Disruptive; like “reach out”, “new paradigm”, or “out of the box”, it’s one of those business buzzwords we’d probably all like to kill. Then again, it does say something. What does being a disruptive business get you? Unlike the workplace, classroom, or any other societal bastion, where disruption will get you a swift kick in the ass, in business, disruption often moves you to the head of the class.
Disruptive companies redefine who other businesses look to for inspiration and make their organization one to emulate. Innovative execution is the order of the day here. It’s having a better idea, technology, or strategy, and pulling it off, too. That second part is the kicker. There have been many better ideas throughout time that never made any waves, simply because the requisite folks never executed.
So, redefining products, service, or business, coupled with a user experience that’s beyond expectations, because no one thought to expect anything like it before. Worthy goals, to be sure… That being said, who’s considered disruptive, why, and more importantly, how can YOU get there?
Disruptive Business 1 – Virgin
Surely I’m not the first to point to Richard Branson’s Virgin as a disruptive force. Virgin is disruptive across a broad business spectrum, as they have their fingers in such disparate industries as travel (even the outer space variety), mobile communications, and music, all of which they’ve brought their own brand of different to. Now, they even have a website dedicated to “identify and engage with the disruptive innovators of tomorrow”; Virgin Disruptors.
In a recent Forbes article Alison Coleman points out Virgin’s Galactic space travel business is, in Branson’s own words “….as disruptive as it gets.” It’s SOP for the Brit, who’s proven time and again “we’ve always done it that way” is more a reason to strike out anew, than to maintain present course and speed.
Disruptive Business 2 -Amazon.com
Proving that all disruptive businesses didn’t just fall off the turnip truck, the 800lb Magila of eCommerce fits the disruptive bill perfectly. Amazon redefines the customer e-commerce experience at every turn, and if that takes little, flying robots, so much the better! Just keep your dog chained up, please.
From deploying one of the first affiliate sales organizations, to developing revolutionary fulfillment techniques, Amazon has consistently redefined the e-commerce experience, and proven their disruptive tendencies along the way.
They are highly user experience focused, and have built a fanatical following when it comes to online shopping. Along the way, they’ve turned into one of the largest product and user experience search engines on the Internet. According to Forester Research, by 2012 more people started at Amazon when searching for products or info about them than anywhere else. That trend has continued.
In another disruptive move, they’ve let other consumer goods providers leverage their infrastructure and website, for a cut of the sales, of course. That gives little guys a chance to make it big in e-commerce, and gives the giant a way to deliver a more varied product selection to their customers. In true disruptive fashion, it’s a win-win for all sides.
The company has morphed from simply the world’s largest e-commerce company into a business services and cloud computing giant as well. Thousands of small and large organizations use Amazon to cloud host videos, podcasts, and other content. They were one of the first on that score, too. Now their massive data centers populate the rural landscape like so many Costcos. Not really, but the company has distributed them throughout the world to boost user efficiency, due to access proximity.
Disruptive Business 3 – NEST
I’m not alone naming NEST as a disruptive business. Ethan Howland named NEST on his list of Disruptive Energy Companies to Watch for 2014 NEST founder Tony Fadell has a disruptive business history, leading the iPOD creation team at Apple that redefined how we listen to music, and creating the Kleenex of MP3 players (sorry, Zune).
Disruptive Business 4 – Comcast / Xfinity
Oh, shut up and get back on hold! They’re not on my disruptive company list for the reasons you may think. Sure, they’re getting into the home automation and security business, but they’ve aimed to do that for over a decade.
I tabbed Comcast for this list not for their customer service, which many love to hate, but because of the way they’re “borrowing” real estate in their customers’ homes and businesses to deploy neighborhood WiFi hot spots. You have to admire their chutzpah. Are they sacrificing your bandwidth to do it?
Really, it makes sense though. The company’s cable infrastructure is everywhere, and so are their wireless routers. Why not use the surplus capacity to deliver wireless hotspots throughout the nation? That’s how they are able to advertise 500,000 wireless hot spots. Since most of their high speed Internet customers use far less than the available connection bandwidth at any given time, Comcast can use the surplus capacity to provide others with WiFi Internet services.
