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Disruption Creates New Industries, Players And Rules

Disruption

Leicester City emerged the 2015/16 English league champions. The EPL for the last decade has almost always looked and felt the same. The top four finishers were always predictable almost all the time. That was Disruption.

Sometimes we get that team that starts really strong, looks promising, “whips” everyone at the beginning of the season but loses steam as January and February comes. That’s usually when we start to separate the boys from the men. Expectations were no different from Leicester City. We assumed that, like Southampton did last season, they will “show themselves” for a while and then drop to seventh or tenth place where teams like them expectedly finish.

Leicester didn’t let off steam, holding the big teams to draws and beating others, winning after first conceding goals, they had impressive home and away forms and won the season comfortably with two matches to go.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

What happened in the EPL has been happening for a while in business and the economy, only at a pace faster and with more reaching implications now. It is called DISRUPTION.

Several books and theses have been written on disruption; I will recommend you to read Peter Thiel’s Zero to One. Disruption is an age-old phenomenon. There was a time when the wealthiest people in the world were kings and governors who ruled. At another time the wealthiest were people who had agricultural land. Disruption happened and then it moved to the folks with industrial know-how, people who could manufacture on a large scale. Then another happened not long ago, and wealthy people today trade on intellectual properties or technology-aided ideas.

Disruption happens when someone changes the rules of an industry. Changing the rules of an industry starts with asking questions, getting uncomfortable with routine and challenging long held ideas, norms and beliefs. Disruptions are rarely led by current industry players. Disruption actually create entirely new industries, players and rules.

Disruptions are not small incremental changes, they are quantum leaps from the present; a far departure from the current order. Disruption are scoffed at, laughed at, scorned and ridiculed by industry players. Some industry players may not be aware of a disruption until it is too late and they are run out of business. Disruptors are often looked at as underdogs. They usually lack the financial muscles and organisational capabilities possessed by the current industry players. Let us look at a few industries where disruptions have happened and look at the pattern that could help us create a disruptive product or service.

Advertising – Facebook Vs The Traditional Newspaper

Before now if I wanted to promote a product or service I would take out a newspaper advert, full-page, on an average cost minimum of N500,000. How many small businesses can afford such? Facebook, on the other hand, allows you very targeted adverts. You can filter who sees your advert based on gender, location, interests, age, etc. The platform also goes on to tell you the profile of the responders to your advert (something the national newspaper cannot do) all for as low as $5, about N1,850 even at black market rates. Newspapers are dead men walking and cannot compete with that. And even if you think you want the newspaper for the news content, there are Entrepreneurs.ng, Twitter, and several websites that deliver the news as they happen in real time.

Manufactures And 3D printers:

3D printers first cost $100,000 when they were invented. With mass adoption and cheaper technology, the cost is coming down to as low as $1000. 3D printers have been used to manufacture almost everything from guns to houses. A 3D printer was used to manufacture the “parts” for a six storey building in China. For me as an entrepreneur, this means I don’t need all the processes and a gigantic factory to manufacture regular products anymore. Plus I have flexibility with regards to what I can manufacture without serious cost to my established processes.

See Also: 100 Profitable business ideas to start now for aspiring entrepreneurs and investors.

Cabs And Uber:

I feel sorry for the yellow and black cab drivers in Lagos. How do they even start to compete? Uber offers me new model cars with air conditioning, a driver who has been well trained, is cautious and respectable and a ride at a price that is sometimes 50% less than the rough-speaking I-am-doing-you-a-favour attitude of the regular cab driver of a usually rickety taxi.

Electric And Gasoline Cars

Tesla has built an electric car that in one charge can cover the same distance as a car with a full tank. Electric cars are no longer figments of imagination. The technology is here and, with time, would replace most of the gasoline vehicles.

Retail Stores And Online Malls

A lot of high street stores in Europe are closing down and building malls have pretty much stagnated in the US and Europe. Fewer people are going in to the malls to buy things. The malls are slowly getting outdated and many people do a lot of shopping online. In Nigeria, malls are tourist attractions centres.  People love hanging out in malls, especially, maybe when there is no light at home (there’s a low growth rate for malls in Africa). Alibaba.com and Amazon.com are the biggest retailers in the world, and they don’t have a physical brick and mortar presence

There are several other industries I could refer to where disruptions have happened. More important than the examples is how to spot or create and plug into disruptive trends.

Disruption starts with attempting to answer impossible questions. Why can’t we travel from Lagos to London in 1 hour? Why do I need a physical keyboard on my computer? If I can hear the person I am talking to on the phone, why can’t I see the person?

Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

Question all the assumptions in the industry where you play or simply ask new questions. You can’t apply the standard of the current industry to a disruption. The rules are different. Peter Thiel, in Zero to One, asks: Is your solution to problems ten times better, ten times faster, ten times cheaper, ten times different? Today’s disruption will also ride on the backbone of technology. Setting up will use far fewer resources and scaling should be rapid.

Disruptors set out with a clear sense of purpose determined to bring new solutions and alternatives to customers. They don’t mind distractors and naysayers. They simply keep their eyes on the prize…similar to what Leicester City did all through that football season.

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