual statistics, but I think the idea isn't without merit.
- 10ren 17y ago
  It makes it difficult for new companies to dominate. The case studies in the innovators dilemma (eg for the disk drive market) show many niche players trailing the leaders. I think the blogger is making the 37signals point that you can have a satisfying, profitable and useful company without dominating. Of course it's thrilling to dominate; just very hard.
  - davidw 17y ago
    I think that, ultimately, it depends a lot on the economics of the business you want to go into. Competing with eBay is probably not an easy thing to do, for instance. Also, you want to be able to do a good job in your niche, not just be a hanger-on fighting for the scraps, knowing that, by and large, the big guys in the market are better.
    - lsc 17y ago
      speaking as someone who gets, ah, the scraps, I can tell you that you must be clearly, objectively, measurably better at /something/ or else you will not get any customers. No scraps, even. When I started out way back when, johncompanies was the leader. I priced competitively, and got three paying customers. On the other hand, you need to understand that there is no need to be better at /everything/ -as the little guy, that's going to be quite difficult. You can thrive on a sub-niche that your competitors may not serve as well as they could. I haven't bought any competitors, but I've seen several go under (one of whom ended up renting space from me to host his personal stuff.) and it seems that the common thread with the ones that went over was that they were 'pretty good' in all areas... they didn't have one or two areas where they were clearly better than the competition.
- acgourley 17y ago
  Re: statistics, it would be interesting if someone groomed a dataset like crunchbase to start to answer certain questions about tech startups with actual numbers. What is the success rate of companies started in year X that were tagged as "disruptive"? You could answer other questions like the likely hood of various exit types given certain starting conditions. Huge challenge making sure the data is relatively comprehensive, even just for tech, but would be cool.
- pchristensen 17y ago
  Actually, Clayton Christensen is my great-uncle (my father's cousin). I've only met him once though.
  - timf 17y ago
    Cool. So as an aside, I think your great-uncle would be your grandfather's brother but this would be your "first cousin once-removed" http://en.wikipedia.org/wiki/File:CousinTree.svg http://en.wikipedia.org/wiki/File:CousinTree.svg (and thanks for the opportunity to brush up on that :-), it's confusing)
    - pchristensen 17y ago
      Touche. I thought I had that down but I got sloppy.
- ssp 17y ago
  Christensen also points out that disruptive technologies often start out the opposite of expensive. They target some low-margin market that is being over-served by existing technology. Then they grow to eat the high-margin competitors from below. There are tons and tons of examples: PCs, low-cost airlines, Linux servers, web applications. Disruptive technologies are often seen as low-end, not-really-good-enough solutions until they suddenly are everywhere and you realize that you have become Digital, US Airways, Sun Microsystems, or Microsoft. The disruptive technology can be cheap or expensive. One expensive thing that is ripe for disruption is mobile bandwidth. Someone with a lot of capital should build a large network of cell towers and then sell the bandwidth to random startups. That would put a stop to 20 cent text messages. (Maybe this will do it: http://www.businessweek.com/idg/2010-03-30/4g-satellite-company-takes-aim-at-cell-carriers.html http://www.businessweek.com/idg/2010-03-30/4g-satellite-comp...) The author of this piece seems to use "disruptive" in the sense of "revolutionary change", but that's not really how Christensen uses it.
mechanician 17y ago
I guess I'm curious what the line is between disruptive and incremental, assuming of course they are only separated by a line.
- davidw 17y ago
  The wikipedia page isn't bad, although it doesn't talk about what 'incremental' is. It lists enough 'disruptive' things to give you a general idea, though: http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology
tkiley 17y ago
"Disruptive" is popular because it implies the product or service can generate value on a large scale without playing catchup to existing market leaders. If you're going to make an incrementally improvement, you have to first catch up to the pack, and in an established industry, this can be (or at least seem) cost-prohibitive and risky. "Disruptive" startups, in theory, do an end-run around the barriers to entry. The article suggests that we replace disruptiveness with usefulness as a criteria for evaluating startups. I think we need both; disruptiveness ensures the startup has a fighting chance against the incumbents, and usefulness ensures the startup has a market. Incidentally, several of the author's supporting arguments can be applied to the term "useful" as well. "Most technology we now consider 'useful' wasn't conceived that way", "the creators of useful technology often don't make the money".
