For small businesses, it’s sometimes hard enough to keep things moving forward when the landscape doesn’t change. But a market disruption can completely change the way the game is played, and they’re impossible to predict. In some markets, working towards that disruptive idea can be worth the resources, and it’s worth understanding how these things play out in the marketplace.
A disruptor in business is usually a new idea, concept or innovation that creates itself a new value proposition and ends up disrupting an existing market. The key is that the adoption of the disruptive idea absolutely overtakes an existing market, which then shifts into a new landscape.
The most famous example is the development of automobiles in the late 19th and early 20th centuries. Early automobiles were luxury items, and thus had no effect on the standard market for horse-drawn vehicles until the mass-produced Ford, which was affordable, came into play. At that point, the entire transportation market changed, because the disruptive innovation was accessible as well as new.
Terminology About Market Disruption Theory
A market disruption is defined as a situation where markets stop functioning in their usual manner, which usually includes very rapid market declines. This can start with anything from a new market addition to a market crash or even, occasionally, a physical phenomenon like an earthquake or hurricane that wipes out key market points.
A disruptive technology is a new technology that makes previous technology obsolete, thus initiating a change in the market landscape. While the concepts are related, it’s important to point out that disruptions aren’t always innovative advances. And even in the cases where significant innovation is seen, disruption is not always successful; much depends on the concept in question and the rest of the landscape.
Disruptive Business Models
Disruptive business models are those that chase this kind of market step-change concept, to cause disruption and grasp market share for their new idea. Their livelihood is dedicated to the development of this disruption — technology, concept product — which then overtakes the traditional business model and marketplace.
These models mainly focus on finding an unmet need in the existing marketplace, and then developing a concept that will meet that need in the hopes that customers will begin the move; they then refine the model as customers continue to adopt their concept, up to the point where the incumbent competitors have to either improve their offerings, or be swept aside by the changes.
How to Disrupt
For small businesses, there are plenty of opportunities to develop a disruptive technology, service or concept. The key is to do market research as the company is kicking off and slowly building up its clientele; focus on customer satisfaction, and identify the gaps that could be filled that might change the market flow. As the company grows, introduce new ways of doing things to break away from the traditional business models and traditions in that landscape. Continue to stay close to the consumer base, and find innovative solutions that include ways to meet needs that are currently unmet.
Driving towards a market disruptor requires resistance to the status quo, and embracing innovation, creativity and risk over standards and “best practices” to better foster the significant types of changes that can disrupt markets. It’s about understanding which rules and regulations need to be kept in place and then discarding all of the “rules of thumb” and guidelines your industry may be bound by.
It requires moving with a sense of urgency to get changes out into the market before any competitors can respond to them, and it also requires consistently moving at that speed to ensure the concept moves from a small ripple to a major disruptor. For small businesses, it’s worth considering in the early days of a startup.
Danielle Smyth is a writer and content marketer from upstate New York. She has been writing on business-related topics for nearly 10 years. She owns her own content marketing agency, Wordsmyth Creative Content Marketing (www.wordsmythcontent.com) and she works with a number of small businesses to develop B2B content for their websites, social media accounts, and marketing materials. In addition to this content, she has written business-related articles for sites like Sweet Frivolity, Alliance Worldwide Investigative Group, Bloom Co and Spent.