Don’t Blame Disruptive Technology

Disruptive technology is innocent. Seriously, it’s everywhere; yet, with one quick web search, we can easily find countless articles in well-known publications that bring grim tidings of these same disruptive technologies. They warn us of dire consequences, of affecting the ‘status quo’ for established companies. Some even predict the demise of entire industries.

Some publications even go so far as to suggest that businesses take a grave risk by not reacting well to this clear and ever-growing threat borne from this cacophony of zeros and ones. Perhaps, though, we should take our time and think things over more deeply.

Without a shred of doubt, we have questions about how these disruptors have emerged and taken such a big piece of the cake in such a short period. We have many unanswered questions like: is disruptive technology the foundation of new business models? Is this tech ‘the greater evil’ for current companies? Is social media a multiplier or divider of growth? Let’s break it down and try to tackle these interrogatives.

What is Disruptive Technology?

Since it’s always best to start at the beginning, let’s start our quest for answers in the most logical place. Let’s figure out what disruptive technology is in the first place before we try to find answers to these existential questions. The globally accepted definition of disruptive technology comes from none other than one of the world’s most trusted sources, Wikipedia. We read that they are “those technologies that change the paradigm of an established business.”

According to this definition and the one that is espoused by many experts, the success of ‘new companies,’ like Über, Netflix, and Airbnb, stems from the correct implementation and application of emerging, disruptive technologies. This leads us to call these same companies ‘disruptors’ or ‘precursors.’ We frequently justify their market gain by pointing to the inactivity and lack of technological evolution of other, existing companies in the same industry or sector.

As you could probably guess, I do not concede the title ‘disruptor’ to these businesses because of the technology they use. To my mind, they are not the precursors of new technologies, nor are they the creators of any disruptive one. The ‘technology,’ as such, is not the foundation of their business model. It’s not even the product that they’re selling. How much did you pay to download the Über app?

Looking back a few years, we have prime examples of actual disruptive technologies. iTunes was both disruptive and a precursor in its time. Goodbye CDs, and hello mp3’s! And what’s a cassette tape again? We saw the same thing play out with Motorola’s first mobile phones, Epson’s first laptops, and Compaq’s first servers. These new technologies genuinely changed the way that we live and work, and we can observe this trend going back for years. Consider the first personal Mac and Windows computers, for instance.

We see this same story play out every five years on average, at least as of late, and the results are always the same. These technologies break with ‘the establishment,’ at least in the sense of it in our above-quoted definition, and they form the basis for many innovative businesses. Über, Netflix or Airbnb are not innovative precursors or the harbinger of disruptive technology, what they did, however, was to find a new kind of innovation that would eventually skyrocket them into the number one rank in their sector. They created a distinctive and exclusive space in which to establish the business. They founded, or rather they created a “blue ocean.”