This is by Karl Ulrich, vice dean of innovation [There's a vice dead of innovation??? Omg, gag me with spoon] and CIBC professor of entrepreneurship and e-commerce at the University of Pennsylvania’s Wharton School.
Disrupt is perhaps the most misused term in entrepreneurship. (Innovation is a close second.)
Successful new companies can indeed disrupt an industry. Amazon disrupted book retailing. Its ascent caused the failure of the incumbent Borders.
Two conditions are required for disruption.
First, a substantial fraction of the market must prefer the product or service of the new company.
Second, the incumbents must be unable to respond and replicate. When those conditions are met, a new entrant can gain sufficient market share that existing firms fade into irrelevance.
But disruption is rare, and it’s not required for entrepreneurial success.
...
Take Tesla Motors. Tesla continues to exceed expectations. Customers love its products. Other auto companies clamor to join forces. It’s hard to imagine a more successful auto industry startup. People routinely speak of Tesla disrupting the auto industry, but Tesla will not do so, in the sense of garnering enough market share that the currently dominant players fade away.
...
Although I do not believe Tesla will disrupt the auto industry, its impact is significant and I can overlook the use of the term disrupt. (emphasis added)
But, listen to the elevator pitch of essentially any startup in a business plan competition and the template is mind-numbingly standard: [ new company ] will disrupt the [ established industry ] by [ new company technology or business model ].
If they are successful, they will find an underserved market segment, deliver a great product, garner some share, and achieve positive cash flow.
That’s a great outcome that will result in the creation of value. It is not disruption. (emphasis added)
Karl Ulrich vice dean of innovation at Wharton, that is a great article!
http://blogs.wsj.com/experts/2014/11/06/the-fallacy-of-disruptive-innovation/
Disrupt is perhaps the most misused term in entrepreneurship. (Innovation is a close second.)
Successful new companies can indeed disrupt an industry. Amazon disrupted book retailing. Its ascent caused the failure of the incumbent Borders.
Two conditions are required for disruption.
First, a substantial fraction of the market must prefer the product or service of the new company.
Second, the incumbents must be unable to respond and replicate. When those conditions are met, a new entrant can gain sufficient market share that existing firms fade into irrelevance.
But disruption is rare, and it’s not required for entrepreneurial success.
...
Take Tesla Motors. Tesla continues to exceed expectations. Customers love its products. Other auto companies clamor to join forces. It’s hard to imagine a more successful auto industry startup. People routinely speak of Tesla disrupting the auto industry, but Tesla will not do so, in the sense of garnering enough market share that the currently dominant players fade away.
...
Although I do not believe Tesla will disrupt the auto industry, its impact is significant and I can overlook the use of the term disrupt. (emphasis added)
But, listen to the elevator pitch of essentially any startup in a business plan competition and the template is mind-numbingly standard: [ new company ] will disrupt the [ established industry ] by [ new company technology or business model ].
If they are successful, they will find an underserved market segment, deliver a great product, garner some share, and achieve positive cash flow.
That’s a great outcome that will result in the creation of value. It is not disruption. (emphasis added)
Karl Ulrich vice dean of innovation at Wharton, that is a great article!
http://blogs.wsj.com/experts/2014/11/06/the-fallacy-of-disruptive-innovation/
