‘Potentially Disruptive’ Label by Andrew Isherwood

One of the contentious elements of Christensen’s (1997)1 work is how to identify what is a Disruptive Technology. As mentioned in the literature review the label can only be applied once...

One of the contentious elements of Christensen’s (1997)1 work is how to identify what is a Disruptive Technology. As mentioned in the literature review the label can only be applied once the technology is successful Tellis (2006). Therefore the author surmises’:

A technology can only be labelled as ‘Potentially’ disruptive until it becomes successful

The label “Potentially Disruptive” is valuable as it can portray to investors, customers and employees, there may be great rewards if the business is successful however there are also some risks. The following points would have to be satisfied for the classification of Potentially Disruptive in the Christensen (1997)2 sense:

  • The new Technology under-performs in areas where existing mainstream customers measure value, therefore cannot initially be sold to these customers
  • There are some customers in new emerging markets that value this new technology; it may be smaller, cheaper, simpler or more convenient.
  • There is a likelihood the new Technology will steadily improve over time and meet the needs of the mainstream customers, who will switch to this new Technology

By identifying a technology as ‘Potentially Disruptive’ it means that as well as the emerging markets, which are probably unknown in size and difficult to predict, the new business can say it is also aiming at the Value Networks above and target the revenues which are measurable of that existing market. This allows the business to raise more funds which help in making the business a success.

For example a start-up company creates a new product for what it envisages as an emerging market, nobody knows what the size of the market will be, so investors see this as being a high risk business. Further research is done and it is found that in three years’ time this product will be sufficiently developed to sell to an existing market. This changes the risks involved as in three years’ time, if the emerging market gamble does not come off, the business can sell the product to existing customers.

It could be viewed that the labelling of an innovation as ‘Potentially Disruptive’ allows it to generate sufficient funding, be that for an internal project or VC back money, to make it successful, whereas without this label funding may be harder to obtain. Further research is required to validate this claim.

 

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  1. Christensen C.M. (1997) “The Innovator’s Dilemma”, Harvard Business School Press []
  2. Christensen C.M. (1997) “The Innovator’s Dilemma”, Harvard Business School Press []

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