- astine 17y ago
  That assumes that the product or service that you are providing needs to duplicate the efforts of established players in order to be useful. What if, instead, your product or service worked as an add-on to existing products? Like, for example, all those Twitter apps. They don't replace or compete with Twitter (currently) but they do provide additional functionality. What if your product is genuinely new, but doesn't fundamentally change the way people live or do business?
  - tkiley 17y ago
    True, complements to existing products can avoid typical barriers to entry for non-disruptive products, but they come with their own set of issues. Generally speaking, they are at high risk of being absorbed into the products they complement. Xobni -> outlook, facebook apps -> facebook, etc.
terra_t 17y ago
If you're a new entrant in a field, you don't usually have a choice. I think of some non-disruptive spaces, such as job shops that make web sites for other businesses, that are boring businesses... boring businesses because they never get big, and because a number of factors work towards their inevitable senescence. There's a low barrier to entry, margins are low, and there's no possibility of making a killing. Now, it would be wonderful to have an incumbent business that dominates a space and commands ludicrously high margins: like, say, Salesforce.com. The trouble is that you've got to ~have~ that business. Unless you've got some way to claw your way up, that's about as practical as chosing to have rich parents. Salesforce.com got that business by being disruptive, by being disruptive to traditional CRM software. At $250 /month*set, Salesforce.com is 'affordable' as a CRM product, since that's a fraction of what you pay the salesperson. As a cloud computing platform, however, Salesforce.com is absurdly expensive and highly limited. If Facebook couldn't provision similar (but less reliable) services for 1/1000 the price, there wouldn't be any Facebook. Pretty obviously there's a market for a platform that's maybe a factor of 10 or so cheaper than Salesforce.com that's still pretty reliable. Somebody who wants to get into the cloud space isn't going to get the high margins Salesforce.com gets... They've got no choice but to be disruptive.
- patio11 17y ago
  Somebody who wants to get into the cloud space isn't going to get the high margins Salesforce.com gets Salesforce has atrocious margins. They're consistently below 10%.
samratjp 17y ago
Perhaps, the truly disruptive companies don't even start out necessarily knowing they are going to be disruptive but instead just grow into it. By the author's observation of the word change from "paradigm shift" to "disruptive," this makes sense, for the great scientists (technologies and other ideas included) didn't necessarily know they were "disrupting" when they discovered (or invent) something.
eli_s 17y ago
Great article. keeping this advice in mind can help alleviate entrepreneur paralysis; instead of wasting time trying to discover the next big thing, just pick an industry which you have some interest in and improve existing tools in some way (through automation, usability improvements, pricing etc.)
pg 17y ago
"Simple, modest goals are most likely to succeed, and most likely to make us happy." That's certainly true for 99% of people, but someone trying to start a startup has already declared by doing so that they are not part of that 99%. I think for some people it's ok to have ambitious goals.
- paraschopra 17y ago
  Yes, completely agree. However, even within the startup world, there is hierarchy of ambition. I guess Jason's post is for those people who start believing startup = disruption, which isn't 100% accurate.
- brlewis 17y ago
  I'm not arguing with you, but for the benefit of those who read your comment and don't read the article, the article's examples of "simple, modest goals" are the problems solved by companies that sold for millions, but not hundreds of millions. I also think for some people it's ok to have ambitious goals. However, if you want to make something "disruptive" that people don't yet know they need, you absolutely must have sales skill, not just technical skill.
- smartbear 17y ago
