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The theory of disruptive innovation has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small companies praise it as their guiding star; so do many executives at large, well-established organisations
Unfortunately, disruption theory is in danger of becoming a victim of its own success. The theory's core concepts have been widely misunderstood and its basic tenets frequently misapplied. Many researchers, writers and consultants use 'disruptive innovation' to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that's much too broad a usage.
The problem with conflating a disruptive innovation with any breakthrough that changes an industry's competitive patterns is that different types of innovation require different strategic approaches. To put it another way, the lessons we've learned about succeeding as a disruptive innovator will not apply to every company in a shifting market.
IS UBER A DISRUPTIVE INNOVATION?
Founded in 2009, the transportation company Uber has enjoyed fantastic growth, reported tremendous financial success and spawned a slew of imitators. Uber is clearly transforming the taxi business in the United States. But is it disrupting the taxi business?
According to the theory, the answer is no. Here are two reasons why.
DISRUPTIVE INNOVATIONS ORIGINATE IN LOWEND OR NEW-MARKET FOOTHOLDS
Disruptive innovations are made possible because they get started in two types of markets that incumbents overlook. Low-end footholds exist because incumbents typically try to provide their most profitable and demanding customers with everimproving products, and they pay less attention to less-demanding customers.
In the case of new-market footholds, disrupters create a market where none existed. Put simply, they find a way to turn non-consumers into consumers.
A disruptive innovation, by definition, starts from one of those two footholds. But Uber did not originate in either one. It...