Disruptive Innovation – Business Model Innovation

  • “Disruption” is the most mis-used in today’s business circles
    • Disruption is not a more sophisticated product, technology or innovation
    • Instead disruption is a business model that creates asymmetric motivation so that incumbents do not perceive the innovation as a threat, since is appears as an inferior product, with lower profits, and less attractive markets
  • Disruption must be shaped through iterative steps
    • Initially the business model takes off in “foothold” markets where overshot customers have needs that are simpler than current offerings (“Low End Disruption) or foot hold markets where new performance dimensions are initially are much more expensive and
  • Most innovators do not have a deliberate methodology to develop disruptive business models
    • Contrary to what they say, they actually trying to “cram” new, potentially disruptive enabling technologies into existing “sustaining” performance dimensions. For this reason, their business models fail to produce truly disruptive results.