Disruptive innovation begins when an idea so big and bold enters an industry that mainstay companies have no choice but to take notice. But it doesn’t end there. These radical innovations fundamentally alter the rules, forcing industry incumbents to either adapt – or get left behind.
Uber is a classic example. Before rideshare apps, taxi companies enjoyed a monopoly on private transport, setting the prices and managing low consumer expectations. Everyone knows how that turned out. For a more recent example, you can take a look at Nobul; a real estate digital marketplace that’s shifting power from agents to consumers in much the same way Uber did.
So why are these disruptive innovations important? What value do they offer consumers, companies, industries and societies at large? This article details a few ways disruptive innovation is important.
It Solves Old Problems, Long-Held Frustrations
Nobul, the digital marketplace spotlighted earlier, is relatively new but has already had a marked impact on the real estate industry because it figured out one critical thing. There are significant problems in the real estate industry that no one has addressed yet.
As CEO Regan McGee puts it to Medium, “We’re solving a different problem compared to others in the industry. We are working towards getting consumers the best possible experience at the best possible value for their real estate transaction.” And they’re doing it by shifting power to consumers in their search for real estate practitioners. The digital marketplace acts as a matchmaking site, pairing consumers with the best real estate agents, who then compete for the consumer’s business.
It Can Remold Entire Industries in a Better Shape
Let’s circle back to Uber, one of the most notable innovative disruptors of the last decade. When Uber first stormed the private transportation market, it took a sizable bite out of traditional cab companies, many of which suffered plummeting profits.
But a funny thing happened in subsequent years. Rather than dying out, those taxi companies adapted to Uber’s model of speed, fair pricing and tech-enabled convenience. And as a result, the entire private transportation industry is now more consumer-centric than ever before.
At a Critical Time, It Can Move Us Toward Efficiency, Sustainability
Disruptive innovation isn’t just about higher profits and satisfied consumers. As this Guardian article argues, disruptive innovation is “key for a sustainable economy.”
The article highlights companies like Kiva, Salesforce and Mosaic, the latter of which leverages an innovative crowdsourcing model to connect investors with solar projects. In general, the article argues, disruptive innovation moves us toward sustainability because it is “focused on both fostering and pressure testing new ideas, collaborations and business models.”
It Favors Ingenuity over Insiders
Lastly, disruptive innovation is important because it favours ingenuity over insiders. In a marketplace defined by innovation, ideas are the primary currency – not established names or nepotism. Disruptive innovation establishes a meritocratic system where the best ideas win out, and not necessarily the companies with the deepest pockets.
Disruptive innovation is more than just a headline-grabbing buzzword. It’s an important principle in modern business – one that elevates consumers, companies, entrepreneurs and environmental efforts.