“Disruptive technology where you really have a big technology discontinuity… tends to come from new companies.” – Elon Musk
Disruptive technology has been a powerful tool for companies that aim towards innovation-centered growth and has been a driving power in changing multiple industries’ core. Netflix, which began as a DVD rental service, altered the entertainment industry when they innovated into the video streaming giant they are today. This game-changing idea extended past the video streaming industry and delved into the sector of movie-making when Netflix started producing their own content. The power of disruptive technology is massive, yet many misunderstand and misapply the term in the business setting.
What is Disruptive Technology?
Disruptive technology is defined, according to Investopedia, as an innovation that significantly alters the way that consumers, industries, or businesses operate. Most think that being disruptive means creating an elaborate product with a “wow” factor at the onset, but that is not the case.
Contrary to popular belief, disruptive innovations are not breakthrough technologies that make good products better; instead, they are innovations that make products and services more accessible and affordable, making them available to a larger population.
Clayton Christensen, the man who coined the term disruptive technology, states that most disruptive technology often starts as innovations that are good enough to compete in the current market. What sets them apart from other products is their accessibility to consumers, such as being more affordable or easier to use.
There are three components to disruptive innovation, according to Christensen:
- It must contain an enabling technology;
- It must have an innovative business model;
- and a coherent value network must exist
Disruptive technology gives consumers access to different industries at an affordable price. It is essential to be aware of disruptive technology to understand how it can reshape the current industry landscape and maximize product accessibility for consumers.