Why Entrepreneurs Today Should Think About Transformation, Not Disruption

  • 2018-11-16
  • Entrepreneur

When Airbnb first skyrocketed to success, it seemed like the writing was on the wall for the traditional hospitality industry. As Uber had decimated the taxi business and Netflix had done away with video rental stores, so would Airbnb's short-term rentals soon replace outdated hotels.

That's how things were supposed to work according to the theory of disruptive innovation, which was originally developed by Harvard Business School professor Clayton Christensen in his 1997 book The Innovator's Dilemma, and which has since been widely popularized in the tech press. By leveraging new technology, upstarts with low overhead and low prices should easily steal market share from slow-moving incumbents and quickly move in to replace them.

Look more closely at many tech startup success stories, and you'll see a similar pattern. Very rarely does the model of "disruptive innovation" actually apply. Uber, Netflix, and Amazon notwithstanding, most successful tech startups don't replace incumbents, but coexist or even collaborate with them.