Weekend reading: Disruption vs. Innovation

The first, What “Disrupt” Really Means, by Andy Rachleff makes the point that its usually business models that are disruptive, not products. And contrary to Clayton Christensen’s definition of disruptive (low-cost, low-margin, low-quality) Rachleff suggests there is such a thing as “high-end” disruption, when a company like Uber offers a competing service that is more convenient, but more expensive than its taxi alternative.

The second, Stop Re-inventing Disruption, a response of sorts by Maxwell Wessel, argues that Rachleff’s idea of a high-end disruption doesn’t make sense. Disruption is a low-end, low-quality, low margin affair, and explains why incumbents get beat even though they are intelligent, well aware, and have capital to spend. The disruption happens because these companies consciously choose not to compete on the low-end because their business has evolved into a high-margin one.

Wessel also makes the distinction between disruption and innovation, which do seem to be used interchangeably sometimes. Innovation is simply making a better product, while disruption is a longer process…upending industries with low-end products that slowly eat away at the incumbents. He says that most of the examples of Rachleff’s are simply classic disruption done more quickly…as the pace of the world increases so does the pace of disruption.

Both authors make the point that some products are simply better, not necessarily disruptive. Wessel argues the iPhone was simply better than the phones it replaced…it wasn’t disruptive in the Clayton Christensen/Innovator’s Dilemma sense of the word. This is where the term “disruptive” becomes problematic…obviously the iPhone completely changed the game within the mobile industry. It’s disruptive in the normal sense of the word…

At any rate, I’m not sure that whether something is “disruptive” is much of an issue on the level of product design, but it is interesting to note that for some products to succeed they don’t necessarily have to be higher quality than the alternative. They might just be cheaper, or offer some functionality that the incumbents cannot (like Google Docs collaboration features). Even though they aren’t higher quality, they still find a foothold in the marketplace. As existing products add feature after feature over time, the opportunity for disruption increases.