Is it about timing? Is it technological factors?
What are the indicators that an industry is ripe for disruption?
We asked entrepreneurs and business owners about the right time to disrupt an industry and here are the responses.
#1- Three factors
1) Timing: multiple decades of the same business practices and no major innovation. 2) No Assets: has the ability to shift marketshare without the need of expensive asset cost. Uber has no cars. Airbnb has no hotels. 3) Friction: customers have a sense of friction in their old experience. Disruptive solutions remove friction from the experience and product.
Thanks to Curt Doherty, CNC Machines!
#2-If there's an issue and in case of a similar business model
If the industry follows the same business model for long, there is an opportunity to seize, eg – Kylie Jenner disrupting the cosmetic industry and becoming the youngest Billionaire b) Solving an issue within the Industry – if there is an unresolved issue persists within an industry, it the right time to disruption – eg Aravind eye Hospital (India), he found a cheaper solution for Cataract surgery and provides worlds largest surgeries in a year.
Thanks to Joseph Sudhip, SmartNumbers Inc.!
#3- A handful of big players with high barriers
When an industry is dominated by a handful of big players with high barriers to entry, it's the best time for startups to stir some disruption and steal market share. Big companies are bounded by complex hierarchy, while startups are able to identify new opportunities and launch products quickly. We are seeing decreasing brand loyalty from customers towards companies that are not innovating quick enough. In this era of instant gratification, it's crucial for businesses to test new ideas and bring surprises to the industry once in a while.
Thanks to Deedee Chong, Crayon HQ!
#4- Lost touch with customers
For me a key bellwether signaling fertile ground for disruption is when industry incumbents lose touch with the customers; expectations aren't met and feedback is consistently negative. Somewhere along the way, businesses forgot (or ignore) what they really value/need. We saw this in the advertising world, which is a big reason we started Abacus. The agency model was just not optimized for customer success anymore (ROI for brands). The telecom business in Canada is a great example – there are limited providers (2 main ones) – everyone hates them and no one is satisfied! The taxi industry is another example. Customers had no choice, jumping in whatever cab is in the area, regardless of safety or convenience and ease of payment. Enter Uber and Lyft, who have radically improved the experience.
Thanks to Peter Reitano, Abacus!
#5- Depend largely on timing
Disrupting industries is often attributed to a visionary idea. What very few people realize is that truly successful disruptions depend largely on timing. A significant moment in any industry occurs when enough variables – from societal and economical to even political circumstances – create the stage on which that disruptive idea can thrive. For the individual or company, it's far easier to be disruptive when you're acting on your own. Or if your actions have a limited range of impact. But if you're leading a company and what you do ripples across a larger field, one really has to weigh all those variables to recognize and pinpoint to that here and now moment that prompts you to take decisive action. Speaking on behalf of what we do at Anatta, we feel very strongly that this is the here and now moment of redefining the way the raw goods market operates. By adopting a more long-range view of the business, we are addressing the current and growing concerns about our environment, the finite aspect of resources, and the wellbeing of our fellowmen. We didn't set out to design our business model just for the sake of being disruptive. We chose to do so simply because it makes financial, social, and yes even moral sense. And we realized that the moment to disrupt the industry is now.
Thanks to Joshua Thomerson, Anatta Inc.!
#6- No change for years
The definition of insanity is doing the same thing repeatedly but expecting different results. What’s even crazier is when a process continuously fails to fulfill one’s expectations but instead of seeking change, they continue to accept the status quo. Too many times have I heard people say, “that’s just the cost of doing business. “An industry is ripe for disruption when both the key players and the technology provided haven’t changed in years. Meaningful innovation needs to be introduced to relieve those who are simply “living with the badness” without any available alternatives. The minute someone comes into the industry with a way of alleviating the pain, things change.
Thanks to Dominick Mauro, Extra Duty Solutions!