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Posted: February 28th, 2022
Uber, WhatsApp, Amazon and Apple. Strange bedfellows? Not really. They are all market disruptors. But precisely what is it that makes them that?
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Despite the fact that they operate in different industries, these companies all have at least one significant thing in common: Each has developed technology that either lowers the cost of goods or services, creates an additional supply of goods or services or does both. The result is that these companies have given access (to their goods and services) to a larger portion of society than had it in the past.
The concept of market disruption is nothing new. It’s been around since the beginning of time, or at least of human civilization: Industrial-size looms for weaving. Gutenberg's printing press. Whitney’s cotton gin. The internet. Humanity is always trying to make tasks easier and more efficient, and that instinct has resulted in an increase of supply often bringing with it lower prices -- and market disruption.
What’s the problem?
Although some of the nascent technological disruptors may not have set out to expressly solve problems, their solutions have done just that.
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Uber’s technological disruption has increased the number of personal transportation providers available to customers. WhatsApp’s technological disruption has increased access to mobile messaging by lowering fees, Amazon’s initial technological disruption effectively increased access to a larger variety of products at lower costs. And Apple’s initial technological disruption allowed greater public access to computer systems, enabling people to become more productive.
Along the way, much academic discussion has examined whether disruption causes companies to fail or to succeed. (But we’ll just leave that determination to those who live in ivory towers.)
Piggybacking? You bet.
Unlike 30 years ago, lots of robust technology platforms exist today as a result of having been built upon the technological achievements of previous disruptors. The new disruptors have understood that it's not always necessary to reinvent the wheel.
Uber, WhatsApp and Amazon were all developed on established software platforms. Apple, in contrast, had to develop new technology platforms from the ground up. So Apple illustrates the fact that some disruptors do have to develop new technology platforms; but there are plenty of examples where existing platforms have made developing disruptive technologies significantly easier.
Consider Uber, for example: The ubiquity of smartphones enabled it to create a technology platform that quickly and conveniently connects almost anyone who wants to provide transportation services with people in need of transportation services, all while reducing the costs of service providers.
Similarly, the prevalence of mobile phones with internet access allowed WhatsApp to develop applications that allow people all over the word to send messages to one other across IP networks, as opposed to sending messages in SMS format. WhatsApp's applications has resulted in greater access to messaging at a low cost.
Widespread access to the worldwide web, as it was called in the good old days, allowed Amazon to create a digital storefront to sell goods to anyone in the country while at the same time eliminating the need for, and thus the costs associated with, brick and mortar stores. Amazon was certainly not the first disruptor to use this model: Sears had been using a printed catalog since the late 1800s to do something similar; but Amazon definitely improved upon in it.
Apple’s initial technological disruption, meanwhile, was much more general and less targeted than that of Uber, WhatsApp or Amazon. And Apple's disruption allowed greater access to computer technology in order to enable people to systematize their businesses and personal lives.
Although developing new technologies can have its benefits -- Apple today is the world's largest and most profitable company by a large margin -- there is still huge success to be had developing technological disruptions that piggyback on mature technology platforms. Just ask Uber, WhatsApp and Amazon.
So, what’s your problem? Are you ready to be disruptive?
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