WorachatKonta

When the word “disruption” is mentioned in business conversations, news or articles. I immediately think of companies such as Uber, Tesla, or Netflix. Yet, looking deeper into the details of innovation, I’ve come to question: Are those companies truly the definition of “disruptive innovation” as many of us assume?

Disruption: What Really Comes to Mind?

When I hear the word “disruption,” my mind often jumps to companies like Uber. But what if I told you that Uber might not be the quintessential example of “disruptive innovation” that we believe it to be?

My Misunderstanding About Uber

I used to believe, like many, that Uber was an example of disruptive innovation. However, I’ve come to realize that Uber is more of a “sustaining innovation”. When it first operated, Uber did not occur in the low-end or emerging markets. Instead, what Uber did was the opposite of disruptive innovation; it built its customer base in the mainstream market before attracting groups that have historically been overlooked. For someone like me, understanding the difference between “sustaining innovation” and “disruptive innovation” is invaluable. It offers insights into market dynamics and helps me anticipate where industries might be headed.

The Essence of Disruptive Innovation

Clayton Christensen, who developed the theory of disruptive innovation, states that true disruptive innovation often establishes a foothold in low-end markets or entirely new market niches. Over time, these innovations ascend, threatening and ultimately displacing industry incumbents. The rise of Netflix against Blockbuster exemplifies this point perfectly. When Netflix debuted in 1997, it offered DVD rentals through the mail, in contrast to Blockbuster’s in-store rental model. Blockbuster disregarded Netflix as a niche player, ignoring its potential. This underestimate proved costly, as Netflix’s model, which later shifted to streaming, transformed the entertainment rental industry.

Conclusion

The term “disruption” has become a buzzword in today’s business lexicon, but its true essence often remains misunderstood. Despite the fact that businesses like Uber have undoubtedly revolutionised industries, they may not necessarily fit Clayton Christensen’s definition of “disruptive innovation”. Real disruptive innovations, like Netflix, begin in overlooked segments and gradually challenge dominant industry players. Recognizing these distinctions not only clarifies the true nature of market disruptors but also equips us with the foresight to anticipate future industry shifts. As we navigate the dynamic landscape of business and technology, it’s vital to discern genuine disruption from mere improvement.

Find out more about the theory in the link below. Enjoy!

what is disruptive innovation? in HBR

Related resources

1. Disruption in your hand (update 2023, October 16th)