  Come on Paul -- trying for a more likely outcome of being a single-digit millionaire instead of an unlikely outcome of being a triple-digit millionaire doesn't make you "not ambitious." I'm not saying it's bad to swing for the fences! Just that many people do out of perceived necessity.
  - pg 17y ago
    I find that the founders who have ambitious goals rarely express them by numbers of digits, which are extremely hard to predict, but more often by how much they want to change the world. For example, the founders of Reddit, which was a disruptive innovation of the classic type, had as their slogan "freedom from the press."
    - 17y ago
joubert 17y ago
I think disruptive starts when you have a big idea of how to change an industry, a political system, a society. Aiming to be disruptive (in this sense) is a valuable goal, since a big idea (put a computer on every desk; organize the world's information) provides the direction that helps you lead and not simply react to market conditions. So I don't think it useful to chase technology which you think might be disruptive, but rather see how you can change peoples' lives, and then figure out how to do it,
deyan 17y ago
I disagree with the article. Except in some rare occasions, startups have 80%+ chance of failure. If that's the kind of risk you are assuming, then making big swings is the only reasonable bet. That's why existing companies innovate incrementally for the most part too - they are better suited for tackling lower risk problems and will crush undercapitalized startups. Which is why "not disruptive, and proud of it" sounds like bad advice for startups to me. Clayton Christensen's books (Innovator's Dilemma, Innovator's Solution) talk a lot about these issues. I will be adding them to my Startup Lore (http://www.deyanvitanov.com http://www.deyanvitanov.com) as well in the next few weeks.
- dennisgorelik 17y ago
  Startup's chance of failure depend on how disruptive that startup wants to be. The more disruptive startup's goals are -- the higher change of failure.
dennisgorelik 17y ago
Disruptive and incremental can go together: incremental improvements may cause disruptive change in the market.
- hawk 17y ago
  In particular, markets with several large, slow-moving, and undifferentiated competitors (e.g. telecom).
chrischen 17y ago
Twitter purpose was hidden but not absent. MSN messenger has always had a feature letting you change your display name. Naturally people started using this as a status message. This has been the case since the early days of msn messenger well before Twitter. Just because someone doesn't understand a disruptive technology doesn't mean it's need or utility can't be simply explained. It just means he or she has a poor grasp on the idea's utility.
maxklein 17y ago
In my opinion, people don't get to really disrupt. Disruption happens. How many video sharing websites existed before youtube - quite a lot. Before facebook, quite a lot of social networking sites. What happens is that someone does something that has already been tried in a somewhat different manner, and this particular combination hits on that particular thing that makes it grow rapidly, and with the rapid growth comes the disruption. It's like ChatRoulette. You couldn't have done this successfully before now, cos flash just was not ready for this. It's very difficult to sit down and plan disruption, because even things that are obvious now are not obvious at all before they exist.
bitwize 17y ago
Nothing much new here: selling sugar water (or point-of-sale or restaurant/garage/insurance agency/medical clinic/etc. management apps or whatever) > changing the world, at least from a stable, reliable income perspective. But what of your soul, man?
Mz 17y ago
Funny, I have spent years trying incredibly hard to be less "disruptive". I typically do things way outside the norm and it is socially disruptive which then creates an atmosphere where it is impossible to keep talking about what I do. Yes, I have done some radical things in terms of coming up with solutions where others say something can't be done at all but I had no goal of upsetting anyone by sharing that information, much less upsetting the status quo. I have found that people tend to split up into roughly two groups: Those folks that act like I'm the second coming of Jesus Christ and those folks that act like I am a liar, charlatan, and snake oil salesman. I recently concluded that the older accusations against me that I was "egomaniacal" imply that people think it can be done, just not by me whereas the accusation of "liar, charlatan, and snake oil salesman" means they think it simply cannot be done at all, by anyone. Period. I still need to figure out how to turn it into a business model and make money off of it so folks can coo over me being "disruptive" instead of pointing fingers over it. At least that's the theory.

