These days everyone is obsessed with disruptive innovation, maybe not everyone really but it sure is a significant number. Just in case you’re not part of the obsessed ones, it’s probably because you haven’t heard what this disruption is all about; well, I’ll describe it with a quote by Clayton Christensen that goes “when mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.”
Most, if not all disruption has been as a result of broadband. There are so many opportunities that have come with broadband and it seems like those that succeed on riding on these opportunities make it and make it really big.
As a result, many entrepreneurs have been inspired by this wave. However, I just can’t help the urge of becoming the party pooper and say my fears.
I foresee this ‘excitement’ as a danger as it can potentially ignite zeal which doesn’t have sufficient knowledge to back it. So really I’m not against the zeal but more against acting according to it without the proper preparation.
The information on the mainstream doesn’t make it any better because it’s mostly fabricated just to capture or interest people while withholding some important aspects of these disruptive innovations success stories.
A classic example is the statement “Uber is the biggest taxi company but doesn’t own any taxis, or Facebook is the largest media company but doesn’t create any content” I get that it gives a nice ring to it and all, but it has some underlying connotations that are very misleading.
For example, that statement gives the impression that Facebook, Uber (or any other disruptive company) didn’t need much to start their businesses, yet in actual fact they did! They didn’t need what other businesses in their line of work often need alright, but they did need something. In actual fact, they needed lots of resources to make up for that conventional thing that they didn’t incorporate.
Uber for example, sustained losses of about US$870 million just to cater for the network effect. They followed Metcalfe’s law that states that “The value of a network system is proportional exponentially to the number of users on the network” so they had to invest that much just to get more users on board.
Therefore, such statements give ‘false sense of hope’ to entrepreneurs. It makes it sound like entrepreneurship is a walk in the park when it’s actually not (well maybe for some it is, but for some not so much, especially if you’re only given a small loan of a million dollars by your dad ?)
This false expectation is capable of crippling a good number of entrepreneurs so much that their brilliant plans never get to see the light of day simply because they never prepared themselves for it. See, before you venture into anything, it’s always good to know the possible detours and/or outcomes otherwise you are headed for disaster.
You need to research otherwise without knowing what happens in the real world (the unadulterated facts that is), you are likely to quit too soon or hold on to something that won’t work for too long. So yea, there is no such thing as what you don’t know won’t kill you, because in business, it indeed will kill you!