How Can Startups Use Disruptive Innovation?

Disruptive innovation for startups

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Every business that’s remotely interested in growth needs innovation within the business. Unless the business keeps improving the quality of the products and services they offer, the business will go downhill and will eventually become nonexistent in the market. With technology grasping the world we live in with a firm grip and almost every business going digital, the need for businesses to brain map technology-induced innovations is alarmingly increasing.

In order to serve the evolving market, businesses have to innovate while focusing on emerging trends. Moreover, the International Data Corporation suggests that 60% of global GDP will come from digital organizations by 2022.

How can a startup, on the verge of sinking with a higher level of competition to face, win the game? How can a startup, already sinking in the highly demanded market, rebuild from the ashes? Well, Clayton Christensen’s “disruptive innovation” has the answer, to a great extent, for startups to lead the game. By definition, “disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.”

According to Christensen, all disruptive innovation starts in small markets, even markets that barely exist, to bring powerful innovations of trend and technology combined with the power of the network. It is creative and design thinking of incremental and radical improvements focusing on unmet customer needs or frustrations. In a nutshell, simply innovating the business is basically doing the same things a bit better, on the other hand, disruptive innovation is making new things that make the old things obsolete.

In his book “The Innovator’s Dilemma”, Christensen talks about sustaining innovation and disruptive innovation to draw a clear distinction between them. Sustaining innovation is bringing incremental improvement in the existing industry for existing customers. But disruptive innovation is to transform the existing market to create new ones. It doesn’t particularly have to include products and services that are valued by the current customers.

For instance, years before, the world went by ‘one computer, many persons’ concept which eventually got disrupted by ‘one computer, one person’ concept. Consequently, just like how personal computers replaced minicomputers, personal computers eventually got replaced by smartphones. This is how disruptive innovation works.

A few of the common examples of disruptive innovations include video streaming, online references, online education, and countless more from various industries. Disruptive companies such as Apple, Amazon, Netflix, Tesla, and many more are well known for their contribution to the market. That is to say, by all means, traditional industries are getting disrupted, too, which in turn is giving more opportunities for startups to shake what they can.

What should a startup company do before rebuilding?

Disruptive innovation is more often overlooked by startups while recovering or rebuilding their businesses. While disruptive innovation is not formed to bring the best performance to current customers, it is to bring lower performance products or services to the market with the introduction of new efficient features that will continue to improve and eventually invade the established markets. Taking how the pandemic shook markets into consideration, recovering startups can still innovate by adopting and utilizing technological solutions.

Before brain mapping the ideas for innovation, startups must consider the following:

  • Determine company purpose and objectives. Define the purpose of the company and align it with the objectives to serve the people inside (stakeholders and staff) and outside (customers and community) and maximize the value.
  • Develop a broad business strategy. Focus the business’s operation on its growth and scalability to be sustainable in the long run. In addition to that, the prioritized focus should be on improvement.
  • Define unique selling points. Discover the company’s unique selling points in the market that separates them apart from others. In other words, competitive advantages. Deciding the company’s core competitive advantages will give a clear picture of what to focus on.
  • Improve efficiency. Strip away anything and everything that is taking the business’ efficiency away. Everything that is not directly related to producing and delivering value to the customers or innovation should be stripped away. Waste of resources while rebuilding is imperative to avoid.
  • Build a strategic reserve. If the business doesn’t already have one to rebuild, it is going to be difficult in the recovery and innovation process. Having access to a minimum of 12 months of capital will support operational expenses.

Once these elements are taken care of, the entire focus of the business should turn to implementation. This is where innovation really matters. By continually improving the product or service and internal processes, the business will be back to get some skin in the game.

Disruptive Process For A Startup

In any case, understanding the unmet needs of customers is essential. For that, startups have to spend time learning and studying new concepts and techniques along with the market, its trends, and customers. They need to stay informed continuously about startling ideas, anything new and different, even ridiculous ones nobody would bat an eye on. Even if the idea sounds too absurd or silly to be true or give a try, they have to consider them. After all, who would have thought ten years ago that we will be walking with our heartbeats recorded on a wristwatch? More specifically, who would have thought of finding Pokemon in “augmented reality”?

Ideas that stand as a sore thumb have the quality to be built and innovated. Thus, startups have to develop qualities to stand out in a crowd, to break the pattern, instead of merely blending along in the existing market. In addition to that, understand that the customers don’t know what they want or need until a new specific product or service with beneficial features is out in the market. We never knew we needed smartphones to carry with us until Steve Jobs convinced us!

Besides, innovations that create an emotional experience for the customers will stay afloat for a longer period. With the attention span of a goldfish (based on a controversial study), it is difficult to capture and keep the attention of customers without innovation. Hence, every startup while innovating must take notice of how to improve customers’ life by bringing ease.

Where can you deliver additional features relevant to the market?

Notably, innovation with convenience, affordability, and accessibility has made customers stay. An innovation of Smart Cities with the help of sensors sounds promising, right? Similarly, Zillow’s emergence with its 3D Home to let users conduct a virtual walkthrough of a house has made it effectively easier for the users. That sounds more promising than physically going over to a house. Wouldn’t you, as a user, choose the 3D Home option, too?

With the development of virtual assistants and augmented realities, it will not come as a surprise if technologies such as 3D printing, Artificial Intelligence, the Internet of Things, Advanced Virtual Reality, Robotics, blockchain technology, and countless more are disrupted. Industries namely healthcare, construction, real estate, finance, insurance, along with several traditional industries are destined for heavy, technological disruption shortly. They are already halfway there.

A startup business doesn’t necessarily need to change the world as famous disruptive companies did. However, if they are rebuilding, or launching a new product, rather than fitting in the current market, they should aim to stand out.

Although a disruptive process takes longer to develop with higher risks than the conventional approach, the impact on the market with disruptive innovation is at a higher degree, too.

Our society is becoming too risk-averse to allow itself to be vulnerable to bring in innovations that stand out. In the long run, if you are afraid to take risks especially as a startup, how do you expect to have your breakthrough anytime soon?

I devour words with love. I read for love and I write for love. I write for money, too, because I am a copywriter.