Think about it. Are you signed up for 100 Meg service? Probably not, but your connection is likely ready for it anyway. If you signed up for 25 Meg service, why let those other 75 go to waste? The community could use them. No, the general public will not be able to log on to your WiFi, unless your password is of the 12345 variety. The new gateways use 2 separate WiFI networks and share the available bandwidth.
By leveraging their resources more effectively, the company is delivering more WiFi to more people, for less. Comcast is disrupting the your WiFi, and we’ll all get to use it, or will if we’re Comcast customers.
Disruptive Business 5 – Tesla Motors
Tesla is one of those companies that’s spun an industry on its head. They introduced radically new products, but didn’t stop there. Their distribution model flies in the face of industry norms, much to the auto industry’s chagrin. If you’re going to be disruptive, why go halfway?
Tesla founder Elon Musk is well acquainted with business disruption. The finances he used get Tesla off the ground stemmed from co-founding PayPal, another company that gave the status quo a beat down. When Musk decides to shake things up, half-assed isn’t his MO.
Not only did Tesla show the world that electric cars should take a back seat to no one, particularly with the swanky Model S sedan, they turned the traditional sales model on its head, preferring to sell cars directly to consumers, rather than use the standard practice of independent, franchised dealers. The stodgy auto industry hates him.
If you think you can hear wailing and teeth gnashing emanating out of boardrooms from Detroit to Stuttgart, it’s not your imagination. Auto industry lawyers are queuing up for their shot at the California -based (Really, where else would they be located?) electric car company as we speak.
It’s not only the product they’re concerned about. Local dealers are concerned that should this new paradigm spread, automakers could end up competing against them in some markets using company owned stores. If you’ve invested millions to secure and grow your GM, Ford, or Chrysler franchise, it’s something to think about.
So, Tesla scores big on the disruptive business chart, hitting on two counts. They revolutionized electric vehicles from a product perspective, cranking out seriously sexy sedans that compete favorably on most counts with the best from Benz, Jaguar, Lexus, and Cadillac….. and let you fill up for $7.
They also decided the distribution model that’s has held for a century should go the way of the dodo. From their impressive Model S sales figures, it looks like they’re really on to something. The company sold roughly 21,500 Model S sedans in 2013. Seeing as Lexus sold 19,742 GS sport sedans, and just over half as many LS luxury sedans in the U.S. for 2013 (official Toyota sales figures), that’s saying quite a bit.
Their Model S sedan is only the latest shot across the auto industry’s bow. Not content to stop there, they’ve got an all electric SUV nearly ready for introduction; the Model X. It should be silently gliding around middle class neighborhoods by the end of the year.
Disruptive Business 6 – NRG Energy
Also on Howland’s List, NRG is disruptive in a big way. They’re looking to redefine an electric utility market that’s been basically unchanged for a century. The company’s CEO, David Crane, is aiming for a complete power reversal; putting it in the hands of consumers instead of the mega-watt electric utilities… literally!
Disruptive Business 7 – OneMedPlace
OneMedPlace is a company that looks to help upstart health care businesses get off the ground. They’re hoping to facilitate disruption on an industry wide scale. What could be more disruptive than that? They’re an enabler, and this case, it’s a great thing.
By using their media and info platform to connect disparate resources, from human to financial, and giving them a place to connect and tell their stories, they give small companies a chance to succeed. The “little guys” are typically lost in a sea of resource heavy organizations who force their way to forefront of conversation.
Now, using OneMedPlace’s media channels, these pint-sized powerhouses have a chance to communicate their research and ideas to prospective investors, executives, and employees who can help make their company dreams a reality. Whether through research and development or new business models, it’s precisely these small companies who are going to create the next wave of change in health care, and OneMedPlace is facilitating the revolution.
Common Threads to Business Disruption
Webster’s defines disruptive as “to cause (something) to be unable to continue in the normal way: to interrupt the normal progress or activity of (something).” If you’re talking business, that can be pretty powerful.