101 points by pchristensen 17y ago

I was reading some advice from one of the Forbes 400 and he said something like: 'Start off trying for singles. Then go for doubles and triples.'

davidw 17y ago

Part of what Christensen (any relation, pchristensen?) talks about in The Innovator's Dilemma, which covers disruptive technologies ( http://www.squeezedbooks.com/book/show/13/the-innovators-dilemma-the-revolutionary-book-that-will-change-the-way-you-do-business-collins-business-essentials http://www.squeezedbooks.com/book/show/13/the-innovators-dil... ) is that more often than not, incremental improvements are dominated by existing companies, because they're operating in a space they're comfortable, and good, in. This makes it difficult for new companies to compete. Now, there's a lot to be discussed there, and a huge need for actual statistics, but I think the idea isn't without merit.

10ren 17y ago
It makes it difficult for new companies to dominate. The case studies in the innovators dilemma (eg for the disk drive market) show many niche players trailing the leaders. I think the blogger is making the 37signals point that you can have a satisfying, profitable and useful company without dominating. Of course it's thrilling to dominate; just very hard.
- davidw 17y ago
  I think that, ultimately, it depends a lot on the economics of the business you want to go into. Competing with eBay is probably not an easy thing to do, for instance. Also, you want to be able to do a good job in your niche, not just be a hanger-on fighting for the scraps, knowing that, by and large, the big guys in the market are better.
  - lsc 17y ago
    speaking as someone who gets, ah, the scraps, I can tell you that you must be clearly, objectively, measurably better at /something/ or else you will not get any customers. No scraps, even. When I started out way back when, johncompanies was the leader. I priced competitively, and got three paying customers. On the other hand, you need to understand that there is no need to be better at /everything/ -as the little guy, that's going to be quite difficult. You can thrive on a sub-niche that your competitors may not serve as well as they could. I haven't bought any competitors, but I've seen several go under (one of whom ended up renting space from me to host his personal stuff.) and it seems that the common thread with the ones that went over was that they were 'pretty good' in all areas... they didn't have one or two areas where they were clearly better than the competition.
acgourley 17y ago
Re: statistics, it would be interesting if someone groomed a dataset like crunchbase to start to answer certain questions about tech startups with actual numbers. What is the success rate of companies started in year X that were tagged as "disruptive"? You could answer other questions like the likely hood of various exit types given certain starting conditions. Huge challenge making sure the data is relatively comprehensive, even just for tech, but would be cool.
pchristensen 17y ago
Actually, Clayton Christensen is my great-uncle (my father's cousin). I've only met him once though.
- timf 17y ago
  Cool. So as an aside, I think your great-uncle would be your grandfather's brother but this would be your "first cousin once-removed" http://en.wikipedia.org/wiki/File:CousinTree.svg http://en.wikipedia.org/wiki/File:CousinTree.svg (and thanks for the opportunity to brush up on that :-), it's confusing)
  - pchristensen 17y ago
    Touche. I thought I had that down but I got sloppy.
ssp 17y ago
Christensen also points out that disruptive technologies often start out the opposite of expensive. They target some low-margin market that is being over-served by existing technology. Then they grow to eat the high-margin competitors from below. There are tons and tons of examples: PCs, low-cost airlines, Linux servers, web applications. Disruptive technologies are often seen as low-end, not-really-good-enough solutions until they suddenly are everywhere and you realize that you have become Digital, US Airways, Sun Microsystems, or Microsoft. The disruptive technology can be cheap or expensive. One expensive thing that is ripe for disruption is mobile bandwidth. Someone with a lot of capital should build a large network of cell towers and then sell the bandwidth to random startups. That would put a stop to 20 cent text messages. (Maybe this will do it: http://www.businessweek.com/idg/2010-03-30/4g-satellite-company-takes-aim-at-cell-carriers.html http://www.businessweek.com/idg/2010-03-30/4g-satellite-comp...) The author of this piece seems to use "disruptive" in the sense of "revolutionary change", but that's not really how Christensen uses it.

mechanician 17y ago

I guess I'm curious what the line is between disruptive and incremental, assuming of course they are only separated by a line.

