point
Menu
Browse by year:
The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

April - 2007 - issue > Innovation@work

Choose to Disrupt

Sanjeev Chopra
Saturday, March 31, 2007
Sanjeev Chopra
Whether it is venture capitalists, entrepreneurs, or fresh college graduates, everyone has a stake in understanding the process of innovation. It is a myth that innovative ideas come from a stroke of genius or a flash of brilliance. No doubt, it helps to have some of those faculties, but one can also find opportunities for successful innovation by being aware of the different types of innovations and their impact on industry participants (customers, startups vs. incumbent vendors). The key difference between innovation and invention is that unlike invention, successful innovation is judged on its ability to earn a profit.

In this article, I would like to remind folks that technology commercialization strategy as opposed to the nature of the underlying technology determines whether or not an innovation is disruptive or sustaining. Furthermore since large, established firms have difficulty identifying or responding to disruptive innovations, upstarts or startups have a better chance at success if they choose to deploy a disruptive innovation strategy to commercialize their innovation.

Disruptive vs. Sustaining Innovation:
An innovation is disruptive if it results in the creation of new / emerging market or increases the consumption of a product by bringing in a larger number of buyers into a market (for example, by making the current product cheaper, easier to use). Digital photography is a disruptive innovation. The benefits of storing and archiving pictures on a hard drive and the ease of sharing pictures enabled by digital cameras far outweighed the lower picture quality of the first generation of digital cameras. Its initial market that gravitated to the above value proposition was the rapidly growing number of computer savvy, email / SMS-happy consumers.

Over time, the picture quality of digital camera has improved to the point that it is equal or better than the traditional film cameras for most applications. Therein lies a key characteristic of disruptive innovations. Disruptive innovations (digital cameras) often have lower performance (print quality) along the performance metrics (number of mega pixels) of mainstream consumers of the current technology, but offer something of value (picture storage, sharing,) to a new user segment. However, as is true of most high technology products, as the new technology matures, its performance improves such that it can also address the mainstream market, This in part explains the woes of companies such as Kodak that are struggling with the digital revolution. Other examples of disruptive innovations are;

1. VOIP technology is disruptive to the Plain Old Telephone System (POTS).

Share on Twitter
Share on LinkedIn
Share on facebook