Disruptive Innovation

Introduction

Out of all the entrepreneurial strategies out there I think disruptive innovation is the most powerful.

Disruptive innovation was popularised by Clayton Christensen in his book The Innovator’s Dilemma.

It’s when a company releases a product which offers good enough functionality for the mass market at a price below the competitors’ products.

Examples

King of Shaves

Will King did this with the King of Shaves razor. Take a look at the average Gillette razor - it’ll either have a ridiculous number of blades or it’ll be battery powered or something.

Most people don’t really want these bells and whistles, they just want a quality product at an affordable price. By getting back to basics King of Shaves managed to gain huge traction in the UK market.

Netbooks

Asus did the same with the EEE netbook. Most people just browse the internet on their computers, so the EEE was well positioned to address this market, where price is more important than performance.

37Signals

37signals are some of the most outspoken advocates of keeping things simple. This was key to their success - by creating simpler software than their competitors they were able to appeal to smaller businesses who didn’t need the feature rich software being offered by their competitors.

Conclusions

The great thing about this strategy is it’s perfectly suited to entrepreneurs. Most start-ups can’t create feature rich products - there are too many constraints in terms of time, money and talent. But they’re perfectly positioned to create a simpler product which is more affordable.