davidw 17y ago
The wikipedia page isn't bad, although it doesn't talk about what 'incremental' is. It lists enough 'disruptive' things to give you a general idea, though: http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology

tkiley 17y ago

"Disruptive" is popular because it implies the product or service can generate value on a large scale without playing catchup to existing market leaders. If you're going to make an incrementally improvement, you have to first catch up to the pack, and in an established industry, this can be (or at least seem) cost-prohibitive and risky. "Disruptive" startups, in theory, do an end-run around the barriers to entry. The article suggests that we replace disruptiveness with usefulness as a criteria for evaluating startups. I think we need both; disruptiveness ensures the startup has a fighting chance against the incumbents, and usefulness ensures the startup has a market. Incidentally, several of the author's supporting arguments can be applied to the term "useful" as well. "Most technology we now consider 'useful' wasn't conceived that way", "the creators of useful technology often don't make the money".

astine 17y ago
That assumes that the product or service that you are providing needs to duplicate the efforts of established players in order to be useful. What if, instead, your product or service worked as an add-on to existing products? Like, for example, all those Twitter apps. They don't replace or compete with Twitter (currently) but they do provide additional functionality. What if your product is genuinely new, but doesn't fundamentally change the way people live or do business?
- tkiley 17y ago
  True, complements to existing products can avoid typical barriers to entry for non-disruptive products, but they come with their own set of issues. Generally speaking, they are at high risk of being absorbed into the products they complement. Xobni -> outlook, facebook apps -> facebook, etc.

terra_t 17y ago

If you're a new entrant in a field, you don't usually have a choice. I think of some non-disruptive spaces, such as job shops that make web sites for other businesses, that are boring businesses... boring businesses because they never get big, and because a number of factors work towards their inevitable senescence. There's a low barrier to entry, margins are low, and there's no possibility of making a killing. Now, it would be wonderful to have an incumbent business that dominates a space and commands ludicrously high margins: like, say, Salesforce.com. The trouble is that you've got to ~have~ that business. Unless you've got some way to claw your way up, that's about as practical as chosing to have rich parents. Salesforce.com got that business by being disruptive, by being disruptive to traditional CRM software. At $250 /month*set, Salesforce.com is 'affordable' as a CRM product, since that's a fraction of what you pay the salesperson. As a cloud computing platform, however, Salesforce.com is absurdly expensive and highly limited. If Facebook couldn't provision similar (but less reliable) services for 1/1000 the price, there wouldn't be any Facebook. Pretty obviously there's a market for a platform that's maybe a factor of 10 or so cheaper than Salesforce.com that's still pretty reliable. Somebody who wants to get into the cloud space isn't going to get the high margins Salesforce.com gets... They've got no choice but to be disruptive.

patio11 17y ago
Somebody who wants to get into the cloud space isn't going to get the high margins Salesforce.com gets Salesforce has atrocious margins. They're consistently below 10%.

samratjp 17y ago

Perhaps, the truly disruptive companies don't even start out necessarily knowing they are going to be disruptive but instead just grow into it. By the author's observation of the word change from "paradigm shift" to "disruptive," this makes sense, for the great scientists (technologies and other ideas included) didn't necessarily know they were "disrupting" when they discovered (or invent) something.

eli_s 17y ago

Great article. keeping this advice in mind can help alleviate entrepreneur paralysis; instead of wasting time trying to discover the next big thing, just pick an industry which you have some interest in and improve existing tools in some way (through automation, usability improvements, pricing etc.)

pg 17y ago

"Simple, modest goals are most likely to succeed, and most likely to make us happy." That's certainly true for 99% of people, but someone trying to start a startup has already declared by doing so that they are not part of that 99%. I think for some people it's ok to have ambitious goals.

