History is littered with companies disrupted by emerging technologies and upstart firms who redefine markets and give value in distinct ways.
BlackBerry and Kodak are just a few iconic companies that have been disrupted in recent years. But disruption is not new. It’s been around for generations.
While disruptions vary in terms of intensity and timing, they tend to follow similar patterns.
Three patterns related to disruptive technology
First, the error of ferment
Everyone remembers Apple’s iPod, but they tend to forget the hundreds of digital music players that came before. Disruptive innovations have an incubation period that is often characterized by the entry of a large number of entrepreneurial ventures, as well as incumbent firms striving for dominance in the marketplace.
Improvements in the innovation may be slow at first but eventually accelerates as more and more experimentation occurs.
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Second, the shakeout
As a disruptive innovation get hold of the market, the competition gets more dynamic. A unique product design or a cutting-edge business model emerges. The numerous players in the market decrease.
Ventures losses their grip on the market. Established businesses fail to cope up in the new market. Mergers and acquisitions bring together former competitors.
When the dust settled, there might only be a few significant contenders left. Think Samsung and Apple with smartphones, or Uber or OLA for on-demand passenger services.
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Third, the end of growth
Over time, innovation matures and growth slows. The market becomes saturated. Each incremental innovation requires more and more effort. This is usually the time when things get interesting again.
Entrepreneurs start experimenting with radically different concepts. Innovators in established businesses or entrepreneurs invest in next-generation technology.
A new disruption may be just around the corner. For more than five decades, the auto industry was relatively stable. Suddenly Tesla reinvigorates electric vehicles and Google and others start testing driverless vehicles.
The market is suddenly flush with radical innovations as the process of disruption begins again. Disruptive technology needn’t be scary. By understanding these three patterns, you can enhance your chances of being the disrupt door rather than the disrupted.