What is it and why should we care Disruption What is it and why should we care

Two meanings for “disruptive innovation” Popular usage Technical, sophisticated usage What is wrong with the popular usage? There are different types of innovation and calling them all “disruptive” leads to mistakes in how to deal with it

What is “disruption”? “Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. “Disruptive innovation” is the trigger of disruption. Often, it is digital innovation. Christiansen et al., HBR 2015

A theory of innovation

A A Low end footholds or new market footholds “Good enough” products Christiansen et al., HBR 2015 A Low end footholds or new market footholds “Good enough” products A

A disrupted incumbent In 2004, Blockbuster dominated the U.S. video/DVD rental market (and others around the world) with 9,000 stores, taking just under two decades to get to that position. By 2010, it had filed for bankruptcy, with its number of outlets shrinking to just a third of its peak. (Gans 2015) In 2000, it changed its business model, moving to a subscription service that allowed consumers to keep DVDs for as long as they wanted. 

Christiansen et al., HBR 2015 Low end footholds or new market footholds “Good enough” products A Netflix started as mailing services and fee based – then pivoted to subscription based all-you-can-watch

What should BB have done? Christiansen et al., HBR 2015 Low end footholds or new market footholds “Good enough” products A Monitor Set up a division & do not be afraid of cannibalization What should BB have done?

A different “demon” Incumbents overfocus on existing major customers Incumbent overfocus on high margins segments

What should BB have done? Christiansen et al., HBR 2015 Low end footholds or new market footholds “Good enough” products A Monitor Set up a division & do not be afraid of cannibalization What should BB have done?

A A Low end footholds or new market footholds “Good enough” products Christiansen et al., HBR 2015 A Low end footholds or new market footholds “Good enough” products A

being disruptive = guaranteed success?

A What should UVA do? Monitor Christiansen et al., HBR 2015 Low end footholds or new market footholds “Good enough” products A Monitor Set up a division & do not be afraid of cannibalization What should UVA do?

A A Low end footholds or new market footholds “Good enough” products Christiansen et al., HBR 2015 A Low end footholds or new market footholds “Good enough” products A

A A Low end footholds or new market footholds “Good enough” products Christiansen et al., HBR 2015 A Low end footholds or new market footholds “Good enough” products A