When the disruptor becomes the disrupted

 
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If I told you to deliberately break your business, you might think I’d lost it.

But hear me out.

It sounds dramatic, but isn’t it better to try to destroy your own business before someone else does?

Think Tinder and the way it gamified dating with one swipe or Uber jumping to the front of the taxi queue.

Keeping your eyes open to all the angles and experimenting with them means you can continue to shape your future.

As Harvard Professor Clayton Christensen poses it in his ‘Innovator’s Dilemma’, businesses fail because they get stuck just doing what made them successful in the first place and either;

a) fail to notice change  

or

b) notice but fail to embrace it because it requires them to disrupt what they're doing today.

In this post, I’ll share stories of brands who fell prey to the latter, along with examples of those brave enough to self-destruct.

The epic fails 👎

#1 Yahoo - The death of a giant

Think of the dot-com bubble, and the first name on your lips is likely to be ‘Yahoo.’

However, when it comes to cautionary tales, the failed media company is just as likely to spring to mind.

There have been many, many thousands of words written on the rise and fall on Yahoo, so I’m going to focus on one particular early error where a disruptive opportunity was neglected.

Back in 1998, Google execs Larry Page and Sergey Brin offered their PageRank system to Google for $1 million.

However, Yahoo was sceptical of PageRank, as it took visitors away from the page once results were displayed.

They were so stuck in their (at that time successful) model of the website as-an-all one destination, where users checked emails, answered questions, shopped and played, they turned down Page and Brin’s offer.

In doing so, they lost the chance to acquire the very algorithm that powers Google to this day.

Trying to doggedly plough on with their own plans rather than experimenting with a change meant Yahoo were eventually rendered obsolete, rather than making an ally of these early-stage competitors and their superior technical ability.

#2 Nokia - A failure to connect

At one time Nokia was the world leader in telecommunications.

They also had a long history of being extremely adaptive, starting out as a paper mill (no, really) in the 1800s and dabbling in all sorts before focusing solely on phones in the 1990s.

Incredibly, they came up with the first prototype of an internet-enabled touchscreen ‘smartphone’ of sorts in the late 1990s.

So what went wrong?

Much like Yahoo, the problem came from being overly inward-looking, and, as the New Yorker puts it “enthralled by its own past success.”

Their stubborn refusal to make phones that ran Android, blasting the operating system for ‘not allowing for innovation’ was ironic, as their dogged determination to stick to their own app store and Ovi services was just that.

Self-disruption success stories 🏆

#1 Tinder- How a dating website became their own competition

Tinder became wildly popular because it enabled users to side-step all the profile building of its predecessors and cut straight to the chase, so to speak.

Tinder is an interesting case, as at first glance it seems like it burst onto the scene as a total newcomer to the marketplace, but it actually came to be because an existing provider decided to disrupt itself rather than get disrupted by others.

As a startup, Tinder was funded by an incubator called Hatch Labs. This, in turn, is part of InterActiveCorp (IAC), the company that owns Match.com and OkCupid.

IAC made the leap to invest in Tinder knowing that would take users from its existing services but could see it was a more progressive concept.  

#2 New York Times- Moving with the times

Chances are if you took a tube journey twenty years ago you’d be surrounded by the rustle of broadsheets.

However the only papers you’re likely to see these days are discarded freebies, as most commuters occupy themselves with their phones instead.

It’s an often-quoted fact that digital is killing the print media industry.

But rather than roll over and be destroyed, The New York Times was on the ball and carved out its own place in the digital marketplace.

It was an early pioneer of a successful subscription model for their online content and continually reports significant growth, with online-only subscription now accounting for over 60% of its total revenue.

As might be expected, the revenue their print editions generates has dropped. Their new digital offering is beginning to destroy the old way of doing things in print - but they are doing it to themselves rather than allowing a competitor to do it to them.

In Conclusion...

In the 1950’s the average company was 60 years old, but now it’s around 20. We now live in a very different world, where the pace of change is different.

We are beginning to move towards the thought that rather than building something static, a good business is iterative.

Today, the end of one incarnation of our business shouldn’t be viewed as a failure - the failure, in fact, would be doing what we’ve always done and expecting the world to stand still.

To stay relevant, you need to be the architect of your own destruction and resurrection.

Danny SomekhComment