What do these disruptive organizations have in common?
Most of them do all of the following, and they all hit at least some of these:
1) They weren’t satisfied with the status quo. They delivered a user experience that customers didn’t even know they wanted….. until they got it.
2) They broke the business model mold. Just because everyone else markets a certain way doesn’t mean its the only, or best way to do it. Look for new ones.
3) They created a blazing value proposition.
How Can Your Organization Be Disruptive?
There’s really no set plan for disruption. In fact, that’s the point. It’s about doing things differently.
Be Disuptive By: Putting Value Through the Roof
Look at how these disruptive companies deliver value to their customers. How can you redefine the value paradigm in your industry or vertical? When your value proposition is huge, you have the ability to disrupt things.
Don’t confuse high value with low cost, although it certainly can be that. Successful organizations find ways to compete and boost value other ways. Only one provider can be the lowest cost, while there are many ways to deliver high value.
What can you do that will peg the value meter at 11? At WELD2, we decided that an insane value proposition for our customers would be making their sales faster, easier, and more profitable, by marketing one of our customers’ oft-neglected customer segments. We then dropped the price through the floor. Low cost and highly effective…. that creates a, as one of our founders put it, “stupidly good value”.
In point of fact though, it’s rarely about price. It doesn’t have to be. Look at the disruptive companies listed here. They’re rarely the lowest price, yet all deliver extremely high value in one way or another. That means your company doesn’t have to drop your shorts (or your prices) to be disruptive.
For example, if you’re a small A/V contracting firm, do things differently. Redefine your customer experience. Look at your product offerings. Are they just like everyone else’s in your market? Why? How can you change the to be different, and become a market leader? Take a step back, and look at things from a new perspective. What could you offer that will deliver a superb user experience from start to finish?
Here’s where I get a bit heretical…
Do this even if you seem to be making less money up front.
Yes, I said less money! Don’t just make less money for nothing, though. (Wasn’t that a line from a Dire Straits song back in the ’80′s?) Do it if it streamlines your entire operation, so you’re getting in and out sooner, and the results are better for the client. They’ll get an end product they love and have fewer people in their home for less time. You KNOW they’ll like that.
You’ll have satisfied clients that give you more referrals (See my post on how to get more referrals here), and waste less on non-billable labor and logistical expenses. Your staff will be happier and work more efficiently, because they’re not fighting so many battles in the trenches, and dealing with unhappy clients.
Be Disruptive By: Redefining the User Experience
What can you do to make your customers fiercely brand loyal? Deliver a user experience like no other. From a business standpoint, this has a massive advantage; you can keep prices and margins high. If users love the experience you give, they will pay more for it, even if it doesn’t cost you more to deliver. BAM, higher profits!
Yes, UEX part of the value equation, but it goes beyond that. Think of Tesla and Apple. Their products are certainly not inexpensive. It could be argued they don’t even deliver more value than several other luxury brands. The entire user experience however, from the products to the way they’re presented and sold, has resonated with consumers. That’s created customer love that’s hard to put a price on.
Your challenge is to bring a user experience revolution to your customers. You can aim for this, whether you’re a small custom audio/video installation contractor, mid-sized accounting firm, or multinational food brand.
Be Disruptive By: Asking the Big Question – What Does It Mean For You (and your Customer?)
Simple, there is a way to grow your business that is extremely powerful, and it’s within your grasp. Examine your entire organization from top to bottom. What do you deliver, really?
Okay, what COULD you deliver, and how? What does your business, and more importantly your offerings, mean to your customers? Then check this: What do you stand for, and do your customers and prospects know it? Are you clearly communicating what you stand for. Wait, do you stand for anything?
Look at everything through the “What Does It Mean for the Customer” prism. Actually, that’s probably the question to ask first. What’s it all mean for your customer?
What are your favorite disruptive companies?
How have you incorporated these principles into your business (or begged your c-suiters to adopt them)? Let me know, thanks!