paraschopra 17y ago
Yes, completely agree. However, even within the startup world, there is hierarchy of ambition. I guess Jason's post is for those people who start believing startup = disruption, which isn't 100% accurate.
brlewis 17y ago
I'm not arguing with you, but for the benefit of those who read your comment and don't read the article, the article's examples of "simple, modest goals" are the problems solved by companies that sold for millions, but not hundreds of millions. I also think for some people it's ok to have ambitious goals. However, if you want to make something "disruptive" that people don't yet know they need, you absolutely must have sales skill, not just technical skill.
smartbear 17y ago
Come on Paul -- trying for a more likely outcome of being a single-digit millionaire instead of an unlikely outcome of being a triple-digit millionaire doesn't make you "not ambitious." I'm not saying it's bad to swing for the fences! Just that many people do out of perceived necessity.
- pg 17y ago
  I find that the founders who have ambitious goals rarely express them by numbers of digits, which are extremely hard to predict, but more often by how much they want to change the world. For example, the founders of Reddit, which was a disruptive innovation of the classic type, had as their slogan "freedom from the press."
  - 17y ago

joubert 17y ago

I think disruptive starts when you have a big idea of how to change an industry, a political system, a society. Aiming to be disruptive (in this sense) is a valuable goal, since a big idea (put a computer on every desk; organize the world's information) provides the direction that helps you lead and not simply react to market conditions. So I don't think it useful to chase technology which you think might be disruptive, but rather see how you can change peoples' lives, and then figure out how to do it,

deyan 17y ago

I disagree with the article. Except in some rare occasions, startups have 80%+ chance of failure. If that's the kind of risk you are assuming, then making big swings is the only reasonable bet. That's why existing companies innovate incrementally for the most part too - they are better suited for tackling lower risk problems and will crush undercapitalized startups. Which is why "not disruptive, and proud of it" sounds like bad advice for startups to me. Clayton Christensen's books (Innovator's Dilemma, Innovator's Solution) talk a lot about these issues. I will be adding them to my Startup Lore (http://www.deyanvitanov.com http://www.deyanvitanov.com) as well in the next few weeks.

dennisgorelik 17y ago
Startup's chance of failure depend on how disruptive that startup wants to be. The more disruptive startup's goals are -- the higher change of failure.

dennisgorelik 17y ago

Disruptive and incremental can go together: incremental improvements may cause disruptive change in the market.

hawk 17y ago
In particular, markets with several large, slow-moving, and undifferentiated competitors (e.g. telecom).

chrischen 17y ago

Twitter purpose was hidden but not absent. MSN messenger has always had a feature letting you change your display name. Naturally people started using this as a status message. This has been the case since the early days of msn messenger well before Twitter. Just because someone doesn't understand a disruptive technology doesn't mean it's need or utility can't be simply explained. It just means he or she has a poor grasp on the idea's utility.

maxklein 17y ago

In my opinion, people don't get to really disrupt. Disruption happens. How many video sharing websites existed before youtube - quite a lot. Before facebook, quite a lot of social networking sites. What happens is that someone does something that has already been tried in a somewhat different manner, and this particular combination hits on that particular thing that makes it grow rapidly, and with the rapid growth comes the disruption. It's like ChatRoulette. You couldn't have done this successfully before now, cos flash just was not ready for this. It's very difficult to sit down and plan disruption, because even things that are obvious now are not obvious at all before they exist.

bitwize 17y ago

Nothing much new here: selling sugar water (or point-of-sale or restaurant/garage/insurance agency/medical clinic/etc. management apps or whatever) > changing the world, at least from a stable, reliable income perspective. But what of your soul, man?

Mz 17y ago

Funny, I have spent years trying incredibly hard to be less "disruptive". I typically do things way outside the norm and it is socially disruptive which then creates an atmosphere where it is impossible to keep talking about what I do. Yes, I have done some radical things in terms of coming up with solutions where others say something can't be done at all but I had no goal of upsetting anyone by sharing that information, much less upsetting the status quo. I have found that people tend to split up into roughly two groups: Those folks that act like I'm the second coming of Jesus Christ and those folks that act like I am a liar, charlatan, and snake oil salesman. I recently concluded that the older accusations against me that I was "egomaniacal" imply that people think it can be done, just not by me whereas the accusation of "liar, charlatan, and snake oil salesman" means they think it simply cannot be done at all, by anyone. Period. I still need to figure out how to turn it into a business model and make money off of it so folks can coo over me being "disruptive" instead of pointing fingers over it. At least that's the theory.